Emberton v. Board of Trustees of Plumbers and Pipefitters Local 572 Pension Fund

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF TENNESSEE

NASHVILLE DIVISION

KATHY EMBERTON AS )

ADMINISTRATOR OF THE ESTATE )

OF BILLY JOE EMBERTON, )

)

Plaintiff, )

)

v. ) Case No. 3:21-cv-00757

) Judge Aleta A. Trauger

BOARD OF TRUSTEES OF )

PLUMBERS AND PIPEFITTERS )

LOCAL 572 PENSION FUND and )

SOUTHERN BENEFIT )

ADMINISTRATORS, INC., )

)

Defendants. )

MEMORANDUM

This action is governed by the Employee Retirement Income Security Act (“ERISA”). Now

before the court are the parties’ cross-motions for Judgment on the Administrative Record.1 (Doc.

Nos. 43, 44.) For the reasons set forth herein, the defendants’ motion will be granted, and the

plaintiff’s motion will be denied.

1 The plaintiff’s motion is styled as a Motion for Summary Judgment, but she

acknowledges in her supporting Memorandum that summary judgment motions under ERISA are

not governed by Federal Rule of Civil Procedure 56 and that a ruling on the motion will turn on

the interpretation of the underlying plan documents. (Doc. No. 45, at 3.) The court construes the

plaintiff’s motion as one for judgment on the administrative record. In any event, it appears that

the relevant background facts are undisputed, and the parties’ minor quibbles regarding whether

matters outside the record may be considered and whether the plaintiff’s motion was properly

styled as a summary judgment motion are immaterial, as neither relies on matters outside the

record.

I. FACTUAL AND PROCEDURAL BACKGROUND2

A. The Plaintiff’s Application for Early Retirement Benefits

The plaintiff’s decedent, Billy Joe Emberton, was a dues-paying member of the Plumbers

and Pipefitters Local 572 (“Local 572” or “the Union”) from 1981 through 2019.3 Local 572 is a

sponsor of the Plumbers and Pipefitters Local 572 Pension Fund (“Pension Fund”), which provides

benefits to participants, including members of Local 572, pursuant to a pension plan (“Plan”) that

is governed by ERISA. Although the plaintiff’s pleadings do not state as much and the parties do

not address the issue, it appears from the record that defendant Southern Benefit Administrators,

Inc. (“SBA”) and defendant the Board of Trustees of the Plumbers and Pipefitters Local 572

(“Trustees”) share in the administration of the Plan.4

The record does not contain information about Emberton’s employment between 1981 and

2003, except to indicate that he was a dues-paying member of the Union and that his employer

contributed to the Pension Fund on his behalf during that time frame. In April 2003, Emberton

accepted a job at Arnold Engineering Development Complex, working for Sverdrup Engineering.

He left Sverdrup Engineering in December 2003 to work for Jacobs Engineering as a pipefitter.

He worked for Jacobs Engineering as a pipefitter until June 2016, when he began working for

National Aerospace Solutions (“NAS”), also as a pipefitter. He worked for NAS as a pipefitter

until January 2022. It is undisputed that NAS never contributed to the Pension Fund on behalf of

2 The facts for which no citation is provided are drawn from the pleadings and are

undisputed unless otherwise noted.

3 Emberton died after commencing this action. His widow, Kathy Emberton, as

administrator of his estate, was subsequently substituted as the plaintiff, pursuant to Federal Rule

of Civil Procedure 25(a). (See Doc. Nos. 26, 39.)

4 The court previously denied SBA’s Motion to Dismiss, which argued that it was not a

proper defendant in this case. The parties have not reprised that contention in their present motion.

Emberton or any other employee. (See Doc. No. 41, Answer ¶ 36 (“Defendants admit that no

contributions were made to the Local 572 Pension Fund by NAS.”).)

On November 24, 2018, Emberton filed an Application for Benefits, specifically “Normal

Retirement Benefits,” with the Pension Fund. (See Doc. No. 25-2, at 1.) He indicated on this form

that his “Last Day Worked” was April 20, 2003. (Id.) His requested retirement date was January

15, 2019. (Id.) The SBA construed his application as an application for early retirement, rather

than an application for “Normal Retirement Benefits,” apparently because Emberton was turning

62 on January 15, 2019, rather than reaching the “normal” retirement age of 65. (See Compl. ¶ 21;

Doc. No. 25-2, at 17 (Dec. 4, 2018 letter from SBA to Emberton referencing his “application for

an Early Retirement Benefit”).) SBA initially approved the application, with an anticipated start

date for the payment of a monthly benefit to begin on February 1, 2019. (Id.)

