Petition for Writ of Certiorari — Delta Air Lines, Inc. v. Air Line Pilots Ass'n, International

Supreme Court brief1989

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IN THE

Supreme Court of the United States

OCTOBER TERM, 1988

DELTA AIR LINES, INC.,

Petitioner,

Vv.

Air LINE PILOTS ASSOCIATION, INTERNATIONAL,

DONALD R. HAZELTINE and EARL E. MEECH,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Of Counsel: *WILLIAM J. KILBERG

WALTER A. BRILL BARUCH A. FELLNER

GreEGorY L. RIGGS JANET M. Cook

DELTA AIR LINEs, INC. G1BSON, DUNN & CRUTCHER

1030 Delta Boulevard 1050 Connecticut Avenue, N.W.

Atlanta, Georgia 30320 Washington, D.C. 20036

(404) 765-2600 (202) 955-8500

Attorneys for Petitioner,

Delta Air Lines, Inc.

*Counsel of Record

QUESTIONS PRESENTED

|. Whether benefit claims denied by the fiduciaries

named in an ERISA employee benefit plan, with “final and

exclusive” authority to decide all claims for benefits under

the plan, may subsequently be submitted to an arbitrator for

de novo consideration under a collective bargaining agree-

ment merely because that agreement incorporates the plan

by reference and recites certain plan terms, or must claim

denials be appealed to a district court under section 502 of

ERISA.

2. Whether the threshold question of an arbitrator’s

jurisdiction to decide claims for ERISA plan benefits may

be deferred to the arbitrator, merely because the plan is

incorporated into a collective bargaining agreement, or must

be decided by the courts under the Supreme Court’s decisions

in AT&T Technologies, Inc. vy. Communications Workers of

America, 475 U.S. 643 (1986), and the Steelworkers Trilogy.

RULE 28.1 LISTING

All parties to this case are named in the caption. The

following are all of the publicly owned parents, subsidiaries.

and affiliates of Delta Air Lines, Inc.: Atlantic Southeast

Airlines, Inc.; Comair, Inc.; SkyWest, Inc.; and Gatwick

Handling, Limited.

11)

TABLE OF CONTENTS

NER II IEG LE RR IO OES AONE T OTT EET OTE

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Statutes and Regulations Involved....................cseeceeeeeeees

A. Employee Retirement Income Security Act of

SEE ES eer

1. Plan and Summary Plan Description ......

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3. Claims Resolution Procedures.................

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A. Exclusive Claims Review Procedures Under

The Plan Pursuant To Section 503 of ERISA.

B. The Plan Denied Meech’s And Hazeltine’s

Claims For Benefits For Which They Applied

After Their Employment With Delta Termi-

a a a aa dicans chin dash ahaa benmbniabincennne 6

C. The District Court Found For Delta On The

Basis Of The Incorporation Of Plan Language

Into The CBA, And The Court Of Appeals

Reversed For The Same Reason....................... 9

Reasons For Granting The Writ........ ip baeescasacaeabaphasiavsians 10

A. The Decision Below, Which Ignores The Provi-

sions Of The Plan Vesting In Named Fiduciar-

ies The “Final And Exclusive” Authority to

Decide Claims For Benefits Under The Plan:

(1) Undermines ERISA’s Mandate That Plan

Terms Govern Plan Claims; (2) Conflicts With

Other Circuit Law; And (3) Creates Duplica-

tive And Conflicting Claims Review Proce-

ala dices cha ndhiusnanabaenatebaanianiiks 12

1. ERISA Mandates That Plan Terms

Govern The Disposition Of Plan Claims,

Including The Identification Of Plan Fi-

duciaries Who Administer The Plan ....... 13

The Decision Below Conflicts With Cir-

cuit Law Allowing ERISA Plans To Estab-

lish Independent Claims Review Proce-

esc on ence cu cudnicgeesegnnchaninlaes 18

WN 2 Bh WN NN lL NNeae if

3. The Decision Below Creates Duplicative

And Conflicting Claims Review Proce-

SPIN Gain hansoonatuinibanasecanehetsumsaemmediacenanaioadcone:

B. The Decision Below Conflicts With The Stee/-

workers Trilogy And AT&T By Deferring To

An Arbitrator The Threshold Jurisdictional

Question As To Whether The Arbitrator Has

Jurisdiction To Award Plan Benefits Notwith-

standing The Determination Of The Plan Fi-

IE sccmntstbicinses methadcanstseteen ie oak

RII oacon chatcr nt ee ee ee eee

TABLE OF AUTHORITIES

Cases:

Air Line Pilots Ass'n v. Northwest Airlines, Inc., 627

F Oe 27 ee Sls De cries essai 11,19,20

Air Line Pilots Ass’n v. Northwest Airlines, Inc., 444

FF Somme. 1 CEE Fe ric taccniseincscltensicots 20

AT&T Technologies, Inc. v. Communications Work-

ers of America, 475 U.S. 643 (1986) ............ ee Passim

Birmingham v. SoGen-Swiss International Corpora-

tion Retirement Plan, 718 F.2d 515 (2d Cir. 1983) 14-16

Bonin v. American Airlines, Inc., 621 F.2d 635 (Sth

CO, SPIE vexseravaniscaceronccatacéessscepsanascmmeicdciodntaanan 11,18-22

Brotherhood of Teamsters Local No. 70 v. Interstate

Distributor Co., 832 F.2d 507 (9th Cir. 1987)..... 25

Connolly v. Pension Benefit Guaranty Corporation,

S75 US. 2) CU tice emda 10

Cummings v. Briggs & Stratton Retirement Plan,

797 F.2d 383 (7th Cir.), cert. denied, 479 U.S.

ROD CUI e stcctsiexasisscairccestscntaaadesincnmainnanapie 14

Davidian v. Southern California Meat Cutters Union

and Food Employees Benefit Fund, 859 F.2d 134

(OU Ce. Ci icici ncmaaunens 14

Degan v. Ford Motor Co., 869 F.2d 889 (Sth Cir.

SFO) incscsnsssstntnden seasssastatupasciagammaaniadameesiionaa 14

Delgrosso v. Sprang and Company, 769 F.2d 928

(3d Cir. 1985), cert. denied, 476 U.S. 1140

CE FIN jnchinnapessnccauaicedcbiunmcmntnabasessananipsrenaeasia 15

Dzinglski v. Weirton Steel Corp., —_— F.2d —__,

1989 WL 51356 (4th Cir. 1989)... eee 14

Firestone Tire & Rubber Co. v. Bruch, U.S ;

BOD B.C Fe Cae acincccicessactestaaeianaonncesn 10,17,23

Halstead & Mitchell Co. v. United Steelworkers of

America, 421 F.2d 1191 (3d Cir. 1969)............... 22

Johnson v. Central States Southeast and Southwest

Areas Pension Fund, 513 F.2d 1173 (10th Cir.

BST FD cciscedncessnincdicaenesvaatmmecaniare aac 15

LAWI/CSA Consolidators, Inc. v. Teamsters Local

63, 849 F.2d 1236 (9th Cir. 1988) ........ ee 25

Massachusetts v. Morash, U.S , 109 S. Ct.

NGG CGD siviaveiiccsticcasioncsccocseansnnsscasisensncen eagienaaeies 10

Moore v. Metropolitan Life Insurance Co., 856 F.2d

Oe (08 GAL, FI iicroacnnnenisienecncacatenn 16-17

Nachman Corp. v. Pension Benefit Guaranty Corp.,

GO UB. FO CD vesncsatincttectianncbalitattciadennins. 10

Nachwalter v. Christie, 805 F.2d 956 (11th Cir.

L SUD <auis scnasccsenbsceuneseke sasasaaemaaaanmeaia sae ans 14

Phillips v. Kennedy, 542 F.2d 52 (8th Cir. 1976) .... 15

Saret v. Triform Corp., 662 F. Supp. 312 (N.D. I1 1.

EPIDGD ccssnersiecksenrsdasttssiacsea ceuaeiiea lees 15

Schoenholtz v. Doniger, 628 F. Supp. 1420

(S.BAIN. ©. TOG ccccitssstnciscceceeas 15

Straub v. Western Union Telegraph Co., 851 F.2d

1 2Gid CEG Sak: Fi ccs ccccccicccrcacrausacnmn oreo 14

United Steelworkers of America v. American Mfg.

Ca, SOS ULB. Se frites cece Passim

United Steelworkers of America v. Enterprise Wheel

& Car Corp., 563 US. SBS Cle viccsaxecsvsnssccesses Passim

United Steelworkers of America v. Warrior & Gulf

Navigation Co., 363 U.S. 574 (1960)................... Passim

Wilken v. AT&T Technologies, 632 F. Supp. 772

(E.D. Mo. 1984), aff'd, 822 F.2d 1095 (8th Cir.

BPW FP iscscsasncnunasencheacccuts sonebubecadsneusees aaa 15

STATUTES:

Ee UA. B BASU 6 Picscnintecicdcosensem ee ee ee

BR ChE. BE ABE cisscsiscrscrncocsassebansbensees manana

OR USK. BEST ccsssccmsssdcciaedicoe eae

BO ihc, G RMON sinniskniccsccmnaee aa

26 UGK... 6 ZOE vckinicaneien eee

Employee Retirement Income Security Act of 1974

(“ERISA”), §§ 2 et seqg., 29 U.S.C. §§ 1001

- hh hh

OF SOD: - ccrssocimsiscitteccniaeneeadaen eee 2

Se © PGE, £9 Uns B We isscccusssecwaneurasdan 5

BRISA § 16200), 29 UG. © BBB vi ccsardcicessavsecssns 2

ERISA § 10200), 29 U.S.C. SID ZIIOD cvcsccesssscccessssnss 2

ERISA § 402(a), 29 U.S.C. § 1102(a)...........0. ee. Passim

ERISA § 402(b)(2), 29 U.S.C. § 1102(b)(2).............. 3,13

ERISA § 404(a)(1), 29 U.S.C. § 1104(a)(1) ....... 3

ERISA § 404(a)(1)(D), 29 U.S.C. § 1104(a)(1)(D) ... 14

ERISA § 405(c)(1), 29 U.S.C. § L1OS(c)(1) «0. 3,13-14

Vil

Page

ERISA § 502, 29 U.S.C. § 1132........c....ccocccscsennsenees Passim

ERISA § S03, 29 U.S.C. § 1133......ccccccccsssssssessosssees 3,10

Railway Labor Act, 45 U.S.C. § 151 et seq. ............. 4

45 U.S.C. § 153 (First (q)...............ccccccccssssscscsessenenes 23

45 U.S.C. § 153(Second) .................ccccessesesesesencsencees 4

GS UBC, © UGG vasiccccccrsseissssnnsnceinsenssecinvecerincsesesenssens 4

ERISA REGULATIONS:

29 C.F.R. § 2520. 102-361) .............scsrcccsocessrenssnesessses 3

29 C.F.R. § 2560.S503-1 ................cccsccccssssesscsessenssoes 3

29 C.F.R. § 2$60.S03-1(0)................cccrrcsscccsesessennees 18

29 C.F.R. § 2560.503-1(D)( 1 Mil) ............ccrerceeesnseeoees 3,5

29 C.F.R. § 2560.S03-1(g M2) ..........ccecsssceeverersesessees 3

MISCELLANEOUS:

F. Elkouri and E. Elkouri, How Arbitration Works

ERGs GR. SBS) vaccssssesensccsansescasssesacnssrannncnetensssneeanees 25

H.R. Conf. Rep. No. 1280, 93rd Cong., 2d Sess.,

reprinted in 1974 U.S. Code Cong. & Admin.

INGE: FI cen cacnncorsxncconanscnnsnatescsonchnspentsbshesaesnunients 14,16

No.

IN THE

Supreme Court of the United States

OCTOBER TERM, 1988

DELTA AIR LINES, INC.,

Petitioner,

¥.

AIR LINE PILOTS ASSOCIATION, INTERNATIONAL,

DONALD R. HAZELTINE and Ear_ E. MEECH,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Petitioner, Delta Air Lines, Inc. (“Delta”), respectfully

prays that a writ of certiorari issue to review the judgment

and opinion of the United States Court of Appeals for the

District of Columbia entered in this case on December 16,

1988.

OPINIONS BELOW

The district court denied respondents’ motion for sum-

mary judgment and granted petitioner’s cross-motion for

summary judgment in an unreported decision on January 21,

1988 (App. B), thereby denying respondents’ attempt to

compel arbitration of disability benefit claims. Respondents

appealed that ruling and in a decision reported at 863 F.2d

87 (D.C. Cir. 1988), issued on December 16, 1988 (App. A),

the court of appeals reversed and remanded with instructions

to grant respondents’ request to compel arbitration. The

Petition Of Appellee, Delta Air Lines, Inc. For Rehearing

And Suggestion For Rehearing En Banc was denied on Febru-

ary 16, 1989 (App. D) and this petition for certiorari followed.

JURISDICTION

The judgment of the court of appeals was entered on

December 16, 1988. (App. C) Petitioner’s timely petition for

rehearing and suggestion for rehearing en banc was denied

by the court of appeals on February 16, 1989. (App. D) On

May 8, 1989, Chief Justice Rehnquist granted petitioner’s

application for an extension of time up to and including June

16, 1989, to file a petition for certiorari. This Court has

jurisdiction pursuant to 28 U.S.C. § 1254(1).

STATUTES AND REGULATIONS INVOLVED

A. Employee Retirement Income Security Act of 1974 (ERISA)

1. Plan and Summary Plan Description

ERISA' requires that all covered employee benefit plans

be in writing and specify the fiduciary with the responsibility

to control and manage the plan (the “named fiduciary”).

ERISA § 402(a), 29 U.S.C. §1102(a). A summary plan

description (“SPD”) must also be furnished to all plan partici-

pants which describes the plan in language understandable to

the average participant. ERISA § 102(a), 29 U.S.C. § 1022(a).

The SPD must describe, inter alia, “the relevant provisions

of any applicable collective bargaining agreement” and “the

remedies available under the plan for the redress of claims

which are denied in whole or in part (including procedures

required under section 503 of this Act.)” Jd. at 1022(b).

2. Fiduciary Duties

Those who administer ERISA benefit plans owe a fidu-

ciary duty to plan beneficiaries, must exercise independent

' The Employee Retirement Income Security Act of 1974, §§ 2 ef seq.,

29 U.S.C. §§ 1001 ef seg. (hereinafter “ERISA”).

judgment in making plan determinations, and must operate

the plan in accordance with plan documents. ERISA

§ 404(aX(1), 29 U.S.C. §1104(a)(1). In addition, ERISA

provides that employee benefit plans may contain procedures

allocating responsibility for their operation and administra-

tion among named fiduciaries. ERISA § 402(b)(2), 29 U.S.C.

§ 1102(b)(2); ERISA § 405(c)(1), 29 U.S.C. § 1105(c)(1).

3. Claims Resolution Procedures

Section 503 of ERISA (29 U.S.C. § 1133) requires that

benefit plans subject to ERISA provide reasonable claims

procedures for the review of denied ciaims. The regulations

governing ERISA also require that the “appropriate named

fiduciary” responsible for the review of denied claims be

either named in the plan or identified pursuant to a procedure

set forth in the plan document. 29 C.F.R. § 2560.503-1(g)(2).

ERISA regulations recognize that some employees who

are covered by an ERISA benefit plan will also be covered by

a collective bargaining agreement which may include a clause

calling for arbitration of disputes between the employer

and the employee. The regulations governing section 503

authorize two alternative types of dispute resolution mecha-

nisms for employees who are covered by an ERISA plan and

a collective bargaining agreement: (1) independent claims

review procedures with the right of appeal to a federal district

court pursuant to section 502 of ERISA; or (2) a collectively

bargained arbitration procedure for benefit claims. 29 C.F.R.

§ 2560.503-1. The plan’s SPD must expressly set out every

aspect of the claims review procedure selected. 29 C.F.R.

§ 2560.503-1(b)(1)(ii).2_ As such, the SPD must state whether

the plan is established or maintained pursuant to a collective

bargaining agreement, /.e., whether such agreement “controls

any duties, rights, or benefits under the plan... .” 29 C.F.R.

