Petition for Writ of Certiorari — Branson v. Greyhound Lines, Inc., Amalgamated Council Retirement & Disability Plan

Court, D.

FILED

97 1247 JAN 2 8 19%

No. ___oeeice oF THE CLERK

IN THE

Supreme Court of the Anited States

October Term, 1997

JENNELL L. BRANSON

Petitioner

v.

GREYHOUND LINES, INC. AMALGAMATED

COUNCIL RETIREMENT AND

DISABILITY PLAN

Respondent

On Petition for Writ of Certiorari

To The United States Court of Appeals

for the Fifth Circuit

PETITION FOR WRIT OF CERTIORARI

MIKE MILLIGAN

Counsel of Record

303 Texas Avenue, Suite 808

El Paso, Texas 79901

(915) 544-5587

QUESTION PRESENTED FOR REVIEW

The administrator of an ERISA pension plan decides

that a participant’s rights in the plan will depend on the

lawfulness of his seniority agreement with the employer, as

determined by the NLRB. The NLRB decides in favor of the

participant, who then files suit for a declaratory judgment that

the plan must abide by the administrator’s decision. The plan’s

lawyer then has the plan trustees come up with a new reason for

ruling against the participant. The plan gives interpretive power

to the trustees, but there is reason to believe they have a conflict

of interest and are biased against the participant. Should the

“arbitrary and capricious” standard apply under these

circumstances?

|

|

|

:

|

|

|

i

LIST OF PARTIES

All of the parties in the United States Court of Appeals

for the Fifth Circuit are listed in the caption.

TABLE OF CONTENTS

Page

QUESTION PRESENTED FOR REVIEW.................... i

ak icl is te csehsctinnaoweninr careuniesonc, li

I es aesbicsncaecsasane iil

TABLE OF CITED AUTHORITIES...................000000000. iv

as Sono csccsscctveedecnedees<essisccscedecenss l

PAE Ee FOIEII EMIT oso ccseceopscsocerssesssessessoresseseses ]

STATUTORY PROVISIONS INVOLVED...................... |

STATEMENT OF THE CASE...............:..cccccccssssssessnsooees 2

REASONS FOR GRANTING THE WRIT.............00.0.0.... 7

a ee

iv

TABLE OF CITED AUTHORITIES

Cases Page(s)

Branson v. Greyhound Lines, Inc. Amalgamated

Council Retirement and Disability Plan,

126 F.26 747 (SG Car. T9GT)......eccccccccesccsccceess 1,2

Brown v. Blue Cross & Blue Shield of Alabama,

Inc., 898 F.2d 1556 (11th Cir. 1990)................. 1]

Diaz v. Seafarers Union, 13 F.3d 454 (ist Cir. 1994)... 9

Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101,

109 S.Ct. 948, 103 L.Ed.2d 80 (1988)............ 7,8,9,10

Greyhound Lines, Inc. and Amalgamated Council,

SED LT, SEO Ci sisiivinipiccemenenrsinersns a5

Henry v. Home Insurance Company, 907 F.Supp.

SDURR RP Wr erecincticacacetaasencebiicceicngse. 10

Jones v. Sonat, Inc. Master Employee Benefits

Plan, 997 F.2d 1556 (11th Cir. 1990)................ 1]

Korematsu v. United States, 323 U.S. 215, 65 S.Ct.

193, 89 L.Ed.2d 194 (1944)... 10

Lowry v. Bankers Life & Casualty Retirement Plan,

S71 B20 S22 C5 Ce: TOI. noo seccccccccsccncss. 11]

Statutes

se BNE visi toeky cine venssctnltin Attire cen Cagadicbantn l

RT 6 1

|

OPINIONS BELOW

The District Court made findings of fact and conclusions

of law, reproduced in the Appendix, but which were

unreported. The Court of Apneals affirmed. Branson v.

Greyhound Lines, Inc. Amalgamated Council Retirement and

Disability Plan, 126 F.2d 747 (Sth Cir. 1997).

BASIS FOR JURISDICTION

The judgment sought to be reviewed was entered on

October 30, 1997. This Court has jurisdiction to review the

judgment of the Court of Appeals pursuant to 28 U.S.C. §

1254(1).

STATUTORY PROVISIONS INVOLVED

Section 1132(a)({1)(B) of Title 29, United States Code,

provides in pertinent part as follows:

“(a) Persons empowered to bring civil action

A civil action may be brought —

(1) by a participant or beneficiary —

* * *

(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

2

his rights to future benefits under the

terms of the plan;”

STATEMENT OF THE CASE

| The Circuit Court’s summary of the evidence is

generally correct, but incomplete in several key respects.

Accordingly, other undisputed facts will be included, with

appropriate references to the record.

Mr. Branson sued his employer, Greyhound Lines, Inc.

(“Greyhound” or “GLI’) and the pension plan which GLI runs

with its union (“the Plan”). He accused GLI of breaching its

agreement to give him seniority credit for 10.18 years of prior

Greyhound service (followed by about a three-year break), and

he sought a declaratory judgment that the Plan should also treat

him as having that same seniority restored to him. He lost on

both issues in the United States District Court for the Western

District of Texas, but the Fifth Circuit reversed as to GLI and

affirmed as to the Plan, applying the familiar “abuse of

discretion” standard. Branson v. Greyhound Lines, Inc., 126

F.3d 747, 756-758 (Sth Cir. 1997). See also Appx., pp. 22a-

23a. The contract claim against GLI is not before this Court,

absent a certiorari application from it. However, many facts

about the contract claim are relevant to the pension plan issues

and will therefore be included in the summary.

3

Mr. Branson was a Greyhound bus driver from 1977 to

1987, hac a break in service of about two years and eight

months, and then returned to GLI during the bitter and vic!ent

strike of 1990. The National Labor Relations Board has

graphically described Greyhound’s negotiating strategy in

Greyhound Lines, Inc. and Amalgamated Council etc., 319

N.L.R.B. 554, 559-561 (1995).

In general, Greyhound was trying to break its union by

making non-negotiable demands for certain clauses in the

collective bargaining agreement then being negotiated. One

clause, entitled “Active Duty Language,” would have treated

returning strikers as new employees, with no seniority, when

they reapplied for reinstatement after the strike. 319 N.L.R.B.

at 566-567. The other, known as “Experience Based Seniority”

(“EBS”), gave drivers Greyhound seniority for all of their

experience “as a Department of Transportation qualified over-

the-road tractor-trailer operator, over-the-road charter bus

operator, or intercity bus operator,” Jd, p. 568, which

benefitted the strike breakers almost exclusively, since most of

them had been working elsewhere prior to the strike. Those

two clauses would have effectively placed the strike breakers at

the top of GLI’s seniority heap, to the extreme detriment of the

strikers. GLI’s tactics caused the strike to turn ugly and

violent, and at least one striker was killed. Jd, p. 561. Mr.

4

Branson was caught in the middle and very much still is, at least

as far as his pension rights are concerned. Despite the clear

distinction between EBS and Greyhound seniority, both GLI

and the Plan have chosen to treat Mr. Branson as a beneficiary

of the hated (and eventually banned) EBS ploy.

All the parties agreed and the District Court found that

Mr. Branson had a vested interest in the Plan as a result of his

10.18 years of prior service. R., Vol. 1, p. 39. The issue was

whether he could continue earning credits under the Plan for his

service after returning to work in 1990. The difference is

substantial: almost $1,100 per month for life. Jd, p. 47.

The clause in the Plan entitled “Break in Service” says

that an individual who returns to work with more than 10 years

of vesting service can resume accruing retirement credit in the

Plan. However, another clause, entitled “Participation,” says an

employee cannot later resume active participation if he

“terminates employment . . . and thereupon loses his seniority

under the collective bargaining agreement .. .”. Cf §§ 2.1 and

2.4 of Plaintiff's Exhibit 17. The two clauses cannot be

reconciled, unless they relate to different subjects.

When Mr. Branson first began trying to get the Plan to

follow its break in service clause, Plan administrator Paul E.

Owsley, a former president of the union, R., Vol. 5, pp. 71-72,

5

rebuffed him, on the grounds that Mr. Branson had been “re-

hired and not reinstated.” Then, Mr. Owsley and union

assistant business agent Wes Ponsford changed their position,

saying that Mr. Branson’s status as a re-employed employee

would be determined by the NLRB in its resolution of the EBS

issue. Plaintiff's Exhibit 18 (part). However, when Mr.

Branson raised the matter with GLI, it took the same position

in the exact same language as that first used by Mr. Owsley: Mr.

Branson could not take advantage of the break in service clause

because he had been “re-hired and not reinstated.” Plaintiff's

Exhibit 10.

