Society of Professional Engineering Employees in Aerospace, IFPTE Local 2001, AFL-CIO v. The Boeing Company

Filing 581

MEMORANDUM AND ORDER denying 551 Motion for Partial Summary Judgment; granting in part and denying in part 555 Motion for Summary Judgment. SEE ORDER FOR DETAILS. Signed by District Judge Monti L. Belot on 12/11/2012. (alm)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS

SOCIETY OF PROFESSIONAL
ENGINEERING EMPLOYEES IN
AEROSPACE, et al.,
Plaintiffs,
v.
BOEING CO., et al.,
Defendants.

)
)
)
)
)
)
)
)
)
)
)
)

CIVIL ACTION
Nos. 05-1251-MLB
07-1043-MLB

MEMORANDUM AND ORDER
This case comes before the court on cross motions for summary
judgment. Plaintiffs’ motion is denied and Boeing’s1 motion is denied
in part and granted in part for the reasons stated herein.
I.

Facts2 and Procedural History
A.

The Parties

Plaintiff

Society

of

Professional

Engineering

Employees

in

Aerospace (“SPEEA”), plaintiff International Association of Machinists
and Aerospace Workers (“IAM”) and plaintiff District Lodge 70 are
unincorporated

labor

organizations

that

represent

employees

in

industries affecting commerce for purposes of collective bargaining.
1

The several Boeing defendants will be collectively referred to
as Boeing unless otherwise noted.
2

All facts set forth are either uncontroverted, or, if
controverted, taken in the light most favorable, along with all
favorable inferences, to the non-moving party.
Adler v. Wal-Mart
Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998).
To the extent
relevant, the factual disagreements between the parties will be noted.
The court has not included statements that are irrelevant to the
analysis at hand.
See Adler, 144 F.3d at 670 (“[a]n issue is
‘material’ if under the substantive law it is essential to the proper
disposition of the claim.”).

These unions represented a majority of the workforce at Boeing.3
In addition, several individuals are plaintiffs in this case.
On July 14, 2008, this court granted certification for one class of
plaintiffs, the “Harkness Class.”

(Doc. 118).

Plaintiffs David A.

Harkness, William G. Hartig, Jr., David Lewandowski, Jene Lewandowski,
Ronald Owens, Richard Pullen, Tomey Shabshab, Donna Zagonel, and
Michael Baker, are the named representatives for the Harkness Class.
The Harkness Class is the group of plaintiffs who accepted employment
with Spirit.
There are two additional groups of plaintiffs who are not
certified as a class and are referred to as the “McCartney/Boone
Plaintiffs.”

Those plaintiffs are Michael McCartney, Norris Palmer,

Bradley Stevens, Margaret Wieland, James Boone, Bruce Carselowey,
Marsha Gray, Darlene Kerns, Randall McFarland, Larry Moore, Russell
Norman, James Queen, Timothy Sanders, Marlon Stocking, William Stoner,
Lisa Wright, and Gary Leavell.

The McCartney/Boone plaintiffs are

those individuals who either did not accept an offer of employment
with Spirit or failed to sign a consent form to be eligible for
employment with Spirit.4

3

International Brotherhood of Electrical Workers, Local 271
(“IBEW 271") is not a named party in this case. Two of its members,
Michael Baker and Larry Moore, are named plaintiffs in the Harkness
Class and the McCartney/Boone plaintiffs, respectively.
4

Plaintiffs Michael McCartney, Margaret Wieland, Randall
McFarland, James Boone, Lisa Wright, Timothy Sanders, Darlene Kerns,
and Marsha Gray declined offers of employment with Spirit.
Plaintiffs Norris Palmer, Bradley Stevens, Gary Leavell, Russell
Norman, Marlon Stocking, William Stoner, Larry Moore, James Queen, and
Bruce Carselowey did not sign the Consent to Release Information form
required for them to be considered for employment by Spirit.
-2-

The individual plaintiffs began employment at various times at
Boeing’s Facility in Wichita (“Wichita plant”) in positions that were
within bargaining units represented by SPEEA, the IAM and IBEW 271.
All the named individual plaintiffs had 10 or more years of service
and were between 49 and 54 years of age as of June 16, 2005, and have
now turned 55.5
The

Boeing

defendants

are

as

follows:

The

Boeing

Company

(“Boeing”) is a corporation that previously operated a commercial
aircraft manufacturing company in Wichita, Kansas.
operates other plants around the United States.

Boeing currently

The Boeing Company

Employee Retirement Plan (“BCERP”) is an ERISA-covered employee
pension benefit plan that provides certain specified pension benefits
to eligible participants in accordance with the terms and conditions
of that plan.

The Boeing Retiree Health and Welfare Benefit Plan

(“BRHP”) is an ERISA-covered employee welfare benefit plan that
provides certain specified benefits to eligible participants in
accordance with the terms and conditions of that plan.

The Boeing

Company Layoff Benefits Plan (“Boeing Layoff Benefits Plan”) provides
certain

severance

benefits

for

eligible

Plan

participants

accordance with the terms and conditions of that Plan.

in

Boeing is the

sponsor of the BCERP, the Boeing Retiree Health Plan, and the Boeing
Layoff Benefits Plan.
The Boeing Employee Benefits Plans Committee (“Committee” or

5

The specific information concerning each individual’s date of
birth and employment history with Boeing can be found in the pretrial
order. (Doc. 548)
-3-

“EBPC”) is the Plan Administrator of the BCERP, BRHP6, and Boeing
Layoff Benefits Plan.

The Committee is comprised of Boeing officers

and employees, appointed to the Committee by Boeing’s Board of
Directors.
Spirit AeroSystems Holdings, Inc. (“Spirit Holdings”) is a
Delaware

corporation

with

its

headquarters

in

Kansas.

Spirit

AeroSystems, Inc. (“Spirit”), is a wholly-owned subsidiary of Spirit
Holdings.

The Spirit AeroSystems Holdings, Inc. Pension Value Plan

(“the Spirit Plan”) is an employee pension benefit plan that provides
certain specified benefits to eligible participants in accordance with
the

terms

and

conditions

of

that

plan.

The

Spirit

AeroSystems

Holdings, Inc. Retirement Plan for IBEW, WEU, WTPU and IAM Employees
was merged into the Spirit Plan on or about December 31, 2005. Spirit
Holdings is the plan sponsor of the Spirit Plan.7
B.

