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Sweeney v. City of West Chicago

May 14, 2010

JAMES M. SWEENEY, ET AL., PLAINTIFFS/COUNTER-DEFENDANTS,
v.
CITY OF WEST CHICAGO, DEFENDANT/COUNTER-PLAINTIFF.



The opinion of the court was delivered by: Harry D. Leinenweber, Judge United States District Court

Hon. Harry D. Leinenweber

MEMORANDUM OPINION AND ORDER

Before the Court are Cross-Motions for Summary Judgment. The Plaintiffs move for Summary Judgment on all their claims, while Defendant moves for Partial Summary Judgment on its Counterclaim. The Motions are denied.

I. BACKGROUND

Plaintiffs are Trustees of the Midwest Operating Engineers Welfare Fund (hereinafter, the "Fund") and suing on its behalf. The Fund is an employee welfare benefit plan under the Employee Retirement Income Security Act ("ERISA"), 20 U.S.C. § 1001, et seq. The Fund provides health benefits to certain employees of Defendant City of West Chicago (hereinafter, the "City") as the beneficiary of an agreement between the City and Local 150 of the International Union of Operating Engineers ("Local 150"). In return for this coverage, the City is obligated to make regular payments to the Fund for each covered employee. The present dispute concerns these payments and whether the City underpaid or overpaid the Fund.

This deal began when the City and Local 150 entered into an "Interim Agreement" on May 3, 2005 which contained numerous employment provisions. The substantive portion relating to the Fund remained essentially the same when the full Collective Bargaining Agreement (the "CBA") was signed in December 2006. The CBA, in relevant part under Article XI, reads:

[A]ll bargaining unit employees shall be eligible to participate in the [Fund]. . . . For the insurance year July 1, 2005 through June 30, 2006, the City will pay $375 per month for single coverage and $750 per month for family coverage for eligible covered bargaining unit employees enrolled in the Union's Plan. [List of increased monthly rates for subsequent years].

Unless mutually agreed to otherwise, the City agrees to remit payment on a monthly basis by the tenth (10th) of the month preceding the coverage month (e.g., the August payment will be paid by July 10th).

The Motions for Summary Judgment address three major disputes:

(1) the date of the initial contribution for a new employee; (2) whether the City gets a prorated refund when it paid for a full month of coverage on employees who terminated employment mid-month; and (3) whether the City was required to make contributions for employees who were on strike. The CBA does not provide further guidance on these subjects beyond the Article XI portion above. The parties submitted other documents to supply some of these details, and the next three sections will describe these submissions.

A. Initial Contribution

The first month for which the City must contribute to the Fund for a new employee is disputed. The Fund argues that the first contribution due is for the month following the employee's hire date. The City argues that its first contribution is due for the month after thirty days of employment. The Fund's view on the initial contribution is based on the January 1, 2000 and January 1, 2008 versions of its Health and Welfare Plan of the Midwest Operating Engineers Welfare Fund (the "2000 Plan" and "2008 Plan"), which describe the coverage and policies of the Fund:

[2000 Plan] An Employee shall become eligible for benefits on the first day of a Benefit Quarter after the Fund Office has received contributions from an Employer or Employers for 300 hours of work during a Contribution Quarter . . . [e.g., 300 hours of work during August, September, and October determines eligibility for January, February, and March]. [2008 Plan] The Initial Eligibility date for a Municipality Employee shall be the first day of the Month in which his employment with the Contributing Employer begins.

The Fund expands on these documents with the affidavit of David S. Bodley ("Bodley"), an Administrative Manager for the Fund. Bodley stated that prior to January 1, 2008 the policies established and administered by the Fund were consistent with those in the 2008 Plan. Further, Bodley stated that a "technical correction" was made to the 2008 Plan on February 16, 2010 which clarified that initial eligibility for Municipality Employees begins on the first day of the month following the month in which employment begins.

The City's view on the date of the initial contribution is based on affidavits and forms which suggest that the parties negotiated and agreed upon the City's view of the initial contribution. Affidavits from City employees Carol LeBeau ("LeBeau") and Tim Wilcox ("Wilcox") state that these employees met with representatives of Local 150 on April 24, 2006, after the Interim Agreement was signed, but before the CBA was signed. The affidavits claim they reached an agreement on that date that eligibility would begin on the first day of the month that follows thirty days of employment with the City. As further evidence that this new agreement was negotiated upon a change to the status quo, the City attached two authorization forms that bargaining unit employees signed upon hire. Form A is the original form and Form B is the current form:

[Form A] While the City of West Chicago does not determine eligibility for coverage or benefits, it is the understanding of the City of West Chicago that coverage under the Local 150 H&W Plan begins the first day of the following month after my first day of my employment by the City of West Chicago in a Local 150 bargaining unit position. [Form B] While the City of West Chicago does not determine eligibility for coverage or benefits, it is the understanding of the City of West Chicago that coverage under the Local 150 H&W Plan begins the first day of the following month after 30 days of employment with the City of West Chicago in a Local 150 bargaining unit position.

The dispute over the initial contribution date concerns contributions for sixteen bargaining unit employees. Table 1 below lists these employees, the month for which the initial contribution was made, the authorization form used, and the amount Plaintiffs claim is due to the Fund:

Table 1: Initial Contributions

Employee Hire Date Initial Form Claim

Contribution Month

A 10/31/05 11/2005 None $0.00

B 11/28/05 12/2005 None $0.00

C 12/05/05 01/2006 A $0.00

D 03/20/06 04/2006 A $0.00

E 06/19/06 08/2006 A ...


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