The NLRB ruled in Mr. Branson’s favor, basically. It

did hold that EBS was an unlawful superseniority program,

inherently destructive of the right to strike, 319 N.L.R.B. at

571-575, but it painstakingly distinguished EBS from

Greyhound seniority. Jd, at 570. The Board held that EBS

was illegal, but Greyhound seniority was not EBS. Mr.

Branson pointed this out in correspondence with both the union

and the company. See Plaintiff's Exhibit 18. The Plan ignored

him, and GLI informed him that it considered his Greyhound

seniority to be the same as EBS. Mr. Branson filed suit first

against the Plan and then against GLI after it kept refusing to

recognize the difference between EBS and Greyhound seniority.

See Plaintiff's Exhibit 4.

6

The Plan raised as a defense Branson’s failure to exhaust

his administrative remedies by appealing to the Plan trustees.

The District Court abated the proceedings so that he could do

so, which gave the Plan’s attorney an opportunity to come up

with a defense which would, hopefully, sound better than

deferring to the NLRB.

The Plan did not receive any independent advice about

the claim. Instead, its attorney of record in this case provided

a memo recommending denial of Mr. Branson’s claim because, _

upon his 1987 resignation, Mr. Branson had “thereupon” lost

his seniority under the applicable CBA. The CBA in effect then

set out various circumstances in which Greyhound was required

to recognize former seniority during subsequent employment.

The Plan’s attorney proposed that the trustees apply the

principle of “expressio unius est exclusio alterius” and interpret

the CBA’s requirement of prior seniority recognition in certain

circumstances as a prohibition of such recognition in all other

circumstances. Defendant’s Exhibit Plan F. The trustees

rubber stamped their attorney’s recommendation without

elaboration. Defendant’s Exhibit Plan G.

The trustees consisted of three company representatives

and three union representatives, including Mr. Dick Simpson,

R., Vol. 5, p. 75, the president and business agent for the union,

7

who previously had refused Mr. Branson’s request for union

assistance in this very same matter. Plaintiff's Exhibit 18 (letter

dated 9/14/93). The union appointees had obvious reason to

resent Mr. Branson for helping GLI try to break the union.

Greyhound showed its animus against Mr. Branson by trying to

break its 1990 agreement with him and by threatening him with

termination on the eve of trial if he did not accept its offer of

settlement. R., Vol. 1, pp. 86-88; R., Vol. 5, pp. 6-7.

At any rate, the Plan now had a new justification for its

denial of Mr. Branson’s claim and a new defense to his suit.

The distinction between being “re-hired” and “reinstated,”

drawn by Mr. Owsley and Greyhound, would not be mentioned

again. Likewise, there would be no further mention of how Mr.

Owsley and the union had told Mr. Branson that his rights under

the pension plan depended upon resolution of the EBS issue by

the NLRB.

REASONS FOR GRANTING THE WRIT

The deferential standard for judicial review of pension

plan determinations, variously called “abuse of discretion” and

“arbitrary and capricious,” has effectively eliminated any

meaningful judicial oversight in this critical area of our national

economy. The time has come for this Court to clarify whether

this is what it really meant to occur when it decided Firestone

Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103

L.Ed.2d 80 (1988). The extreme misfortune of Mr. Branson

furnishes a good opportunity for such a salutary exercise of this

Court’s power.

Mr. Branson was unfortunate enough to find himself

caught in the middle of something like a war between two

exponents of big business and big labor who happened to

control a big pension plan. He allowed Greyhound to use him

in its shameless campaign of union busting, and it is fatuous to

say that the union bore him no grudge. Eventually, GLI turned

against him so completely that they threatened to terminate his

employment if he did not settle with them the day before trial.

There was certainly more than ample reason to believe that the

pension plan trustees appointed by GLI and the union were

“operating under a conflict of interest.” Firestone, 489 U.S. ai

115, 109 S.Ct. at 957.

Not surprisingly, the responses Mr. Branson got from

Greyhound, the union, the Plan administrator, and the trustees

all look suspiciously like a search for some excuse that would

fit their predetermined conclusion to deny his claim. At various

times they told him the problem was that he had been “re-hired

and not reinstated,” or that his rights would depend on the

NLRB’s predictable response to the pending no-brainer about

9

the legality of EBS, and finally that he lost because of a

completely new maxim of construction: “requirement of certain

things is prohibition of all others.” This case thus represents an

extreme, but probably not isolated, example of the extent to

which the deferential standard has immunized pension plan

Interestingly, this Court’s seminal decision establishing

the deferential standard in Firestone was dictum. The company

in that case was trying to get this Court to hold that ERISA

itself established the deferential standard without regard to plan

language. Firestone, 489 U.S. at 111-113, 109 S.Ct. at 954-

956. This Court held instead that ERISA mandates “a de novo

standard unless the benefit plan gives the administrator or

fiduciary discretionary authority to determine eligibility for

benefits or to construe the terms of the plan.” 489 U.S. at 115,

109 S.Ct. at 956-957.

What happened next was thoroughly predictable. Every

single ERISA plan in the country was changed to take

advantage of this Court’s dictum. Plans were even allowed to

apply the changes and the deferential standard retroactively.

Diaz v. Seafarers Union, 13 F.3d 454, 458 (Ist Cir. 1994). A

diligent search has turned up a grand total of one reported case

in which a court has held the deferential standard to have been

10

met. Henry v. Home Insurance Company, 907 F.Supp. 1392

(C.D.Cal. 1995).

Such a state of the law, as a practical matter, amounts

to considerably more than deference and something at least

fairly close to absolute immunity. Courts do hold, from time to

time, that various government agencies have behaved arbitrarily

and capriciously, and courts of appeal similarly will find, on

occasion, that trial judges have abused their discretion. ERISA

pension plans’ apparent one hundred percent litigation success

rate under the deferential standard, however, is even more

striking than experience with the “strict scrutiny” standard for

racial classifications which had at least one conspicuous

exception in Korematsu v. United States, 323 U.S. 215, 65

S.Ct. 193, 89 L.Ed.2d 194 (1944). Simply put, no decision —

and certainly no dictum — of this Court has ever immunized so

thoroughly an entire industry as Firestone apparently has.

Some courts of appeal, while never ruling against a

pension plan, have picked up on this Court’s dictum within

dictum to the effect that conflict of interest is a factor in

determining whether or not an abuse of discretion has occurred.

At least two courts have amplified on that a bit by holding that

even a legally correct interpretation of a plan may still constitute

an abuse of discretion and be “arbitrary and capricious if it

11

advances the conflicting interests of the fiduciary at the expense

of the affected beneficiary or beneficiaries unless the fiduciary

justifies the interpretation on the grounds of its benefit to the

class of all participants and beneficiaries.” Jones v. Sonat, Inc.

Master Employee Benefits Plan, 997 F.2d 113 (Sth Cir. 1993),

quoting Brown v. Blue Cross & Blue Shield of Alabama, Inc.,

898 F.2d 1556, 1566-1567 (11th Cir. 1990). In at least one

case, the Fifth Circuit has suggested that a slightly different

standard, something close to de novo review, might apply when

there is a “suspicion of partiality” on the part of the plan

trustees, in which case the court must resort to a “sliding scale”

applying greater scrutiny to the trustees’ decision as the

suspicion of partiality increases. Lowry v. Bankers Life &

Casualty Retirement Plan, 871 F.2d 522, 525 n. 6 (Sth Cir.

1989).

Both the District Court and the Court of Appeals

refused to consider applying anything other than the abuse of

discretion standard, despite all of the circumstantial evidence of

partiality, because of two occasions when the union assisted Mr.

Branson with minor matters. 126 F.3d at 756-757; Appendix,

pp. 24a, 38a-39a. Even if such weak evidence were enough to

exonerate the union, there is nothing to dispel the obvious

inference of Greyhound’s bias from its attempts to breach its

contract with Mr. Branson. Most significantly, not a single

12

member of the Plan’s board of trustees iestified at the trial so

that their claims of impartiality toward Mr. Branson could be

tested by cross examination.

CONCLUSION

It is respectfully submitted that, for the reasons outlined

above, this Petition for Writ of Certiorari should be granted.

Respectfully submitted,

/s/ Mike Milligan

Mike Milligan

Counsel of Record for Petitioner

303 Texas Avenue, Suite 808

El Paso, Texas 79901

(915) 544-5587

la

Jennell L. BRANSON, Plaintiff-

Appellant,

Vv.

GREYHOUND LINES, INC. AMALGAM-

ATED COUNCIL RETIREMENT AND

DISABILITY PLAN; Greyhound Lines,

Inc., Defendants-Appellees.

No. 96-50881

United States Court of Appeals,

Fifth Circuit.

Oct. 30, 1997.

Before JONES, EMILIO M. GARZA and PARKER,

Circuit Judges.