Boeing Sale

In 2003, Boeing decided to bundle its commercial aircraft assets
in Wichita, Tulsa and McAlester, Oklahoma, to sell to an as then
unknown company. Boeing’s plan was for the new company to manufacture
6

The Boeing Company VEBA Master Trust (the “Trust”) is the
funding mechanism for the Retiree Health Plan. Some of the benefits
Boeing provides under the Retiree Health Plan are self-funded and
others are fully-insured. Boeing makes contributions to the Trust
(including premium payments from the participants), which are then
utilized to purchase or provide the retiree medical coverage. For
insured benefits, premiums are paid from the Trust to the insurer. For
self-funded benefits, the benefits are funded from the Trust and paid
to a third-party administrator who pays the providers.
7

The Spirit defendants have not moved for summary judgment at
this time.
On November 27, 2012, this court issued an order
preliminarily approving voluntary dismissal of all claims against
Spirit defendants with prejudice. (Doc. 579). After the individual
Harkness class members receive notice, the court will hold a fairness
hearing on June 3, 2013.
-4-

parts and then sell those parts to Boeing.

Boeing assigned a team of

personnel to work on employment issues concerning the potential sale.
In 2005, Boeing sold certain assets associated with its manufacture
of commercial airplanes in Wichita and Oklahoma to Onex, a private
equity firm, which had created a company called Mid-Western Aircraft
Systems, Inc. (“Mid-Western”) to hold the purchased assets and to
operate the commercial airplane business.
renamed

Spirit.

On

February

22,

2005,

Mid-Western was later
Boeing

and

Mid-Western

(hereinafter “Spirit”) executed an Asset Purchase Agreement (APA).
The unions were not consulted by Boeing or Spirit about the terms of
the APA.
In March 2005, Boeing advised the unions and employees of the
Wichita plant that Worker Adjustment and Retraining Notification Act
(WARN) notices8 would be issued in connection with the sale of assets
8

Boeing drafted Workforce Administration Redeployment Guidelines
to assist management in the event of layoffs and redeployment of
employees who are subject to layoff.
The guidelines discuss the
issuance of a 60 day WARN notification to employees who will be
subject to a “layoff.”
WARN notices were issued on March 11 to give 60-day notices to
affected employees. The first negotiated sale date was May 13, 2005.
However, the sale was not completed on that date.
Boeing sent
additional notices advising of a new date between June 16 and 29,
2005.
The WARN notice issued to the IBEW representative stated as
follows:
Pursuant to the Worker Adjustment and Retraining
Notification Act, this is to advise you the Boeing Company
will be conducting a layoff in the Wichita area commencing
May 13, 2005 due to the sale of the Wichita/Tulsa division.
These layoffs are expected to be permanent (exceeding 6
months in duration).
It is anticipated that approximately 195 persons
represented by your organization will be placed on layoff.
-5-

to Spirit.
Boeing entered separate talks, called “effects bargaining,” with
IAM, SPEEA, and IBEW 271 over the effects of the sale of the assets
of the Boeing Commercial Aircraft facility in Wichita.

There was no

agreement, however, as to the effect of the sale with respect to the
issues before the court and especially those relating to a “lay off.”
Boeing ultimately retained a small number of employees to continue
with its military projects which were not subject to the sale.

The

remaining employees received WARN notices which advised them of their
recall rights, as set forth in the CBAs, to certain positions that
each individual was qualified for.9
Spirit announced that it planned to operate the Wichita plant to
manufacture airplane parts and that it would hire most of the Boeing
employees.

All Boeing employees who worked at the Wichita plant were

informed that they were required to sign a Consent to Release
Information form as a condition to be considered for employment by
Spirit.

The consent form allowed Boeing to disclose the employees’

employment records to Spirit.
Spirit interviewed the Boeing managers of certain employees who
Employees on leave of absence may be laid off upon their
return from leave of absence. Attached is a roster listing
those employees who we anticipate will be affected by this
reduction on May 13, 2005.
(Doc. 552, exh. E-2).
9

Boeing admits that it agreed during negotiations to allow
recall rights for IAM- and IBEW-represented employees. Notably, the
letter advising the IAM- and IBEW-represented employees of their
recall rights was issued at the end of June and continued to refer to
June 16 as the “layoff” date.
(Doc. 552, exh. E-4).
Boeing,
however, disputes recall rights being available for SPEEA-represented
employees regardless of the language in the WARN notice.
-6-

applied for work at Spirit.

Spirit hired most but not all of the

Boeing employees who sought employment with Spirit. The employees who
applied for but did not receive a position with Spirit were eligible
to go through Boeing’s redeployment process and were treated as laid
off employees.

While Spirit was not required to hire all of Boeing’s

employees, the APA required Spirit to pay a higher purchase price if
it hired less than 90% of Boeing’s workforce.
On or about June 17, 2005, referred to as “Day One”, Spirit began
manufacturing

airplane

parts

in

Wichita.

As

of

that

date,

approximately 85% of former Boeing employees had been hired by Spirit
and started work as Spirit employees, including the members of the
Harkness class.
i. New CBAs and Benefits
Spirit did not assume any of the existing collective bargaining
agreements

that

Boeing

had

with

the

commercial-division employees in Wichita.
have

executed

collective

bargaining

unions

representing

the

On Day One, Spirit did not

agreements

SPEEA-WEU, or SPEEA-WPTU11 bargaining units.

with

the

IAM10,

When the CBAs were

executed, the IAM- and IBEW-represented employees agreed to a 10% pay
reduction but negotiated an equity bonus, which ultimately paid out
$61,44012 per employee when Spirit became a public company. The SPEEA-

10

The IAM CBA was finalized in late June 2005.

11

The SPEEA CBAs were executed on July 11, 2005.

12

The amount of the bonus is controverted but not material at
this stage. The employees received a $34,556 cash bonus and 1,034
shares of Spirit Class A stock. On March 15, 2007, the value of the
stock was $31.05 a share. The value of Spirit’s stock, however, has
declined.
-7-

represented employees declined an offer for reduced pay and therefore
received the same pay at Spirit but were not eligible for the bonus.
The APA between Boeing and Spirit included provisions relating
to the BCERP and certain assets and liabilities.

Under the terms of

the APA, Spirit agreed to assume the accrued pension liabilities for
its newly hired employees, i.e. the members of the Harkness Class.
Spirit created “mirror pension plans13” — the Spirit Plans — for the
Harkness Class members who were not yet age 5514, under which they will
receive certain pension benefits when they terminate their employment
with Spirit.15

Boeing transferred assets from the BCERP to the Spirit

Plans that it determined were sufficient to fund the liabilities to
the Harkness Class who would be participants in the Spirit Plans.
Spirit, however, did

not continue to fund these plans for its

employees and the assets were in essence frozen.
contribution

plan

for

its

SPEEA

and

Spirit’s defined

IBEW-represented

employees

included 401(k) benefits. It was not a defined benefit plan as Boeing
had provided.16 Spirit also agreed to retain vacation pay, sick leave,
create

flexible

spending

accounts

and

provide

health

insurance

13

Plaintiffs contend that the benefits were not equivalent to
the amount of benefits they would have received if they had been able
to retire under the BCERP.
14

Boeing employees who had reached age 55 were allowed to retire
from Boeing, receive retirement benefits under the BCERP and seek
employment with Spirit.
15

With the exception of plaintiff Stevens, plaintiffs did not
receive benefits from the Boeing Layoff Benefits Plan.
16

The IAM-represented employees elected to participate in the
IAM National Pension Fund after the sale.
-8-

benefits17

for

its

employees

and

eligible

retirees.18

Spirit’s

estimated savings in employee compensation and benefits was $100
million for the first year of operation.
C.