§§ 2520.102-3(1), 2560.503-1(b)(1)(i1).

? If arbitration is the chosen dispute resolution mechanism, the SPD

must so state in order for the pian to be in compliance with ERISA. 29

C.F.R. § 2560.503-1 (b) (1) (11).

B. The Railway Labor Act

The RLA,’ whose coverage was extended to air carriers

in 1936, establishes procedures for resolving disputes that lie

within its coverage. Respondents allege that this case involves

a so-called “minor dispute” between the parties. A “minor

dispute” under the RLA is one between an employer and its

employees which involves the interpretation and application

of a collective bargaining agreement. Minor disputes are to

be resolved by System Boards of Adjustment established by

covered employers and their employees. 45 U.S.C. § 184. In

the event of a System Board deadlock, the dispute is submit-

ted to binding arbitration. 45 U.S.C. § 153 (Second).*

STATEMENT OF THE CASE

This case arises from a dispute over whether the power

to resolve disability benefit claims rests with fiduciaries

named by the plan and the SPD as having the “exclusive,”

“final” and “conclusive” authority to resolve plan disputes,

or with an arbitrator not named in the plan or the collective

bargaining agreement as a plan fiduciary.° The court below

reversed the district court’s conclusion that the incorporation

of the plan and its exclusive dispute resolution mechanism

into the collective bargaining agreement constitutes an ex-

press exclusion of such disputes from arbitration. The court

of appeals held that the general arbitration procedure of

the collective bargaining agreement may give an arbitrator

jurisdiction to award plan benefits, notwithstanding the plan’s

express provisions, because of the plan’s incorporation by

reference into the collective bargaining agreement and the

recitation of certain plan provisions therein. The court also

held that the threshold jurisdictional question regarding the

arbitrator’s authority to reverse plan benefit denials by the

named fiduciaries was for the arbitrator to decide.

> Railway Labor Act, 45 U.S.C. § 15! et seq. (hereinafter “RLA”).

“The complete text of statutes and regulations cited in this section

can be found in Appendix E.

* Federal jurisdiction in the district court was invoked under 45 U.S.C.

§§ 151, 153 and 184, and 28 U.S.C. §§ 1331, 1337, 2201 and 2202.

A. Exclusive Claims Review Procedures Under The Plan Pur-

suant To Section 503 of ERISA

The respondents in this case, the Air Line Pilots Associa-

tion (*ALPA”), Donald R. Hazeltine (“Hazeltine”) and Earl

E. Meech (“Meech”)® seek System Board review’ of disability

benefit claims denied by and pursuant to the Delta Air Lines,

Inc. Pilots Disability and Survivorship Plan (“Plan”), an

ERISA employee benefits plan. As required by ERISA (29

U.S.C. § 1022; 29 C.F.R. § 2560.503-1 (b) (1) (i1)), the Plan’s

SPD clearly sets forth the exclusive procedures for review of

denied claims. These procedures do not provide for arbitra-

tion of denied claims, but instead establish an independent

review of claims through Pian procedures by named Plan

fiduciaries with a right of review in federal court under section

502 of ERISA.

To receive disability benefits under the Plan, a pilot must

submit an application for benefits to the Plan. The application

is reviewed, an initial determination is made, and the claim-

ant is notified of the result. If the claim is initially denied, a

written explanation of the reasons for the denial is sent to the

claimant who may appeal the decision to the Administrative

Subcommittee of the Plan. If the claim is denied by the

Administrative Subcommittee, the claimant has 90 days to

appeal the denial to the entire Administrative Committee.

At both levels of review, claimants or their representatives

may review pertinent documents, and submit comments and

documentary evidence. If the Administrative Committee

denies the claim, the claimant may challenge the decision in

federal court pursuant to section 502 of ERISA. Nothing in

the Plan or the SPD provides for arbitration of Plan disputes.

The written terms of the Plan explicitly provide that,

subject only to the mght to bring an action in United States

District Court, the decisions of the Administrative Commit-

tee are final: “The decisions of the Administrative Committee

as to interpretation and application of the Plan shall be final.”

The Administrative Committee shall have the power to “in-

° Collectively referred to as “ALPA” or “respondents.”

; “Arbitration” and “System Board review” are used interchangeably

throughout this petition.

terpret the Plan, and decide all questions of eligibility of any

Employee to participate in the Plan or to receive benefits

under it, its interpretation thereof in good faith to be final and

conclusive.” Similarly, the exclusive authority to interpret the

Plan lies with the Plan Administrator: “The operation and

administration of the Plan ..., the exclusive power to inter-

pret it, and the responsibility for carrying out its provisions

are vested in an Administrative Committee ....” (J.A. 82-

83)*® Thus, the SPD concludes: “The above review procedures

are the exclusive procedures provided under the Plans.” (J.A.

90)

These provisions of the Plan are incorporated into the

collective bargaining agreement between Delta and ALPA

(“CBA” or “Agreement”) by reference. Thus, the Plan lan-

guage giving the Administrative Committee the final and

exclusive authority to determine eligibility for benefits has

been made part of the CBA between the parties. The CBA

also contains an arbitration clause which provides for System

Board review of “disputes between any pilot covered by [the]

Agreement and the Company growing out of grievances or

out of interpretation or application of the terms of [the]

Agreement.” (J.A. 46)

B. The Plan Denied Meech’s And Hazeltine’s Claims For

Benefits For Which They Applied After Their Employment

With Delta Terminated.

The respondents in this case worked for Delta as airline

pilots. Both pilots were fired by Delta for misconduct.’ Both

* “JA.” citations are to the Joint Appendix filed in the court below.

* On January 24, 1985, Meech was indicted by a federal grand jury in

Dallas, Texas on eleven felony charges involving fraud and conspiracy for

filing false insurance claims. (J.A. 114-15) On February 8, 1985, Meech

was suspended by Delta without pay following his indictment on these

criminal charges. On May 30, 1985, a superseding indictment added three

additional counts. On June 28, 1985, Meech pled guilty to two felony

charges and admitted that he had filed fraudulent insurance claims alleging

the theft of a boat, motor, and trailer which were in his possession. (J.A.

120) Upon his conviction of fraud and sentencing to jail for five years,

Meech’s suspension at Delta was converted into a termination, effective

July 31, 1985.

Hazeltine was placed on a one-year disciplinary suspension on June

1, 1983, after 15 years of disciplinary infractions, resulting in approxi-

mately 20 registered complaints, which had triggered two pricr suspensions.

terminations were upheld by a System Board. Both pilots

submitted claims for permanent disability benefits after they

were terminated.'® The claims of both pilots were fully

processed through the dispute resolution procedures of the

Plan and were denied by the Plan at each level of review.

The Plan denied respondents’ claims because at the time of

their terminations, neither pilot was disabled within the

meaning of the Plan."'

At the System Board hearing regarding the propriety of

Hazeltine’s termination, the issue of System Board jurisdic-

tion to award disability benefits was directly addressed and

representatives of both ALPA and Delta agreed that the

System Board did not have the jurisdiction to consider a

claim for disability benefits.'? The System Board upheld the

(J.A. 98-105) As part of this one-year suspension, Delta required Hazeltine

to seek psychiatric treatment for a personality disorder which interfered

with his ability to get along with people. Jd. On June 18, 1984, Hazeltine’s

psychiatrist reported that he could “see no medical or psychological reason

at this time that would prevent [Hazeltine’s] return to full duty... .” (J.A.

102) Hazeltine was reinstated as of June 20, 1984, and returned to work

with the following understanding as stated in a memorandum to Hazeltine

from Delta: “You were expressly advised ...[that this was your] final

opportunity to correct your attitude toward your job and fellow employees.”

Declaration of Odom and Davis at Exhibit 21 (emphasis in original). On

July 3, 1984, while reporting for his first line flight since his reinstatement,

Hazeltine resumed his pattern of misconduct, resulting in his termination.

(J.A. 98-103)

'° Before he was terminated, Meech submitted a claim for temporary

disability benefits which was denied because he claimed to have become

temporarily disabled more than thirty days after he was placed on a

disciplinary suspension, which made him ineligible for benefits. After he

was terminated, Meech claimed he had become permanently disabled.

'' Under the Plan, a pilot becomes disabled when the FAA determines

that the pilot does not meet FAA medical requirements for a first class

medical certificate. (§ 1.08 at J.A. 72) When their employment with Delta

terminated, both pilots still held FAA first class medical certificates and

therefore were not disabled under the Plan.

'? At the hearing Delta objected to Hazeltine’s request for disability

benefits on two separate grounds:

First, there’s a very basic legal problem. The Board does

not have jurisdiction to consider medical disability or to award

medical disability. Under the pilot’s plan, which is governed by

federal statute and is highly regulated, the only authority that has

or may consider a disability claim would be the Administrative

Committee. Again, this Board just does not have jurisdiction to

consider that claim.

Second, the Company has not been put on notice... that

there’s going to be a claim for disability.

(footnote continued)

propriety of Hazeltine’s discharge’? and also stated that even

though he was no longer an employee, Hazeltine was not

precluded from applying for disability benefits to the disabil-

ity Plan and the Administrative Committee was not precluded

from considering his application for benefits nor was bound

by Hazeltine’s current employment status in making its deter-

mination. The System Board did not state that if Hazeltine

applied for disability benefits, they should be awarded.

On April 28, 1986, after the Plan denied their claims for

disability benefits, Hazeltine and Meech filed nearly identical

grievances with Delta protesting the denial of disability bene-

fits by the Plan’s Administrative Committee. The factual

predicate for both grievances filed under the CBA was that

under the Plan “[t]he Administrative Committee denied my

application for disability benefits. ...” (J.A. 111, 126) Delta

denied the grievances and refused to participate in any System

Board proceedings. “Because applications for disability bene-

fits lie exclusively within the province of the Administrative

Committee, it is clear that the System Board has no jurisdic-

tion over these matters, and accordingly the grievances cannot

be entertained.” (J.A. 129) Instead of availing themselves

of court review of ERISA plan determinations pursuant to

section 502(a), respondents filed this action to compel Delta

to arbitrate the decisions of the Plan’s Administrative

Committee.

Declarations of Odom and Davis at Exhibit 27 at 30-31 (emphasis added).

In response, Robert H. Drew, the ALPA Contract Administrator

who represented Hazeltine before the System Board, acknowledged the

exclusivity of Plan provisions and procedures in resolving disability claims.

[By Mr. Drew:]

Mr. Kassin is toially correct in his position that says that the

System Board is not the proper body to consider whether Captain

Hazeltine is disabled or not. We all recognize that that obligation

and responsibility rests with the federal air surgeon, and we also

recognize that the pilot’s disability retirement pian sets forth very

precise conditions which must be met for purposes of receiving

disability retirement.

Id. at 33-34 (emphasis added).

'3 “The general pattern of the grievant’s unsatisfactory conduct during

his 16-year employment with the Company together with the previous

discipline imposed by the Company and the war. ings received by the

grievant justify the Company’s action in terminating the gnevant’s employ-

ment for his most recent incident of misconduct.” (J.A. 97)

C. The District Court Found For Delta On The Basis Of The

Incorporation Of Plan Language Into The CBA, And The

Court Of Appeals Reversed For The Same Reason.

The district court held that disputes under an ERISA

employee benefit plan are not arbitrable where plan terms

designating exclusive plan fiduciaries with “final” and “con-

clusive” authority to decide benefit claims are incorporated

into a collective bargaining agreement. The district court

concluded,

that the provisions of the Collective Bargaining

Agreement incorporating the Delta Pilots Disability

and Survivorship Plan therein by reference (Section

26 A), in conjunction with the provisions of the Plan

itself which vest in the Administrative Committee

thereof the exclusive power to interpret it, and to

decide all questions of eligibility to receive benefits

thereunder (Sections 11.01, 11.07(b)), render this

dispute with respect to disability benefits cognizable

only by the Committee and not subject to arbitration

before the System Board....

App. B.

The court of appeals reversed, holding that, notwith-

standing a plan’s express terms reserving to itself claims

dispute resolution, the mere incorporation of a plan and

recitation of its terms in the CBA render such benefit claims

arbitrable.'* (App. A at 13-18) Nevertheless, the court de-

clared that:

Our decision should in no way be interpreted as

binding on the System Board as it reviews the Meech

and Hazeltine grievances. The System Board might

well determine that the exclusivity and finality lan-

guage in the Plan means that all (or some portion)

of disputes over the Plan’s administration are not

normally to be submitted to the System Board.

Id. at 18-19.

'* The court of appeals properly held that the RLA did not require

arbitration of disputes over employees’ claims for ERISA plan benefits in

all cases — i.e., that the parties have the right to establish independent

claims review procedures under ERISA — and that such disputes “were

not arbitrable at all if not arbitrable under the collective bargaining

agreement.” (App. A at 8-9, n.2)

Thus, the court below remanded to the arbitrator not

only the merits of the Hazeltine and Meech claims but also

the threshold jurisdictional question of whether the parties

agreed to arbitrate claims for disability Plan benefits. The

court concluded that it is up to the arbitrator and not the

courts to determine whether the description of plan proce-

dures as “exclusive” and “final” excludes benefit claims from

the CBA’s aruitration clause. The court’s decision deferring

this jurisdictional issue to the arbitrator squarely conflicts

with Supreme Court precedent, including the Steelworkers

Trilogy, (United Steelworkers of America v. Warrior & Gulf

Navigation Co., 363 U.S. 574 (1960); United Steelworkers of

America v. American Mfg. Co., 363 U.S. 564 (1960); United

Steelworkers of America v. Enterprise Wheel & Car Corp., 363

U.S. 593 (1960)) and most recently, AT&T Technologies, Inc.

v. Communications Workers of America, 475 U.S. 643 (1986).

REASONS FOR GRANTING THE WRIT

The decision below unravels ERISA—what this Court

has repeatedly called a “comprehensive and reticulated stat-

ute.” Nachman Corp. v. Pension Benefit Guaranty Corp.

446 U.S. 359, 361 (1980); Massachusetts v. Morash,_—

U.S.___., 109 S. Ct. 1668 (1989); Firestone Tire & Rubber

Co. v. Bruch, U. S.___, 109 S. Ct. 948 (1989); Connolly

v. Pension Benefit Guaranty Corporation, 475 U.S. 211,

214 (1986). An essential element of ERISA is the express

designation of plan fiduciaries to administer ERISA pians.

With respect to the disposition of claims under a plan, section

503 of ERISA requires that a plan identify the “appropriate

named fiduciary.”- The disability plan at issue expressly

designates the decisions of such fiduciaries as final and exclu-

sive. The court below has added the arbitrator as the final,

yet de novo, level in the claims review process notwithstanding

the absence of any reference to arbitration in the Plan or the

SPD.

The effects of the court’s decision are far reaching. It is

axiomatic that under ERISA, plan terms govern the disposi-

tion of substantive and procedural issues under the plan. See

infra at 13-18. The court below would have it otherwise. In

grafting the arbitral mechanism onto “final” and “exclusive”

plan procedures, the court virtually ignores the exclusivity

provisions of the Plan. To so tur a blind eye to plan

provisions undermines the fundamental purpose of ERISA—

substantive and procedural certainty as reflected in plan

terms. The decision below renders plan terms nugatory,

designates new fiduciaries not named in the plan, and creates

a duplicative dispute resolution process which requires the

use of both of the alternative claims review procedures autho-

rized by ERISA. Such a result fosters confusion and uncer-

tainty, is clearly inconsistent with Supreme Court precedent

and creates a conflict with other circuit law.

The impact of this decision is not limited to ERISA. It

affects the broader scope of labor-management relations as a

whole. In an unbroken line of precedent, from the Steelwork-

ers Trilogy to AT&T, it has been well settled that the jurisdic-

tional question as to whether, by “express exclusion or other

forceful evidence, ” a specific dispute is not subject to arbitra-

tion should be decided by the courts and not referred to ihe

arbitrator, AT&T, 475 U.S. at 652. See also Bonin v. American

Airlines, Inc., 621 F. 2d 635 (Sth Cir. 1980) (court decides

dispute is not arbitrable under the RLA); Air Line Pilots

Association v. Northwest Airlines, Inc., 627 F. 2d 272 (D.C.