EMILIO M. GARZA, Circuit Judge:

Jennell L. Branson appeals from the district court’s

order dismissing his claims agains‘ “Greyhound Lines, Inc.

(“Greyhound” or “GLI’) and Greyhound Lines, Inc.

Amalgamated Council Retirement and Disability Plan (the

“Plan”). The district court held as a matter of law that

Branson’s breach of contract claim against Greyhound was

preempted by section 8 of the National Labor Relations Act

(“NLRA”), 29 U.S.C. § 158, and section 301 of the Labor

Management Relations Act (“LMRA”), 29 U.S.C. § 185. We

2a

reverse the district court’s preemption ruling and remand for

action consistent with this opinion.

The district court further ruled that the Plan Trustees did

not abuse their discretion under the Employees’ Retirement

Income Security Act (“ERISA”), 29 U.S.C. § 1132(a)(1)(B), by

rejecting Branson’s claim for additional seniority credit. We

affirm.

I.

Branson began working for Greyhound in May 1977 and

remained an employee of the company until July 1987, when he

resigned to take another job. At the time of Branson’s

voluntary termination, he was covered by the 1987 collective

bargaining agreement (“1987 CBA”), negotiated between

Greyhound and the Amalgamated Transit Union (the “Union’”)

Branson’s 10.18 years of service entitled him to certain

vested, non-forfeitable pension rights under the Plan, which

continues to exist as a legal entity separate and apart from

Greyhound and the Union. Branson later returned to work for

Greyhound as a replacement employee in April 1990, about a

month into a bitter strike.

By the time Branson returned to work for Greyhound,

the most recent collective bargaining agreement (the 1987

3a

CBA) had expired, and negotiations toward a new collective

bargaining agreement were proceeding. Greyhound also had

recently introduced a new term in its negotiations with the

Union, essentially designed to encourage experienced drivers to

cross the picket line. Greyhound labeled this new term

“Experience Based Seniority’ or “EBS”, and it promised

Greyhound seniority credit for any past commercial driving

experience. Greyhound informed the Union that it would not

abandon this program under any circumstances and began

implementing EBS without further negotiations. Shortly

thereafter, the Union filed an unfair labor charge with the

National Labor Relations Board (“NLRB” or “Board”) based

on the implementation of EBS.

Following Branson’s return to work, he filled out a

standard form by which he requested seniority credit not only

for his prior work with Greyhound, but also for driving

experience gained from other firms. Because Branson had

worked only part-time for these other companies, however,

Greyhound granted Branson credit only for his prior Greyhound

service.

The grants of EBS “super-seniority” to replacement

workers and returning strikers became a major issue in the

continuing negotiations between Greyhound and the Union.

4a

Even when Greyhound and the Union at last succeeded in

signing a new collective bargaining agreement (“1993 CBA”),

they inserted a provision leaving the resolution of EBS to the

NLRB. The Board later found EBS to be an unfair labor

practice and ordered Greyhound to “eliminate all effects of EBS

by all appropriate means.” Greyhound subsequently began an

EBS “buy-out” program, whereby the Company offered cash

payments to those employees that had earned EBS in exchange

for their signing a standard waiver form.

Branson refused to sign the waiver, insisting that he

wanted his additional seniority credit rather than the cash buy-

out. Thereafter, Branson brought suit against the Plan in federal

court, seeking declaratory relief setting forth his rights under the

Plan as provided in ERISA, 29 U.S.C. § 1132(a)(1)(B).

Because Branson had not submitted his claim to the Plan

Trustees before filing suit, the trial court granted a joint request

to modify the scheduling order to permit exhaustion. The

district court held the cause in abeyance while Branson

exhausted his administrative remedies. The Plan Trustees

subsequently held that Branson could not accumulate additional

seniority credit under the Plan beyond his already vested 10.18

years. In the meantime, Branson amended his complaint to

include a breach of contract claim against Greyhound based on

the alleged promise of seniority.

Sa

Branson then tried his case to the district court. At the

close of Branson’s presentation of evidence, the district court

dismissed Branson’s breach of contract claim against

Greyhound on preemption grounds. The bench trial continued

with respect to the Plan. Following the trial, the district court

ruled in favor of the Plan, finding that the Trustees did not

abuse their discretion in interpreting the Plan to deny Branson

additional seniority credit after his termination in 1987.

Branson’s timely appeal followed.

1

[1] At the close of Branson’s presentation of

evidence, the district court granted judgment as a matter of law

in favor of Greyhound on the grounds that both the NLRA and

the LMRA preempted Branson’s breach of contract claim.

Branson timely appealed the district court’s order on both

grounds.’ We review de novo the district court’s rulings on

preemption. Baker v. Farmers Elec. Coop., Inc., 34 F.3d 274,

78 (Sth Cir. 1994).

A

[2] In order to preserve the primary jurisdiction of

' Because we reverse the district court’s judgment as to the breach

of contract claim against Greyhound, we do not address Branson’s claim

that the district court erred in granting judgment for Greyhound without

adequate notice and without making findings of fact.

6a

the NLRB, the NLRA requires that courts not regulate activities

“when it is clear or may fairly be assumed that [such] activities

. . . are protected by § 7 of the National Labor Relations Act, or

constitute an unfair labor practice under § 8.” San Diego Bldg.

Trades Council v. Garmon, 359 U.S. 236, 244, 79 S.Ct. 773,

779, 3 L.Ed.2d 775 (1959); accord Belknap , Inc. v. Hale,, 463

U.S. 491, 498, 103 S.Ct. 3172, 3177, 77 L.Ed.2d 798 (1983);

Windfield v. Groen Div., Dover Corp., 890 F.2d 764, 767 (Sth

Cir. 1989). Here, Branson seeks to recover for Greyhound’s

alleged breach of a promise to restore Branson’s previously

acquired seniority.

The first prong of Garmon preemption requires us to

decide whether Branson bases his claim on an activity

“protected by section 7” of the NLRA. Garmon, 359 US. At

244, 79 S.Ct. At 779. Section 7 protects the rights of

employees to organize, strike, and collectively bargain. 29

U.S.C. § 157. Branson’s claim, however, relies on his

employer’s alleged breach of contract. Because the employer’s

alleged breach of contract does not constitute “activity

protected by section 7,” the first prong of Garmon protection

does not apply.

[3] | The second prong of Garmon preemption

requires us to decide whether Branson’s claim involves an

Ta

activity actually or arguably forbidden under section 8 of the

NLRA, which prohibits employers from engaging in unfair labor

practices. Garmon, 359 U.S. at 244, 79 S.Ct. At 779, 29

U.S.C. § 158. Branson argues that his claim arises solely under

an individual promise, unrelated to GLI’s implementation of

EBS, and therefore involves no terms of employment arguably

regulated by section 8. Whether Branson’s seniority is or is not

EBS, however, does not prove dispositive. Certainly if

Branson’s claims do not involve the EBS program, no colorable

argument exists for NLRB jurisdiction. See Belknap, 463 U.S.

at 512, 103 S.Ct. at 3184 (holding that federal law does not

preempt replacement employees from suing in state court for an

employer’s breach of individual promises of permanent

employment).

Yet our holding of no preemption remains the same

even if Branson’s clagahs do involve EBS. The Supreme Court

said as much in Belknap, where individual replacement

employees succeeded in maintaining their state breach of

contract claims against a company which promised them

permanent employment but then fired them to make room for

returning strikers. 463 U.S. at 495-497, 103 S.Ct. At 3175-

3177. There the Court explicitly rejected the employer’s

contention that the employees’ breach of contract suit was

preempted “because it related to . . . conduct that was part and

8a

a parcel of an arguable unfair labor practice.” /d at 510, 103

S.Ct. at 3183. Recognizing that “whether the strike was an

unfair labor practice strike and whether the offer to

replacements was the kind of offer forbidden during such a

dispute were matters for the Board,” the Court nevertheless

noted that in making those determinations, “the Board would be

concerned with the impact on strikers not with whether the

employer deceived replacements.” Jd Thus, the state law

causes of action were not preempted by the NLRA because they

were “of no more than peripheral concern to the Board and the

federal law . . .while [the state] surely [had] a substantial

interest in protecting its citizens from misrepresentations that

have caused them grievous harm.” /d At 511, 103 S.Ct. at

3183.

GLI seeks to distinguish Belknap on the grounds that

“Belknap did not involve a breach of contract based on a term

of employment concerning a mandatory subject of bargaining

(seniority) unilaterally implemented by an employer upon an

impasse in bargaining negotiations.” As an initial matter, we

note that Greyhound has failed to demonstrate whether impasse

in fact occurred before the implementation of EBS, a finding

necessary to complete Greyhound’s alleged distinction. More

fundamentally, however, Belknap indeed did involve a term of

employment (whether the position was permanent or

9a

temporary) concerning a mandatory subject of bargaining

(reinstatement of strikers) unilaterally implemented by an

employer upon an impasse in bargaining negotiations. See

Belknap, 463 U.S. at 493-496, 103 S.Ct. at 3174-3176.