Boeing’s Employment Classifications After the Sale

Boeing

treated

the

departing

commercial

division

employees

differently depending on the employees’ circumstances. Employees who
accepted positions with Spirit were considered “terminated pursuant
to divestiture,” which is abbreviated as “TER-DIV.”

Employees who

applied for a position with Spirit but were not hired were considered
to be “laid off” from Boeing.

Finally, Boeing employees who did not

apply for a position with Spirit or declined an offer of employment
with Spirit were considered “resigned” from employment.

The EBPC had

17

Boeing had provided a no-cost health plan in addition to plans
with premiums. Spirit did not offer a no-cost health plan. Spirit’s
health insurance required a substantial increase in monthly payments
and deductibles. Additionally, employees at Spirit were required to
pay co-pays with office visits.
18

The APA required as follows:

Without limiting the scope of Section 6.2(a), as of
the Closing, Buyer shall be responsible for and shall
maintain retiree medical coverage for the benefit of each
Hired Employee who was eligible for or could have become
eligible for (after meeting applicable age and service
requirements) retiree medical coverage maintained by Seller
and who is not receiving retiree medical benefits from
Seller, and shall provide each such Hired Employee full
credit for periods of service prior to the Closing for all
purposes thereunder, subject to the provisions of any
collective bargaining agreements between Buyer and the
unions.
(Doc. 562, exh. A-26 at ¶ 6.2(g)).
However, Spirit did not provide subsidized health insurance
benefits to retirees until they reached age 62, unlike the Boeing plan
which provided those benefits at age 55. Spirit provides retirees
with medical benefits at age 55, however they are not subsidized.
-9-

informed all Boeing employees prior to the sale that employees who
refused to apply for or declined a position at Spirit and those who
went to work at Spirit would not be treated as “laid off” for the
purposes of pension, medical and severance benefits.
The terms “laid off” and layoff” are used in various Boeing
documents but they are never defined.
D.

This Action

On August 8, 2005, SPEEA filed this action against Boeing,
asserting claims pursuant to § 301 of the LMRA, § 510 of ERISA and the
Declaratory Judgment Act. (Doc. 1). On January 20, 2006, SPEEA moved
to add the IAM as a party.
SPEEA’s ERISA claims.

Boeing objected and moved to dismiss

The court granted Boeing’s motion to dismiss

SPEEA’s ERISA claims and allowed IAM to join.

On February 16, 2007,

plaintiffs Harkness, Hartig, David and Jene Lewandowski, Owens,
Pullen, Shabshab, Zagonel, McCartney, Palmer, Stevens, and Wieland
filed a complaint asserting claims under ERISA19, § 301 of the LMRA,
and the Declaratory Judgment Act against Boeing, the BCERP, the
Retiree Health Plan, the EBPC, Spirit Holdings, and the Spirit Mirror
Plans in case number 07-1043.20
The individual plaintiffs assert claims under ERISA for the
denial of their subsidized early retirement benefits and retiree
medical benefits, the transfer of the pension assets, and eliminating
the “layoff bridge” benefits.

The “layoff bridge” benefits were

19

These individuals were the first named plaintiffs in this
action.
They include members of both the Harkness class and the
McCartney/Boone plaintiffs.
20

The 2007 case was consolidated with the 2005 case on January
3, 2008.
-10-

available to employees who were laid off between the ages of 49 and
54 with ten years of service at Boeing.

These benefits are referred

to as the “layoff bridge” because they bridge an individual who was
laid off from Boeing to early retirement and certain health benefits,
without that individual returning to active employment at Boeing.
Additionally, the individual plaintiffs assert claims under ERISA
for a breach of fiduciary duty.

Ten individual plaintiffs assert an

ERISA claim for denial of severance benefits.

All plaintiffs assert

claims for breach of the CBAs under section 301 of the LMRA.
Boeing contends that plaintiffs’ claims are barred because they
failed to exhaust their administrative remedies. Additionally, Boeing
responds that it did not breach the CBAs nor violate ERISA because all
individual plaintiffs were not laid off from their employment with
Boeing.
Plaintiffs now move for partial summary judgment on their breach
of contract claims.
all claims.

Boeing defendants move for summary judgment on

The motions require somewhat detailed consideration of

the various collective bargaining agreements or CBAs.
E.

The CBAs

At various times, the unions bargained with Boeing over the terms
and conditions of Boeing’s employment of bargaining unit employees.
A CBA between SPEEA and Boeing covering the Wichita Technical and
Professional

Unit

(“WTPU”)

was

executed

on

July

7,

2004.

The

SPEEA-WTPU bargaining unit was decertified at Boeing in June 2007.
A CBA between SPEEA and Boeing covering the Wichita Engineering
Unit (“WEU”) was executed on December 6, 2002. SPEEA and Boeing
executed another CBA effective on December 20, 2005.
-11-

A CBA between IAM and Boeing was executed on September 2, 2002.
IAM represented Boeing’s production employees in Wichita.
A CBA between IBEW 271 and Boeing was executed on December 3,
2002.

IBEW 271 represented Boeing’s electrical workers.
F.

CBA and BCERP Language Relevant to the Claims
Termination of Employment/Layoff

All CBAs discussed circumstances in which an employee can be
terminated and/or lose his or her seniority rights with Boeing.

The

SPEEA CBAs stated that “employees shall not be suspended or discharged
without just cause.”

(Doc. 552, exhs. B-1 and B-2 at Art. 3.2(b)).

The IBEW CBA and IAM CBA stated that “An individual shall lose
seniority rights for the following reasons: 4.3(a) Resignation; (an
individual who, while on a leave of absence, engages in other
employment not approved by the Company, or fails to report for work
or to obtain renewal of his leave on or before it’s [sic] expiration,
will be considered as having resigned); 4.3(b) Discharge for cause.”
(Docs. 552, exh. E-1 at Art. 4.3; 552, exh. R-1 at Art. 14.3).
The CBAs also provided for a series of job-retention protections
for employees in the event of a “workforce reduction,” a “surplus” of
employees or a “reduction in force.”

Therefore, an employee with

seniority, or a SPEEA employee with a higher retention rating, who was
subject to a job loss because of an event, could displace an employee
who did not have the same seniority.

The SPEEA CBAs also included a

provision called the “CEO Clause” which allowed Boeing to avoid the
ratings-based procedure if Boeing’s CEO determined an exception was
needed.
In

addition

to

the

provisions
-12-

discussing

seniority

and

terminations, all CBAs contained provisions to provide layoff benefits
in the form of a lump sum or income continuation based on a formula,
and medical coverage for three months to Boeing employees who were
laid off. The benefits were available to an employee who was a member
of a participating group of employees, had at least one year of
service and experienced a layoff event.

