The case involves an appeal by the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO/CLC, and United Steelworkers Local 12003 against National Grid and the Benefits Committee of National Grid USA Service Company. The central issue is whether the district court erred in denying arbitration for pension benefit claims by two former Boston Gas Company employees, Harry Barnard and Andrew Colleran.
The Union filed grievances after a Joint Pension Committee (JPC), established under the Boston Gas Company Union Employees' Pension Plan (BGC Pension Plan), deadlocked on the pension underpayment claims. Following the deadlock, the Union sought arbitration, which the Company refused, prompting the Union to file a complaint in federal court to compel arbitration. The district court ruled against arbitration as outlined in the BGC Pension Plan.
The appellate court, however, found that the disputes should indeed be referred to arbitration and reversed the district court's decision. Key documents in the case include the collective bargaining agreement (CBA), the KeySpan Retirement Plan, the Master Plan, and the BGC Pension Plan. Each party contended that the language within these documents supported their respective positions regarding the arbitration of the pension claims. The BGC Pension Plan specifically outlines procedures for resolving disputes, including the creation of the JPC and the delegation of fiduciary responsibilities.
The Collective Bargaining Agreement (CBA) is effective from January 20, 2019, to June 16, 2024, and includes pension benefits for employees hired before January 20, 2019. It retains the title 'KeySpan' for the Master Plan, which consists of twenty merged component plans due to National Grid's acquisitions of various companies, including Boston Gas Company. The only component plan relevant to this discussion is Addendum M, the BGC Pension Plan. The CBA specifies that it does not alter the Boston Gas Company Union Employees' Pension Plan, directing attention to the plan documents for complete benefit details.
The Master Plan designates the Retirement Plans Committee as the plan administrator under ERISA, granting it broad powers for administration, including rule-making, interpretation of plan terms, and determining eligibility and benefit payments. The Committee's decisions are final and binding, with the authority to delegate fiduciary responsibilities to other parties as allowed under ERISA. The Master Plan also establishes a claims procedure per ERISA, enabling claimants to request a review of denied claims, with the right to pursue civil action if claims are denied upon review.
The BGC Pension Plan, established in 1971 and consolidated into the Master Plan in 2003 after KeySpan acquired Boston Gas Company, provides pension benefits to employees of Boston Gas Company and its successors, delegating authority similarly to the Master Plan.
Since 1971, the BGC Pension Plan has undergone amendments through collective bargaining agreements between the Union and the Company, with the Company's ability to amend being governed by these agreements. Article 12 of the BGC Pension Plan details its administration, asserting that its provisions take precedence over those in the Master Plan. It establishes a Joint Pension Committee (JPC) composed of three members from the Union and three from the Plan Administrator, tasked with resolving eligibility questions and acting as fiduciaries under ERISA standards. Key provisions of Article 12 grant the JPC the authority to determine employees' rights regarding Retirement Allowances and mandate arbitration for disputes, excluding determinations of employee disability. If the JPC cannot rule on a case, it must refer the matter back to the parties without a decision.
In January 2020, the Union filed grievances for Barnard and Colleran, claiming they were denied proper pension payments upon retirement. After unsuccessful resolution attempts, the Union sought arbitration, which the Company rejected, asserting that the grievance was not arbitrable and directing the Union to use the Claims Review Procedure instead. Subsequently, the grievances were presented to the JPC, which met on June 9, 2020, but deadlocked on the claims, failing to provide clarity on whether it was returning the matter to the parties under the relevant provision of the Pension Plan. The basis for the JPC's tie vote remains unclear.
On June 15, the Union proposed arbitrators to the Company for disputes related to Section 12.025 of the BGC Pension Plan. The Company rejected arbitration on July 14, claiming the disputes were not arbitrable, as they pertained to a rule requiring individuals to contact the Pension Connect Center 45 days before retirement. The Company stated that since Mr. Colleran and Mr. Barnard were already determined eligible for benefits, their cases did not involve "questions of eligibility" that could be arbitrated. Additionally, the Company reiterated that the Claims Review Procedure was the sole means for participants to claim benefits, apart from civil actions under Section 502(a) of ERISA.