GLI more correctly observes that Belknap did not

involve either an NLRB unfair labor practice finding or a

specific order issued by the NLRB because the parties settled

their differences before such a decision could issue.

Nevertheless, Belknap addressed that very argument by noting

that even in the face of an explicit Board order directing an

employer to violate contracts made with replacement workers,

“the suit for damages for breach of contract could still be

maintained without in any way prejudging the jurisdiction of the

Board or the interest of the federal law in insuring the

replacement of strikers.” 463 U.S. at 512, 103 S.Ct. at 3184.

The Supreme Court faced a similar issue in J. /. Case v.

NLRB, 321 U.S. 332, 64 S.Ct. 576, 88 L.Ed 762 (1944). There

the Court ordered an employer not to enforce individual

employment contracts that forestalled collective bargaining or

deterred self-organization. 321 U.S. at 341-42, 64 S.Ct. at 582.

Nonetheless, the Court specifically preserved the right of the

employees to seek damages for the breach of their individual

agreements. Jd.

10a

GLI also makes much of Bassette v. Stone, 25 F.3d 757

(9th Cir. 1994), cited by the district court for the proposition

that Branson may have been able to bring his claim under

section 8 of the NLRA. Bassette does hold that in addition to

“limiting employers in which terms they may implement after

impasse, section 8 requires that employers honor those terms

once they are implemented . . . the latter duty follow[ing] from

the former.” 25 F.3d at 761. In Zassette, however, the court

confronted the claims of an employee represented under the

expired collective bargaining agreement, who continued to

work during negotiations over a new collective bargaining

agreement and whose claim rested on a unilaterally implemented

term validly implemented under section 8.

Whether or not we should accept Bassette generally is

a question we leave for another day. At the very least,

however, we decline to apply Bassette on the facts currently

before us, where a replacement employee has challenged the

breach of a promise arguably based on a_ unilaterally

implemented term that the NLRB already has determined

violates section 8. Applying Bassette in this way would create

an unacceptable incoherence in the duties required by section 8.

It cannot both be an unfair labor practice to refuse to honor an

implemented term and then also an unfair labor practice to

continue to honor that same term.

lla

In addition, simply labeling a term of employment

“unilaterally implemented” cannot transform replacement

workers into participants in the collective bargaining process.

See Service Elec. Co., 281 N.L.R.B. 633, 641 (1986) (holding

that employer has no duty to negotiate with the union regarding

the terms and conditions of the replacements’ employment);

Leveld Wholesale, Inc., 218 N.L.R.B. 1344, 1350 (holding that

union’s duty of fair representation does not interfere with its

ability to insist during negotiations that an employer terminate

replacements to make room for returning strikers). These

replacement workers come to work when no collective

bargaining agreement is in effect, and they work under

conditions that have not been collectively bargained for their

benefit. -See Service Elec., 281 N.L.R.B. 633; Leveld, 218

N.L.RB. at 1350 (“Strike replacements can reasonably foresee

that, if the union is successful, the strikers will return to work

and the strike replacements will be out of a job.”); cf Belknap,

463 U.S. at 513-514, 103 S.Ct. at 3184-3185 (Blackmun, J.,

concurring) (“During settlement negotiations, the union can be

counted on to demand reinstatement for returning strikers as a

condition for any settlement.”).

To assert that such replacement workers must bring

their claims to the NLRB rather than to an appropriate court,

seems to vest this federal administrative body with power over

12a

disputes purely private and independent of an unfair labor

practice or collective bargaining agreement. See 29 U.S.C. §

160 (giving Board jurisdiction only to prevent any person from

engaging in any unfair labor practice); see also National

Licorice v. NLRB, 309 U.S. 350, 366, 60 S.Ct. 569,578, 84

L.Ed. 799 (“the National Labor Relations Act contemplates no

more than the protection of the public rights which it creates

and defines”). Federal labor law may create in represented

employees a certain expectation and interest that an employer

will abide by terms properly and unilaterally implemented during

negotiations over a collective bargaining agreement. See

Bassette, 25 F.3d at 760. Nevertheless, the expectations of

replacement employees, who trust that an employer will keep its

promises, stem from the different and more traditional source of

state contract law. See Belknap, 463 U.S. at 507, 103 S.Ct. at

3181 (holding that even if replacement employees are

“represented” by the Union in some technical sense, and thus

governed by whatever settlement the Union negotiates to end

the strike, this cannot change the Court’s holding in J. J. Case

that such currently “represented” employees may sue for

damages on their non-collective contracts); see also Caterpillar

Inc. v. Williams, 482 U.S. 386, 396, 107 S.Ct. 2425, 2431-32,

96 L.Ed.2d 318 (1987) (finding that a state-law plaintiff may be

covered by a collective bargaining agreement, but still may have

independent contract rights arising under state law).

13a

[4] The remainder of GLI’s arguments for affirming

the district court’s findings of preemption relates to the

possibility that a court might order GLI to behave in a manner

contrary to the NLRB’s decision. As Belknap makes clear,

however, “it will not be open to any tribunal to compel the

employer to perform the acts, which, even though he has bound

himself by contract to do them, would violate the Board’s order

or be inconsistent with any part of it.” Belknap, 463 U.S. at

$12 n. 13, 103 S.Ct. at 3184 n. 13 (quoting National Licorice

Co. v. NLRB, 309 U.S. at 365, 60 S.Ct. at 577). GLI fails to

recognize the flip side of this statement, that although no

tribunal may order specific performance in the face of a contrary

NLRB order, proper tribunals nonetheless may award damages

for that very breach “without in any way prejudicing the

jurisdiction of the Board or the interest of the federal law in

insuring the replacement of strikers.” Belknap, 463 U.S. at 512,

103 S.Ct. at 3184. J. 1. Case makes a similar distinction,

providing that its order for the employer to bargain collectively,

despite the existence of non-expired individual contracts, is

“without prejudice to the assertion of any legal rights the

employee may have acquired under such contract or to any

defenses there-to by the employer.” 321 U.S. at 342, 64 S.Ct.

at 582.

Because Branson’s breach of contract claim is not based

14a

on activity arguably protected or prohibited under the NLRA,

it is not preempted under Garmon.

B

The district court also held that section 301 of the

LMRA preempted Branson’s breach of contract claim because

a resolution of the relevant allegations would depend on the

analysis of one or more collective bargaining agreements.

Because Branson bases his breach of contract claim on either

the 1990 EBS program unilaterally implemented by GLI or a

separate individual promise made to Branson, we disagree.”

[5,6] The district court’s ruling on preemption is a

question of law which we review de novo. Baker v. Farmers

Elec. Coop., Inc., 34 F.3d 274, 278 (Sth Cir. 1994). Section

301 preempts state causes of action that allege the violation of

a collective bargaining agreement affecting interstate commerce.

Allis-Chalmers Corp., 471 U.S. at 210, 105 S.Ct. at 1911;

Eitmann v. New Orleans Public Serv., Inc., 730 F.2d 359, 361-

? In earlier proceedings, Branson made an alternative argument

that “if for some reason the 1990 agreement should prove to be invalid,

then Mr. Branson would nevertheless be entitled to his seniority under the

plain and unmistakable language of the [1993] collective bargaining

agreement itself.” Because Branson does not reassert this argument in his

briefs on appeal, it is waived. See Zuccarello v. Exxon Corp., 756 F.2d

402, 407-408 (5th Cir. 1985); FED. R. APP. P. 28.

15a

62 (Sth Cir. 1984). When the resolution of a state law claim

substantially depends on the meaning of a collective bargaining

agreement, courts must treat the claim as o ne made under

section 301 or dismiss it as preempted by federal labor law.

Allis-Chalmers, 471 U.S. at 220, 105 S.Ct. at 1916; Thomas v.

LTV Corp., 39 F.3d 611, 617 (Sth Cir. 1994). Nonetheless,

section 301 does not necessarily preempt every state law claim

between the parties to a collective bargaining agreement, nor

does it preempt claims only tangentially related to such an

agreement. Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S.

309, 409-11, 108 S.Ct. 1877, 1883-85, 100 L.Ed.2d 410

(1988); Allis-Chalmers, 471 U.S. at 211-12, 105 S.Ct. at 1911-

1912; Thomas, 39 F.3d at 617.

[7] Inthe instant case, GLI claims that resolution of

Branson’s breach of contract claim depends on the

interpretation of the 1987 CBA. We disagree. Greyhound

concedes that at the time Branson retired in 1987, he had

accumulated 10.18 years of seniority under the 1987 CBA.