However, there was an

exception for employees who were “laid off from the Company because
of a merger, sale or similar transfer of assets and are offered
employment with the new employer.”
As with the Boeing documents, none of the CBAs define the terms
“laid off” or “layoff.”
Early Retirement
The CBAs also had provisions specific to the BCERP and stated
that eligibility for benefits under the BCERP will be determined
pursuant to provisions contained in a separate document not attached
to

the

CBAs.

The

document

set

forth

the

following

provision

concerning early retirement:
A Participant may retire on an Early Retirement Date
which, subject to his or her election, may be the first day
of any month coincident with or next following the later of
the Participant’s 55th birthday or the date of the
Participant’s Termination of Employment, provided that if
the Participant is less than age 62, the Participant must
either:
(a) have ten or more Years of Service,
(b) have some Credited Service and have been issued a
declaration of permanent and total disability .
. . or
(c) have some Credited Service and be laid off on or
after the date the Participant attains age 55.
(Doc. 562, exh. QQ-1 at ¶ 3.2).
The

BCERP

variously

defined

-13-

a

participant

as

an

“active

participant,” “inactive participant,” “terminated vested participant,”
or

“retired

participant.”

The

BCERP

further

defined

“inactive

participant” as a prior Active Participant who was on an Authorized
Period of Absence, which included an employee who was absent with
authorization due to a “layoff not to exceed six years duration.”21
(Doc. 562, exh. QQ-1 at ¶ 1.7).
The

BCERP

identified

basic

benefit

rates

for

both

Active

Participants and Participants on an Authorized Period of Absence.
Participants on an Authorized Period of Absence who retired at age 55
were subject to a 10% reduction in benefits.

However, participants

who were terminated after they vested in their retirement benefits
were subject to a 60% reduction in benefits if they chose to retire
at age 55.

Participants who elected an early retirement had to

refrain from employment with Boeing but could be employed with another
company.
Health Benefits
Additionally, all CBAs included provisions which set forth the
existence of the Boeing Retiree Health Plan, which was included as
attachment B to all CBAs and provided as follows:
For employees covered on or after July 1, 2003, the
Company will provide for the duration of this agreement for
eligible retired employees and for covered dependents of
eligible retired employees the medical benefits summarized
21

The definition continues as follows: “Any discretion of the
Company under the provisions of this definition will be exercised
without discrimination and in accordance with definitely established
rules uniformly applicable to Employees or Participants whose approved
periods of absence were occasioned by similar circumstances.” (Doc.
562, exh. QQ-1 at ¶ 1.7). This additional language was deleted by
Boeing from the BCERP as part of a restatement that was effective
January 1, 2006. The unions were told of the amendment but were not
asked for an agreement to the change.
-14-

in the document entitled Attachment B, effective July 1,
2003, or on such later date when specifically stated
therein and subject to all of the terms and conditions
contained in or referred to in such Attachment B.
The
program summarized in Attachment B shall be referred to as
the Retiree Medical Plan.
(Doc. 552, exh. E-1 at 11.3)22.
The Retiree Medical Plan stated that the following requirements
must be satisfied for employees to eligible under the plan:
To be eligible for the Retiree Medical Plan, the
employee must retire from the service of the Company under
the Company-sponsored retirement plan at age 55 or older
with ten (10) or more years of vesting service under a
Company-sponsored retirement plan.
If an employee becomes eligible for disability
benefits under the Company sponsored retirement plan, the
employee also is eligible for the Retiree Medical Plan if
he or she is at least age 50 and has ten (10) or more years
of vesting service at retirement.
A retired employee who is at least age 55 and has ten
(10) or more years of vesting service at retirement is
eligible for the Retiree Medical Plan if he or she retires
under the Company-sponsored retirement plan within the
following time limits:
• Two (2) years following the start of an approved
leave of absence, provided the approved leave of absence
has not ended prior to the employees retirement.
• Six (6) years following the employee’s layoff.
A retired employee no longer is eligible for coverage
under the Retiree Medical Plan after attaining age 65 or
becoming eligible for Medicare.
(Doc. 552, exh. R-1 at attachment B)23.

22

All CBAs include this provision and have an Attachment B.
(Doc. 552, at exhs. B-1 at ¶ 16.3; B-2 at ¶ 16.3; R-1 at ¶ 11.3). The
only differences in these provisions are the dates stated for
eligibility which does not effect the outcome of the issues in this
case.
23

Again, the other CBAs included virtually identical language.
(Doc. 552, exhs. B-1 and B-2 at Attachment B; E-1 at Attachment B).
-15-

Therefore, while a terminated vested participant24 was eligible
for pension benefits at a 60% reduction at age 55, he or she was not
eligible for retiree health care benefits.
G.

Claims and Grievances

i.

CBA Grievance Provisions

All CBAs contained articles which set forth the scope and
procedures for grievances.
arising

between

the

The SPEEA CBAs stated that “grievances

Company

and

its

employees

subject

to

this

Agreement, or between the Company and the Union, with respect to the
interpretation or application of any of the terms of this Agreement
shall be settled according to the following procedure.”
exh. A-7 at Art. 3.1).25

(Doc. 556,

With respect to the BCERP, all CBAs provided

that only questions concerning the amount of Credited Service were
subject to the grievance and arbitration procedure.

The CBAs also

stated that no question or issue arising under the administration of
the Retiree Medical Plan was subject to the grievance and arbitration
procedure.
All CBAs provided a grievance procedure that was to be used by
the employee.

The SPEEA CBAs allowed for an employee to appeal a

layoff, discharge or involuntary resignation by filing a grievance

24

A terminated vested participant is defined as a prior Eligible
Employee [defined in section 1.21] who has incurred a Termination of
Employment, who retains a Vested Interest in accordance with Section
6.1 [of the BCERP], and who is not currently receiving benefit
payments under the plan.
25

The IAM CBA has language similar to the SPEEA CBAs. The IBEW
CBA stated that “only matters dealing with the interpretation or
application of terms of this Agreement shall be subject to this
grievance machinery.” (Doc. 556, exh. A-4 at 12.2).
-16-

through the Union within ten workdays after the employment action.26
The SPEEA and the IAM CBAs provided that a Union versus Company
grievance must be submitted within ten days after the occurrence of
the last event on which the grievance is based.27

If no agreement was

reached with respect to the grievance, the Union had a set period in
which to request an arbiter.
ii. Grievances to the Company
On June 22, 2005, the IAM filed a “union versus company”
grievance asserting that employees with 10 years of service and who
were age 49 to 55 years old and ceased to be employed by Boeing as a
result of the Wichita divestiture to Spirit were “in fact laid off
from Boeing and are entitled to the negotiated benefits of early
retirement and early retirement medical benefits.”