On August 7, 2020, the Union filed a complaint in the U.S. District Court for the District of Massachusetts, alleging two counts to compel arbitration under the Taft-Hartley Act and the FAA. The defendants moved to dismiss the complaint, and on September 28, 2021, the court granted the motion. It ruled that the pension grievances were non-arbitrable under the CBA and that the Joint Pension Committee (JPC) lacked authority to address the grievances, rendering the arbitration provision of Section 12.025 inapplicable. The court confirmed the Union's standing to compel arbitration, noting it had suffered an "injury in fact" due to the Company's refusal, which was causally connected to the inability to arbitrate, and that a favorable decision could redress this injury.
The Company misinterpreted the BGC Pension Plan by suggesting that only JPC members could refer disputes to arbitration. The court found the Plan ambiguous regarding who could initiate arbitration and concluded that the Plan Administrator's determination was not arbitrary or capricious. The Union appealed the dismissal of Count II but did not appeal Count I. The governing law indicates that unless a benefit plan grants discretionary authority to its administrator, challenges to denial of benefits are reviewed de novo.
The threshold issue for determining the standard of review in benefit plans is whether the plan grants clear discretionary authority for eligibility determinations, as established in Gross v. Sun Life Assurance Co. of Canada. This authority must be explicitly stated in the plan, and mere subtle inferences are insufficient. When a pension plan provides such clear authority, the administrator's decisions are upheld unless deemed arbitrary, capricious, or an abuse of discretion. Under ERISA, named fiduciaries can delegate responsibilities, excluding trustee duties, through specified procedures, and may also delegate discretionary authority to a neutral arbitrator to resolve deadlocks. The Taft-Hartley Act supports the use of impartial arbitrators in such situations. The BGC Pension Plan explicitly designates the Joint Pension Committee (JPC) as a fiduciary and grants it discretionary fiduciary responsibilities, including authority over eligibility questions, determining employee disability, benefit distribution upon plan termination, and assessing beneficiary incompetence. The JPC is empowered to execute its duties under ERISA standards and is responsible for resolving various eligibility-related issues as outlined in the plan.
The Joint Pension Committee (JPC) is tasked with determining eligibility for benefits from the Fund, particularly when a beneficiary is unable to manage their affairs due to illness or accident. Under federal law, the entire text of relevant documents must be considered, highlighting the broad authority delegated to the JPC under Section 2.13 of the BGC Pension Plan, which allows it to resolve questions relating to eligibility. This delegation is interpreted vigorously, ensuring all provisions are meaningful and avoiding conflicts.
The term "relating to" is defined broadly, implying a connection to the issues at hand. Additionally, in cases of deadlock, Section 12.025 of the BGC Pension Plan allows for a neutral arbitrator to step in, reinforcing the JPC's expansive authority. The central issue is whether the Union's grievances fall under the JPC's mandate of "questions relating to eligibility" and are thus subject to arbitration during a deadlock.
A preliminary question exists regarding the JPC's authority to determine its own jurisdiction to rule on these grievances. This requires a de novo review of the Plan's language, which indicates that the Plan Administrator does not retain exclusive authority to decide if the JPC can rule on disputes. Instead, Section 12.027 explicitly delegates this authority to the JPC itself, stipulating that any matters outside its jurisdiction must be returned without a ruling. Under Section 12.029, decisions made by the JPC within its authority are binding on the Plan Administrator. Consequently, the arbitrator's first task is to assess whether the JPC has the power to rule on the grievances, after which it can address the merits of the Union's claims.
The jurisdiction of the Joint Pension Committee (JPC) extends beyond merely 'questions of eligibility' as defined in the BGC Pension Plan, with the 'relating to' language indicating a broader scope of authority. The Company contends that a broad reading of the JPC's power could lead to arbitrating nearly any dispute regarding vesting, amount, or form of pension benefits, but this argument is to be made to the arbitrator. The Master Plan's claims procedure remains relevant for other Company employees not covered by the BGC Pension Plan. Ultimately, it is the arbitrator's role to assess whether the JPC can resolve the disputes and if they should proceed despite a deadlock. Furthermore, the BGC Pension Plan empowers the JPC to make determinations on issues outside the Plan Administrator's narrow definition of 'eligibility,' including decisions about employee disability, benefit distribution upon plan termination, and determining beneficiary competency. The decision is reversed and remanded to the district court with instructions to grant the Union's request for arbitration.