Deciding whether or not GLI made a subsequent promise in

1990 to credit Branson with that amount of seniority, whether

Branson relied on such a promise, and whether GLI breached

such a promise will not require the interpretation of the 1987

CBA and thus cannot support a finding of preemption. See

Lingle, 486 U.S. at 413, 108 S.Ct. at 1885 (holding that section

16a

301 preempts “an application of state law . . . only if such

application requires the interpretation of a collective bargaining

agreement”).

GLI also claims that a court would have to consider the

1993 CBA’s seniority provision “to consider the merits of the

parties’ dispute as to the nature of Branson’s seniority.” The

seniority provision of the 1993 CBA, however, contains no

precise definition of EBS, nor does it clarify whether EBS

contemplated the extension of seniority credit only for non

Greyhound driving experience. Even if it did, what Greyhound

and the Union say in 1993 (in the CBA) about what Greyhound

and Branson agreed to in 1990 cannot alter the analysis of the

1990 agreement itself (unless one argues that the 1993

agreement supersedes the one made in 1990, an argument

addressed and rejected below). Thus, if and when a court

attempt to resolve the merits of the dispute over the nature of

the seniority allegedly promised to Branson in 1990, interpreting

the 1993 CBA will not prove necessary or useful.

GLI additionally claims that a court must consider the

1993 CBA’s seniority provision “to consider GLI’s defense that

validity of its action is based on the NLRB’s order.” We

disagree. While GLI indeed may attempt to use the NLRB

order as a defense to the state contract claim, section 301 does

17a

not provide for the preemption of claims that might involve the

interpretation of an NLRB order. See Belknap, 463 U.S. at

512, 103 S.Ct. at 3184. Simply pointing out that the 1993 CBA

anticipates the issuing of such an order cannot transform GLI’s

defense into one based on the 1993 CBA.’ To the extent that

such a defense would implicate the 1993 CBA at all, it would do

so only tangentially and thus would not preempt the underlying

state claim.’ See Allis-Chalmers, 471 U.S. at 211, 105 S.Ct. at

3 The 1993 CBA anticipates an NLRB order because Greyhound

and the Union explicitly agreed to leave the resolution of EBS to the NLRB

and to abide by whatever decision the NLRB made.

* The Supreme Court faced, but refused to decide, a similar issue

in Caterpillar, Inc. v. Williams, where former employees brought a breach

of contract suit in state court against their former employer based on

alleged individual employment contracts. Caterpillar, Inc. v. Williams,

482 U.S. 386, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). The employer

sought to remove the case to federal court, arguing that its intent to raise

a collective bargaining agreement as a defense mandated preemption under

section 301. Jd. at 390, 107 S.Ct. at 2428. Because of the procedural

posture of the case — whether or not removal of the state claims to federal

court was appropriate — the Supreme Court expressly declined to rule on

the merits of the preemption issue. 482 U.S. at 398 n. 13, 107 S.Ct. at

2433 n. 13. Nonetheless, the Court expressly held that section 301 does

not so “completely preempt” a state law claim for breach of contract that

simply raising a collective bargaining agreement as a defense would merit

removal. Jd: see also Franchise Tax Bd. V. Construction Laborers

Vacation Trust, 463 U.S. 1, 24, 103 S.Ct. 2841, 2854, 77 L.Ed.2d 420

(1983) (“[I}f a federal cause of action completely preempts a state cause of

action any complaint that comes within the scope of the federal cause of

action necessarily ‘arise under’ federal law.”). The Court noted that even

when an employer-defendant alleges that a subsequent collective

18a

1911 (“not every dispute concerning employment, or

tangentially involving a provision of a collective-bargaining

agreement, is pre-empted by § 301”).

GLI also argues that section 301 preempts Branson’s

breach of contract claim because the alleged individual seniority

agreement seeks to limit or condition the 1993 CBA. Yet each

of the cases that Greyhound cites for this proposition concern

individual agreements made in the context of currently binding

collective bargaining agreements. See Thomas, 39 F.3d at 617-

18; Eitmann, 730 F.2d at 363. In Zhomas,, we held that an

individual attendance probation agreement negotiated by the

employee, his union, and the employer that set forth minimum

attendance requirements for the year and modified the discharge

procedures of the existing CBA, would be treated as a CBA for

section 301 preemption purposes. Thomas, 39 F.3d at 614-17.

In Eitmann, we found that where an employer’s pre-

employment promises conflicted with the collective bargaining

agreement in effect at the date of hire, section 301 would

preempt a state law claim based on the pre-employment

promise. 730 F.2d at 360-63.

bargaining agreement supersedes the individual agreement at issue, section

301 does not necessarily mandate preemption. 482 U.S. at 394-97, 107

8.Ct. at 2430-32.

19a

Here, in contrast to the cases cited by Greyhound, at the

time Branson allegedly struck his individual deal with

Greyhound, the 1987 CBA had expired and the bargaining

parties had yet to agree on the 1993 CBA. In fact, Branson was

a replacement employee and had no interest in the CBAs. See

Service Elec., 281 N.L.R.B. at 641 (employers have no duty to

bargain with a striking union about terms for replacement

employees). Thus, because no collective bargaining agreement

governed at the time Branson and Greyhound allegedly made

their individual contract, we cannot find that Branson’s

individual claim seeks to limit or condition a collective

bargaining agreement.

Whether or not the 1993 CBA supersedes the alleged

individual agreement, even though made outside the context of

a binding collective bargaining agreement, presents a different

issue. GLI relies on /. J. Case for the proposition that collective

bargaining agreements must supersede and thus preempt

individual employment contracts. Yet while J. J. Case did state

broadly that the “very purpose of providing by statute for the

collective agreement is to supersede the terms of separate

agreements by employees,” see 321 U.S. at 338, 64 S.Ct. at

580, the Court also explicitly sought to preserve the rights of

employees to seek damages based on these superseded

individual contracts. See 321 U.S. at 342, 64 S.Ct. at 582.

20a

[8] | The Supreme Court has attempted to correct this

type of erroneous interpretation before. In Caterpillar, the

employer “argue[d] that when respondents returned to the

collective-bargaining unit, their individual employment

agreements were subsumed into, or eliminated by, the collective

bargaining agreement.” 482 U.S. at 395-96, 107 S.Ct. at 2431.

With unmistakable clarity, the Court responded:

Caterpillar is mistaken . . . J. J. Case does not stand for

the proposition that all individual employment contracts

are subsumed into, or eliminated by, the collective-

bargaining agreement... Thus, individual employment

contracts are not inevitably superseded by any

subsequent collective agreement covering an individual

employee, and claims based upon them may arise under

state law.

482 U.S. at 396, 107 S.Ct. at 2431 (citations omitted).

“Caterpillar’s basic error,” continued the Court, “is its failure to

recognize that a plaintiff covered by a collective bargaining

agreement is permitted to assert legal rights independent of that

agreement, including state law contract rights, so long as the

contract relied upon is not a collective bargaining agreement.”

Id. Whether Branson’s claim for breach of contract arises out

of a purely individual agreement, as he alleges or out of

Greyhound’s unilateral implementation of EBS, as GLI alleges,

no one posits that his claim arises out of a contract that is itself

Zia

a collective bargaining agreement.’ GLI’s arguments of

supersession thus cannot withstand appropriate scrutiny.

In its final plea for a finding of section 301 preemption,

GLI notes that should Branson prevail on his breach of contract

claim, a court could not determine Branson’s damages without

looking to the rates of pay included in the 1993 CBA, or the

parameters of any proper injunction without looking to the

seniority provisions of the 1995 modification. Assuming

arguendo that this proposition is true, it hardly establishes that

Branson’s underlying claim “is substantially dependent upon” an

analysis of the terms of a collective bargaining agreement.

Allis-Chalmers, 471 U.S. at 211, 105 S.Ct. At 1916. Indeed,

the Supreme Court rejected this very argument in Lingle, 486

US. at 413 n. 12, 108 S.Ct. at 1885 n. 12, holding that while

collective bargaining agreements may contain information such

as rates of pay, possibly helpful in determining the damages due

5 GLI does half-heartedly assert that the EBS provisions are the

“functional equivalent” of a collective bargaining agreement for

preemption purposes. We disagree. The 1990 contract terms were not a

collectively bargained instrument, and were functionally distinct in many

ways. See Thomas, 39 F.3d at 618 (defining collective bargaining as

“bargaining by an organization or group of workmen on behalf of its

members with the employer”). The terms were implemented three days

after being presented to the union. Lastly, section 301 preempts claims

that depend on a CBA, not its functional equivalent. A/lis-Chalmers, 471

U.S. at 220, 105 S.Ct. At 1916.

22a

to a worker prevailing in a state-law suit, and while “federal law

would govern the interpretation of the agreement to determine

the proper damages, the underlying state-law claim, not

otherwise preempted, would stand.”

