Sciascia v. Rochdale Vill., Inc.

851 F.Supp.2d 460

53 Employee Benefits Cas. 2538

Joseph SCIASCIA, Al Dooley, Fred Eisgrub, and Fred Jordan, as Trustees of the Special and Superior Officers Benevolent Association Defined Contribution Fund, Plaintiffs,

v.ROCHDALE VILLAGE, INC., Defendant.

No. 09–CV–4237 (ADS)(ARL).

United States District Court, E.D. New York.

March 30, 2012.

John H. Byington, III, Esq., Paula A. Clarity, Esq., of Counsel, Archer, Byington, Glennon & Levine LLP, Melville, NY, for Plaintiffs.

Arthur J. Robb, Esq., of Counsel, Clifton Budd & DeMaria, LLP, New York, NY, for Defendant.

MEMORANDUM OF DECISION AND ORDER

SPATT, District Judge.

On October 1, 2009, the Plaintiffs Joseph Sciascia, Al Dooley, Fred Eisgrub, and Fred Jordan, as Trustees of the Special and Superior Officers Benevolent Association Defined Contribution Fund (“SSOBA Fund” or “the Plaintiffs”), commenced this action against the Defendant Rochdale Village, Inc. (“Rochdale” or “the Defendant”). The complaint asserts causes of action under Section 301 of the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185, and Sections 515 and 502(a)(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), 29 U.S.C. §§ 1145 and 1132(a)(3). The causes of action are based on the Defendant's alleged failure to comply with its statutory and contractual obligations to the Plaintiffs arising under the Defendant's Collective Bargaining Agreement (“CBA”) with the non-party union, the Special and Superior Officers Benevolent Association (“SSOBA” or “the Union”). Presently before the Court are the parties' cross-motions for summary judgment. For the reasons that follow, the Court grants the Plaintiffs' motion for summary judgment and denies the Defendant's motion for summary judgment.

I. BACKGROUND

A. The Relationship Between Rochdale and SSOBA

The Defendant, Rochdale Village, Inc. is an affordable housing cooperative in Jamaica, Queens in New York City. (Pls.' Rule 56.1 Stmt., ¶¶ 1–2.) The cooperative is organized under Article II of the Private Housing Finance Law and consists of five groups of twenty residential buildings within 120 acres of a residential park in Jamaica, Queens. Rochdale is considered an “employer” under Section 2(2) of the National Labor Relations Act (“NLRA”), 29 U.S.C. § 152(2), and Sections 3(5) and 515 of ERISA, as amended, 29 U.S.C. §§ 1102(5), 1145. Rochdale provides the cooperative with a Public Safety Department, which employs uniformed foot patrol officers, and motorized and plain clothes officers to afford twenty-four hour security.

SSOBA is a labor organization that represents security personnel, mostly in New York City, as well as in various other areas within the eastern United States. Pursuant to Section 301(a) of the LMRA, 29 U.S.C. § 185(a), SSOBA constitutes a labor organization that represents employees in an industry affecting commerce. SSOBA is the exclusive collective bargaining representative for the security officers employed by Rochdale. SSOBA and Rochdale have engaged in collective bargaining for the past decade and have entered into agreements that have established the hours, benefits, wages, and other terms and conditions of employment of the Public Safety Department's officers.

Beginning in 1986, Rochdale has made annual contributions on behalf of eligible Rochdale employees, including its SSOBA employees, to the Rochdale Money Purchase Pension Plan (“the Rochdale Plan”). Rochdale's contributions to the Rochdale Plan equal five percent of each eligible Rochdale employee's annual W–2 compensation. Unlike employee deferrals to a 401(k) plan, the Rochdale's annual contributions to the Rochdale Plan are in addition to participant wages.

B. The 2005 CBA

In 2005, Rochdale and SSOBA entered into a collective bargaining agreement (“CBA”) that would govern the 2005 through 2008 time period (“the 2005 CBA”). ( See Ex. F to the Defendant's Summary Judgment Motion (“Def.'s Motion”).) Unlike the parties' previous collective bargaining agreements, the 2005 CBA contemplated the existence of a retirement fund for SSOBA employees separate and apart from the Rochdale Plan. In particular, the 2005 CBA expressly stated that “[t]he Union is in the process of creating a retirement fund; we agree to a re-opener on April 1, 2006.” (2005 CBA at 13.) During the 2005 through 2006 year, both eligible SSOBA members and Rochdale's non-union employees participated in the Rochdale Plan under the same terms and conditions.

On September 25, 2006, Rochdale and SSOBA were parties to a memorandum of agreement, modifying the 2005 CBA that deferred, among other things, the retirement fund reopener until April 1, 2007. (Def.'s Motion, Ex. H.) On August 20, 2007, the parties entered into a letter agreement that, among other things, stated that the Union would “take over” the pension plan on September 1, 2007. (Def.'s Motion, Ex. I.) The April 1, 2007 and August 20, 2007 letter agreements are referred to by the parties as the “side letters”.