Cir. 1980) (court determines which portion of the dispute

over benefits is arbitrable under the RLA).

The court below determined that, in the final analysis, it

is for the arbitrator to decide whether the incorporation of

“exclusive” and “final” Plan procedures into the CBA yieids

authority over benefit claims to the arbitrator or constitutes

express exclusion of such claims from arbitration. Although

the court concluded that the incorporation and recitation of

such “final” and “exclusive” plan procedures in the CBA

makes the claims arbitrable, the court nevertheless deferred

the issue to the arbitrator. Such a result does violence to

labor-management relations and cannot be squared with the

decisions of this Court and other circuits.

A. The Decision Below, Which Ignores The Provisions Of

The Plan Vesting In Named Fiduciaries The “Final And

Exclusive” Authority To Decide Claims For Benefits Under

The Plan: (1) Undermines ERISA’s Mandate That Plan

Terms Govern Plan Claims; (2) Conflicts With Other

Circuit Law; And (3) Creates Duplicative And Conflicting

Claims Review Procedures.

The principal holding of the court below is that by virtue

of a plan’s incorporation into a CBA and the recitation of

certain plan provisions in a CBA, arbitrators have jurisdiction

under the CBA’s general arbitration provision to award bene-

fits under the plan, notwithstanding plan terms which desig-

nate plan fiduciaries with exclusive and final authority to

resolve such claims. Such a result does violence to ERISA’s

fundamental purpose that plans be administered by named

fiduciaries according to their written terms.

Moreover, ERISA clearly contemplates that plans may

choose between arbitration and exclusive plan mechanisms

to resolve bencfit claims. The court below obliterates that

choice and requires an arbitral remedy for all plans that are

referred to and whose provisions are copied into a CBA.

The court’s decision will affect many hundreds of employee

welfare and pension benefit plans and many thousands of

claims.'* While ERISA provides a choice between dispute

resolution procedures, it does not provide for two indepen-

dent and parallel dispute resolution mechanisms. Duplicative

and conflicting claims resolutions, interpretations of plan

terms, and standards of review are the inevitable outcome of

the court’s decision.

'S Almost all of those employers responding to a member survey by

the National Association for Manufacturers offer employee benefit plans

which are incorporated into and described by collective bargaining agree-

ments. Only six plans, out of 338, provide for arbitration of disputes over

plan benefits; the remaining 333 are independently administered. See

Appendix F.

1. ERISA Mandates That Plan Terms Govern The Dispo-

sition Of Plan Claims, Including The Identification Of

Pian Fiduciaries Who Administer The Plan.

It is beyond cavil that ERISA employee benefit plans are

to be administered in accordance with their written terms.

The language of the statute could not be clearer:

(a)(1) Every employee benefit plan shall be estab-

lished and maintained pursuant to a written instru-

ment. Such instrument shall provide for one or

more named fiduciaries who jointly or severally shall

have authority to control and manage the operation

and administration of the plan.

(2) For purposes of this title, the term “named

fiduciary” means a fiduciary who is named in the

plan instrument, or who, pursuant to a procedure

specified in the plan, is identified as a fiduciary

(A) by a person who is an employer or employee

organization with respect to the plan or (B) by such

an employer and such an employee organization

acting jointly.

ERISA § 402(a), 29 U.S.C. §1102(a). In addition, ERISA

sets forth the requirement that employee benefit plans contain

procedures allocating responsibility for their operation and

administration:

(b) Every employee benefit plan shall—

**s**

(2) describe any procedure under the plan for the

allocation of responsibilities for the operation and

administration of the plan (including any procedure

described in section 405(c)(1)).

Id. at § 1102(b){2).

(c)(1) The instrument under which a plan is main-

tained may expressly provide for procedures (A)

for allocating fiduciary responsibilities (other than

trustee responsibilities) among named fiduciaries,

and (B) for named fiduciaries to designate persons

other than named fiduciaries to carry out fiduciary

responsibilities (other than trustee responsibilities)

under the plan.

ERISA § 405(c)(1), 29 U.S.C. § 1105(c)(1).'© ERISA also

requires plan fiduciaries to comply with plan terms:

[A] fiduciary shall discharge his duties with respect

to a plan ... in accordance with the documents

and instruments governing the plan insofar as such

documents and instruments are consistent with the

provisions of this title or Title IV.

ERISA § 404(a)(1)(D), 29 U.S.C. § 1104(a)(1)(D).

Furthermore, the case law is legion that ERISA plans

must be administered in a manner which is consistent with

their written terms.'’ Birmingham v. SoGen-Swiss Interna-

‘© Underscoring the clear language of the statute, the legislative history

also supports Congress’ conclusion that the provisions of the plan and the

SPD be in writing, and that they fully and accurately describe benefits and

claims review procedures available to plan participants. See H.R. Conf.

Rep. No. 1280, 93rd Cong., 2d Sess., reprinted in, 1974 U.S. Code Cong.

& Admin. News 5038, 5041. Further, the legislative history makes clear

that any delegation or allocation of fiduciary duty must be specifically and

expressly provided for by the plan’s written terms. /d. at 5081-82 (“The

plan must specifically allow such allocation or delegation, and the plan

must expressly provide a procedure for it.”) (emphasis added).

'” See e.g. Degan v. Ford Motor Co., 869 F.2d 889, 895 (Sth Cir. 1989)

(ERISA mandates that a plan be in writing; claim of an alleged oral

modification of pension plan dismissed because to allow such a claim

“would threaten the stability and solvency of many plans upon which

sO many other emloyees are dependent”); Dzinglski v. Weirton Steel

Corp. F.2d , 1989 WL 51356 (4th Cir. 1989) (Retirement Com-

mittee did not breach fiduciary duty because it acted in accordance with

the terms of the plan); Straub v. Western Union Telegraph Co., 851 F.2d

1262 (10th Cir. 1988) (plaintiff is only entitled to the benefits promised

under the express terms of the plan); Davidian v. Southern California Meat

Cutters Union and Food Employees Benefit Fund, 859 F.2d 134 (9th Cir.

1988) (claim against fund was dismissed in the face of contrary, written

plan provisions); Cummings v. Briggs & Stratton Retirement Plan, 797

F.2d 383, 389 (7th Cir.), cert. denied, 479 U.S 1008 (1986) (divorce decree i

may not override written provisions of a plan; “[florcing trustees of a plan

to pay benefits which are not part of the written terms of the program

disrupts the actuarial balance of the Plan and potentially jeopardizes the

pension rights of others aren entitled to receive them”); Nachwalter

v. Christie, 805 F.2d 956, 959-961 (11th Cir. 1986) — oral agreement

which seeks to vary the express written terms of an ERISA plan is not

enforceable; central policy goal of ERISA would be undermined if such

modifications were allowed; plan not amended in accordance with plan

tional Corporation Retirement Plan, 718 F.2d 515 (2d Cir.

1983) is directly analogous to this case. In Birmingham, the

Second Circuit held that the Company’s Board of Directors

lacked the power to overrule the Retirement Committee’s

interpretation of the pension plan because such power was

not explicitly reserved with precision in plan documents.

Unlike the case at bar where plan documents yield no author-

ity to the arbitrator, in Birmingham, plan language indicated

that the Committee’s actions were “subject to the Board of

Directors.” However, in the absence of a defined procedure

set out in the plan for an appeal from the Committee to the

Board, the Second Circuit concluded that the Committee’s

fiduciary decisions could not be routinely appealed to the

Board. In so concluding, the Second Circuit held that ERISA

would be violated if the Board of Directors were given the

power to override interpretations of the plan by the desig-

nated plan fiduciaries — without explicit and precise plan

language delegating such authority to the Board.

However, we need not define the precise rela-

tionship between the Board and the Retirement

Committee under the terms of the Plan since the

Retirement Committee’s authority is derived from

ERISA as well as from the Plan. Under ERISA, a

procedures); Delgrosso v. Sprang and Company, 769 F.2d 928, 930-936

(3d Cir. 1985), cert. denied, 476 U.S. 1140 (1986) (employer breached

fiduciary duty by failing to administer the plan in accordance with the

documents governing the plan); Phillips v. Kennedy, 542 F.2d 52, 55 n.8

(8th Cir. 1976) (doctrine of estoppel not applied to pension benefits in

recognition of the fact that “[t]he actuarial soundness of pension funds is,

absent extraordinary circumstances, too important to permit trustees to

obligate the fund to pay pensions to persons not entitlied to them under

the express terms of the pension plan.”); Johnson v. Central States Southeast

and Southwest Areas Pension Fund, 513 F.2d 1173 (10th Cir. 1975)

(judgment of district court enforcing benefits per booklet and letter which

are inconsistent with plan terms is reversed as clearly erroneous); Saret v.

Triform Corp., 662 F. Supp. 312, 316 (N.D. Ill. 1986) (the writing require-

ment is a “central feature” of ERISA such thai enforcement of agreements

which conflict with the express terms of the plan conflicts with ERISA’s

“basic purpose and design”); Schoenholtz v. Doniger, 628 F. Supp. 1420,

1428-1430 (S.D.N.Y. 1986) (plan trustees held liable for, inter alia, failure

to fulfill obligations as trustees in accordance with the specific written

instructions of the plan); Wilken v. AT&T Technologies, 632 F. Supp. 772

(E.D. Mo, 1984), aff'd, 822 F.2d 1095 (8th Cir. 1987) (practice of offsetting

plan benefits with workers compensation benefits unlawful because it was

not provided for in the plan).

“named fiduciary” has the “authority to control and

manage the operation and administration of the

plan.” 29 U.S.C. § 1102(a)(1). We have no difficulty

in concluding that these powers, even apart from

Section 10.2(b) of the Plan, include the rendering of

interpretations as to the meaning of the provisions

of the Plan. We also have no difficulty in holding

that the “subject to” language does not by itself alter

the statutory grant of authority embodied in Section

1102 (a)(1).

/d. at 521-522. Moreover, the court expressed a concern that

any other result would undermine ERISA’s statutory scheme

which focuses responsibility for plan operations in clearly

identified plan fiduciaries.

A valid plan under ERISA must designate “a named

fiduciary” so that responsibility for managing and

operating the Plan — and liability for mismanage-

ment — are focused with a degree of certainty. See

H.R. Conf. Rep. No. 1280, 93d Cong., 2d Sess.,

reprinted in 1974 U.S. Code Cong. & Ad. News

5038, 5075-78, 5081. This is in the interest of

the beneficiaries, but it is also in the interest of a

sponsoring corporation .... The very purpose of

requiring the designation of a “named fiduciary”

would thus be undermined by [the Company’s] inter-

pretation. It would diffuse responsibility where

Congress intended to focus it.... [S]uch a reserva-

tion in derogation of a statutory grant of power must

be done explicitly and with precision . . . the “subject

to” language fails to accomplish that end.

Id. at 522 (footnote omitted) (emphasis added).

In Moore v. Metropolitan Life Insurance Co., 856 F.2d

488 (2d Cir. 1988), the court dismissed a claims for benefits

that were contrary to the express terms of the plan because

to ignore plan language is to undermine ERISA’s framework

and reduce ERISA protections:

Plaintiffs’ argument, if accepted, would undermine

ERISA’s framework which ensures that plans be

governed by written documents filed under ERISA’s

reporting requirements and that SPDs, drafted in

understandable language, be the primary means of

informing participants and beneficiaries.

ses **

Congress intended that plan documents and the

SPDs exclusively govern an employer’s obligations

under ERISA plans. This intention was based on a

sound rationale.

*s*

While these plaintiffs would be helped by a

decision in their favor, such a ruling would not only

fly in the face of ERISA’s plain language but would

also decrease protection for future employees and

retirees.

Id. at 492.

It follows a fortiori that ERISA is violated if an arbitrator

is allowed to review eligibility determinations and plan inter-

pretations made by the designated fiduciaries of the plan,

when plan language reserves for the designated fiduciaries

the “exclusive” power to interpret the plan and to decide all

questions of eligibility for benefits, such decisions to be “final

and conclusive.”

This Court has recently underscored the over-arching

importance of plan terms in defining the standard of court

review of benefit determinations:

[T]he validity of a claim to benefits under an ERISA

plan is likely to turn on the interpretation of terms

in the plan at issue. Consistent with established

principles of trust law, we hold that a denial of

benefits challenged under § 1132(a)(1)(B) is to be

reviewed under a de novo standard unless the benefit

plan gives the administrator or fiduciary discretion-

ary authority to determine eligibility for benefits or

to construe the terms of the plan.

Firestone Tire & Rubber Co. v. Bruch, U.S. 109 S.

Ct. 948, 956 (1989). The Court has unmistakably concluded

that plan terms govern the validity of benefit claims, and that

plan terms designating named fiduciaries even govern the

standard of review to be applied by a court in an appeal of

such claims. It therefore follows that plan terms designating

an exclusive plan procedure and fiduciaries for resolving

benefit claims must control the procedural disposition of such

claims.

In contravention of ERISA, the court below holds that

explicit provisions contained in a plan and described in the

SPD,'® are irrelevant to a court’s analysis of the procedures

for resolving benefit claims, merely because that plan is

incorporated by reference into a collective bargaining agree-

ment and certain plan provisions are recited therein. In so

holding, the court of appeals renders nugatory the “exclusive,”

“final” and “conclusive” power to determine eligibility for

benefits granted in plan documents to the designated plan

fiduciaries. This Court should grant certiorari in order to

prevent the erosion of fundamental protections guaranteed

by ERISA to participants, sponsors and administrators of

employee benefit plans, that an ERISA plan must be adminis-

tered by the named fiduciaries in accordance with plan

documents.

2. The Decision Below Conflicts With Circuit Law Allowing

ERISA Plans To Establish Independent Claims Review

Procedures.

The court below holds that the Plan is maintained pursu-

ant to the CBA and, therefore, that the CBA’s arbitral mecha-

nism trumps the Plan’s exclusive dispute resolution mecha-

nism. In so holding, the D.C. Circuit’s opinion directly

conflicts with the Fifth Circuit’s opinion in Bonin v. American

Airlines, Inc., 621 F.2d 635 (Sth Cir. 1980) (“Bonin”). In

Bonin, the Fifth Circuit concluded that plan terms govern the

procedures for resolving plan disputes; here, the court ignores

~ '® The SPD, in addition to the Plan, details a claims review procedure

which is independently administered and makes no provision for arbitra-

tion of disputes over plan benefits. Pursuant to section 102 of ERISA and

Labor Department regulation, 29 C.F.R. § 2560.503-1(b), the SPD must

detail the claims review procedure and provide for either arbitration of

plan disputes or independent administration of plan disputes.

plan terms because they were incorporated into the CBA.

The Bonin court held:

Congress by enactment of ERISA endorsed in effect

two alternative methods of administering pension

plan claims for employers whose collective bargai-

ning disputes are governed by the Railway Labor

Act: (1) arbitration of employee pension claims or

(2) independent administration of claims by the

pension plan administrator with a federal right of

review pursuant to ERISA:

“The most that can be gathered from

... [ERISA’s] background is that Congress

did not wish to require a// benefit plans to

offer an arbitral remedy, nor did it desire

to make it possible for any collective bargai-

ning agreement, no matter in what industry

or business, to make $$ arbitration

compulsory.”

Air Line Pilots Ass'n v. Northwest Airlines, Inc.,

... [627 F.2d 272 (D.C. Cir. 1980)] (emphasis in

original). Since the pension plan in this case is

not maintained pursuant to a collective bargaining

agreement, the district court has jurisdiction of

plaintiffs pension claim under ERISA.