By letter dated December 17, 2018, however, SBA notified Emberton that, upon further

review, it had determined that Emberton was not entitled to Early Retirement Benefits, because he

had not retired under the Plan definition of “Retire.” (Id. at 23.) As a result, his application was

denied. (Id.)

The Plan, executed on January 22, 2015 but with an effective date of April 1, 2014 (Doc.

No. 25-5, at 1, Doc. No. 25-6, at 14), provides that a Plan Participant is eligible for the Early

Retirement Benefit if he “Retire[s] on or after April 1, 1976,” has at least five years of service at

the time of retirement, and is between the ages of 55 and 65. (Doc. No. 25-5, at 25 (Plan ¶ 5.01).)

There is no dispute that Emberton was a Plan Participant, as defined by Sections 1.18 and 2.01 of

the Plan, had more than five years of service at the time of his desired early retirement date, and

was between 55 and 65 years old. As such, he was eligible under the Plan for the Early Retirement

Benefit if he had “retired” by his proposed retirement date, as defined by the Plan.

“Retire” is defined in the Plan as “a Participant’s complete cessation of: (i) any kind of

work for an Employer, or (ii) any plumbing or pipefitting work in the construction or maintenance

industries within the geographical area of the Fund.” (Id. at 15 (Plan § 1.24).) However, in a Plan

Amendment executed on January 17, 2019 but effective retroactively beginning November 20,

2018 (i.e., just four days before Emberton submitted his application for retirement benefits), the

Plan definition of “Retire” in Section 1.24 was revised to state as follows:

The term “Retire” shall mean a Participant’s complete cessation of: (i) any kind of

work for an Employer, and (ii) any plumbing or pipefitting work in the construction

or maintenance industries within the geographical area of the Fund, for a minimum

period of six full consecutive calendar months.

(Doc. No. 25-6, at 29 (Amendment to Plan § 1.24); id. at 46 (same document).)

The Plan defines “Employer” as

any association or individual employer who has duly executed and who is bound

by a collective bargaining agreement in effect with the Union requiring periodic

payments to the Trust Fund for the purpose of providing and maintaining benefits

for the employees of such employer. Further, any employer not a party to such

collective bargaining agreement who satisfies the requirements for participation as

established by the Trustees and who agrees to be bound by the Trust Agreement

shall be considered an Employer. For purposes of this Plan, the term “Employer”

shall also include Local Union # 572 of the United Association of Journeymen and

Apprentices of the Plumbing and Pipefitting Industry of the United States and

Canada, AFL-CIO, the Trustees of the Plumbers and Pipefitters Local # 572

Pension Fund, collectively, and the Mechanical Contractors Association of

Nashville, Incorporated.

(Doc. No. 25-5, at 12 (Plan § 1.09).) “Union” is specifically defined as the “Plumbers and

Pipefitters Local Union #572 of the United Association of Journeyman and Apprentices of the

Plumbing and Pipefitting Industry of the United States and Canada, AFL-CIO, Nashville,

Tennessee.” (Id. at 17 (Plan § 1.31).)

SBA’s denial of Emberton’s application for Early Retirement Benefits, as stated in the

December 17, 2018 letter, was based on the conclusion that Emberton was “currently involved in

employment that disqualifie[d] [him] from meeting the criteria of being Retired” as defined in the

Plan. (Doc. No. 25-2, at 23.)

Emberton, through his attorney at the time, appealed the SBA’s decision and appeared for

a hearing on his appeal at the Trustees’ April 12, 2019 meeting. (See Doc. No. 25-8, at 1 (Minutes

of Apr. 12, 2019 Board Meeting).) According to the Meeting Minutes, the plaintiff acknowledged

that he “had not actually ceased employment at the time of his ‘retirement,’” but he argued in

support of his appeal that he was not working for an “Employer” as defined by the Plan. He also

claimed that he knew of other individuals who were receiving a retirement benefit from the Pension

Fund, even though they did not meet the definition of “retired,” and argued that the Trustees were

not fairly and equitably administering the Plan. (Id. at 1–2.)

