News & Information

LABOR & EMPLOYMENT LAW — 2/15/08

Retirees were entitled to arbitrate their pension claims

Retired Steelworkers were entitled to arbitrate a dispute over pension benefits denied them, the Ninth Circuit Court of Appeals ruled. The court rejected the pension plan's contention that a presumption of arbitrability, based in the Supreme Court's recognition of "the national labor policy of peaceful resolution of labor disputes," did not apply in the case of retirees, who posed no threat of economic disruption (i.e., a strike). Because it was the union that sought arbitration and actively sued to compel arbitration, the threat of economic disruption still was present, the appeals court reasoned (Steelworkers v Retirement Income Plan for Hourly-Rated Employees of ASARCO, Inc, 9thCir, 155 LC ¶10,960).

Further, once the presumption of arbitrability was applied, the court said it need not delve into which of the parties' competing interpretations of the relevant plan documents was more persuasive--so long as the union's interpretation that the dispute fell within the arbitration clause was at least a reasonable one.

The appeals court also rejected the contention that the retirees were not entitled to arbitrate because they are no longer "employees." While the court noted it was a "close question as to which side presents the better textual interpretation of the plan documents," it ultimately was swayed by the "inherent absurdity of creating a pension dispute mechanism and then denying access to pensioners." The court affirmed a lower court's grant of summary judgment in favor of the union in their suit to compel arbitration.

For more information on this and other topics, consult CCH Employment Practices Guide or CCH Labor Relations.

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