Id. at 639.'°

The D.C. Circuit concludes that the Plan is “maintained”

pursuant to Delta’s CBA with ALPA because part of the Plan

is “reproduced in the contract” (App. A at 16) and because

'? In Bonin, the Fifth Circuit recognized that ERISA gives the parties

a choice of dispute resolution mechanisms. The choice made by Delta

and ALPA is reflected in the provisions of the Plan. Through the collective

bargaining process ALPA has tried to change these provisions by proposing

that a specialized System Board be created to resolve “all issues arising

from disputes over retirement, disability, medical insurance and other

employee benefits.” (J.A. 148) Delta has not agreed to this proposal and

ALPA has ultimately agreed to a contract which continues to provide for

independently administered employee benefit plans. If ALPA wants to

change the Plan’s dispute resolution process, it must do so with Delta’s

agreement through the collective bargaining process. ALPA should not be

allowed to achieve through this lawsuit what it has failed to achieve through

collective bargaining.

the Plan is incorporated by reference into the CBA. /d. at

18. According to the D.C. Circuit, the simple expedient of

duplication of Plan terms and incorporation of a Plan into a

CBA transforms the Plan into one “maintained” pursuant to

the CBA.

In so holding, the court below ignores the Bonin standard

for distinguishing between plans “maintained” pursuant to a

collective bargaining agreement and those that are indepen-

dently administered apart from the collective bargaining

agreement. That standard is not whether the plan is incorpo-

rated by reference or reproduced by duplicating machine.

Rather, it is whether the plan provides that the arbitral

machinery in the collective bargaining agreement will be used

to resolve benefit disputes. See supra at 13-18. The court

below even ignores prior D.C. Circuit precedent (Air Line

Pilots Ass’n v. Northwest Airlines, Inc., 627 F.2d 272 (D.C.

Cir. 1980)) which had been recognized and properly under-

stood by the Fifth Circuit in Bonin. Thus, as described in

Bonin, “the parties [in Northwest] agreed as part of their

pension plan that the adjustment board would hear all dis-

putes arising out of the application and interpretation of the

pension plan.” 621 F.2d at 639 (emphasis added). As the

district court, affirmed in relevant part by the court of appeals

in Northwest, concluded:

The parties have also agreed as part of their collec-

tively bargained pension plan that, “[T]he Retire-

ment Board shall hear all disputes arising out of

the application and interpretation of the Plan... .”

Amended Pension Plan, section 9.3.

Air Line Pilots Ass'n v. Northwest Airlines, Inc., 444 F. Supp.

1138, 1141 (D.D.C. 1978) (emphasis added). The conflict

between the court below and Bonin is clear. Under Bonin, a

plan is independently administered unless the plan itself

provides for arbitral remedies to resolve claim disputes. Here,

the Plan does not provide for arbitration. Accordingly, Bonin

would require benefit disputes to be appealed directly to

the courts under section 502 of ERISA rather than to an

arbitrator.

Moreover, although the court below recognizes Bonin as

the “leading case,” it fails to distinguish the exclusivity

language of Delta’s Plan from the exclusivity language of

the plan in Bonin. There, the plan read in relevant part:

“Notwithstanding any other provision of this Plan, neither

the interpretation of the Plan nor its administration shall as

such be within the jurisdiction of [the collective bargaining

agreements],” Bonin, supra, 621 F.2d at 636.7? Thus, the

Bonin plan stated, in the negative, that the interpretation and

administration of the plan shall not be within the jurisdiction

of the Bonin agreement. Delta’s Plan affirmatively provides,

in numerous provisions, that the Administrative Committee’s

“interpretation,” “application,” “operation” and “adminis-

tration” of the Plan are “exclusive,” “final” and “conclusive.”

For example, the Delta Plan states: “The operation and

administration of the Plan...the exclusive power to inter-

pret it, and the responsibility for carrying out its provisions

are vested in an Administrative Committee... .”

Whether a plan is independently administered should

not depend on whether the plan uses proscriptive language,

as in Bonin, or prescriptive language, as in the case at bar.

Indeed, the Supreme Court has recognized that there are two

ways to exclude a matter from the ambit of arbitration:

A specific collective bargaining agreement may ex-

clude contracting out from the grievance procedure.

Or a written collateral agreement may make clear

that contracting out was not a matter for arbitration.

United Steelworkers of America v. Warrior & Gulf Navigation

Co., 363 U.S. 574, 584 (1960) (emphasis added). The Plan

in this case is a written collateral agreement which makes it

clear that claim disputes are not a matter for arbitration.

20 In the very same provision, the Bonin plan also stated that “The

Administrator shall not administer the Plan in any manner inconsistent

with a final determination under [the collective bargaining agreements].”

Id. Despite the latter provision, the court in Bonin held that the Bonin

plan was not maintained pursuant to a collective bargaining agreement

and that the plan administrator did not even have to “defer action on Mr.

Bonin’s pension claim until a final determination is made by the . . . System

Board . . . regarding the arbitration of the plaintiff's discharge.” Bonin, 621

F.2d at 639.

The Plan’s words of exclusivity are equivalent to words of

exclusion. 7'See Halstead & Mitchell Co. v. United Steelwork-

ers of America, 421 F.2d 1191 (3d Cir. 1969).

This Court should grant certiorari to reconcile the conflict

between the decision below and the Fifth Circuit’s decision

in Bonin in order to restore certainty to the administration

of employee benefit plans.

3. The Decision Below Creates Duplicative And Conflict-

ing Claims Review Procedures.

The court’s decision to inject the arbitrator into plan-

designated claims review procedures profoundly affects the

day-to-day administration of employee benefit plans. In this

case, Meech and Hazeltine sought and were denied disability

benefits by the fiduciaries named in the Plan and the SPD.

Instead of holding that the claimants’ right of review, pursu-

ant to Plan language and the SPD, was to appeal the claim

denials to the district court under section 502 of ERISA, ”*the

court below allows the claimants a second bite at the apple—

arbitration of their disability claims. Having failed under

Plan terms and exclusive Plan procedures to obtain their

benefits, Meech and Hazeltine can pursue their disability

claims before the arbitrator. The potential for inconsistency,

forum shopping, protracted benefit reviews, and conflicting

standards of court review cannot be avoided.

The effect of the decision below is to create two parallel

and potentially inconsistent mechanisms for the administra-

tion of ERISA plans incorporated into collective bargaining

agreements. The same plan terms will be interpreted and

*! The court of appeals also relies on “the apparent absence of indica-

tion in the collective bargaining agreement [in Bonin] of an intent to

incorporate the plan,” which, combined with the proscnptive language,

“led the /Bonin/ court to conclude that the plan was wholly independent.”

(App. A at 11) There is no indication in Bonin, that the Fifth Circuit was

presented with the question of incorporation or lack thereof. To the

contrary, non-incorporation played no apparent role in the court’s conclu-

sion that the plan was not maintained pursuant to a collective bargaining

agreement because the parties had not agreed, as part of their plan, that

the System Board “would hear all disputes arising out of the application

and interpretation of the pension plan.” Bonin, 621 F.2d at 639.

2 The district court expressly held that its decision did not preclude

“judicial review of the merits of the decision of the Administrative Commit-

tee ...” pursuant to section 502 of ERISA. (App. B at n.1)

enforced by designated fiduciaries with exclusive authority

under the plan, and arbitrators exercising authority under the

CBA. Some claimants will be successful at persuading their

unions to invoke the arbitral mechanism. Other claimants

may choose to appeal “final” claim decisions directly to the

court under section 502 of ERISA. Some arbitrators will be

guided by plan terms and will sustain the benefit claim

dispositions of exclusive plan administrators. Others may

disregard previous interpretations of plan terms and eligibil-

ity criteria.2> Unpredictable plan administration will be the

inevitable result of such parallel and independent procedures

for the interpretation and enforcement of ERISA employee

benefit plans.

Confusion and inconsistency will also extend to court

review of benefits claims. In Firestone, supra, this Court

resolved the standard of review which applies to benefit

determinations—a de novo standard if the plan does not give

to its fiduciaries discretionary authority and the arbitrary and

capricious standard if it does. Here, of course, the Plan gives

its administrators exclusive and conclusive authority over

Plan_benefits, but the court below compromises that discre-

tion by the addition of arbitral review. The question that

would then have to be resolved under Firestone is which

standard of review would apply in such a hybrid situation.

The issue is further complicated by yet a third, exceptionally

narrow, review standard to be applied under the Railway

Labor Act to decisions by System Board arbitrators.7* Thus,

depending upon whether a “final” decision by plan adminis-

trators is appealed directly to a district court under section

502 of ERISA or whether it is reviewed by an arbitrator,

different standards of review will be applied by reviewing

courts. Such a result will undermine the uniform and consis-

tent administration of ERISA plans.

?3 Plaintiffs urged below that the arbitrator had the authority, inter alia,

to ignore Plan eligibility terms requiring that an FAA medical certificate be

withdrawn prior to discharge before a participant may qualify for a

disability benefit. See Plaintiffs’ Motion for Summary Judgment at 3.

?4 A System Board decision may be set aside only for failure to comply

with the requirements of the RLA, failure to confine itself to matters

within the scope of its jurisdiction, or fraud or corruption. 45 U.S.C.

§ 153(First\(q).

In sum, the Court should grant certiorari because the

decision below undermines the foundation of ERISA—that

plan terms govern the administration of ERISA employee

benefit plans; conflicts with Supreme Court and circuit law;

and interferes with the day-to-day administration of ERISA

plans.

B. The Decision Below Conflicts With The Steelworkers Tril-

ogy And AT&T By Deferring To An Arbitrator The Thresh-

old Jurisdictional Question As To Whether The Arbitrator

Has Jurisdiction To Award Plan Benefits Notwithstanding

. The Determination Of The Plan Fiduciaries.

The sweeping impact of the court’s holding on the admin-

istration of ERISA plans has been described in Argument A.

The court below must have recognized the effect of its broad

holding. Thus, despite its conclusion that the disputes over

plan benefits are arbitrable, the court remanded the Meech

and Hazeltine claims asserting that it was “not deciding”

(App. A at 18) that their claims, much less all claims, were

subject to arbitration. Rather, the court deferred to the

arbitrator the question of whether the Plan’s exclusivity and

finality terms mean what they say — that Plan-designated

fiduciaries have exclusive jurisdiction over resolving benefit

claims — or whether the arbitrator’s jurisdiction extends to

such claims by virtue of incorporation of the Plan into the

CBA. By allowing the arbitrator to determine the ambit of

the arbitrator’s own jurisdiction, the court below contravenes

thirty years of precedent, from the Steelworkers Trilogy to

AT&T.

As this Court stated in AT&T:

The issue in the case [AT&T] is whether, because of

express exclusion or other forceful evidence, the

dispute over the interpretation of Article 20 of the

contract, the layoff provision, is not subject to the

arbitration clause. That issue should have been

decided by the District Court and reviewed by the

Court of Appeals; it should not have been referred to

the arbitrator.

AT&T, supra, 475 U.S. at 652 (emphasis added).

In referring the meaning of the Plan terms “final” and

“exclusive” to the arbitrator (App. A at 19), the court below

made the identical error made by the Seventh Circuit in

AT&T. It was incumbent on the court below to decide what

this Court has called the “threshold question” (AT&T, supra

at 649), whether these terms constitute an “express exclusion”

of disputes over plan benefits”* from the ambit of the CBA’s

arbitration clause. To allow the arbitrator to construe plan

terms in order to define the arbitrator’s and the plan’s respec-

tive jurisdictions is to violate the mandate of AT&T.**

Perhaps the court believed that the interpretation of

“final” and “exclusive” only goes to the “potential merits of

the underlying claims,” (App. A at 19) and, therefore, should

be properly left to the arbitrator. The interpretation of the

Plan’s exclusivity provisions, however, has nothing to do with

the grievants’ eligibility for benefits and everything to do with

the proper forum for resolving those grievances, /.e., the very

jurisdictiona! question AT&T directs the court to decide.

Accordingly, in light of the clear error by the court of

appeals, this Court should follow the course charted in thirty

25 As noted supra, p.21, express exclusion of a controversy from

arbitration can be established by either the collective bargaining agreement

itself “or a written collateral agreement.” United Steelworkers of America

v. Warrior & Gulf Navigation Co., 363 U.S. 574, 584 (1960). Clearly, the

Plan at issue constitutes such a collateral agreement.

bargaining agreement that questions of arbitrability will be decided by the

arbitrator rather than the court. To so provide the parties must act “clearly

and unmistakably.” AT&T, supra, 475 U.S. at 649; See generally F. Elkoun

and E. Elkouri, How Arbitration Works 215 (4th ed. 1985) (“Under the

federal law the question of substantive arbitrability is for the court when

asked to stay or compel arbitration, unless the arbitration clause clearly

specifies that the arbitrator shall make the determination.”); LAWI/CSA

Consolidators, Inc. v. Teamsters Local 63, 849 F.2d 1236, 1239 (9th Cir.

1988) (“Courts refer the question of arbitrability to the arbitrator ‘only if

[the parties] leave no doubt that such was their intent.’ ”) (citing Brother-

hood of Teamsters Local No. 70 v. Interstate Distributor Co., 832 F.2d

507, 510 (9th Cir. 1987)). In the case at bar, the court correctly held that

the parties did not clearly and unmistakably leave questions of arbitrability

for determination by the arbitrator. (App. A at 9-10)

years of precedent — from the Steelworkers Trilogy to AT&T.

The Court should grant certiorari, reverse the court below,

and remand the matter to the district court for further

proceedings in accord with its opinion.

CONCLUSION

For the foregoing reasons, the Court should grant the

petition for a writ of certiorari.

June 16, 1989 Respectfully submitted,

Of Counsel: *WILLIAM J. KILBERG

Wa ctTeR A. BRILL BARUCH A. FELLNER

Grecory L. RiGGs JANET M. Cook

De ctTA AiR Lines, INC. GiBSON, DUNN & CRUTCHER

1030 Delta Boulevard 1050 Connecticut Avenue, N.W.

Atlanta, Georgia 30320 Washington, D.C. 20036

(404) 765-2600 (202) 955-8500

Attorneys for Petitioner,

Delta Air Lines, Inc.

*Counsel of Record

APPENDIX A

A-l

Notice: This opinion is subject to formal revision before publication

in the Federal Reporter or U.S.App.D.C. Reports. Users are requested

to notify the Clerk of any formal errors in order that corrections may be

made before the bound volumes go to press.

United States Comt of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 1, 1988 Decided December 16, 1988

No. 88-7054

AtR LINE PILOTS ASSOCIATION, INTERNATIONAL, et al.,

APPELLANTS

Vv.

DELTA AIR LINES, INC.

Appeal from the United States District Court

for the District of Columbia

(C.A. No. 87-00673)

Eugene B. Granof, with whom Gary Green was on the

brief, for appellants.

Baruch A. Fellner, with whom William J. Kilberg was

on the brief, for appellee.

Before: RuTH B. GINSBURG, SILBERMAN and D.H.

GINSBURG, Circuit Judges.

Opinion for the Court filed by Circuit Judge SILBERMAN.

Bills of costs must be filed within 14 days after entry of judgment. The

court looks with disfavor upon motions to file bills of costs out of time.

—

A-2

SILBERMAN, Circuit Judge: The Air Line Pilots As-

sociation (“ALPA”) brought suit against Delta Air

Lines, Inc. in the district court—pursuant to the Rail-

way Labor Act (“RLA’), 45 U.S.C. §§ 151-188 (1982)

—seeking injunctive relief to compel arbitration before a

System Board of Adjustment of disputes allegedly aris-

ing from a collective bargaining agreement between the

parties. The district court held that the disputes at issue,

which concerned the eligibility.of two pilots for disability

benefits from the Delta Pilots Disability and Survivor-

ship Plan, were not subject to arbitration before the Sys-

tem Board. The court thus granted summary judgment

for Delta, and ALPA appealed. We conclude that the

disability benefit disputes arguably do arise under the

collective bargaining agreement and are thus subject to

arbitration before the System Board. Therefore, we re-

verse the judgment of the district court.

te, I

The Railway Labor Act has governed disputes between

air carriers and their employees since 1936. 45 U.S.C.