The Trustees unanimously decided to uphold SBA’s decision to deny the application for

Early Retirement Benefits. (Id. at 2.) According to the Meeting Minutes, the decision was based

on the Trustees’ conclusion that Emberton did not satisfy the eligibility requirements for Early

Retirement Benefits, because he

continued to work for an Employer in the plumbing and pipefitting industry who

had a duly executed collective bargaining agreement in effect with Local 572.

Specifically, the trustees referenced the agreement by and between [NAS]

[Emberton’s employer] and Air Engineering Metal Traces Counsel and Affiliated

Unions AFL-CIO. The trustees indicated that Local 572 was an affiliated local and

therefore a party to the agreement.

(Id.)5

An exchange of emails between SBA’s administrator, Seth Caldwell, and Eric Coons, a

Trustee, documents that the Trustees confirmed prior to hearing the appeal that Emberton was

5 The Minutes indicate that the SBA was also directed to undertake an investigation into

the plaintiff’s allegations that other individuals were receiving a benefit from the Pension Fund,

even though they were not “retired” under the Plan. (Doc. No. 25-8, at 3.)

“still working in the trade” as of the date of the consideration of his application. (Doc. No. 25-2,

at 37.) The April 12, 2019 Meeting Memo states that the decision to deny benefits was based on

confirmation that “Mr. Emberton was actively employed in the trade.” (Id. at 38.)

Emberton was notified of the Trustees’ decision by letter dated April 16, 2019. (Doc. No.

25-3, at 1–2.) The letter misquotes the amended definition of “Retire”6 and states that the Trustees

had unanimously agreed that Emberton did not meet that definition, because he “continue[d] to

work for an Employer in the plumbing and pipefitting industry who has a duly executed collective

bargaining agreement in effect with Local 572.” (Id. at 2.)7

Emberton filed this lawsuit in October 2021. Kathy Emberton was permitted to amend the

Complaint and to be substituted as the plaintiff in early 2023, after the death of her husband.8 The

Amended Complaint (Doc. No. 40) contends that the Trustees improperly denied Emberton’s

appeal and that they amended the Plan improperly in order to deny his claim for early retirement

benefits. The defendants filed a complete copy of the administrative record (Doc. No. 25 and

attachments), and the parties thereafter filed their cross-motions for judgment on the record. Both

6 The letter states that the Plan definition of “Retire,” as “refined in an amendment dated

November 20, 2018,” was “a participant’s complete cessation of: (1) any kind of work for an

Employer, or (2) any plumbing or pipefitting work in the construction or maintenance industries

within the geographical area of the Fund, for a minimum of 6 (six) full consecutive calendar

quarters.” (Doc. No. 25-3, at 1.) As quoted above, the amended definition actually is “[a]

Participant’s complete cessation of: (i) any kind of work for an Employer, and (ii) any plumbing

or pipefitting work in the construction or maintenance industries within the geographical area of

the Fund, for a minimum period of six full consecutive calendar months.” (Doc. No. 25-6, at 29

(emphasis added).)

7 Emberton eventually retired with pension benefits effective August 1, 2022, after

reaching “normal” retirement age (65). (See Doc. No. 25-3. at 9.)

8 Kathy Emberton is referred to herein as the “plaintiff,” and Billy Joe Emberton is referred

to as “Emberton.”

parties filed Memoranda of Law in support of their motions, and each filed a Response to the

other’s motion and a Reply in support of its own motion. (Doc. Nos. 43-1, 45, 47, 48, 49, 52.)

II. STANDARD OF REVIEW

Section 502(a)(1)(B) of ERISA authorizes an individual to bring an action “to recover

benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan,

or to clarify his rights to future benefits under the terms of the plan.” 29 U.S.C. § 1132(a)(1)(B).

Judicial review of the denial of benefits challenged under this provision is de novo, “unless the

benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for

benefits or to construe the terms of the plan.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101,

115 (1989); McClain v. Eaton Corp. Disability Plan, 740 F.3d 1059, 1063 (6th Cir. 2014). “If a

plan affords such discretion to an administrator or fiduciary, [the court reviews] the denial of

benefits only to determine if it was ‘arbitrary and capricious.’” McClain, 740 F.3d at 1064 (6th

Cir. 2014). Here, the parties agree that the “arbitrary and capricious” standard of review applies.

