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PEHR v. UNIVERSITY OF CHICAGO

July 14, 1992

WILLIAM PEHR, individually, etc., Plaintiffs,
v.
UNIVERSITY OF CHICAGO, et al., Defendants.



The opinion of the court was delivered by: MILTON I. SHADUR

 William Pehr ("Pehr"), seeking to act not only individually but also "on behalf of all persons similarly situated," sues both the University of Chicago ("University") and its Employee Retirement Income Plan ("ERIP" or "Plan") for claimed pension plan benefits allegedly withheld by those defendants. Originally Pehr had tendered a pro se Complaint in December 1991 in which he asserted only his own claim. After he then made the necessary financial showing, this Court granted Pehr leave to file in forma pauperis and appointed counsel to represent him.

 On April 15 of this year the appointed counsel filed a two-count First Amended Complaint ("Complaint"), Count I of which stated Pehr's individual claim and Count II of which advanced an asserted class action claim. University and ERIP then filed a motion targeting both claims set out in the Complaint for alternative disposition via dismissal or summary judgment. Now the motion has been fully briefed, and for the reasons stated in this memorandum opinion and order:

 1. Summary judgment is in order as to Pehr's Count I individual claim, and his individual action is dismissed with prejudice.

 2. Pehr's Count II class claim is dismissed as well, but without prejudice to any claims that may hereafter be asserted by any other claimant in other litigation (no class having been certified).

 Facts1

 Even though the litigants have provided this Court with a good deal in the way of detail, the really material facts are quite simply put. What follows, then, is a somewhat streamlined statement of events. This Court has of course reviewed and taken into account all of the evidentiary submissions--and no omission of any piece of evidence from this section or from the later substantive discussion should be mistaken as a failure to consider any aspect of either side's presentation.

 Pehr was hired as a building engineer by University in August 1981, and he was always assigned to work in University's buildings that make up its medical center group. In October 1986 University formed a separate not-for-profit entity, University of Chicago Hospitals ("Hospitals"), as an affiliated corporation of which University is the sole member. *fn2" Then beginning in June 1987 University began to transfer various employees from its payroll to Hospitals' payroll--over 1,000 of them during the 18-1/2 months ended December 31, 1988.

 Throughout the period of his employment Pehr (like other University employees) has been a participant in ERIP, a tax-sheltered annuity plan in which University (and now both University and Hospitals) as well as the participants make contributions to a defined benefit program and a defined contribution program. That participation on Pehr's part has been pursuant to collective bargaining agreements that General Service Employees Union Local No. 73, SEIU, AFL-CIO ("Union") had with University and that Union now has with both University and Hospitals. Union has continuously represented the bargaining unit of which Pehr has been a member from the very beginning of his employment.

 Under ERIP's terms Pehr's benefits became vested on January 1, 1988. *fn3" On October 31 of that year the entire Physical Plant Medical Group of which Pehr was a member was transferred from the University payroll to Hospitals' payroll, but everything about Pehr's preexisting employment status remained without change after that transfer:

 2. Pehr's existing seniority date of August 24, 1981 also continued unchanged after the payroll transfer.

 3. All of Pehr's accrued benefits--including vacation, sick leave and ERIP benefits--were neither lost nor diminished by reason of the transfer. All of those benefits continued to accrue thereafter based on his preexisting August 24, 1981 seniority date.

 4. No requirement was imposed calling for Pehr to complete a new application form in order that he continue to participate in ERIP upon his transfer to Hospitals' payroll.

 5. Under the collective bargaining agreement with Union, Pehr and other employees were entitled to four weeks' vacation after completing eight years of service. In 1989 Pehr in fact received four weeks of vacation, something that was consistent only with his service with University and then Hospitals being viewed as continuous.

 In 1988 a joint agreement was negotiated among Union, Hospitals and University covering the transfer of the Physical Plant Medical Group employees from University to Hospitals. That joint agreement, and the ensuing collective bargaining agreements covering each entity, treated the change from one affiliated entity (University) to another such entity (Hospitals) as nothing more than a change in form--carrying with it such consequences as (1) combined seniority in applying for a vacancy to either entity, (2) recall rights for laid-off employees as though the entities were entirely fungible, (3) retained seniority and benefits for anyone who might transfer in either direction and (4) bumping rights applicable to either entity, no matter on which payroll the employee might be.

 Pehr tries to raise a number of aspects of his transfer as somehow working a "termination" of his University employment. Not only does that mechanistic approach emphasize form at the expense of substance, but as explained a bit later it also glosses over the critical fact that the relevant terminology in ERIP speaks of termination of "service" and not termination of "employment"--and this opinion has already made clear, and will continue to point out, that Pehr's service in his job has never been interrupted. *fn4"

 In any event, no analysis need be undertaken of some attempted distinctions raised by Pehr that are patently immaterial (examples of those are the obvious need to switch Pehr from one payroll to another or Hospitals' preparation of new W-2 and W-4 forms for his signature--the latter being required by the Internal Revenue Service simply because University and Hospitals are concededly different ...


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