(Doc. 552, exh.

R-2).
Boeing denied the IAM’s June 22 grievance on June 30, 2005, and
stated that “the grievance is not subject to arbitration,” citing
sections 10.4 and 11.6 of the IAM CBA.

Boeing further stated that,

“in any event,” employees who accepted work with Spirit are not
“eligible for early retirement bridging under a Boeing pension plan
or the Retiree Medical Plan” because, among other things, their
“pension benefits transferred to Onex and there is no remaining
Company-sponsored

retirement

plan

with

Boeing

employees can retire.” (Doc. 552, exh. R-3).

under

which

such

After receiving this

26

The IAM CBA required the filing of the grievance to be within
seven days. The IBEW CBA required that the employee file his or her
grievance within three days.
27

The IBEW CBA required the Union to file its grievance within
seven days.
-17-

letter, the IAM filed an arbitration request to which Boeing never
responded.
In addition, six IAM-represented individuals who were classified
as voluntarily resigned filed timely grievances through the IAM. Four
of those individuals are members of the McCartney/Boone plaintiffs.
No IAM-represented individuals who began employment with Spirit filed
a grievance.
SPEEA filed a grievance with Boeing on August 29, 2005, after
initiating this suit on August 8.28 SPEEA’s written grievance informed
Boeing that it was “grieving the coding of [its] represented employees
upon completion of their Boeing service as a result of the BCA Wichita
divestiture.”

The grievance further stated that: “Article 8 and

Article 21 of the Collective Bargaining Agreements clearly indicate
the intent a [sic] coding of ‘layoff’ for all employees upon the
completion of their advance notification of layoff (WARN) notices.”
SPEEA did not request arbitration after filing its grievance.

IBEW

did not file a written grievance with Boeing pertaining to the layoff
bridge benefits.
grievance

with

No SPEEA or IBEW-represented employee filed a
the

union

representative

concerning

his

or

her

employment status.

28

There are significant disputes of fact as to whether Boeing’s
representative Jim Edenfield told IBEW and SPEEA representatives that
Boeing would refuse to arbitrate the grievance of the layoff bridge
benefits. Both IBEW and SPEEA contend in declarations made by their
respective union representatives that they were told that Boeing
refused to arbitrate this issue prior to June 30, 2005, the deadline
for filing a grievance under the CBAs. However, this testimony is
inconsistent with the deposition testimony of the same union
representatives. At this stage of the proceedings, however, the court
cannot make credibility determinations.
Nat’l Am. Ins. Co. v. Am.
Re-Insurance Co., 358 F.3d 736, 742 (10th Cir. 2004).
-18-

iii. Individual Grievances to the BCERP and Boeing Layoff
Benefits Plan
Prior to the sale, the unions engaged in effects bargaining with
Boeing specifically discussing the ability of employees aged 49 to 54
to be eligible for the “layoff bridge” retirement benefits. The
parties never reached an agreement on the issue.

Subsequent to the

sale, all but one of the Harkness class plaintiffs filed claims for
benefits or clarification of future benefits under the BCERP and the
Boeing Retiree Health Plan.29

Each of those plaintiffs was issued a

written denial and all, with the exception of McFarland, appealed
those denials.

The EBPC denied each of the appeals.

The Harkness plaintiffs were denied benefits by Boeing Pension
Operations on the basis that their benefits had been transferred to
the Spirit plan.

On appeal, the EBPC determined that Harkness30 “was

not ‘laid off' for purposes of the BCERP and, therefore, is also not
eligible for “layoff bridge” benefits under the Plans. The [EBPC] has
determined that Claimant ceased to be a Participant in the BCERP
(Section 1.32) effective as of his separation from the Company
because: (a) he experienced a Termination of Employment, which is
defined as a cessation of employment due to voluntary or involuntary

29

Harkness class plaintiffs who filed claims were Harkness,
Hartig, David Lewandowski, Jene Lewandowski, Owens, Pullen, Shabshab,
Zagonel, McCartney, McFarland, Palmer, Stevens, and Wieland.
Plaintiff Baker, although a Harkness class member, did not file
a claim for benefits or clarification of future benefits under the
BCERP or the Boeing Retiree Health Plan.
30

The EBPC listed the same reasons for denial in all Harkness
class members’ claims. The locations of those exhibits are set forth
in Doc. 556 at ¶ 254.
-19-

termination or separation of employment (Section 1.41(a)), and (b) all
assets and liabilities attributable to Claimant's BCERP benefit were
transferred to, and assumed by, the Onex/Spirit Pension Plan pursuant
to the terms of Section 14.7 of the BCERP.”
8).

(Doc. 552, exh. L-3 at

The Harkness class plaintiffs were also denied retiree health

care benefits on the basis that they were not participants in and did
not retire under the BCERP.
The McCartney/Boone plaintiffs sought early retirement pursuant
to the 90% formula for participants on an approved leave.
requests were denied and appeals followed.

Their

The EBPC discussed its

denial of McCartney’s appeal as follows, noting that there is no
definition for the term “layoff” while, at the same time, stating that
the “definition” of “layoff” was not satisfied:
The Committee finds that the “layoff” is nowhere
defined in the BCERP.
Therefore it is the Committee’s
responsibility to determine whether Claimant’s cessation of
employment with the Company qualified as a layoff for
purposes of the BCERP.
***
Article 17 of Claimant's collective bargaining
agreement provides that eligibility for retirement income
is based on the provisions of the BCERP. Thus, the
collective bargaining agreement expressly disclaims any
jurisdiction over Claimant's eligibility to receive
retirement benefits under the BCERP. Therefore, pursuant to
the terms of the BCERP, the Committee finds that only the
terms of the BCERP are relevant in determining whether
Claimant experienced a "layoff."
***
The facts and conditions surrounding the participant's
termination of employment must satisfy the definition of

-20-

"layoff."31 The Company's notification to Wichita Division
employees that they were at risk of layoff, without more,
does not qualify their subsequent terminations as a
"layoff' for purposes of the Retiree Health Plan and the
BCERP. Not all employees who were at risk of layoff were in
fact laid off. Only those who participated in the offer
process in good faith and were not offered employment by
Onex/Spirit were considered laid off by the Company. The
Committee acknowledges that the Company issued layoff
notices to all Wichita Division employees sixty days prior
to the Divestiture; however, this was done because the
Company did not know which employees would be offered
employment by Onex/Spirit. A notice that a participant is
"at risk" of a layoff does not by itself convert his or her
subsequent cessation of employment with the Company into a
layoff. Also, subsequent communications made it clear that
not all employees would be considered laid off.
***
Claimant next claims that because Onex/Spirit did not
assume liability for retiree health benefits Claimant
should continue to be eligible for retiree health benefits
under the Retiree Health Plan. The Committee disagrees with
this claim. The 2003 Benefits Update clearly provides that
an employee must retire under the BCERP to be entitled to
receive retiree medical benefits under the Retiree Health
Plan.
Moreover, as indicated numerous times above,
Onex/Spirit agreed to be responsible for the retiree
medical benefits of transferred employees subject to
collective bargaining.
***
The Committee finds that Claimant is not entitled to
bridging benefits under the BCERP. He did not experience a
"layoff" under the terms of the BCERP.32 Moreover, because
he refused the offer of employment with Onex/Spirit, his
accrued benefit was not transferred but he became a
Terminated Vested participant in the BCERP as a result of
his voluntary termination. Based on these findings, the
Committee further finds that Claimant is not eligible to
"bridge" into retiree health benefits under the Retiree
Health Plan.
(Doc. 552, exh. L-4 at 8, 10, 12-13).