The parties also generally agree that, when reviewing an administrator’s denial of benefits pursuant

to an ERISA plan, the court “may typically review only evidence contained in the administrative

record.” Jones v. Metro. Life Ins. Co., 385 F.3d 654, 660 (6th Cir. 2004) (quoting Wilkins v. Baptist

Healthcare Sys., Inc., 150 F.3d 609, 613 (6th Cir. 1998)).

“[T]he arbitrary or capricious standard is the least demanding form of judicial review of

administrative action.” Judge v. Metro. Life Ins. Co., 710 F.3d 651, 658 (6th Cir. 2013) (quoting

Davis v. Ky. Fin. Cos. Ret. Plan, 887 F.2d 689, 693 (6th Cir. 1989)). “A plan administrator’s

decision will not be deemed arbitrary or capricious so long as ‘it is possible to offer a reasoned

explanation, based on the evidence, for a particular outcome.’” Id. (quoting Davis, 710 F.3d at

693). In other words, the court will uphold a benefits determination if it is “rational in light of the

plan’s provisions.” Id. (quoting Jones, 385 F.3d at 661). Although the standard of review is

“extremely deferential,” the court does not simply “rubber stamp the administrator’s decision.”

Jones, 385 F.3d at 660–61.

III. ANALYSIS

In support of her motion, the plaintiff quotes the Plan’s definition of “Retire” as “a

Participant’s complete cessation of: (i) any kind of work for an Employer, or (ii) any plumbing or

pipefitting work in the construction or maintenance industries within the geographical area of the

Fund.” (Doc. No. 45, at 5; see also Doc. No. 25-6, at 29 (Plan § 1.24.) Pointing to the “or” between

clauses (i) and (ii), she argues that, under the plain language of this definition, a participant must

meet only one of these two requirements to be deemed “retired.” (Id.) She effectively concedes

that Emberton did not meet the second clause, as he continued to be employed by NAS as a

pipefitter, apparently within the geographic area of the Fund, as those terms are defined by the

Plan.

The plaintiff contends, however, that NAS does not qualify as an “Employer” under the

Fund, principally because it was not “bound by a collective bargaining agreement with [Local 572]

requiring periodic payment to the Trust Fund for the purpose of providing and maintaining benefits

for the employees of such employer.” (Id. at 6; see also Doc. No. 25-5, at 12 (Plan § 1.09).) It is

undisputed that NAS never made contributions to the Pension Fund on behalf of Emberton or any

other employee. (See Doc. No. 41, Answer ¶ 36 (“Defendants admit that no contributions were

made to the Local 572 Pension Fund by NAS.”).)9

9 The definition of “Employer” does not expressly require the employer to make

contributions to the Pension Fund on behalf of the plaintiff. Rather, it appears also to include

employers who make contributions to the Pension Fund for some employees, even if not for the

particular plaintiff. But the defendants here concede that NAS never made contributions to the

Pension Fund for any employee.

The plaintiff also argues that the Trustees improperly amended the Plan in January 2019,

after Emberton became eligible for Early Retirement Benefits, and made the amendment

retroactive to November 20, 2018, before Emberton submitted his application for Early Retirement

Benefits. The plaintiff infers from the timing of it that the amendment was intended to make

Emberton ineligible for benefits. She contends that the amendment violated the terms of the Plan

Summary, insofar as it retroactively reduced Emberton’s vested rights. (Doc. No. 45, at 9.)

The defendants, focusing only on the language in the amendment requiring cessation of

work “for a minimum period of six full consecutive calendar months” before an employee will be

deemed to meet the definition of “Retire,” assert that the amendment had no effect on Emberton’s

eligibility, because he was still working at the time the decision to deny benefits was made. The

court finds, therefore, that the defendants have waived any argument that the amendment controls

the outcome of this appeal.10

The defendants do not address the plaintiff’s argument that the plain language of the

definition of “Retire” required Emberton to meet only one of the two clauses in the definition set

forth in the pre-amendment version of Plan § 1.24. Instead, they argue that the Trustees reasonably

concluded that NAS qualified as an Employer, because there was a collective bargaining

agreement between NAS “and Air Engineering Metal Trades Council and Affiliated Unions AFL-

CIO, and Local 572 is an affiliated local and therefore a party to the agreement.” (Doc. No. 27-3,

at 2 (April 16, 2019 from Pension Fund to Emberton).)