GLI has presented no persuasive authority for the

proposition that section 301 preempts Branson’s breach of

contract claim.

Ill

Branson appeals the district court’s decision in favor of

the Plan on two grounds: first, Branson argues that the district

court erred in using the abuse of discretion standard to review

the Trustees’ interpretation; and second, he argues that the

Trustees’ interpretation was nonetheless an abuse of discretion.

We disagree on both counts.

[9] The district court applied an abuse of discretion

standard because it found that the Plan conferred discretionary

authority on the Trustees. See Firestone Tire & Rubber Co. v.

Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 957, 103 L.Ed.2d 80

(1989); Chevron Chem. Co. V. Oil, Chem. and Atomic Workers

Local Union 4-447, 47 F.3d 139, 142 (Sth Cir. 1995). Whether

the district court employed the correct standard of review for

analyzing the Trustees’ interpretation of the Plan is a question

23a

of law which we review de novo. Chevron Chem., 47 F.3d at

142.

{10} The district court must apply an abuse of

discretion standard only when the Plan itself confers

discretionary authority on the Trustees to interpret the Plan.

See Firestone Tire, 489 U.S. at 115, 109 S.Ct. at 956-57

(holding that “a denial of benefits . . . is to be reviewed under a

de novo standard unless the benefit plan gives the administrative

or fiduciary discretionary authority to determine eligibility for

benefits or to construe the terms of the plan”); Chevron Chem.,

47 F.3d at 142. In Chevron Chem., we held that the district

court correctly used the abuse of discretion standard where the

pension plan conferred discretionary authority in the following

manner: “[T]he administrator is empowered to ‘make such

rules, regulations, [and] interpretations . . . and [to] take such

other action... as [he] may deem appropriate.” 47 F.3d at 143

(emphasis and alterations in original)(quoting pension plan).

[11] Im the case at hand, the Plan uses similar

language to confer discretionary authority upon the Trustees.

Section 6.2 of the Plan states that the Trustees have the power

“[t]o decide any question arising in the administration,

interpretation, and application of this Plan.” Consequently, the

district court correctly used the abuse of discretion standard to

24a

review the decision of the Trustees.

Branson argues, however, that the Trustees here are

subject to a “suspicion of partiality”® and that the district court

should have used a sliding scale — something less than the

abuse of discretion standard — to review the Trustees’ decision.

See Lowry v. Bankers Life and Casualty Retirement Plan, 871

F.2d 522, 525 & n. 6 (Sth Cir. 1989)(suggesting the possibility

of using a sliding scale to review trustees’ decisions). We

disagree.

[12,13] The district court found, as a matter of fact,

that no animosity toward replacement workers influenced either

Greyhound or the Union. We review the district Court’s factual

findings for clear error. See Bellaire Gen. Hosp. V. Blue Cross

Blue Shield, 97 F.3d 822, 829 (Sth Cir. 1996). Branson does

not dispute that in 1990 the Union helped him correct

Greyhound records to reflect his actual starting date and that

later, the Union pursued Branson’s grievance regarding a

company decision to place him on sick leave for an extended

period of time. Under these circumstances, we cannot say that

* — Branson claims that the Plan operates under a conflict of

interest because the Plan is managed by a six-member Board of Trustees,

half chosen by the Union and half by Greyhound, none of whom have an

interest in helping former strike-breakers.

25a

the district court committed clear error in finding no suspicions

of partiality. Thus, the district court was correct in refusing to

use a suspicion of partiality as a factor in determining whether

the Trustees abused their discretion.

[14] Branson additionally claims that the district court

erred in finding no abuse of discretion because: (1) the Trustees

looked to the 1987 CBA instead of the 1993 CBA to determine

whether Branson lost his seniority;’ and (2) even the 1987 CBA

did not explicitly state that Branson would lose his seniority

when he quit. We review de novo the district court’s ultimate

legal conclusion that there was no abuse of discretion by the

Trustees. See Sweatman v. Commercial Union Ins. Co., 39

F.3d 594, 601 (Sth Cir. 1994).

[15-17] A two-step inquiry governs whether the

Trustees abused their discretion in refusing to give Branson the

additional seniority he claimed. Pickrom v. Belger Cartage

Serv., Inc., 57 F.3d 468, 471 (5th Cir. 1995). First, we

determine whether the Trustees gave the Plan a “legally correct”

7 Branson also appears to argue that the Trustees should have

looked to the 1990 Agreement implemented unilaterally by Greyhound to

determine whether he lost his seniority. This argument ignores the fact

that under section 11.1 of the Plan, any action taken by Greyhound without

the concurrence of the Union can have no effect on the Plan.

26a

interpretation. Jd In deciding the first step —- whether the

Plan’s interpretation was legally correct — we consider three

factors: (1) whether the Trustees have given the pension plan a

uniform construction; (2) whether the Trustees’ interpretation

is consistent with a fair reading of the Plan; and (3) whether

different interpretations of the Plan will result in unanticipated

costs. /d.; Chevron Chem., 47 F.3d at 145.

In the instant case, the first factor proves insignificant

because the Trustees have not previously interpreted the

relevant provisions. Although not determinative, the third

factor of unanticipated costs supports the Trustees. Indeed, the

Trustees’ interpretation seems designed to thwart the very

unanticipated costs that Branson’s interpretation inevitably

would produce. Particularly with employees like Branson, who

have accumulated long terms of seniority and then left the

company, attempting to arrange actuarially for the possibility

that these employees might reenter the Plan at any moment,

demanding immediate recognition of substantial terms of

seniority, certainly results in unanticipated costs.

The second factor, relating to whether or not the

Trustees’ engaged in a “fair reading of the Plan,” forms the basis

of Branson’s argument that the Trustees’ abused their discretion

in interpreting the Plan to deny him additional seniority credit.

We find, however, that the Trustees’ interpretation is a fair

27a

reading of the Plan.

Section 2.1 of the Plan provides:

Notwithstanding anything to the contrary in this Section

2.1(1), however, an Active Participant who

subsequently terminates employment with an Employer

and thereupon loses his seniority under the Collective

Bargaining Agreement . . . shall thereafter cease to be an

Active Participant regardless of whether such

Participant is subsequently re-employed by an Employer

or a Related Employer.

The Plan provides in 2.3(2) that only Active Participants may

accrue pension credit or benefits under the Plan. In 1987,

Branson was an “Active Participant who subsequently

terminate{d] employment with an Employer.” Thus, the

question for the Trustees became whether Branson “thereupon

los[t] his seniority under the Collective Bargaining Agreement.”

The Trustees found that Branson did lose his seniority under the

1987 CBA and thus “cease[d] to be an Active Participant” in the

Plan, meaning that he could no longer accrue additional pension

credit, regardless of his later re-employment.

Branson argues that using the 1987 CBA does not

comport with a fair reading of the Plan because the definition of

“Collective Bargaining Agreement” includes not only “[t]he

current collective bargaining agreement between the Company

and the Union,” but also any “extensions thereof, or any

successor agreements between the parties.” This definition,

28a

however, cannot alter the import of the phrase, “thereupon loses

his seniority” in section 2.1 (emphasis added). Black’s Law

Dictionary defines “thereupon” as: “without delay or lapse of

time.” BLACK’S LAW DICTIONARY 1478 (6th ed. 1990).

Webster’s New Collegiate Dictionary similarly defines

“thereupon” as “immediately after that.” WEBSTER’S NEW

COLLEGIATE DICTIONARY 1201 (1979). Thus, the

Trustees did engaged in a fair reading of the Plan by looking to

the collective bargaining agreement in effect “immediately after”

Branson terminated his employment in 1987.

Branson also argues that the Trustees failed to make a

fair reading of the Plan by interpreting the 1987 CBA to

impliedly revoke seniority for employees who voluntarily quit.

We disagree. Branson correctly notes that the 1987 CBA

neither explicitly protects nor explicitly revokes the seniority of

employees who voluntarily quit. The 1987 CBA does, however,

explicitly retain seniority for several categories of employees,

including employees entering the armed forces, employees

receiving leaves of absence for less than 30 days, employees

furloughed as part of a reduction in force (so long as they return

to work when it becomes available), employees in the service of

the union, and employees accepting supervisory positions (so

long as they resume a position within the bargaining unit within

24 months). The Latin maxim expressio unius exclusio alterius

29a

proves instructive. The Trustees found that the inclusion of

specific circumstances in which an employee retained seniority

meant that an employee did not retain seniority in other

circumstances. Consequently, those employees who voluntarily

quit “lost” their seniority, and the Plan could not allow any later

accumulation of additional seniority. Branson has failed to

show that this not a fair reading of the Plan.