31

What definition?

Whose definition?

32

Where is it?

Once again, the “terms” of the BCERP which supposedly define
a “layoff” are not identified.
-21-

The

EBPC

issued

similar

denials

to

all

McCartney/Boone

plaintiffs. Boeing subsequently sent written communication to former
employees stating that the EBPC’s decision on the issue of the layoff
bridge was final and would not change during the pendency of this
case.

Boeing instructed former employees to cease filing appeals.

Plaintiffs McCartney, Palmer, and Stevens additionally filed claims
for severance benefits under the Boeing Layoff Benefits Plan which
were denied.
H.

Plan Changes

Following the sale of Boeing Wichita, Boeing made a change to the
BCERP on September 14, 2005.33 The amendment explained that the assets
and liabilities associated with the transferred employees benefits
would be transferred to the successor plan at Spirit.34

The amendment

expanded section 14 of the BCERP as follows:
14.4 Release of Liability
After a Transfer occurs, the Plan fully relinquishes
liabilities associated with Transferred Persons.
As a
result, the Plan will not be liable for the liabilities
that are transferred or spunoff, even as a secondary payor
should
the
Recipient
Plan
fail
to
pay
benefits.
Transferred
Persons
will
no
longer
be
considered
participants or beneficiaries under sections 3(7) and 3(8)
of ERISA, and will not have standing under sections 502 and
503 of ERISA with respect to this Plan.
(Doc. 552, exh. L-5 at 2).
Boeing did not discuss the amendment with the unions prior to the
revision.

The amendment was not ratified or approved by the unions

33

An additional change made unilaterally by Boeing is discussed
in footnote 21, supra.
34

With respect to the IAM-represented employees, the amendment
states that those liabilities and assets will be transferred to the
IAM plan.
-22-

in their representation of the Day One Spirit employees.
I.

Boeing Sales of Other Plants

As previously noted, Boeing began restructuring its business
practices

around

2000.

Boeing

manufacturing to other companies.

made

a

decision

to

outsource

As a result, Boeing began selling

its existing manufacturing assets to third-party companies.
Wichita plant is only one example.

In addition to the Wichita sale,

Boeing sold two plants located in Washington state.
occurred in 2002 and 2003.

The

Those sales

The union employees in Washington were

represented by IAM and SPEEA and were covered under the BCERP.
Similar to the Wichita sale, the new owners of the Washington
plants did not adopt the union contracts.

The employees had to apply

for positions with the new company and new terms were negotiated with
the unions.

Unlike the Wichita sale, however, Boeing retained the

pension plan for the union-represented employees.

The employees who

accepted offers with the new company were classified in Boeing’s
system as “terminated pursuant to a divestiture (‘TER-DIV’).”

One

union employee who rejected a job offer from the new company in
Spokane was classified as “terminat[ed] pursuant to a reduction in
force without severance pay.”

The employees who began work with the

new companies and were at least 49 years old subsequently filed for
early retirement benefits from the BCERP when they reached the age of
55.

The BCERP granted the applications for early retirement benefits

for all of those employees.

The employees were also eligible for the

early retiree health care benefits.

The employees, however, were not

eligible for the layoff severance benefit.
J.

Contemporary Litigation Concerning Boeing Sale
-23-

With respect to the sale of the Oklahoma plants, the United Auto
Workers Union (UAW) filed a suit against Boeing seeking to compel
Boeing to arbitrate the layoff issue.
parties continued to arbitration.

The UAW was successful and the
The arbitrator determined that

Boeing breached the CBA by failing to classify the Boeing workers as
laid off. The arbitrator then issued a remedy award to the employees,
finding that the employees were eligible for the layoff bridge
regardless of Boeing’s transfer of the assets of the plan to Spirit.
Boeing moved to vacate the arbitrator’s remedy award.

The district

court confirmed the award and the decision was affirmed by the Seventh
Circuit.

Boeing v. UAW, 600 F.3d 722 (7th Cir. 2010)

Additionally, a class action was filed in this district alleging
that the Wichita-area Boeing employees who applied for, but did not
receive, a position at Spirit were terminated in violation of the ADEA
and ERISA.

See Apsley, et al. v. Boeing, Case No. 05-1369.

The

Apsley plaintiffs were classified as laid off by the EBPC for benefits
purposes.

In various pleadings, Boeing argued that the Spirit sale

was equivalent to plant-wide layoffs or reductions in force.

Boeing

also referred to the employees as being terminated as a result of the
sale.

The court determined that the Apsley plaintiffs must establish

evidence of a conspiracy in order to succeed on their claims because
Boeing uniformly terminated all employees on June 16.

At summary

judgment, the court held that the plaintiffs had not met their burden
and granted judgment in favor of Boeing.35

35

This decision was affirmed by the Tenth Circuit. Apsley v.
Boeing, 691 F.3d 1184 (10th Cir. 2012). The case is still pending in
this court on the remaining claims.
-24-

II.

Summary Judgment Standards
The rules applicable to the resolution of this case, now at the

summary judgment stage, are well-known and are only briefly outlined
here.

Federal Rule of Civil Procedure 56(c) directs the entry of

summary judgment in favor of a party who "show[s] that there is no
genuine issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law."

Fed. R. Civ. P. 56(c).

An issue is “genuine” if sufficient evidence exists so that a rational
trier of fact could resolve the issue either way and an issue is
“material” if under the substantive law it is essential to the proper
disposition of the claim.

Adamson v. Multi Community Diversified

Svcs., Inc., 514 F.3d 1136, 1145 (10th Cir. 2008).

When confronted

with a fully briefed motion for summary judgment, the court must
ultimately determine "whether there is the need for a trial–whether,
in other words, there are any genuine factual issues that properly can
be resolved only by a finder of fact because they may reasonably be
resolved in favor of either party."
477 U.S. 242, 250 (1986).
judgment.

Anderson v. Liberty Lobby, Inc.,

If so, the court cannot grant summary

Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).

Even though the parties have filed cross-motions for summary
judgment, the legal standard does not change.

See United Wats, Inc.

v. Cincinnati Ins. Co., 971 F. Supp. 1375, 1382 (D. Kan. 1997).