10 This concession also means that the court has no need to consider the import of that part

of the amendment that substituted the word and for the word or in the definition of “Retire.”

However, in light of the court’s discussion, below, of the interpretation of the word or as used in

the Plan’s pre-amendment definition, the court finds that the substitution amounts simply to a

clarification rather than a modification.

Regarding the plaintiff’s argument that the defendants ignore the second part of the

definition of “Employer,” which requires not merely a collective bargaining agreement, but a

collective bargaining agreement “with the Union requiring periodic payments” to the Pension

Fund, the defendants assert that, “[e]ven if this interpretation were to be accepted, Emberton still

was not eligible for early retirement benefits as he continued to work in the plumbing and

pipefitting industry.” (Doc. No. 47, at 5.)

In their own Memorandum in support of their Motion for Judgment, the defendants

continue to focus on the second clause of the definition, arguing that the Trustees reasonably

determined that Emberton had not retired, because he continued to work “in the trade.” (Doc. No.

43-1, at 10.) In response, the plaintiff maintains that Emberton’s continued employment as a

pipefitter is irrelevant, because he was not employed by an “Employer” as defined by the Plan and,

therefore, satisfied the first definition of “Retired.”

The Supreme Court has long recognized that the “validity of a claim to benefits under an

ERISA plan is likely to turn on the interpretation of terms in the plan at issue.” Firestone Tire &

Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). Here, as the plaintiff submits, the plain language

of the (original) Plan definition of “Retire” appears to require the participant’s “complete

cessation” of “any work for an Employer” or his “complete cessation” of “any plumbing or

pipefitting work in the construction or maintenance industries within the geographical area of the

Fund.” (Doc. No. 25-5, at 15 (Restated Plan § 1.24).) And the definition of “Employer” also

unambiguously requires an employer who has, not only a collective bargaining agreement with the

Union, but a collective bargaining agreement “requiring periodic payments to the Trust Fund.” (Id.

at 12 (Restated Plan § 1.09).) And not just any trust fund, the “Fund,” defined as the Plumbers and

Pipefitters Local #572 Pension Fund. (Id. at 16 (Restated Plan § 1.29).) Here, the defendants do

not contend that NAS ever contributed to the Pension Fund, and it is therefore clear that NAS does

not qualify as an Employer under the Plan. The Trustee’s conclusion to the contrary is arbitrary

and capricious, as it simply ignores a large part of the definition of the term. Under the plain

language of the Plan, that is, Emberton was no longer employed by an “Employer” at the time he

turned 62 and sought early retirement benefits. He was, however, still employed as a pipefitter in

the maintenance or construction industry within the geographic area of the Fund. The question,

then, is whether it was arbitrary and capricious to read the word or in the definition of “Retire” to

mean and. If the two clauses of the term “Retire” must be read in the disjunctive, then it does not

matter whether Emberton was still employed by a non-“Employer” as a pipefitter.

The Sixth Circuit has observed that, typically, “the word or does not also mean and.”

Marquette Gen. Hosp. v. Goodman Forest Indus., 315 F.3d 629, 633 (2003). As the court stated

there, in the context of interpreting an ERISA plan’s definition of claims excluded from coverage,

the use of the disjunctive or usually means that “one exclusion does not depend on the other, nor

does one determine the other.” Id. As the Seventh Circuit has recognized, however, or does in fact

sometimes mean and. See Schane v. Int’l Bhd. of Teamsters Union Loc. No. 710 Pension Fund

Pension Plan, 760 F.3d 585, 589–90 (7th Cir. 2014) (“Formal notation aside, the point is merely

that determining the meaning of or in a sentence is not just a matter of declaring that the word is

disjunctive. Context matters.”).

Contracts, including ERISA plans “ordinarily should be enforced as written.” Trustees of

Sheet Metal Workers Loc. 7 Zone 1 Pension Fund v. Pro Servs., Inc., 65 F.4th 841, 847 (6th Cir.

