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COMMUNICATIONS WORKERS OF AMERICA v. AT&T

March 22, 1993

COMMUNICATIONS WORKERS OF AMERICA, AFL-CIO, et al., Plaintiffs
v.
AMERICAN TELEPHONE & TELEGRAPH CO., et al., Defendants.



The opinion of the court was delivered by: SPORKIN

 I. Background.

 In 1991, AT&T acquired the stock of NCR Corporation. As a result, NCR became, and continues to be, a wholly-owned subsidiary of AT&T. As part of the merger agreement between AT&T and NCR, most of the computer-related operations and servicing formerly done at AT&T were shifted to NCR. AT&T employees affected by the merger were given three options:

 (1) AT&T would assist such employees in seeking employment at NCR; *fn1"

 (2) For those employees who wished to remain with AT&T or an affiliated company, AT&T attempted to transfer such employees to other divisions within AT&T or its affiliates; *fn2"

 (3) Employees who were eligible to receive service pensions under the Plan, but who were not transferred to another division at AT&T (or an AT&T affiliate) or hired by NCR, could begin to receive their service pension and other retirement benefits.

 In effecting the merger, AT&T and NCR signed an "Interchange Agreement", which covers the continued eligibility of former AT&T employees hired by NCR under the AT&T Pension Plan. This Agreement provides for the portability of service credit between the two companies. That is, upon retirement from NCR, a former service-pension-eligible AT&T employee will be eligible to receive whatever AT&T pension she or he had earned as of the date she or he left AT&T and moved to NCR; years of service with NCR will be treated as years of service with AT&T for purposes of determining eligibility to receive a pension under the AT&T Plan. NCR has a separate pension plan for its employees, and the former AT&T employees will also begin to accumulate pension benefits as NCR employees. Under the Interchange Agreement, former AT&T employees hired by NCR cannot begin to receive any Plan benefits to which they would be entitled if they retired or otherwise stopped working for AT&T.

 In their Motion for Summary Judgment, Defendants first argue that CWA lacks standing to assert ERISA claims and that Plaintiffs failed to exhaust the internal remedies afforded under the Plan and the governing collective bargaining agreements. Regarding the substance of Plaintiffs' claim, Defendants argue that AT&T's actions regarding the pension benefits under the Plan were valid. The Court will address each of these arguments in turn.

 A. Standing

 Three classes of persons may commence an action under section 502 of ERISA: (1) A participant or beneficiary of the pension plan; (2) the Secretary of labor; (3) a fiduciary. See Chemung Canal Trust Co. v. Sovran Bank/Maryland, 939 F.2d 12 (2d Cir. 1991). The statute does not specifically list collective bargaining agents as a party authorized to commence such an action. See 29 U.S.C. ┬ž 1132(a). Therefore, Defendants argue, the express language of the statute precludes CWA from asserting a claim under ERISA.

 The Court does not agree. The test for representational standing set forth in Hunt v. Washington State Apple Advertising Commission, 432 U.S. 333, 97 S. Ct. 2434, 53 L. Ed. 2d 383 (1977), is applicable to CWA's standing to sue on behalf of its members under ERISA. In Hunt the Supreme Court held that an association has standing to bring suit on behalf of its members when "(a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit." Id., at 2441. *fn3"

 In the instant case, the first two elements of this test are clearly met. CWA's members would have standing to assert the ERISA claims raised by CWA and the interests CWA seeks to protect are fundamental to CWA's purpose as collective bargaining agent.

 Regarding the third element, Defendants argue that the participation of individual members of CWA is necessary because some employees stand to lose if CWA prevails in its claim. At this point in the proceedings, the Court does not find that any employees will be harmed if the position advanced by CWA prevails. Moreover, while a binding contract prohibits a party from lessening the benefits conferred by the contract on the other party, there is nothing which precludes one party from providing the contract beneficiaries more than is required under the contract. Thus, AT&T is free to provide more pension benefits under the AT&T-NCR Interchange Agreement to employees covered under the Plan than would have been provided by AT&T prior to the merger. What AT&T cannot do is to provide any employee less benefits ...


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