§ 181 (1982). The RLA provides that “disputes between

an employee or group of employees and a carrier or car-

riers by air growing out of grievances, or out of the in-

terpretation or application of agreements concerning rates

of pay, rules, or working conditions .. . may be referred

by petition of the parties or by either party to an ap-

propriate adjustment board.” 45 U.S.C. § 184. Each car-

rier has a duty to establish a board of adjustment. /d.

The statutory grievance procedure is “mandatory, ex-

clusive, and comprehensive,” Brotherhood of Locomotive

Engineers v. Louisville & N.R.R., 373 U.S. 33, 38 (1963),

and judicial review of a System Board’s decision is nar-

rowly limited to three categories provided in the Act.

Union Pacific R.R. v. Sheehan, 439 U.S. 89, 98 (1978) ;

45 U.S.C. § 153 First (p).?

1 The Act states that an order of a System Board may be

set aside only “for failure of the division to comply with the

A-3

In section 19 of their 1982 collective bargaining agree-

ment, Delta and ALPA established a System Board of

Adjustment in order to comply with the RLA. The agree-

ment states that the Board’s purpose is to “adjust{] and

decide[] disputes which may arise under the terms of the

Pilots’ Agreement and which are properly submitted to

it.” Its jurisdiction includes “disputes between any pilot

covered by [the] Agreement and the Company growing

out of grievances or out of interpretation or application

of any of the terms of [the] Agreement.” The Board is

composed of four members, two appointed by Delta and

two appointed by ALPA. A majority vote of the Board

members establishes a final and binding decision on any

matter properly before it; in the case of deadlock, the

agreement provides for the selection of a fifth Board

member from a panel of neutrals established by the

parties.

Section 26 of the contract describes retirement, dis-

ability, and survivor benefits for the pilots. Two parts

of that section are directly implicated in this case. Sec-

tion 26.A states that “[t]he Company shall pay the full

cost of the Delta Pilots Retirement Plan and the Delta

Pilots Disability and Survivorship Plan, plans regulated

under the Employee Retirement Income Security Act of

1974 (“ERISA”), such plans hereby incorporated by ref-

erence into this Agreement,” and section 26.C provides

that “[a] pilot who becomes disabled prior to his normal

retirement date shall be provided a monthly disability

benefit from the Delta Pilots Disability and Survivorship

Plan equal to fifty percent (50%) of his highest twelve

(12) consecutive months of normal earnings during the

last thirty-six (36) months of active service as defined

in the Plan.”

requirements of {the RLA], for failure of the order to con-

form, or confine itself, to matters within the scope of the

division’s jurisdiction, or for fraud or corruption by a member

of the division making the order.” 45 U.S.C. § 153 First (p).

A-4

The Delta Pilots Disability and Survivorship Plan pro-

vides benefits for pilots employed by Delta. The Plan

vests the exclusive power to interpret its terms and the

responsibility for carrying out its provisions in an Ad-

ministrative Committee of at least three members, who

are appointed by the Board of Directors of Delta. Of

particular relevance to this appeal, section 11.02 of the

Plan states that “decisions of the Administrative Com-

mittee as to interpretation and application of the Plan

shall be final.”

Like virtually all employee benefit plans, the Delta

Plan is regulated by ERISA, which was passed by Con-

gress in 1974 to establish minimum standards for such

plans. 29 U.S.C. §1001(a) (1982). Administrators of

the Plan are designated fiduciaries, see 29 U.S.C. § 1102,

and ERISA imposes certain duties on them as a matter

of federal law. 29 U.S.C. §§ 1102-1113. ERISA also im-

poses a series of disclosure and reporting requirements

to protect the interests of participants and beneficiaries.

29 U.S.C. §§ 1021-1031. Section 502 of ERISA provides

for civil enforcement of the various provisions of the Act

through actions brought by participants, beneficiaries,

and fiduciaries. 29 U.S.C. § 1132(a) (1).

The first of two grievances underlying this dispute in-

volves former Delta pilot Donald R. Hazeltine. Delta

discharged Hazeltine on July 23, 1984, after an incident

at the Houston airport on July 3, 1984, during which,

according to Delta, Hazeltine “created an unnecessary

scene with security checkpoint personnel at [the airport]

in front of numerous passengers.” This episode was the

last in a series of events since 1969 which Delta believed

made Hazeltine a “constant source of embarrassment to

the Company.” Hazeltine had been progressively disci-

plined through suspensions of increased durations, so

Delta concluded that termination was warranted after

the Houston incident.

A-5

Hazeltine appealed the termination of his employment

to the System Board, claiming that he should be placed

on disability and that his conduct did not justify his ter-

mination. The Board sustained Hazeltine’s discharge and

ruled that the “initial determination of the medical merits

[of the disability claim] are properly determined by the

Administrative Committee of the Delta Pilots Disability

and Survivorship Plan.” (emphasis added). But the

Board concluded that “the grievant shall not be barred

from making application for disability under the Delta

Pilots Disability and Survivorship Plan; the Administra-

tive Committee of the Plan shall not be barred from con-

sidering his application, and that the Administrative

Committee shail not be bound by the grievant’s current

employment status in making its determination.” ALPA

had sought such a determination, because it feared that

the Committee would deny Hazeltine’s claim on the

ground that he was not disabled at the time of his dis-

charge. When terminated, Hazeltine was arguably not

yet “disabled” as that term is defined by both section

26.C.4 of the agreement and section 1.08 of the Plan,

because he had not “los[t] his [Federal Aviation Admin-

istration] license to fly as an airline pilot,” and section

7.01 of the Plan states that “[t]here are no benefits un-

der this Plan in the event of Termination of Continuous

Employment.”

Hazeltine subsequently applied for issuance of an air-

man medical certificate from the FAA, which the agency

denied on July 18, 1985. He then sought disability bene-

fits under the Plan in August 1985. The Plan’s Admin-

istrative Committee denied his claim on April 15, 1986,

stating that “at the time of the termination of [his] em-

ployment with Delta, {Hazeltine] held a first class medi-

cal certificate.” The Committee reasoned that “the on-

set of disability must occur during employment,” and

“no post termination benefits are available under the

Plan.” Its decision made no mention of the Board’s ear-

lier seemingly inconsistent award.

A-6

The second underlying grievance was brought by for-

mer Delta pilot Earl E. “Ed” Meech. On January 24,

1985, Meech was indicted by a federal grand jury in

Dallas, Texas on eleven felony charges of fraud and con-

spiracy. Delta thereafter suspended him without pay and

benefits on February 8, pending resolution of the crimi-

nal charges. The company said that the “serious nature

of the criminal charges” called into question Meech’s

“judgment and integrity” and that Meech’s prepara-

tion of a legal defense would prevent him from giving

“undivided attention to [his] duties and responsibilities

as a pilot for the Company.”

In March 1985, while on suspension, Meech fell from

a ladder and seriously aggravated a prior back injury.

On the 19th of that month Meech received a “Disability

Certificate” from an FAA-certified medical examiner,

attesting that Meech was physically unable to perform

his job duties. This certificate, however, was not tech-

nically equivalent to the denial of an FAA license, which

Delta argues is a prerequisite to disability benefits un-

der the Plan and the agreement. In June 1985, Meech

was convicted on two felony charges, and Delta converted

his suspension into a termination on July 31, 1985. Some-

time thereafter, Meech applied for, and was denied, an

FAA license.

During his suspension, on July 10, 1985, Meech applied

for long term disability benefits under the Plan. Delta

denied his claim on August 16, on the ground that his

alleged disability commenced after 30 days from the date

he was suspended. Although section 4.02 of the Plan,

which delineates the requirements for income benefits,

does not explicitly include a 30 day limitation period,

Delta explained that section 4.02 had been “interpreted

to be consistent with the provisions of Section 25.A.1. of

the Agreement.” The latter section provides that a pilot

is eligible for short term weekly disability benefits while

A-7

under disciplinary suspension only if the disability occurs

within the first 30 days of the suspension.

Meech appealed this decision to the Administrative

Committee of the Plan, which upheld the decision on a

different basis. It wrote to Meech, stating: “With re

spect to your claim for permanent disability benefits, the

Committee noted that through the time of your termina-

tion, you had never been denied a first class medical

certificate. Denial of such a certificate is required in or-

der to qualify for permanent disability benefits.” This

is the same reason that the Committee gave for denying

Hazeltine’s application for benefits.

On May 27, 1986, Hazeltine and Meech both submitted

grievances to the System Board for consideration and

decision. They alleged that the Administrative Commit-

tee’s denials of their disability applications violated the

collective bargaining agreement. Delta refused to par-

ticipate in a Board proceeding, however, because in its

view “applications for disability benefits lie exclusively

within the province of the Administrative Committee,

[and] it is clear that the System Board has no jurisdic-

tion over these matters.” ALPA then sued to compel

arbitration.

IT.

As a threshold matter, ALPA maintains that the

district court should not have decided whether the griev-

ances are within the jurisdiction of the System Board.

Rather, appellant contends that the Board should deter-

mine its own jurisdiction in the first instance—in other

words, it has primary jurisdiction to decide its own

jurisdiction. The court should rule on the Board’s juris-

diction, ALPA argues, only if the Board’s jurisdiction

is challenged after it has acted. See 45 U.S.C. § 153 First

(p). ALPA premises its primary jurisdiction argument

on the language of the agreement; section 19.C defines

the jurisdiction of the Board, and section 19.G.7 provides

A-8

that “(t]he Board shall have the authority for the ad-

ministration and interpretation of this Section of the

Agreement.”

The Supreme Court has recently announced the general

rule—at least in cases arising under the National Labor

Relations Act—that “{u]niess the parties clearly and

unmistakably provide otherwise, the question of whether

the parties agreed to arbitrate is to be decided by the

court, not the arbitrator.” AT&T Technologies, Inc. v.

Communications Workers of America, 475 U.S. 648, 649

(1986). This is so because “arbitrators derive their au-

thority to resolve disputes only because the parties have

agreed in advance to submit such grievances to arbitra-

tion.” Jd. at 648-49. The Court explained that “([t]he

duty to arbitrate being of contractual origin, a compul-

sory submission to arbitration cannot precede judicial

determination that the collective bargaining agreement

does in fact create such a duty.” Id. at 649 (quoting

John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543,

546-47 (1964) (citations omitted) ).

ALPA argues that the AT&T rule should not apply

here, because this case arises under the RLA, under which

the duty to arbitrate is not only a contractual obligation

but a mandatory statutory requirement. We think, how-

ever, that the instant dispute really does center on the

scope of the parties’ contractual grant of jurisdiction to

the System Board. As we explained above, the purpose

of the Board is to decide disputes arising under the agree-

ment. We have implied previously that arbitration is a

matter of contract in an RLA case—at least where a

collective bargaining agreement is in effect "because an

2 ALPA argues in its brief that any claim founded upon

some incident of the employment relationship, whether or

not it is covered by the collective bargaining agreement, is

a “minor dispute”—a term of art under the RLA—which must

be submitted to the System Board. To be sure, the Supreme

Court has said that some claims independent of those covered

A-9

issue need not be subject to arbitration if there is “posi-

tive assurance that the arbitration clause is not suscep-

tible of an interpretation that covers the asserted dis-

pute.” Northwest Airlines v. ALPA, 808 F.2d 76, 82

(D.C. Cir. 1987) (quoting AT&T, 475 U.S. at 650

(quoting Steelworkers v. Warrior & Gulf Navigation Co.,

363 U.S. 574, 582-83 (1960))). We are confronted with

the question whether the Hazeltine and Meech grievances

“arise under the terms of the Pilots’ Agreement”—as

required by section 19.A of the compact—in which case

they would be within the jurisdiction of the System

Board, or whether they are really independent disputes

between the pilots and the Plan fiduciaries. The arbitra-

bility question here is, in essence, an issue of contract in-

terpretation, and we thus think AT&T applies.

Appellant does not really contend that the agreement

provides clear and unmistakable evidence of a contractual

intent that the court be ousted of primary jurisdiction

to determine arbitrability, and we think that the contract

certainly does not so provide. The mere statement that

the Board shall administer and interpret the section of

by the agreement are subject to mandatory arbitration. Elgin,

J. &@ BE. RR. v. Burley, 325 U.S. 711, 728 (1945). When

there is a collective bargaining agreement in effect (as in

this case), however, all disputes that arguably are covered

by the agreement are minor disputes under the RLA and must

go to the System Board. Railway Labor Executives v. Con-

solidated Rail Corp., 845 F.2d 1187, 1190 (3d Cir. 1988) ;

Brotherhood of Locomotive Engineers v. Burlington Northern

R.R., 838 F.2d 1087, 1091 (9th Cir. 1988). Insofar as ALPA

argues that the RLA gives it the independent right to take

to the Board grievances over Plan applications, its theory is

contrary to Bonin v. American Airlines, 621 F.2d 635 (5th

Cir. 1980), which concluded that employees’ rights to pension

benefits were not arbitrable at all if not arbitrable under

the collective bargaining agreement. Moreover, the union’s

view would undermine the parties’ ability to agree to the

jurisdiction of the Board through bargaining.

A-10

the agreement that includes the jurisdictional provision

does not satisfy the AT&T test. Such general provisions

are quite common in labor agreements, and we feel con-

fident that the Supreme Court meant to require some

thing more direct and explicit in order to deprive the

courts of jurisdiction to decide the arbitrability issue be-

fore the System Board considers it. The district court

was thus correct to address the arbitrability dispute, and

we turn now to that question.

ITI.

Delta asserts that since all claims for disability bene-

fits from the Plan are to be resolved by the Plan’s

Administrative Committee, denials of such claims are not

subject to arbitration before a System Board. The plain

language of the Plan, Delta says, shows that it is meant

to be administered independently from the collective bar-

gaining agreement. Delta relies on sections 11.01, 11.02,

and 11.07 of the Plan, which provide respectively: ‘The

operation and administration of the Plan... , the ex-

clusive power to interpret it, and the responsibility for

carrying out its provisions are vested in an Administra-

tive Committee ....” “The decisions of the Administra-

tive Committee as to interpretation and application of

the Plan shall be final.” The Administrative Committee

shall have the power to “interpret the Plan, and decide

all questions of eligibility of any Employee to participate

in the Plan or to receive benefits under it, its interpre-

tation thereof in good faith to be final and conclusive.”

The union, on the other hand, maintains that the

System Board has the power to define the relationship

between the Administrative Committee and the Board.

It contends that the entire Plan is subsumed within, or

incorporated by reference into, the collective bargaining

agreement. Therefore, according to ALPA, it may insist

that any benefit claim under the Plan follow the same

grievance machinery as other claims under the contract.

A-11

In support of its argument, Delta points to a group of

circuit court decisions that have recognized the independ-

ence of pension and disability plans from collective bar-

gaining agreements. The leading case is Bonin v. Amer-

ican Airlines, Inc., 621 F.2d 635, 639 (5th Cir. 1980),

in which the court held that since the employee pension

plan involved was “not maintained pursuant to a col-

lective bargaining agreement,” jurisdiction over employee

pension claims was in the district court under ERISA

rather than in the System Board under the RLA. In

Bonin, the pension plan provided that “neither the inter-

pretation of the Plan nor its administration shall as such

be within the jurisdiction” of the collective bargaining

agreement. Id. This statement, combined with the ap-

parent absence of indication in the collective bargaining

agreement of an intent to incorporate the plan, led the

court to conclude that the plan was wholly independent.

Other courts have reached similar results in cases

involving collective bargaining agreements governed by

the NLRA. In RCA Corp. v. Local 241, International

Fed. of Prof. & Tech. Engineers, 700 F.2d 921 (3d Cir.

1983), the court held that where a retirement plan fails

to provide an independent basis for mandatory arbitra-

tion, and where no provision in the general collective

bargaining agreement either brings or seeks to bring the

retirement plan within the ambit of the general agree-

ment, disputes over the retirement plan are not arbi-

trable. The court stressed that “[{t]he mere mentioning

of the Retirement Plan in the General Agreement is in-

sufficient reason to construe the Retirement Plan as part

and parcel of the General Agreement.” Jd. at 927. Simi-

larly, in Printing Specialties, Local 680 v. Nabisco

Brands, Inc., 833 F.2d 102 (7th Cir. 1987), the court

stated that a “passing reference to the Pension Plan in

the collective bargaining agreement does not bring spe-

cific pension disputes . . . under the umbrella of the ar-

bitration clause of the agreement.” Jd. at 105. Because

A-12

there was no “clear relationship between the Pension

Plan and the collective bargaining agreement,” id., the

court held that grievances over denials of pension bene-

fits were not arbitrable. Against this background, we

proceed to analyze the Hazeltine and Meech grievances.