2023) (quoting Heimeshoff v. Hartford Life & Acc. Ins. Co., 571 U.S. 99, 108 (2013)). Thus,

“[w]here the words of a contract in writing are clear and unambiguous, its meaning is to be

ascertained in accordance with its plainly expressed intent.” Id. (quoting M & G Polymers USA,

LLC v. Tackett, 574 U.S. 427, 435 (2015)). At the same time, courts interpreting ERISA plan

provisions “have at times gone beyond the actual language of the plan to ascertain the underlying

intent.” Stockman v. GE Life, Disability & Med. Plan, 625 F. App’x 243, 250–51 (6th Cir. 2015)

(citing Citizens Ins. Co. of Am. v. MidMich. Health ConnectCare Network Plan, 449 F.3d 688,

692–93 (6th Cir. 2006)). Courts have the “paramount responsibility in construing plan language

. . . to ascertain and effectuate the underlying intent.” Id. (citations omitted). Courts interpreting

ERISA provisions must “first reference the plan language itself, but may also consider reasonable

inferences and presumptions under the particular circumstances of the claim. The language of a

plan is ambiguous only ‘if it is subject to two reasonable interpretations.’” Id. at 251 (quoting

Citizens Ins. CO., 449 F.3d at 694)). “[I]f Plan language, ‘however inartfully worded or clumsily

arranged, fairly admits of but one interpretation it may not be said to be ambiguous or, indeed,

fatally unclear.’” Id. (quoting Reardon v. Kelly Servs., Inc., 210 F. App’x 456, 459 (6th Cir. 2006)).

Further, an ERISA plan, like any contract, is to be “construed as a whole.” Mitzel v. Anthem Life

Ins. Co., 351 F. App’x 74, 90 (6th Cir. 2009) (quoting Alexander v. Primerica Holdings, Inc., 967

F.2d 90, 93 (3d Cir. 1992); Miller v. Monumental Life Ins. Co., 502 F.3d 1245, 1250 (10th Cir.

2007)).

In Schane v. International Brotherhood, a plan participant and the plan trustees disagreed

about the date on which the participant had retired, with the trustees arguing for an earlier date and

the participant arguing for a later date, both based on the plan’s definition of the term “Retire.”

The date mattered, because the participant was entitled to an additional $300 per month if he was

considered to have retired on the later date. The definition of “retire” was stated in the disjunctive.

As relevant to the participant’s claim, the definition provided that “retirement” or “retire,” prior to

a participant’s “attainment of Normal Retirement Age” meant

cessation of being employed in Covered Employment or engaging in any of the

following:

(i) employment with any Contributing Employer . . . .

Schane, 760 F.3d at 587 (emphasis added). It was clear from the record that the employee “was

employed in Covered Employment until August 2009” and was “was engaged in employment with

a Contributing Employer . . . until December 2011.” Id. at 588. The pension plan argued that the

participant retired when he ceased working in Covered Employment, without making any real

effort to interpret the plan or to explain why or, as used in the definition of “retire,” did not really

mean or.

The plaintiff filed an ERISA action in federal court, arguing that the trustees acted

arbitrarily and capriciously by “focusing only on whether he had ceased working for a covered

employer, while ignoring whether—and when—he had also ceased engaging in the activities

precluded by” the remainder of the definition of “retire.” Id. The district court rejected the

employee’s argument, observing that “the plan’s definition of ‘retirement’ was phrased in the

disjunctive [to] mean[] ‘cessation of being employed in Covered Employment or engaging in any

of the following . . . .’” Id. (emphasis in original).

The Seventh Circuit found that the issue was not as clear as suggested by the district court,

undertaking a lengthy analysis of when or can means and:

Often, the word or does function as a straightforward disjunctive. Consider the

following sentence: “parent” means someone who has a son or daughter. No one

would contend that a man who has a daughter is not a “parent” because he does not

also have a son. Clearly, to satisfy this definition, the man must only have a son or

have a daughter; he does not need both. In this sentence, the word or indicates

precisely what the board of trustees thought it did . . . .

But consider another sentence, very similar to the previous one: “non-parent”

means someone who does not have a son or daughter. Suppose the same man comes

to you and claims he is a non-parent. True, he admits, he does have a daughter.

