What do a CBA, the LMRA, and ERISA all have in common?
This alphabet soup sounds like a joke whose punchline only a labor relations lawyer would appreciate. But even they may not find it funny.
Collective Bargaining Agreement (CBA)
In, Johnson Controls Security Solutions, LLC v. International Brotherhood of Electrical Workers, Local 103, No. 21-1460, __F.4th__, 2022 WL 262963 (1st Cir. Jan. 28, 2022), union members were the beneficiaries of a matching contribution from their employer. The union and the employer had bargained in the collective bargaining agreement (CBA) to a certain level of 401(k) matching contributions. Also in the CBA was an exception for grievances that involved the interpretation of plans covering pensions, disability benefits, and death benefits. The CBA also had a provision whereby the employer agreed to provide the 401(k) benefit level previously in effect.
Labor Management Relations Act (LMRA)
The employer decided to temporarily reduce the matching contribution. The union disagreed that it could. The union filed a grievance under the Labor Management Relations Act (LMRA). In response, the employer contended that the grievance was not an arbitrable matter since it pertained to the 401(k) plan benefit.
Employee Retirement Income Security Act of 1974 (ERISA)
The employer argued that ERISA rather than the LMRA applied, and each participant would have to make their own individual challenge if they disagreed. An impasse developed. A lawsuit ensued.
What They Have in Common
The federal district court sided with the employer ruling that the reduction in the matching contribution was exempted under the CBA from arbitrable matters under the LMRA. Thus only ERISA was applied. The union challenged that ruling and appealed the matter to the First Circuit Court of Appeals. The First Circuit noted that “the only issue raised by the Union’s grievance is whether Johnson Controls’ unilateral reduction in its matching contribution to the 401(k) plan violates the language of the CBA.” Citing to AT & T Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 106 S. Ct. 1415, 89 L. Ed. 2d 648 (1986), the court found that the employer did not meet its burden to rebut the presumption of arbitrability. There was no evidence in the record demonstrating that the parties intended to exclude the matching 401(k) contributions from arbitrability under the CBA. Thus, there was no 401(k) plan interpretation issue but rather an issue as to whether the requirements of the CBA were met. That was a matter that could be arbitrated under the LMRA. It was therefore not an ERISA matter.
Now that the alphabet soup has been stirred, the parties must see what is dished up at arbitration. Our takeaway: make sure you know all of the letters in your soup and the implications of the acronyms they form. If you find yourself in a situation similar to this one, it is time to contact an experienced ERISA attorney at The Martin Law Group.