A. The Hazeitine Grievance

Even if no other disputes over eligibility for Plan

benefits were subject to arbitration, we think it clear

that the facts of Hazeltine’s grievance require the System

Board to entertain his claim. In his appeal of termination

of employment to the Board, Hazeltine sought and re-

ceived a specific provision in the Board’s decision that

arguably pertains to his eligihility for disability benefits

under the Plan. Such an arbitral decision operates as an

interpretation of the original agreement; it might be

said therefore that a “Hazeltine clause” concerning the

relevant criteria to determine his eligibility for disability

benefits was incorporated into the contract. Fournelle v.

NLRB, 670 F.2d 331, 344 (D.C. Cir. 1982) (“[a]n

award interpreting a collective bargaining agreement us-

ually becomes a binding part of the agreement... .”)

(quoting F. Elkouri & E. Elkouri, How Arbitration

Works 377 (1973)); Local Union No. 9735, UMW v.

NLRB, 258 F.2d 146, 148 (D.C. Cir. 1958) (arbitrator’s

decision generally becomes part of the contract) ; Szewe-

zuga v. NLRB, 686 F.2d 962, 973 n.84 (D.C. Cir. 1982)

(“collective bargaining process” includes certain arbitral

results as well as the terms of the collective agreement

reduced to writing). Delta does not squarely deny that

the parties could have agreed in collective bargaining to

modify any provision of the pension plan or could do so

ad hoc for Hazeltine alone. Whether or not Hazeltine

could reach the System Board without this earlier Board

decision (a question we explore below), the Board’s first

ruling, which is an interpretation of the collective bar

gaining agreement, may affect Hazeltine’s status vis-a-vis

ee |

A-13

the Plan, and the Board therefore must hear his griev-

ance,

We do not hold that the Board must interpret its prior

decision in any particular way. Delta’s counsel main-

tained at oral argument that it was not the intention of

the original Board decision to allow Hazeltine to obtain

disability benefits regardless of his employment status at

the time he was deemed disabled. If the Board finds that

contention determinative, it can so rule. Rather, we hold

only that because the agreement now contains the equiva-

lent of a collectively bargained term arguably addressing

Hazeltine’s eligibility for disability benefits, his grievance

is within the mandatory jurisdiction of the System Board.

B. The Meech Grievance

The Meech grievance raises substantially different

questions than the Hazeltine claim, and it comes much

closer to presenting the large issue of whether all claims

under the Plan are subject to arbitration before the Sys-

tem Board. We conclude that the Board must entertain

Meech’s grievance, but in doing so we need not decide

whether the System Board has jurisdiction over all ap-

peals from denials of benefits by the Plan’s Administra-

tive Committee.

We have recently explained in an RLA case that doubts

about the arbitrability of issues should be resolved in

favor of coverage. Northwest Airlines v. ALPA, 808

F.2d 76, 82 (D.C. Cir. 1987). In order to establish that

the System Board has no jurisdiction over Meech’s claim,

Delta must provide “positive assurance that the arbitra-

tion clause is not susceptible of an interpretation that

covers the asserted dispute.” Jd. (quoting AT&T, 475

U.S. at 650 (quoting Steelworkers v. Warrior & Gulf

Navigation Co., 363 U.S. 574, 582-83 (1960))). Unlike

the company in Bonin, we think Delta has failed to offer

“positive assurance” that its disability plan is entirely

independent from the collective bargaining agreement.

A-14

Significantly, the agreement between Delta and ALPA

provides that the Plans are incorporated by reference

into the agreement. Section 25.A.1 states that “[e]ach

pilot ... shall... be provided with the following group

benefits pursuant to the Delta Pilots Disability and

Survivorship Plan, and the Delta Pilots Medical Plan,

plans . . . hereby incorporated by reference into this

Agreement.” (emphasis added). Likewise, section 26.A.1

says “(t]he Company shall pay the full cost of the Delta

Pilots Retirement Plan and the Delta Pilots Disability

and Survivorship Plan, . .. such plans hereby incorpo-

rated by reference into this Agreement.” (emphasis

added). It is generally held that “[w]hen a document

incorporates outside material by reference, the subject

matter to which it refers becomes a part of the incor-

porating document just as if it were set out in full.”

Cunha v. Ward Foods, Inc., 804 F.2d 1418, 1428 (9th

Cir. 1986). Both ALPA and Delta seemed to intend this

in section 26.6 of the contract, when they referred to the

Plans as “contained herein.” An explicit incorporation

by reference is a far cry from the “mere mentioning of

the Retirement Plan in the General Agreement” that

courts have found insufficient to bring pension disputes

under the umbrella of collective bargaining agreements

in Nabisco and RCA. See Nabisco, 833 F.2d at 105;

RCA, 700 F.2d at 927.

Meech’s disability claim, moreover, is based on col-

lectively bargained provisions that appear both in the

agreement and in the Plan. His request for benefits, as

we explained earlier, was eventually denied on the ground

that Meech had never been denied a first-class medical

certificate before his termination by Delta.* Meech now

* Meech also contends that his grievance is within the

jurisdiction of the Board, because it involves a dispute over

whether his suspension was properly characterized as a “‘dis-

ciplinary’” suspension under sections 18.B and 25.A.1 of the

agreement. We need not decide that question, however, be-

CC ee

A-15

contends that he clearly was disabled before his discharge,

even though he had not technically been denied an FAA

license. He also maintains that Delta made independent

promises in the contract to provide disability benefits to

pilots in his situation. The first relevant provision, sec-

tion 1.08 of the Plan, which defines “disabled” for pur-

poses of benefits, is reproduced in the agreement, at sec-

tion 26.C.4.* Likewise, section 5.01 of the Plan, which

provides that “[a] Participant who becomes disabled

. .. Shall be entitled to a monthly income benefit .. .,”

is set forth almost verbatim in section 26.C.1 of the con-

tract.* This parallel structure suggests that the key terms

cause only Delta’s original denial of Meech’s claim for per-

manent disability benefits relied on the fact that he had not

become disabled during the first 30 days of a “disciplinary

suspension.” The final resolution of the claim for permanent

disability benefits by the Administrative Committee relied

solely on the fact that Meech was not disabled at the time of

his discharge; it did not rest at all on the nature of Meech’s

suspension.

* Section 1.08 of the Plan provides:

A Participant shall be considered disabled when he loses

his FAA license to fly as an airline pilot, and has been

denied res‘oration of such license by the FAA and has

appealed or is in the process of appealing such denial

to the FAA at its highest appeal levei because of acci-

dental bodily injury or any sickness or disease, including

natural deterioration, which shall result in his being

prevented from flying as an airline pilot....

Section 26.C.4 of the agreement states:

A pilot shall be considered disabled when he loses his

FAA license to fly as an airline pilot, has been denied

restoration of such license by the FAA and has appealed

or is in the process of appealing such denial to the FAA

at its highest appeal level because of accidental bodily

injury or any sickness or disease, including natural de-

terioration, which shall result in his being prevented

from flying as an airline pilot....

§ Section 5.01 of the Plan states in relevant part:

A Participant who becomes Disabled in accordance with

the definition in Section 1.08 shall be entitled to a monthly

A-16

in the Meech dispute were products of negotiation and

bargaining. See Nabisco, 833 F.2d at 105 (“[WJe might

reach a different result if Nabisco and the Union had

explicitly bargained over the terms of the Pension Plan

and made their agreement a part of the collective bar-

gaining agreement.’’).

The distinction between the instant case and those

relied upon by Delta is highlighted by the Nabisco court’s

statement that, in its case, “(t]he collective bargaining

agreement did not incorporate the provisions of the Pen-

sion Plan.” Nabisco, 833 F.2d at 105 (emphasis added).

The ALPA—Delta agreement doubly incorporated the

relevant terms of the Plan: it purported to incorporate

the whole Plan by reference, and it literally incorporated

the terms relating to disability benefits.* The plan in

Bonin gave “positive assurance” that it was separate

from the collective bargaining agreement because it stated

that “neither the interpretation of the Plan nor its ad-

ministration shall as such be within the jurisdiction” of

the agreement. Bonin, 621 F.2d at 639. Here, by con-

trast, we have indications to the contrary. Thus, unlike

the pension plan in Bonin, we think that the Delta Plan—

at least the part of it reproduced in the contract—is

income benefit equal to 50% of the average of his highest

twelve consecutive months of normal earnings during

the last 36 months of active pay status.

Section 26.C.1 of the agreement says:

A pilot who becomes disabled prior to his normal retire-

ment date shall be provided a monthly disability benefit

from the Delta Pilots Disability and Survivorship Plan

equal to fifty percent (50%) of his highest twelve (12)

consecutive months of normal earnings during the last

thirty-six (36) months of.active service as defined in the

Plan.

* We need not and do not decide in this case whether the

agreement’s statement that the Plans are “incorporated by

reference” is sufficient, in and of itself, to give the System

Board jurisdiction over all benefit claims.

A-17

“maintained pursuant to a collective bargaining agree-

ment.” Id.

In addition to arguing that the Plan’s own language

shows that it is entirely separate from the agreement,

Delta also suggests-—unfortunately with no supporting

authority—that ERISA prohibits the System Board from

reviewing decisions by the Administrative Committee,

absent an explicit statement in the Plan that permits

such review. In its brief, Delta states rather boldly that

“ERISA as it now reads .. . requires that the plan itself

state that it is subject to the arbitration provision of a

collective bargaining agreement,” but it refers us to no

statutory language in support.” On the contrary, the

Department of Labor’s own regulations imply the oppo-

site. The rules on claims procedure state that: “In the

case of a plan established and maintained pursuant to

a collective bargaining agreement .. . [s]uch plan will

be deemed to comply with the provisions of paragraphs

(g) and (h) of this section [concerning review proced-

ures] ... if the collective bargaining agreement pursuant

to which the plan is established or maintained sets forth

. . . &@ grievance and arbitration procedure to which de-

nied claims are subject... .” 29 C.F.R. § 2560.503-1 (b)

7 Delta does cite Sinai Hospital v. National Benefit’ Fund,

697 F.2d 562 (4th Cir. 1982), for the proposition that an

employer and a union cannot alter the terms of a trust agree

ment “unless the power te ‘o so was reserved when the trust

was created or properly amended.” Jd. at 567. Sinai Hospital

is inapposite, however, because it involved a national, multi-

employer trust fund that received contributions from and

provided benefits for the employees of 1500 employers. Obvi-

ously, one employer and its employees could not change the

terms of a multiemployer trust fund. The court’s analysis was

limited to trust instruments “such as the one involved in

th{at] case.” Id. It does not seem to apply to the situation in

this dispute, where the Plan is designed specifically for a par-

ticular employer-employee relationship and is maintained, at

least in part, pursuant to the corresponding collective bargain-

ing agreement.

A-18

(2) (ii) (1986). In short, Delta has not brought any-

thing to our attention establishing that a plan is not

“maintained” pursuant to a collective bargaining agree-

ment unless the plan itself so states. As we stated earlier,

the combined incorporation by reference of the Plan with

the duplication of certain Plan terms in the contract

satisfy us that this Plan is, at least in relevant part,

maintained pursuant to the contract.

Delta also asserts that acceptance of ALPA’s position

would give the System Board “jurisdiction to compel the

Administrative Committee to commit a breach of fiduci-

ary responsibilities under ERISA.” Although there may

exist some hypothetical case where an order of the Board

would be in tension with the Administrative Committee’s

fiduciary responsibilities, we see nothing in ERISA that

prohibits a System Board from hearing appeals from de-

cisions of a plan’s administrators. The statute itself says

that a fiduciary shall discharge his duties “in accordance

with the documents and instruments governing the plan

insofar as such document and instruments are consistent

with the provisions [of ERISA].” 29 U.S.C. § 1104(a)

(1)(D). If, as we have said, the agreement governs

the terms of the Delta Plan involved in these grievances,

the Plan’s fiduciaries must act in accordance with rulings

of the Board as long as they are consistent with ERISA.

If an order of the Board is inconsistent with the fiduci-

ary, disclosure, or other requirements of the statute, a

participant, beneficiary, or fiduciary may bring an inde-

pendent action in the district court under section 502 of

ERISA, 29 U.S.C. § 1132 (1982). ALPA v. Northwest

Airlines, Inc., 627 F.2d 272, 277 (D.C. Cir. 1980) (ex-

clusive System Board jurisdiction over benefit claims does

not deprive district court of jurisdiction over claims pre-

mised on a violation of ERISA); Bonin, 621 F.2d at 639

(same).

Finally, it is important to state what the court is not

deciding. Our decision should in no way be interpreted

A-19

as binding on the System Board as it reviews the Meech

and Hazeltine grievances. The System Board might well

determine that the exclusivity and finality language in

the Plan means that all (or some portion) of disputes

over the Plan’s administration are not normally to be

submitted to the System Board. That depends, of course,

on how the System Board interprets the Plan’s terms—

including words like “exclusive” and “final”—which have

been brought into its ambit by collective bargaining. The

crucial point, it seems to us, is that it is up to the Sys-

tem Board to determine the relationship between the

Plan administration and the Board with respect to those

aspects of the Plan maintained pursuant to the collective

bargaining agreement.* As the Supreme Court has made

clear, “in deciding whether the parties have agreed to

submit a particular grievance to arbitration, a court is

not to rule on the potential merits of the underlying

claims.” AT&T, 475 U.S. at 649. The ultimate decision

on the benefit claims is left to the Board.

For the foregoing reasons, the judgment of the district

court is reversed and the case is remanded to that court

with instructions to grant ALPA’s request for injunctive

relief to compel arbitration before the System Board of

the Meech and Hazeltine grievances.

It is 30 ordered.

* Delta also complains that adoption of ALP4A’s position

would generate a cumbersome and duplicative mechanism for

resolving disability claims. The simple answer to this “prob-

lem” is that the parties are free to agree to any procedures

that they choose. Even assuming the extra layer of review

at the System Board would be Delta’s “procedural nightmare”

(which we doubt), nothing in the RLA restricts the parties’

right to make such a contract.

APPENDIX B

B-1

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

AIR LINE PILOTS )

ASSOCIATION,

INTERNATIONAL, et al.,

Plaintiffs, } Civil Action No. 87-673

¥.

DELTA AIR LINES, INC.,

Defendant. J

ORDER

Upon consideration of plaintiff's motion and defendant’s

cross-motion for summary judgment, and the respective op-

positions thereto, the Court being of the opinion that the

provisions of the Collective Bargaining Agreement incorpora-

ting the Delta Pilots Disability and Survivorship Plan therein

by reference (Section 26 A), in conjunction with the provi-

sions of the Plan itself which vest in the Administrative

Committee thereof the exclusive power to interpret it, and

to decide all questions of eligibility to receive benefits thereun-

der (Sections 11.01, 11.07(b)), render this dispute with respect

to disability benefits cognizable only by the Committee and

not subject to arbitration before the System Board, and it

further appearing to the Court that such an arrangement is

lawful, see Bonin v. American Airlines, 621 F.2d 635 (Sth Cir.

1980); see also Airline Pilots Association v. Northwest Airlines,

627 F.2d 272 (D.C. Cir. 1980), it is, this 2/st day of January,

1988,

ORDERED, that plaintiffs motion for summary judg-

ment is denied; and defendant’s motion for summary

judgment is granted; and it is

FURTHER ORDERED, that the seediniacs is dismissed

with prejudice.*

THOMAS PENFIELD JACKSON

U.S. District Judge

* This decision is without prejudice to the rights of plaintiffs Hazeltine and

Meech to judicial review of the merits of the decisions of the Administrative

Committee denying them disability benefits under the Plan.