Having found that the Trustees’ interpretation of the

Plan was legally correct, we need not proceed to the second

step of our analysis. Pickrom v. Belger Cartage Serv., Inc., 57

F.3d 468, 472-473 (Sth Cir. 1995). The Trustees did not abuse

their discretion in interpreting the Plan.

IV

[18] In summary, we hold that Branson’s breach of

contract claim against Greyhound is not preempted by the

NLRA or the LMRA.* We reverse and remand to the district

type, if any, of seniority credit Greyhound offered Branson, what that

seniority credit would have done for Branson, whether or not Greyhound’s

subsequent behavior contradicted any accepted offer and whether

Greyhound has any viable defenses.

30a

court for proceedings consistent with this opinion.” We affirm

the district court’s judgment in favor of the Plan.

. Branson’s only remaining claim is a breach of contract based on

State law. In light of this opinion, the district court may revisit its decision

paduaseine tan tuiiaaenc shes Sa ceyelt

Parker & Parsley Petrolewn Co. v. 85 (Sth

Cir. 1992) (“Our ee Ens sie te he

Claims to which they are pendent are dismissed.”).

3la

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TEXAS

EL PASO DIVISION

JENNELL L. BRANSON,

Plaintiff,

v. EP-95-CA-235-DB

GREYHOUND LINES, INC.—

AMALGAMATED COUNCIL

RETIREMENT AND DISABILITY

PLAN and GREYHOUND

LINES, INC.,

Defendants.

rr GP ar LN LN MN LN LF Li Lr

FINDINGS OF FACT AND CONCLUSIONS OF LAW

On this day, the Court considered the above-captioned

cause. Trial in this matter was before the Bench on Wednesday,

September 25, 1996. The Plaintiff filed his Proposed Findings

of Fact and Conclusions of Law on October 1, 1996.

Defendant Greyhound Lines, Inc. Amalgamated Council

Retirement and Disability Plan, also filed its Proposed Findings

of Fact and Conclusions of Law on October 1, 1996. After due

consideration, the Court is of the opinion that this matter be

resolved as set forth below:

32a

Dismissal of Plaintiff's Claims As Against

Greyhound Lines, Inc.

At this point, the Court notes that, on the day of trial,

after Plaintiff had presented all of his evidence, the Court

dismissed Plaintiff's action as against Greyhound Lines, Inc.,

because state law causes of action are preempted by the

National Labor Relations Act (“NLRA”) when they concern an

activity which is actually or arguably protected by the NLRA.

San Diego Building Trades Council v. Garmon, 359 U.S. 236,

245 (1959). In this instance, Plaintiff's action is based on

conduct which is actually or arguably prohibited by Section 8 of

the NLRA. Bassette v. Stone Container Corp., 25 F.3d 757

(9th Cir. 1994). Finally, Section 301 of the Labor Management

Relations Act preempts a state law claim, the resolution of

which is dependent on the consideration or analysis of a

collective bargaining agreement for resolution. Allis-Chalmers

Corp. v. Lueck,, 471 U.S. 202, 220 (1985); Thomas v. LTV

Corp., 39 F.3d 611, 616 (Sth Cir. 1994); Baker v. Farmers

Electric Cooperative, Inc., 34 F.3d 274 (Sth Cir. 1994).

FINDINGS FACT

1. Plaintiff Jennell L. Branson went to work for

Greyhound Lines, Inc. or one of its predecessors on or about

| May 16, 1977 as a bus driver. Plaintiff remained an employee

of Greyhound Lines, Inc. (“the Company”) until about July 20,

1987, when he resigned from the company to pursue other

33a

employment opportunities. At the time of his resignation in

1987, Plaintiff had vested pension rights with the Greyhound

Lines, Inc.- - Amalgamated Council Retirement and Disability

Plan (“the Plan”) based on his 10 years’ service with the

Company. Plaintiff returned to work for the Company as a bus

driver on or about April 1, 1990.

2. Plaintiff filed this suit in the U.S. District Court for

the Western District of Texas seeking declaratory relief setting

forth his rights under the Plan, as provided in the Employee

Income Retirement Security Act of 1974 (ERISA), 29 U.S.C.

§ 1132(a)(1)(B). Plaintiff requests a declaration that he is

entitled to pension credit for the time he has worked for the

Company since his return in 1990. Defendant Plan duly

answered, denying Plaintiff's right to such pension credit.

Plaintiff has exhausted his remedies under the Plan. The Plan

trustees considered and rejected Plaintiff's claim on or about

February 6, 1996. This decision was then communicated in

writing to Plaintiff and his counsel.

3. The Plan is managed by a six-member board of

trustees. Half of the trustees are chosen by Greyhound Lines,

Inc., and the other half are chosen by the Amalgamated Council

of Greyhound Local Unions. The Plan was created in march

1987 and is a legal entity separate and apart from the Company

and the Union.

4. Only those persons who were participating in one of

34a

several predecessor retirement plans in 1987 could become

participants in the Plan. As of January 1995, the Plan had about

17,074 participants. Of those, 1,466 are “active participants”

who continue to accrue pension benefits under the Plan. About

10,754 of the participants are now receiving pension benefits.

The remaining 4,854 participants, including Plaintiff, are

classified as “inactive, non-retired participants,” meaning they

have vested pension benefits but are neither accruing additional

benefits nor have begun receiving pension payments.

5. The Plan provides that a person who leaves the

company and loses his seniority at that time ceases to be an

active participant in the Plan even if he later returns to work for

the Company. The Plan, at Sec. 2.1(1), states:

Notwithstanding anything to the contrary in this

Section 2.1(1), however, an Active Participant

who subsequently terminates employment with

an Employer and thereupon loses his seniority

under the Collective Bargaining Agreement . . .

shall thereafter cease to be an Active Participant

regardless of whether such Participant is

subsequently re-employed by an Employer or a

Related Employer.

The Plan, at Sec. 2.3(2), provides that only Active Participants

may accrue pension credit or benefits under the Plan. The Plan,

at Sec. 6.2(b), provides that the trustees have the power “To

decide any question arising in the administration, interpretation,

and application of this Plan; . . .” The Plan may be amended

Te

35a

only by the joint action of the Union and the Company, as

provided in Sec. 11.1.

6. At the time Plaintiff resigned from the Company in

1987, a collective bargaining agreement was in effect between

the Company and the Amalgamated Council. Plaintiff was

subject to the terms and conditions of the collective bargaining

agreement. The collective bargaining agreement contains the

following provisions regarding when covered employees may

retain their seniority:

© Section A-17 (employees “in the service of the Union

_etain and accumulate all seniority rights and benefits . . .”);

© Section A-18 (bargaining unit employees accepting

supervisory positions retain seniority for 24 months and “suffer

no loss of seniority” if they resume a bargaining unit position

during that period);

© Section A-24 (employees entering the armed forces

“retain and accumulate seniority rights and benefits” during their

military service);

© Section B-6 (by agreement, employees may receive

leaves of absence of 30 days or more “without loss of

seniority”); and

@ Section B-7 (employees furloughed as part of a

reduction in force “retain their seniority,” although it may be

lost if they decline to return to the company when work

36a

becomes available).

The collective bargaining agreement, however, contains

no language permitting a covered company employee who has

resigned to pursue other employment interests to retain his

seniority. Robert Tancos, a labor relations specialist with the

Company, testified that the 1987-90 agreement had always been

construed as divesting a driver of his seniority if he voluntarily

quit the service of the Company. The current labor contract

contains substantially the same provisions. Tancos further

testified that in the thirty years he has been involved in labor

relations for the Company, every labor agreement between the

Company and the Union has been so construed with respect to

the seniority of voluntary resignees. Likewise, Tancos testified

that the labor agreements never provided for “bridging” of

seniority for voluntary resignees. This position is also reflected

in the documentary evidence submitted in this case.

7. In rejecting Plaintiffs contention that he should

accrue pension benefits under the Plan for the time he has

worked for the Company since 1990, the Trustees relied on Sec.

2.1(1) of the Plan.

8. Until Plaintiff's claim had been submitted, the

Trustees had not been called upon to interpret the Plan language

for purposes of determining if a person who voluntarily resigned

from and later returned to employment with the Company

should be permitted to accrue pension benefits based on the

37a

latter period of employment.

9. Based on the pension benefits he accrued between

1977 and 1987, Plaintiff would be eligible to receive $134.99

per month for life if he retiree at age 55. Assuming Plaintiff

works for the Company until he turns 55 years of age and were

to receive pension credit not only for the time he worked from

1977 until 1987 but also for the time he would have worked

after April 1990, Plaintiff would be eligible to receive $1,228.92

per month for life, if he retired at age 55. This calculation is

based on the assumption Plaintiff would receive annual wage

increases of 2 percent during that time, since pension payments

are tied to a pafticipant’s average final earnings with the

company.