However, he is quite certain that he does not have a son. The man notes that the

definition of “non-parent” consists of two parts joined with an or, and furthermore

that “the word or does not also mean and.” Thus, he reasons, the definition is

disjunctive; because he satisfies the first part of the definition (no son), it simply

does not matter whether he satisfies the second (no daughter). . . .

The flaw in the man’s argument is easy to spot. To be a non-parent, a person must

not have a son or daughter—which is to say, he must not have a son and he must

not have a daughter. Because this man does not satisfy the second part of the

definition (he has a daughter), he is not a non-parent, even though he satisfies the

first (he has no son).

Note how, in the paragraph above, the or-statement (“not have a son or daughter”)

was rephrased using only an and (“not have a son and not have a daughter”). This

equivalence arises when a speaker combines a negation (like “not have”) with a

disjunctive word (like “or”). Another example from a recent book on legal

interpretation illustrates the point: “After a negative, the conjunctive and is still

conjunctive: Don’t drink and drive. You can do either one, but you can’t do them

both. But with Don’t drink or drive, you cannot do either one: Each possibility is

negated.” Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of

Legal Texts 119 (2012). In propositional logic, this move—the rule of inference

that not (X or Y) is equivalent to not X and not Y—is known as one of “De Morgan’s

Laws.” See Lawrence M. Solan, The Language of Judges 49 (1993). Formal

notation aside, the point is merely that determining the meaning of or in a sentence

is not just a matter of declaring that the word is disjunctive. Context matters.

Id. at 589–90 (some internal citations omitted).

So, in light of these considerations, the court was confronted with the question of whether

cessation of covered employment was sufficient to make an employee “retired.” And it found that

the answer was “not obvious, in part because the plan’s language . . . is so inelegant. Certainly the

word ‘cessation’ has the flavor of a negation, but given the unwieldy phrasing there may be room

for debate.” Id. at 590. However, even granting the trustees “substantial room to interpret

ambiguous provisions,” the court found that their argument on appeal—that the “subparts in the

definition of retire are separated by the disjunctive word ‘or’, . . . indicating that either subpart may

constitute ‘retirement”—“must still be compatible with the language and structure of the plan

document” as a whole. Id. (internal quotation marks and citation omitted). And in that regard, the

court noted that the trustees’ proposed interpretation could not be reconciled with the plan

provision covering the suspension of benefits.

More specifically, the plan required a participant who took early retirement to notify the

trustees if he became no longer “retired,” for purposes of the section defining “retire,” and

permitted the trustees to suspend the participant’s benefits until he once more entered retirement.

The court found that the same definition of “retire” applied to both provisions and had to be

interpreted consistently in both contexts and that it made no sense to apply the trustees’ definition

of “Retire” in the latter context:

In the trustees’ view, the fact that an employee has ceased covered employment is

itself sufficient to deem that employee retired. This would undercut the suspension-

of-benefits provision because a pensioner who resumed work in the same industry

and geographic area would nevertheless remain retired. Why? Even though the

employee would have resumed employment in one of the activities listed in section

6.05(a)(i)-(v)—and so would not satisfy the second half of the definition of

“retirement”—the employee would still continue the “cessation of being employed

in Covered Employment” (at least so long as the new employer did not make

pension contributions on his behalf). Under the trustees’ interpretation, therefore,

that employee would still be deemed “retired” despite now working for a

competitor—largely vitiating the suspension-of-benefits clause.

. . . .

Remember, the trustees have already argued that the subparts in the definition of

retire are separated by the disjunctive word “or,” indicating that either subpart may

constitute “retirement.” They cannot now turn around and say that, for suspension-

of-benefits purposes, cessation of covered employment alone is not enough. . . .

Once a term has been defined by the Plan and interpreted by the administrator to

have a particular meaning, the administrator may not change the meaning when the

term is used in a different part of the Plan without any basis in the Plan or in ERISA

to do so. To interpret the same defined term in two different ways in this manner is

paradigmatically arbitrary and capricious.

Id. at 591–92 (internal quotation marks and citations omitted).