APPENDIX C

C-1

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

AIR LINE PILOTS

ae ee et al No. $8-7054

; A seit i September Term, 1988

2 aint D.C. Civil No. 87-00673

DELTA AIR LINES, INC. ,

APPEAL FROM THE UNITED STATES DISTRICT

COURT FOR THE DISTRICT OF COLUMBIA

Before: RUTH B. GINSBURG, SILBERMAN and

D.H. GINSBURG, Circuit Judges

JUDGMENT

This cause came on to be heard on the record on appeal

from the United States District Court for the District of

Columbia, and was argued by counsel. On consideration

thereof, it is

ORDERED and ADJUDGED, by the Court, that the

judgment of the District Court appealed from in this cause

is hereby reversed and the case is remanded with instructions,

in accordance with the Opinion for the Court filed herein this

date.

Per Curiam

FOR THE COURT:

CONSTANCE L. DUPRE, CLERK

Date: December 16, 1988

Opinion for the Court filed by Circuit Judge Silberman.

APPENDIX D

Neon eceg? Wyeem

D-1

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

AIR LINE PILOTS 1

ASSOCIATION

; No. 88-7054

INTERNATIONAL, et al., | September Term, 1988

Appellants CA 87-00673

Vv.

DELTA AIR LINES, INC., !

BEFORE: Ruth G. Ginsburg, Silberman and D. H. Ginsburg,

Circuit Judges

ORDER

Upon consideration of appellee’s petition for rehearing,

filed January 17, 1989, it is

ORDERED, by the Court, that the petition is denied.

FOR THE COURT:

CONSTANCE L. DUPRE,

CLERK

BY:

Robert A. Bonner

Deputy Clerk

APPENDIX E

CONRAD eh eM ORE pee ST Pm EOIN ac BR

ERISA

ERISA § 102, 29 U.S.C. §1022—Plan description and

summary plan description

(a)(1) A summary plan description of any employee

benefit plan shall be furnished to participants and

beneficiaries as provided in section 104(b). The sum-

mary plan description shall include the information

described in subsection (b), shall be written in a

manner calculated to be understood by the average

plan participant, and shall be sufficiently accurate and

comprehensive to reasonably apprise such partici-

pants and beneficiaries of their rights and obligations

under the plan. A summary of any material modifica-

tion in the terms of the plan and any change in the

information required under subsection (b) shall be

written in a manner calculated to be understood by

the average plan participant and shall be furnished in

accordance with section 104(b)1).

(2) A plan description (containing the information

required by subsection (b)) of any employee

benefit plan shall be prepared on forms pre-

scribed by the Secretary, and shall be filed with

the Secretary as required by section 104(a)(1).

Any material modification in the terms of the

plan and any change in the information de-

scribed in subsection (b) shall be filed in accord-

ance with section 104(a)(1)(D).

(b) The plan description and summary plan description

shall contain the following information: The name

and type of administration of the plan; the name and

address of the person designated as agent for the

service of legal process, if such person is not the

administrator; the name and address of the adminis-

trator; names, titles and addresses of any trustee

or trustees (if they are persons different from the

E-2

administrator); a description of the relevant provi-

sions of any applicable collective bargaining agree-

ment; the plan’s requirements respecting eligibility

for participation and benefits; a description of the

provisions providing for nonforfeitable pension

benefits; circumstances which may result in disquali-

fication, ineligibility, or denial or loss of benefits; the

source of financing of the plan and the identity of

any organization through which benefits are pro-

vided; the date of the end of the plan year and

whether the records of the plan are kept on a calendar,

policy, or fiscal year basis; the procedures to be

followed in presenting claims for benefits under the

plan and the remedies available under the plan for

the redress of claims which are denied in whole or

in part (including procedures required under section

503 of this Act).

ERISA § 402, 29 U.S.C. § 1102—Establishment of plan

(a)

Named fiduciaries. (1) Every employee benefit plan

shall be established and maintained pursuant to a

written instrument. Such instrument shall provide

for one or more named fiduciaries who jointly or

severally shall have authority to contro! and manage

the operation and administration of the plan.

(2) For purposes of this title, the term “named

fiduciary” means a fiduciary who is named in the

plan instrument, or who, pursuant to a procedure

specified in the plan, is identified as a fiduciary

(A) by a person who is an employer or employee

organization with respect to the plan or (B)

by such an employer and such an employee

organization acting jointly.

(b) Requisite features of plan. Every employee benefit

plan shall—

(1) provide a procedure for establishing and carry-

ing out a funding policy and method consistent

E-3

with the objectives of the plan and the require-

ments of this title,

(2) describe any procedure under the plan for the

allocation of responsibilities for the operation

and administration of the plan (including any

procedure described in section 405(c)(1),

(3) provide a procedure for amending such plan, and

for identifying the persons who have authority to

amend the plan, and

(4) specify the basis on which payments are made

to and from the plan.

may provide—

(1) that any person or group of persons may serve

in more than one fiduciary capacity with respect

to the plan (including service both as trustee and

administrator);

(2) that a named fiduciary, or a fiduciary designated

by a named fiduciary pursuant to a plan proce-

dure described in section 405(c)(1), may employ

one or more persons to render advice with regard

to any responsibility such fiduciary has under

the plan; or

(3) that a person who is a named fiduciary with

respect to control or management of the assets

of the plan may appoint an investment manager

or managers to manage (including the power to

acquire and dispose of) any assets of a plan.

ERISA § 404, 29 U.S.C. § 1104—Fiduciary duties

(a) Prudent man standard of care.

(1) Subject to sections 403(c) and (d), 4042, and

4044, a fiduciary shall discharge his duties with

respect to a plan solely in the interest of the

participants and beneficiaries and—

E-4

(A) for the exclusive purpose of:

(i) providing benefits to participants and

their beneficiaries; and

(ii) defraying reasonable expenses of ad-

ministering the plan;

(B) with the care, skill, prudence, and diligence

under the circumstances then prevailing

that a prudent man acting in a like capacity

and familiar with such matters would use

in the conduct of an enterprise of a like

character and with like aims;

sO as to minimize the risk of large losses,

unless under the circumstances it is clearly

prudent not to do so; and

(D) in accordance with the documents and in-

struments governing the plan insofar as

such documents and instruments are con-

sistent with the provisions of this title or

title IV.

ERISA § 405(c), 29 U.S.C. § 1105(c)—Liability for breach by

co-fiduciary

sons to carry out fiduciary responsibilities.

(1) The instrument under which a plan is main-

tained may expressly provide for procedures (A)

for allocating fiduciary responsibilities (other

than trustee responsibilities) among named 4-

duciaries, and (B) for named fiduciaries to desig-

nate persons other than named fiduciaries to

carry out fiduciary responsibilities (other than

trustee responsibilities) under the plan.

(2) If a plan expressly provides for a procedure

described in paragraph (1), and pursuant to such

procedure any fiduciary responsibility of a

(3)

E-5

named fiduciary is allocated to any person, or

a person is designated to carry out any such

responsibility, then such named fiduciary shall

not be liable for an act or omission of such

person in carrying out such responsibility except

to the extent that—

(A) the named fiduciary violated section

404(a)(1)

(i) with respect to such allocation or

designation,

(ii) with respect to the establishment or

implementation of the procedure under

paragraph (1), or

(iii) in continuing the allocation or designa-

tion; or

(B) the named fiduciary would otherwise be

liable in accordance with subsection (a).

For purposes of this subsection, the term “trustee

responsibility” means any responsibility pro-

vided in the plan’s trust instrument (if any) to

manage or control the assets of the plan, other

than a power under the trust instrument of

a named fiduciary to appoint an investment

manager in accordance with section 402(c)(3).

ERISA § 502, 29 U.S.C. § 1132—Civil enforcement

(a) Persons empowered to bring a civil action. A civil

action may be brought —

(1)

by a participant or beneficiary —

(A) for the relief provided for in subsection (c)

of this section, or

(B) 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

E-6

to future benefits under the terms of the

plan;

(2) by the Secretary, or by a participant, beneficiary

or fiduciary for appropriate relief under section

409;

(3) by a participant, beneficiary, or fiduciary (A) to

enjoin any act or practice which violates any

provision of this title or the terms of the plan,

or (B) to obtain other appropriate equitable relief

(i) to redress such violations or (ii) to enforce

any provisions of this title or the terms of the

plan;

(4) by the Secretary, or by a participant, or benefi-

ciary for appropriate relief in the case of a viola-

tion of 105(c);

(5) except as otherwise provided in subsection (b),

by the Secretary (A) to enjoin any act or practice

which violates any provision of this title, or (B)

to obtain other appropriate equitable relief (i) to

redress such violation or (ii) to enforce any

provision of this title; or

(6) by the Secretary to collect any civil penalty under

subsection (i).

(b) Plans qualified under Internal Revenue Code; mainte-

nance of actions involving delinquent contributions.

(1) In the case of a plan which is qualified under

section 401(a), 403(a), or 405(a) of the Internal Reve-

nue Code of 1954 (or with respect to which an

application to so qualify has been filed and has not

been finally determined) the Secretary may exercise

his authority under subsection (a)(5) with respct

[respect] to a violation of, or the enforcement of,

parts 2 and 3 of this subtitle (relating to participation,

vesting, and funding), only if —

(A) requested by the Secretary of the Treasury,

E-7

(B) one or more participants, beneficiaries, or

fiduciaries, of such plan request in writing

(in such manner as the Secretary shall pre-

scribe by regulation) that he exercise such

authority on their behalf. In the case of

such a request under this paragraph he may

exercise such authority only if he deter-

mines that such violation affects, or such

enforcement is necessary to protect, claims

of participants or beneficiaries to benefits

under the plan.

(2) The Secretary shall not initiate an action to

enforce section 515.

tion. (1) Any administrator (A) who fails to meet the

requirements of paragraph (1) or (4) of section 606

with respect to a participant or beneficiary, or (B)

who fails or refuses to comply with a request for any

information which such administrator is required by

this title to furnish to a participant or beneficiary

(unless such failure or refusal results from matters

reasonably beyond the control of the administrator)

by mailing the material requested to the last known

address of the requesting participant or beneficiary

within 30 days after such request may in the court’s

discretion be personally liable to such participant or

beneficiary in the amount of up to $100 a day from

the date of such failure or refusal, and the court may

in its discretion order such other relief as it deems

proper.

(2) The Secretary may assess a civil penalty of up

to $1,000 a day from the date of a plan adminis-

trator’s failure or refusal to file the annual report

required to be filed with the Secretary under

section 101(b)(4). For purposes of this para-

graph, an annual report that has been rejected

under section 104(a)(4) for failure to provide

E-8

material information shall not be treated as

having been filed with the Secretary.

(d) Status of employee benefit plan as entity. (1) An

employee benefit plan may sue or be sued under this

title as an entity. Service of summons, subpena

[subpoena], or other legal process of a court upon a

trustee or an administrator of an employee benefit

plan in his capacity as such shall constitute service

upon the employee benefit plan. In.a case where

a plan has not designated in the summary plan

description of the plan an individual as agent for the

service of legal process, service upon the Secretary

shall constitute such service. The Secretary, not

later than 15 days after receipt of service under the

preceding sentence, shall notify the administrator or

any trustee of the plan of receipt of such service. (2)

Any money judgment under this title against an

employee benefit plan shall be enforceable only

against the plan as an entity and shall not be enforce-

able against any other person unless liability against

such person is established in his individual capacity

under this title.

(e) Jurisdiction. (1) Except for actions under subsection

(a)(1)(B) of this section, the district courts of the

United States shall have exclusive jurisdiction of civil

actions under this title brought by the Secretary or

by a participant, beneficiary, or fiduciary. State

courts of competent jurisdiction and district courts

of the United States shall have concurrent jurisdic-

tion of actions under subsection (a)(1)(B) of this

section. (2) Where an action under this title is

brought in a district court of the United States, it

may be brought in the district where the plan is

administered, where the breach took place, or where

a defendant resides or may be found, and process

may be served in any other district where a defendant

resides or may be found.

(f)

(g)

E-9

Amount in controversy; citizenship of parties. The

district courts of the United States shall have jurisdic-

tion, without respect to the amount in controversy or

the citizenship of the parties, to grant the relief

provided for in subsection (a) of this section in any

action.

Attorney’s fees and costs; awards in actions involving

delinquent contributions. (1) In any action under this

title (other than an action described in paragraph 2)

by a participant, beneficiary, or fiduciary, the court

in its discretion may allow a reasonable attorney’s

fee and costs of action to either party. (2) In any

action under this title by a fiduciary for or on behalf

of a plan to enforce section 515 in which a judgment

in favor of the plan is awarded, the court shall award

the plan—

(A) the unpaid contributions,

(B) interest on the unpaid contributions,

(i) interest on the unpaid contributions, or

(ii) liquidated damages provided for under the

plan in an amount not in excess of 20

percent (or such higher percentage as may

be permitted under Federal or State law) of

the amount determined by the court under

subparagraph (A),

(D) reasonable attorney’s fees and costs of the

action, to be paid by the defendant, and

(E) such other legal or equitable relief as the court

deems appropriate.

For purposes of this paragraph, interest on unpaid

contributions shall be determined by using the rate

provided under the plan, or, if none, the rate pre-

scribed under section 6621 of the Internal Revenue

Code of 1954.

E-10

(h) Service upon Secretary of Labor and Secretary of the

(i)

Treasury. A copy of the complaint in any action

under this title by a participant, beneficiary, or fidu-

ciary (other than an action brought by one or more

participants or beneficiaries under subsection

(a)(1)(B) which is solely for the purpose of recovering

benefits due such participants under the terms of the

plan) shall be served upon the Secretary and the

Secretary of the Treasury by certified mail. Either

Secretary shall have the right in his discretion to

intervene in any action, except that the Secretary of

the Treasury may not intervene in any action under

part 4 of this subtitle. If the Secretary brings an

action under subsection (a) on behalf of a participant

or beneficiary, he shall notify the Secretary of the

Treasury.

Administrative assessment of civil penalty. In the case

of a transaction prohibited by section 406 by a party

in interest with respect to a plan to which this part

applies, the Secretary may assess a civil penalty

against such party in interest. The amount of such

penalty may not exceed 5 percent of the amount

involved in each such transaction (as defined in sec-

tion 4975(f)(4) of the Internal Revenue Code of 1986)

for each year or part thereof during which the prohib-

ited transaction continues, except that, if the transac-

tion is not corrected (in such manner as the Secretary

shall prescribe in regulations, which shall be consis-

tent with section 4975(f)(5) of such Code within 90

days after notice from the Secretary (or such longer

period as the Secretary may permit), such penalty

may be in an amount not more than 100 percent of

the amount involved. This subsection shall not apply

to a transaction with respect to a plan described in

section 4975(e)(1) of such Code.

Direction and control of litigation by Attorney General.

In all civil actions under this title, attorneys appointed

by the Secretary may represent the Secretary (except

as provided in section 51 8(a) of title 28, United States

E-11

Code), but all such litigation shall be subject to the

direction and control of the Attorney General.

(k) Jurisdiction of action against Secretary of Labor.

Suits by an administrator, fiduciary, participant, or

beneficiary of an employee benefit plan to review a

final order of the Secretary, to restrain the Secretary

from taking any action contrary to the provisions of

this Act, or to compel him to take action required

under this title, may be brought in the district court

of the United States for the district where the plan

has its principal office, or in the United States District

Court for the the District of Columbia.

ERISA § 503, 29 U.S.C. § 1133—Claims procedure

In accordance with regulations of the Secretary, every

employee benefit plan shall—

(1) provide adequate notice in writing to any partici-

pant or beneficiary whose claim for benefits

under the plan has been denied, setting forth the

specific reasons for such denial, written in a

manner calculated to be understood by the par-

ticipant, and

(2) afford a reasonable opportunity to any partici-

pant whose claims for benefits has been denied

for a full and fair review by the appropriate

named fiduciary of the decision denying the

claim.