It

remains this court's sole objective to discern whether there are any
disputes of material fact, see Harrison W. Corp. v. Gulf Oil Co., 662
F.2d 690, 692 (10th Cir. 1981), and the court will treat each motion
separately.

See Atl. Richfield Co. v. Farm Credit Bank of Wichita,

226 F.3d 1138, 1148 (10th Cir. 2000).
-25-

III. Analysis
A.

Breach of Contract

Plaintiffs

and

Boeing

have

moved

for

plaintiffs’ claims of breach of the CBAs.

summary

judgment

on

Plaintiffs assert that

Boeing has breached the CBAs by 1) failing to classify all employees
as laid off after the sale to Spirit and 2) amending the BCERP.
Boeing contends judgment should be granted in its favor because
plaintiffs failed to adhere to the grievance procedure set forth in
the CBAs and the employees were not laid off as a consequence of the
sale.

The court will first turn to Boeing’s motion which seeks

summary judgment on all breach of contract claims on the basis that
plaintiffs failed to exhaust their administrative remedies.
i.

Boeing’s Motion for Summary Judgment - Failure to Exhaust

“As a general rule in cases to which federal law applies, federal
labor policy requires that individual employees wishing to assert
contract

grievances

must

attempt

use

of

the

contract

grievance

procedure agreed upon by employer and union as the mode of redress.”
Republic Steel Corp. v. Maddox, 379 U.S. 650, 652, 85 S. Ct. 614, 13
L. Ed.2d 580 (1965). “[U]nless the contract provides otherwise, there
can

be

no

doubt

that

the

employee

must

afford

opportunity to act on his behalf.” Id. at 652-53.

the

union

the

“Exhaustion is

excused when: (1) it would be futile; (2) the employer through its
conduct has repudiated the grievance procedure itself; or (3) the
union has prevented the employee from utilizing the grievance process

-26-

by breaching its duty of fair representation36.”

Garvin v. Am. Tel.

& Tel. Co., 174 F.3d 1087, 1093 (10th Cir. 1999).
As an initial matter, the CBAs provide that all grievances
arising under the CBAs are subject to the grievance policy unless
there is an exception.

The BCERP is a separate document and the CBAs

all set forth an exception for grievances which arise under the BCERP.
Specifically, the CBAs state that only the amount of credited service
under the BCERP is subject to the grievance procedure.

Therefore,

plaintiffs’ failure to follow the grievance procedure in this instance
is not fatal to their claim.
Turning to the layoff claim, however, the CBAs do contain a
provision which allows an employee to appeal a decision of an
employment action, i.e. layoff or termination, by filing a grievance
within a certain time period.

Therefore, this claim would be subject

to the grievance procedure.37
Boeing contends that summary judgment should be granted in its
favor because of plaintiffs’ failure to exhaust the administrative
remedies with respect to the layoff claim.

Plaintiffs respond that

36

Boeing asserts that the individual plaintiffs’ claims fail
because they have not alleged claims of inadequate representation by
the unions and have failed to file grievances in accordance with the
CBAs. The individual plaintiffs, however, are not claiming that their
failure to exhaust is excused by the unions’ failure to act. Rather,
plaintiffs argue that Boeing repudiated the grievance procedure and
that Boeing is estopped from raising the defense because of its
actions. Therefore, plaintiffs say, it was not necessary for the
individual plaintiffs to allege inadequate representation in this
case.
37

On June 30, 2005, Boeing informed the IAM that the grievance
was not subject to arbitration. (Doc. 561, exh. E-7). Boeing now
takes the position that this issue should have been grieved by all
plaintiffs and presented to an arbitrator because it involves
interpretation of terms in the CBAs. (Doc. 556 at 77-81).
-27-

Boeing repudiated the grievance procedure and should be estopped from
raising the defense of exhaustion because Boeing failed to timely move
to compel arbitration.
An employer is estopped from relying on unexhausted grievance and
arbitration procedures when the employer has effectively repudiated
the procedures.

Garcia v. Eidal Int’l Corp., 808 F.2d 717, 721 (10th

Cir. 1986)(citing Vaca v. Sipes, 386 U.S. 171, 185 (1967)).

“An

employer's repudiation may take the form of either an express refusal
to abide by contractually established grievance and arbitration
machinery . . . or conduct which renders the employer unable or
apparently unable to comply.”

Id. at 721-22.38

“[I]n determining

whether one party has so repudiated his promise to arbitrate that the
other party is excused the circumstances of the claimed repudiation
are critically important” and plaintiffs “must show some specific
basis for believing that the breaching party would not submit the
matter to arbitration, and conclusory allegations will not fulfill
this requirement.”

Id.

Boeing cites to a Seventh Circuit opinion and states that
repudiation “does not occur when the parties merely disagree about the
‘effect of some substantive provision of the contract.’”

38

(Doc. 556

Boeing asserts that repudiation “occurs only ‘when [an]
employer proclaims that it no longer considers the obligation to
arbitrate binding,’” citing to an opinion written by Judge Rogers in
1998. (Doc. 556 at 83). That opinion, however, did not discuss an
issue of repudiation because Judge Rogers stated that a claim of
repudiation was not made in that case. See Lohf v. Runyon, 999 F.
Supp. 1430, 1437 (D. Kan. 1998). For many reasons, this court is at
a loss to understand why Boeing would cite Lohf.
Perhaps Boeing
mistakenly thinks the court does not read the cases cited in
memoranda.
The court finds that the holding in Garcia is the
applicable law in this case.
-28-

at 91, citing Bailey v. Bicknell Minerals, Inc., 819 F.2d 690 (7th
Cir. 1987)).

Bailey, however, is distinguishable.

In Bailey, the

plaintiffs asserted that the defendant repudiated the bargaining
agreement

simply

repudiation.”

because

“any

breach

of

contract

.

.

.

is

a

The Seventh Circuit also noted that the defendant did

not state that it would not proceed to arbitration.
In this case there is a written statement by Boeing to IAM which
stated that “the grievance is not subject to arbitration.”39

In

addition, Boeing did not respond to the IAM’s request for arbitration
which was filed in response to Boeing’s June 30 letter.40
The court finds that there is sufficient evidence to create a
factual issue as to whether Boeing repudiated its agreement to
arbitrate

with

the

IAM

and

whether

obligations set forth in the CBA.

the

IAM

complied

with

its

Therefore, Boeing’s motion for

summary judgment against the IAM and the IAM-represented plaintiffs
for failure to exhaust administrative remedies is therefore denied.
Turning to the IBEW and SPEEA plaintiffs, there is additional
evidence that Boeing informed their union officials of its position
that the grievance was not subject to the arbitration procedure.
However, that evidence is disputed by Boeing.