10. The Trustees were advised that it would be

inconsistent with the actuarial assumptions upon which the

Plan’s obligations have been calculated to allow a participant to

accrue additional pension benefits once he had left the

Company’s employ, even if he should later return to work for

the Company. Such an interpretation of the Plan language

would have an adverse impact on contributions or benefits or

both.

11. When Plaintiff returned to work in 1990, the labor

contract had expired, and the union had called a strike. In an

effort to induce non-union drivers to work during the strike, the

Company promised them employment based seniority (“EBS”).

ail

38a

This was seniority credit for any prior full-time employment

they had as over-the-road drivers. When he returned to work

in 1990, the Company credited Plaintiff with about 10 years’

seniority. EBS was intended to enhance a driver’s seniority for

purposes of assignment of bus routes and, in turn, could affect

his pay and vacations. The National Labor Relations Board |

subsequently found the Company’s use of EBS to be illegal as

an unfair labor practice. Thereafter, the Company and the

Union agreed that all EBS would be rescinded. The Company

then rescinded the 10 years’ seniority it had credited to Plaintiff

when he returned to work in 1990.

12. Plaintiff contends the Company promised him

restoration of his Greyhound Seniority as such rather than EBS

credit for that time. Tancos testified that the Company offered

only EBS. As discussed below, neither EBS nor a unilateral

promise of restored Greyhound seniority would affect Plaintiff s

pension rights under the Plan.

13. There is no evidence to support the argument that

the Union or the Company has been influenced by any

purported animosity toward drivers, such as Plaintiff, who

worked during the strike. After Plaintiff returned to work in

1990, the Union helped him correct Company records to reflect

his actual starting date. Later, the Union pursued to Plaintiff's

satisfaction his grievance regarding the Company decision to

39a

place him on sick leave for an extended period of time. In

January 1996, Plaintiff filed a grievance with the Union of the

recision of his seniority. The Union did not pursue that

_ grievance.

CONCLUSIONS OF LAW

1. This Court has jurisdiction over Plaintiff s claim. See

§ 5029e) of ERISA, 29 U.S.C. § 1132(e). Plaintiff has

exhausted his internal Plan remedies. His suit was timely filed,

and the Plan, likewise, timely answered.

2. In § 6.2, the Plan furnishes the Trustees the authority

to interpret and apply the plan language in their sound

discretion. Therefore, this Court must accept any such

interpretation unless it amounts to an abuse of that discretion.

Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 111, 109

S.Ct. 948, 103 L-Ed.2d 80 (1989) (recognizing the abuse-of-

discretion standard to be controlling, when the trustees are

afforded such authority); Chevron Chem. v. Workers Union 4-

447, 47 F.3d 139, 142-43 (Sth Cir. 1995) (same and noting that

language comparable to that in § 6.2 is sufficient to confer such

authority). The Court must accord the Trustees’ interpretation

considerable deference. Penn v. Howe-Baker Engineers, Inc.,

898 F.2d 1096, 1100 (Sth Cir. 1990) (the courts must afford

“great deference” to interpretations of plan language); Wallace

v. American Petrofina, 668 F.Supp. 586, 591 (E.D.Tex. 1987)

40a

(if the trustees of a pension fund and a participant offer rational,

though conflicting interpretations, the trustees’ interpretation

must control).

3. The Trustees’ interpretation of § 2.1 of the Plan is

reasonable and conforms to the language of that section. The

language provides that a participant who leaves the Company’s

employ and, thereby loses his seniority, ceases to be an active

participant in the Plan, even if he later returns to work for the

Company. This is the most natural reading of that section and

the one the Trustees have given it. The interpretation does not

conflict with other provisions of the Plan or with the Summary

Plan Description. The SPD states:

What happens if I quit or am laid off and

then I come back to work?

If your employment terminates and you lose

seniority under the Collective Bargaining

Agreement . . . then you cannot become an

Active Participant in this Plan again, even if you

come back to work. If you did not lose your

seniority, you will become an Active Participant

again when you return to work, as long as you

... return as a Re-Employed Employee.

This question and answer directly addresses Plaintiff's

circumstance and is consistent with the Trustees’ position.

4. The Trustees also properly interpreted the Plan as

stating that only “active participants” may accrue pension

benefits. The Trustees properly read the collective bargaining

4la

agreement in effect at the time Plaintiff voluntarily quit the

Company in 1987 as divesting him of his seniority. The

agreement contains numerous provisions detailing when

seniority may be retained. None permits a voluntary resignee,

such as Plaintiff, to retain seniority. Had the parties to the

agreement intended such a result, they would have so stated.

5. The net effect of these provisions of the Plan and the

relevant labor agreement is that a participant who leaves the

Company and loses his seniority becomes ineligible to accrue

additional benefits under the Plan even if the participant later

returns to work for the Company. Plaintiff is such a participant

and, accordingly, could not earn additional pension credit for

the time he has worked for the company since 1990.

6. The Trustees’ conclusion is reasonable in light of the

language of the Plan and the collective bargaining agreement.

There was no abuse of discretion. See Chevron Chem., 47 F.3d

at 145 (if trustees’ position reflects a “reasonable reading” of

the Plan, it generally should be upheld). This conclusion is

further bolstered in that the Trustees have never rendered a

contrary interpretation of the Plan Id. Similarly, a contrary

interpretation of the Plan, as Plaintiff would give it, creates

additional, unanticipated pension liability. This is a factor that

may be considered, as well. Id. While the latter two

considerations are not especially significant here, they are

42a

consistent with the Trustees’ decision in this case. See Jordan

v. Cameron Iron Works, Inc., 900 F.2d 53, 56 (Sth Cir. 1990),

cert. denied, 498 U.S. 939 (1990) (Absent any evidence

concerning either prior interpretations of the plan language or

unanticipated costs, the appellate court upholds summary

judgment based on the trustees’ “fair reading of the plan.”’).

7. Whether the Company offered Plaintiff EBS or actual

Greyhound seniority in 1990 to induce him to return to work is

irrelevant. In materials submitted to the Trustees, Plaintiff

specifically disavowed any reliance on EBS. Furthermore, EBS

was never intended to affect pension benefits. It has been

declared illegal and it has been rescinded by mutual agreement

of the Company and the Union. For these, among other

reasons, EBS cannot and does not afford Plaintiff any right to

pension credit for his employment with the Company since

1990. Assuming Plaintiff were, in fact, offered Greyhound

seniority rather than EBS, this amounted to a unilateral action

_of the Company and cannot legally bind the Plan. The Plan

itself provides it may be amended only by the joint action of the

Union and the Company. In addition, ERISA will not give any

legal effect to oral or written representations that “are not and,

do not purport to be, formal amendments of a plan. . .” Borst

v. Chevron Corp., 36 f.3d 1308, 1322 (Sth Cir. 1994), cert.

denied, _—US. ___, 115 S.Ct. 1699 (1995) (written

cee cake SI ni SAU st ema

SN re Ce en a

43a

representations); Rodriguez v. Western and Southern Life Ins.

Co., 948 F.2d 969, 971 (Sth Cir. 1991) (Fifth Circuit has

rejected argument that an ERISA plan participant is entitled to

additional benefits based on oral representations of his

employer’s representative), Degan v. Ford Motor Co., 869 F.2d

889, 895 (Sth Cir. 1989) (Court holds “that ERISA precludes

oral modifications to benefit plan and that claims of promissory

estoppel are not cognizable in suits seeking to enforce rights to

pension benefits.”). Whatever the Company’s representations

to Plaintiff may have been, they did not constitute amendments

of the Plan entitling him to additional pension credit.

8. Finally, Plaintiff has offered no evidence that the

Trustees labored under any sort of conflict in this case. There

is no showing that the Union or the Company has targeted

employees hired during the strike for disfavored treatment. In

fact, the Union has taken action on Plaintiff s behalf on several

occasions since his return in 1990. Moreover, the Plaintiff has

offered no evidence the Trustees made their decision in this case

based on any sort of improper grounds or because of any

improper motives.

Accordingly, IT IS HEREBY ORDERED,

ADJUDGED and DECREED that Plaintiff's claims against

Defendant Greyhound Lines, Inc. are DISMISSED.

IT IS FURTHER ORDERED that judgment is

44a

rendered on behalf of Defendant Greyhound Lines, Inc. - -

Amalgamated Retirement and Disability Plan.

IT IS FURTHER ORDERED that Plaintiff shall take

nothing, and Plaintiff's cause of action is hereby DISMISSED,

with prejudice.

Finally, IT IS ORDERED that all taxable costs are

hereby assessed against Plaintiff.

SIGNED this 30th day of October, 1996.

s/ David Bri

THE HONORABLE DAVID BRIONES

UNITED STATES DISTRICT JUDGE