ERISA REGULATIONS

29 C.F.R. § 2560.503-1 Claims procedure

(a) Scope and purpose. (1) This section sets out certain

minimum requirements for employee benefit plan

procedures pertaining to claims by participants and

beneficiaries (claimants) for plan benefits, consider-

ation of such claims, and review of ciaim denials,

E-12

hereinafter referred to in the aggregate as “claims

procedures.” Except as otherwise noted, these re-

quirements apply to every employee benefit plan

described in section 4(a) and not exempted under

section 4(b) of the Employee Retirement Income

Security Act of 1974 (the Act).

(b) Obligation to establish a reasonable claims procedure.

Every employee benefit plan shall establish and main-

tain reasonable claims procedures.

(1) Aclaims procedure will be deemed to be reason-

able only if it:

(i) Complies with the provisions of paragraphs

(d) through (h) of this section, except to the

extent that it is deemed to comply with some

or all of such provisions under the authority

of paragraph (b)(2) or paragraph (j) of this

section.

(ii) Is described in the summary plan descrip-

tion, as required by § 2520.102-3,

(iii) Does not contain any provision, and is

not administered in a way, which unduly

inhibits or hampers the initiation or proces-

sing of plan claims, and

(iv) Provides for informing participants in writ-

ing, in a timely fashion, of the time limits

set forth in paragraphs (e)(3) and (g)(3) and

paragraph (h) of this section.

(2) In the case of a plan established and maintained

pursuant to a collective bargaining agreement

(other than a plan subject to the provisions

of section 302(c)(5) of the Labor Management

Relations Act, 1947 concerning joint representa-

tion on the board of trustees):

(i) Such plan will be deemed to comply with

the provisions of paragraphs (d) through (h)

of this section if the collective bargaining

E-13

agreement pursuant to which the pian is

established or maintained sets forth or incor-

porates by specific reference.

(A) Provisions concerning the filing of ben-

efit claims and the initial disposition

of benefit claims, and

(B) A grievance and arbitration procedure

to which denied claims are subject.

(ii) Such plan will be deemed to comply with

the provisions of paragraphs (g) and (h) of

this section (but will not be deemed to

comply with paragraphs (d) through (f)) if

the collective bargaining agreement pursu-

ant to which the plan is established or main-

tained sets forth or incorporates by specific

reference a grievance and arbitration proce-

dure to which denied claims are subject

(but not provisions concerning the final and

initial disposition of benefit claims).

plan.

(1)

(2)

To the extent that benefits under an employee

benefit plan are provided or administered by an

insurance company, insurance service, or other

similar organization which is subject to regula-

tion under the insurance laws of one or more

States, the claims procedure pertaining to such

benefits may provide for filing of a claim for

benefits with and notice of decision by such

company, service or organization.

See paragraph (g) regarding review and final

decision on denied claims by insurance compan-

ies, insurance services and similar organizations.

(d) Filing of a claim for benefits. For purposes of this

section, a claim is a request for a plan benefit by a

participant or beneficiary. A claim is filed when the

E-14

requirements of a reasonable claim filing procedure

of a plan have been met. If a reasonable procedure

for filing claims has not been established by the plan,

a claim shall be deemed filed when a written or

oral communication is made by the claimant or

the

claimant’s authorized representative which is

reasonably calculated to bring the claim to the atten-

tion of:

(1)

(2)

(3)

(4)

In the case of a single employer plan, either

the organizational unit which has customarily

handled employee benefits matters of the em-

ployer, or any officer of the employer.

In the case of a plan to which more than one

unafhliated employer contributes, or which is

established or maintained by an employee orga-

nization, either the joint board, association,

committee or other similar group (or any

member of any such group) administering the

plan, or the person or organizational unit to

which claims for benefits under the plan custom-

arily have been referred.

In the case of a plan the benefits of which

are provided or administered by an insurance

company, imsurance service, or other similar

organization, which is subject to regulation

under the insurance laws of one or more States,

the person or organizational unit which handles

claims for benefits under the plan or any officer

of the insurance company, insurance service, or

similar organization.

For purposes of paragraphs (d){1)}, (2), and (3)

of this section, acommunication shall be deemed

to have been brought to the attention of an

organizational unit if it is received by any person

employed in such unit.

(e) Notification to claimant of decision.

(1)

If a claim is wholly or partially denied, notice

of the decision, meeting the requirements of

E-15

paragraph (f) of this section, shall be furnished

to the claimant within a reasonable period of

time after receipt of the claim by the plan.

(2) If notice of the deniai of a claim is not furnished

in accordance with paragraph (e)(1) of this sec-

tion within a reasonable period of time, the

claim shall be deemed denied and the claimant

shall be permitted to proceed to the review stage

described in paragraph (g) of this section.

(3) For purposes of paragraphs (e)(1) and (2), of this

section, a period of time will be deemed to be

unreasonable if it exceeds 90 days after receipt

of the claim by the plan, unless special circum-

stances require an extension of time for pro-

cessing the claim. If such an extension of time

for processing is required, written notice of the

extension shall be furnished to the claimant prior

to the termination of the initial 90-day period.

In no event shall such extension exceed a period

of 90 days from the end of such initial period.

The extension notice shall indicate the special

circumstances requiring an extension of time

and the date by which the plan expects to render

the final decision.

(f) Content of notice. A plan administrator or, if para-

graph (c) of this section is applicable, the insurance

company, insurance service, or other similar organi-

zation, shall provide to every claimant who is denied

a claim for benefits written notice setting forth in a

manner calculated to be understood by the claimant:

(1) The specific reason or reasons for the denial;

(2) Specific reference to pertinent plan provisions

on which the denial is based;

(3) Adescription of any additional material or infor-

mation necessary for the claimant to perfect the

claim and an explanation of why such material

or information is necessary; and

E-16

(4) Appropriate information as to the steps to be

taken if the participant or beneficiary wishes to

submit his or her claim for review.

(g) Review procedure.

(1) Every plan shall establish and maintain a proce-

(2)

(3)

dure by which a claimant or his duly authorized

representative has a reasonable opportunity to

appeal a denied claim to an appropriate named

fiduciary or to a person designated by such fidu-

ciary, and under which a full and fair review of

the claim and its denial may be obtained. Every

such procedure shall include but not be limited

to provisions that a claimant or his duly autho-

rized representative may:

(i) Request a review upon written application

to the plan;

(ii) Review pertinent documents; and

(iii) Submit issues and comments in writing.

To the extent that benefits under an employee

benefit plan are provided or administered by an

insurance company, ... that company, service,

or organization shall be the “appropriate named

fiduciary” for purposes of this section. In all

other cases, the “appropriate named fiduciary”

for purposes of this section may be the plan

administrator or any other person designated by

the plan, provided that such plan administrator

or other person is either named in the plan

instrument or is identified pursuant to a proce-

dure set forth in the plan as the person who

reviews and makes decisions on claim denials.

A plan may establish a limited period within

which a claimant must file any request for review

of a denied claim. Such time limits must be

reasonable and related to the nature of the bene-

fit which is the subject of the claim and to other

E-17

attendant circumstances. In no event may such

a period expire less than 60 days after receipt by

the claimant of written notification of denial of

a claim.

(h) Decision on review. (1)(i) A decision by an appro-

priate named fiduciary shall be made promptly, and

shall not ordinarily be made later than 60 days after

the plan’s receipt of a request for review, unless

special circumstances (such as the need to hold a

hearing, if the plan procedure provides for a hearing)

require an extension of time for processing, in which

case a decision shall be rendered as soon as possible,

but not later than 120 days after receipt of a request

for review.

(ii) In the case of a plan with a committee or

board of trustees designated as the appro-

priate named fiduciary, which holds regu-

larly scheduled meetings at least quarterly,

a decision on review shall be made by no

later than the date of the meeting of the

committee or board which immediately fol-

lows the plan’s receipt of a request for

review, unless the request for review is filed

within 30 days preceding the date of such

meeting. In such case, a decision may be

made by no later than the date of the second

meeting following the plan’s receipt of the

request for review. If special circumstances

(such as the need to hold a hearing, if the

plan procedure provides for a hearing) re-

quire a further extension of the time for

processing, a decision shall be rendered not

later than the third meeting of the commit-

tee or board following the plan’s receipt of

the request for review.

(2) Ifsuch an extension of time for review is required

because of special circumstances, written notice

E-18

of the extension shall be furnished to the claim-

ant prior to the commencement of the extension.

(3) The decision on review shall be in writing and

shall include specific reasons for the decision,

written in a manner calculated to be understood

by the claimant, as well as specific references

to the pertinent plan provisions on which the

decision is based.

(4) The decision on review shall be furnished to the

claimant within the appropriate time described

in paragraph (h)(1) of this section. If the decision

on review is not furnished within such time, the

claim shall be deemed denied on review.

(i) Apprenticeship plans. This section does not

apply to employee benefit plans which pro-

vide solely apprenticeship training benefits.

THE RAILWAY LABOR ACT

§ 153. National Railroad Adjustment Board

Second. System, group, or regional boards: establishment

by voluntary agreement; special adjustment boards:

establishment, composition, designation of repre-

sentatives by Mediation Board, neutral member,

compensation, quorum, finality and enforcement of

awards

Nothing in this section shail be construed to prevent any

individual carrier, system, or group of carriers and any class

or classes of its or their employees, all acting through their

representatives, selected in accordance with the provisions

of this chapter, from mutually agreeing to the establishment

of system, group, or regional boards of adjustment for the

purpose of adjusting and deciding disputes of the character

specified in this section. In the event that either party to

such a system, group, or regional board of adjustment is

dissatisfied with such arrangement, it may upon ninety days’

E-19

notice to the other party elect to come under the jurisdiction

of the Adjustment Board.

If written request is made upon any individual carrier

by the representative of any craft or class of employees of

such carrier for the establishment of a special board of

adjustment to resolve disputes otherwise referrable to the

Adjustment Board, or any dispute which has been pending

before the Adjustment Board for twelve months from the

date the dispute (claim) is received by the Board, or if any

carrier makes such a request upon any such representative,

the carrier or the representative upon whom such request is

made shall join in an agreement establishing such a board

within thirty davs from the date such request is made. The

cases which may be considered by such board shall be defined

in the agreement establishing it. Such board shall consist of

one person designated by the carrier and one person desig-

nated by the representative of the employees. If such carrier

or such representative fails to agree upon the establishment

of such a board as provided herein, or to exercise its nights to

designate a member of the board, the carrier or representative

making the request for the establishment of the special board

may request the Mediation Board to designate a member of

the special board on behalf of the carrier or representative

upon whom such request was made. Upon receipt of a

request for such designation the Mediation Board shall

promptly make such designation and shall select an individual

associated in interest with the carrier or representative he is

to represent, who, with the member appointed by the carrier

or representative requesting the establishment of the special

board, shall constitute the board. Each member of the board

shall be compensated by the party he is to represent. The

members of the board so designated shall determine all

matters not previously agreed upon by the carrier and the

representative of the employees with respect to the establish-

ment and jurisdiction of the board. If they are unable to

agree such matters shall be determined by a neutral member

of the board selected or appointed and compensated in the

same manner as is hereinafter provided with respect to

situations where the members of the board are unable to

E-20

agree upon an award. Such neutral member shall cease to be

a member of the board when he has determined such matters.

If with respect to any dispute or group of disputes the

members of the board designated by the carrier and the

representative are unable to agree upon an award disposing

of the dispute or group of disputes they shall by mutual

agreement select a neutral person to be a member of the

board for the consideration and disposition of such dispute

or group of disputes. In the event the members of the board

designated by the parties are unable, within ten days after

their failure to agree upon an award, to agree upon the

selection of such neutral person, either member of the board

may request the Mediation Board to appoint such neutral

person and upon receipt of such request the Mediation Board

shall promptly make such appointment. The neutral person

so selected or appointed shall be compensated and reimbursed

for expenses by the Mediation Board. Any two members of

the board shall be competent to render an award. Such

awards shall be final and binding upon both parties to the

dispute and if in favor of the petitioner, shall direct the other

party to comply therewith on or before the day named.

Compliance with such awards shall be enforceable by pro-

ceedings in the United States district courts in the same

manner and subject to the same provisions that apply to

proceedings for enforcement of compliance with awards of

the Adjustment Board.

§ 184. System, group, or regional boards of adjustment

The disputes between an employee or group of employees

and carrier or carriers by air growing out of grievances,

or out of the interpretation or application of agreements

concerning rates of pay, rules, or working conditions, includ-

ing cases pending and unadjusted on April 10, 1936, before

the National Labor Relations Board, shall be handled in the

usual manner up to and including the chief operating officer

of the carrier designated to handle such disputes; but, failing

to reach an adjustment in this manner, the disputes may be

referred by petition of the parties or by either party to an

appropriate adjustment board, as hereinafter provided, with

E-21

a full statement of the facts and supporting data bearing upon

the disputes.

It shall be the duty of every carrier and of its employees,

acting through their representatives, selected in accordance

with the provisions of this subchapter, to establish a board

of adjustment of jurisdiction not exceeding the jurisdiction

which may be lawfully exercised by system, group, or regional

boards of adjustment, under the authority of section 153 of

this title.

Such boards of adjustment may be established by agree-

ment between employees and carriers either on any individual

carrier, or system, or group of carriers by air and any class

or classes of its or their employees; or pending the establish-

ment of a permanent National Board of Adjustment as

hereinafter provided. Nothing in this chapter shall prevent

said carriers by air, or any class or classes of their employees,

both acting through their representatives selected in accor-

dance with provisions of this subchapter, from mutually

agreeing to the establishment of a National Board of Adjust-

ment of temporary duration and of similarly limited

jurisdiction.

APPENDIX F

F-1

May 12, 1989

16 responses out of 372

questionnaires; (13 with

plans & unions)

April 21, 1989

NAM MEMBER SURVEY

The following survey was developed to respond to the recent case of

ALPA vy. Delta Air Lines, 863 F.2d 87 (D.C. Cir. 1988). In this case the

court held that if an employee benefit plan is incorporated by reference

into a collective bargaining agreement and plan benefits are described in

the collective bargaining agreement, any dispute over plan benefits must

be arbitrated even if the plan provides some internal mechanism to review

denied claims other than arbitration.

Delta Air Lines is currently in the process of seeking Supreme Court

review of this.decision. NAM is interested to know how many employers

will be adversely affected by this decision, and, if the numbers are large

enough, we plan to use this information in aggregate form in an amicus

brief supporting Delta’s petition.

Thus, we ask you to take a few minutes to complete and return this

survey. In general, we seek information about the relationship between

employee benefit plans and collective bargaining agreements. If none of

your employees are unionized, you need not respond.

1. How many collective bargaining agreements govern your workforce?

547.

. How many ERISA employee benefit plans, either pension or welfare,

do you have which cover unionized employees? 338 +.

3. Please answer the following ques''ons for each ERISA employee benefit

plan you have which covers unionized employees.

Make any additional copies of this survey you need and do not hesitate

to elaborate on an answer if you think that necessary.

Background Information

Type of Plan

Union Involved.

Relation to the Collective Bargaining Agreement

Is the plan mentioned in the collective bargaining agreement? Almost

all.

Does the collective bargaining agreement indicate that the plan is

made part of the collective bargaining agreement is otherwise incorpo-

rated by reference into the collective bargaining agreements? Almost

all.

F-2

Are benefits provided by the plan mentioned or described in the

collective bargaining agreement? Almost all.

Is the plan physically attached to the collective bargaining agreement?

8 Yes of 338; Almost all No.

Claims Review Procedures

Can employees whose claims are denied by the plan arbitrate whether

the claim was properly denied through the arbitration clause of a

collective bargaining agreement? 6 Yes of 338; Almost all No.

If so, does the plan or the summary plan description mention the right

to arbitrate claim denials in its description of the claims review

procedure (or elsewhere?) Same.

Does the plan and/or collective bargaining agreement provide for both

a complete claims review procedure under the plan and a separate

arbitration mechanism to resolve the same types of claims under the

collective bargaining agreement? Almost all No.

NAME:

COMPANY:

Please fold and return this self-mailing survey by May 5 to the address on

the back.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.