Accordingly, the Seventh Circuit found that, to the extent the plan’s definition of “retire”

was ambiguous, that ambiguity was resolved by looking at the suspension-of-benefits clause, and

the “only sensible interpretation” of the provision defining “retire” was that “a participant must

cease both covered employment and the activities listed in [the remainder of the provision] to be

deemed ‘retired.’” Id. at 592.11

The parties in the present case are on different sides of a nearly identical issue: the plan

participant—rather than the Trustees—contends that the disjunctive or means he must only meet

one part of the definition of “Retire.” The Plan’s definition of the term here is even more

“inelegant” than that at issue in Schane, and the Trustees’ defense of their interpretation is even

more flimsy, insofar as they fail even to engage with the plaintiff’s argument that the use of or in

the definition of “Retire” means that its differing parts must be read in the disjunctive. Further, as

set forth above, the Trustees’ determination that NAS qualified as an “Employer” is completely

unsupported by the Plan itself. Neither party, however, attempts to construe the definition of

“Retire” in light of the Plan as a whole, and here too, as in Schane, the Plan contains a provision

requiring the suspension of benefits for any employee who is reemployed following retirement,

under certain circumstances, as follows:

In the event a Retired Participant receiving monthly benefits under the Plan again

becomes employed in plumbing or pipefitting work in the construction or

maintenance industries within the Geographical Area of the Fund, his monthly

benefit shall be suspended for each month during which he is so re-employed

following his working four hundred eighty (480) hours in a calendar year in

employment as described above [after earning] total wages in excess of Fifteen

Thousand Dollars ($15,000). . . . Upon his subsequent re-retirement, the Retired

Participant shall have restored to him the monthly benefit which he was receiving

from the Plan prior to his return to work, plus any benefit due calculated on

additional Employer contributions which may have been remitted to the Trust Fund

during any periods of re-employment.

(Doc. No. 25-5, at 39 (Plan § 10.04).) In other words, this provision presumes that a “Retired

Participant,” by virtue of his retirement, is no longer “employed in plumbing or pipefitting work

11 In light of that conclusion, the court found it unnecessary to remand to the trustees to

“make further findings or provide explanation” for its decision. Schane, 760 F.3d at 592.

in the construction or maintenance industries within the Geographical Area of the Fund.” And if

he were deemed to be retired simply by virtue of no longer working for a covered “Employer”

under § 1.24, then he would nonetheless still be subject to suspension of benefits for continued

employment in “pipefitting work in the construction or maintenance industries within the

Geographical Area of the Fund,” at least if he worked enough hours and made enough money.

In light of this provision, the use of or in the definition of “Retire” makes the definition

ambiguous, or susceptible of more than one reasonable interpretation. The court’s review of the

administrator’s interpretation of an ERISA plan under the arbitrary and capricious standard does

not mean that the court must accept the administrator’s rationale for the denial of benefits. Rather,

the question before the court is whether it is “possible to offer a reasoned explanation, based on

the evidence, for a particular outcome”—that is, whether a benefits determination is “rational in

light of the plan’s provisions.” Judge, 710 F.3d at 658. Here, crediting the Seventh Circuit’s

suggestion that “the word ‘cessation’ has the flavor of a negation,” Schane, 760 F.3d at 590, and

applying propositional logic, it is rational in light of the plan as a whole to construe the definition

of “Retire” (“a Participant’s complete cessation of: (i) any kind of work for an Employer, or (ii)

any plumbing or pipefitting work in the construction or maintenance industries within the

geographical area of the Fund” (Doc. No. 25-5, at 15)) to mean that a participant is retired if he is

not engaged in (has ceased) “(i) any kind of work for an Employer” and is not engaged in “(ii) any

plumbing or pipefitting work in the construction or maintenance industries within the geographical

area of the Fund.” In fact, given the structure and purpose of the Plan as a whole; this interpretation

is the only one that makes sense. Accordingly, the Trustees’ ultimate decision to deny benefits

based on Emberton’s failure to show that he was retired under the Plan, despite their failure to

articulate a legitimate rationale, was not arbitrary and capricious.

IV. CONCLUSION

For the reasons set forth herein, the defendants’ Motion for Judgment on the Administrative

Record (Doc. No. 43) will be granted, and the plaintiff's construed motion for judgment (Doc. No.

44) will be denied. An appropriate Order is filed herewith.

ALETA A. TRAUGER if

United States District Judge

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