C. The Creation of the SSOBA Fund

In 2006, SSOBA Fund was established pursuant to collective bargaining agreements between SSOBA and various employers whose employees were represented by SSOBA. Pursuant to ERISA, 29 U.S.C. §§ 1002(2)(A), 1002(34), and 1002(37), the SSOBA Fund is a multiemployer, defined contribution pension plan, which was created as a joint labor-management, Taft–Hartley trust fund with an equal number of union and employer representatives. The SSOBA Fund was established and is maintained pursuant to an Agreement and Declaration of Trust (“Trust Agreement”), which governs the operation of the SSOBA Fund. (See Ex. A to the Affidavit of Joseph Sciascia in Support of the Plaintiffs' Motion for Summary Judgment (“Sciascia Aff.”).) The named Trustees who executed this Trust Agreement were John Hernandez of St. Vincent's Midtown Hospital and Elizabeth Goldsmith of Rochdale, both acting as employer representative Trustees, and Joseph Sciascia and Natalie Rodriguez, both acting as Union representative Trustees.

The SSOBA Fund purports to provide for retirement benefits and deferred income for eligible employees and their beneficiaries pursuant to a written plan of benefits entitled the “SSOBA Defined Contribution Retirement Plan” (“SSOBA Plan” or “SSOBA Fund/Plan”). The initial SSOBA Plan was signed on January 1, 2006, and was adopted by the Trustees on November 1, 2006. The SSOBA Plan currently in effect was restated on January 1, 2009. Although the parties disagree about the propriety of the decision, there is no dispute that the Internal Revenue Service (“IRS”) has issued letter determinations that both the initial and current versions of the SSOBA Plan are tax-qualified profit sharing plans under Internal Revenue Code § 401(a).

Pursuant to the SSOBA Plan, employers contribute payments to the SSOBA Fund and the SSOBA Fund, in turn, provides retirement benefits to those employees and their beneficiaries through individual, defined contribution retirement accounts in accordance with the benefits provided through negotiations in collective bargaining. (Pls.' Rule 56.1 Stmt., ¶ 6.) The parties dispute the type of benefits that the SSOBA Fund provides. According to Rochdale, the SSOBA Plan provides its participants with 401(k) benefits, but does not provide its participants with the type of tax-qualified money purchase pension plan benefits afforded by the Rochdale Plan. Rochdale contends that the SSOBA Plan does not include any provision for individual participant accounts to accept employer contributions.

Although the Plaintiffs admit that the SSOBA Plan does permit certain employees to have 401(k) elective deferrals, the Plaintiffs contend that this option is only available to employees if it is included in their collective bargaining agreement with their respective employer. (Sciascia Aff., ¶ 20.) By contrast, employers who do not have a 401(k) wage deferral election provided in their collective bargaining agreement contribute a straight percentage of each employee's wages over and above the employees' wages into their employees' qualified retirement accounts. (Sciascia Aff., ¶ 20–21.) According to the Plaintiffs, the SSOBA Fund has maintained individual, defined contribution retirement accounts for between 140–200 employees from between six to ten participating employers since 2008. (Sciascia Aff., ¶ 19.)

D. The March 17, 2008 Memorandum of Agreement and the 2008 CBA

On March 17, 2008, the parties entered another memorandum of agreement (the “MOA”) amending the 2005 CBA, which stated in pertinent part that:

It is hereby agreed, effective January 1, 2008, on an annual basis, [Rochdale] agrees to contribute the sum of 5.00% of gross payroll on behalf of each [SSOBA Employee] to the SPECIAL AND SUPERIOR OFFICERS BENEVOLENT ASSOCIATION DEFINED CONTRIBUTION RETIREMENT PLAN (“Fund”), a jointly-administered trust fund subject to applicable law, whose purpose is to provide eligible participants with defined contribution pension benefits....

The parties agree to prepare and execute those documents necessary to effect transfer of assets from the [Rochdale Plan] to the Fund. [Rochdale] acknowledges and agrees that it will immediately transfer all assets held on behalf of [SSOBA Employees], including contributions to and owing, for the period on or before December 31, 2007. [Rochdale] agrees to fully cooperate in providing any documents required by the Fund in connection with this transaction.

( See Sciascia Aff., Ex. D.) The signatories to the MOA were Joseph Sciascia on behalf of the Union, and Elizabeth Goldsmith, Director of Human Resources for Rochdale.

Subsequently, on October 29, 2008, Rochdale and SSOBA entered into a collective bargaining agreement effective from April 1, 2008 through March 31, 2011 (the “2008 CBA”). ( See Sciascia Aff., Ex. E.) Article XXIII of the 2008 CBA titled “Retirement Fund” stated “See the attached Memorandum of Agreement dated March 17, 2008”. (2008 CBA, Article...