Viewing the evidence

39

The IAM did not submit its individual member grievances to
Boeing in accordance with the terms of the CBA.
40

Boeing asserts that the exhausted grievance is somehow
different from the current claim concerning “whether Boeing should
have coded its members as ‘laid off.’” (Doc. 556 at 81). However, the
grievance clearly states that the “Union asserts the employees are in
fact laid off from Boeing.” (Doc. 552, exh. R-2). Even though the
main thrust of the grievance concerns retirement benefits, the court
finds that the IAM grievance was sufficient to put Boeing on notice
of the coding claim and Boeing’s treatment of the IAM-represented
employees.
-29-

in a light most favorable to plaintiffs, a jury could find that Boeing
“would not submit the matter to arbitration.”

Garcia, 808 F.2d at

722.
The court finds that a genuine dispute of material fact exists
as to whether Boeing repudiated the grievance procedures with respect
to all plaintiffs’ claims and therefore denies Boeing’s motion for
summary judgment based on the contentions that these plaintiffs failed
to exhaust their claims.
ii. Plaintiffs’ Motion for Summary Judgment on Boeing’s
Exhaustion Defense
Turning to plaintiffs’ motion for summary judgment, plaintiffs
seek a ruling that Boeing is estopped from raising the defense of
failure to exhaust, citing Reid Burton Const., Inc. v. Carpenters
Dist. Council of S. Colo., 614 F.2d 698 (10th Cir. 1980), for the
proposition that “arbitration may not be preserved as a bar to relief
unless the party relying on it affirmatively moves to stay the case
and compel arbitration.”

(Doc. 566 at 3).

Essentially, plaintiffs

argue, as a matter of law, that Boeing has waived the defense of
failure to exhaust by actively participating in this suit without
moving

to

compel

arbitration.

Boeing

hotly

disputes

this

characterization of Reid Burton and the parties spend a significant
amount of time briefing its applicability.
In Reid Burton, the plaintiff construction company brought suit
against two defendant unions for an alleged breach of the CBA.

The

plaintiff, however, did not adhere to the arbitration procedure and
the defendants asserted the CBA’s arbitration clause as a bar to the
plaintiff’s claim. The case proceeded to trial without the defendants
-30-

moving to stay the proceeding.41

At trial, the defendants raised the

arbitration issue with a witness and informed the court that the
defendants were willing to proceed to arbitration. The district court
found that the “unions played games with plaintiff and the court too
long to now insist on an injunctive order requiring plaintiff to
arbitrate this stale dispute.”
On appeal, the defendants argued that “they did not waive their
right to assert the arbitration defense by not moving for a stay or
by participating in the litigation. . . Mere delay, they say, does not
constitute waiver, absent such a showing of prejudice; defendants were
not

obligated

to

move

for

a

stay;

and

counterclaim does not waive the defense.”

the

mere

filing

of

a

614 F.2d at 701-02

(emphasis supplied). The Circuit explained that the court must review
several factors in determining whether a defendant has waived its
right to arbitration.
In determining whether a party to an arbitration
agreement, usually a defendant, has waived its arbitration
right, federal courts typically have looked to whether the
party has actually participated in the lawsuit or has taken
other action inconsistent with his right;
whether the
litigation machinery has been substantially invoked and the
parties were well into preparation of a lawsuit by the time
an intention to arbitrate was communicated by the defendant
to the plaintiff; whether there has been a long delay in
seeking a stay or whether the enforcement of arbitration
was brought up when trial was near at hand.
Other relevant factors are whether the defendants have
invoked the jurisdiction of the court by filing a
counterclaim without asking for a stay of the proceedings;
whether important intervening steps (e. g., taking
advantage of judicial discovery procedures not available in
arbitration had taken place); and whether the other party
was affected, misled, or prejudiced by the delay.
41

There is no notation of any pretrial dispositive motions on
the defense of failure to arbitrate.
-31-

614 F.2d at 702.
The Circuit continued citing a Fifth Circuit case, Burton-Dixie
Corp. v. Timothy McCarty Const. Co., 436 F.2d 405 (5th Cir. 1971),
which confronted the waiver issue in a “context substantially similar
to the present one.”
Burton-Dixie,
building.

the

Burton-Dixie is similar to this case.

plaintiff

hired

the

defendant

to

construct

In
a

The parties entered into a contract that contained a

provision in which disputes were submitted to an architect and thence
to arbitration.

The plaintiff initiated several requests to repair

roof leaks in the building but the defendant did not replace the roof.
The plaintiff did not adhere to the arbitration procedure in the
contract but instead filed suit. The defendant did not move to compel
arbitration or stay the proceedings but “rather denied liability and
set

up

as

arbitrate.”

an

affirmative

defense

436 F.2d at 409.

[the

plaintiff’s]

failure

to

After the jury returned a verdict in

favor of the plaintiff, the defendant moved for judgment as a matter
of law on the basis that the plaintiff failed to comply with the
arbitration procedures. The district court denied the motion and that
decision was upheld by the Fifth Circuit.

The Fifth Circuit found

that the jury could have reasonably concluded that the defendant
“waived its right to insist upon arbitration.”

Id.

Boeing asserts that Reid-Burton is distinguishable and the Tenth
Circuit did not hold that a defendant may waive his right to a defense
of

failure

to

arbitrate.

The

court

disagrees.

The

Circuit

specifically discussed the defendant’s argument that it did not waive
its right to raise the failure to arbitrate defense. In doing so, the

-32-

Circuit pointed to Burton-Dixie which confronted the exact issue here.
Turning to the factors cited by the Circuit and applying them to
this case, the court finds that Boeing has clearly taken advantage of
this forum by extensively utilizing the discovery process offered in
court but not available in arbitration.

This case has proceeded for

more than seven years and Boeing has filed countless discovery
motions.

The filings in this case have exceeded 500 documents.

In

those 500 documents, Boeing has never moved to dismiss on the basis
of failure to exhaust even though Boeing was aware of the grievance
procedures in 2005 and the two unions’ alleged lack of compliance with
those procedures.

Boeing also has neglected to file a motion to

compel arbitration or stay the proceedings, even after plaintiffs
stated in their response that they will consent to arbitration.42
(Doc. 566 at 9-10).

Moreover, prior to the entry of the pretrial

order on October 3, 2011, more than six years after the case was
filed, Boeing’s documented position has been that these issues were
not subject to arbitration.

Clearly, Boeing has taken actions which

are not consistent in a party who wishes to arbitrate a dispute.
The court finds that there are sufficient facts present for a
reasonable fact finder to conclude that Boeing waived the right to
42

During its consideration of the parties’ extremely extensive
dispositive motion submissions, the court became concerned that it
might be making a mistake if it didn’t order arbitration on some
issues.
The court was so uncertain about Boeing’s seemingly
inconsistent positions that it was compelled to issue a letter which
required Boeing to unambiguously state “yes or no” whether it would
agree to plaintiffs’ expressed willingness to arbitrate. Doc. 571.
Boeing responded with a “no” but in a long letter (actually two
letters) which essentially repeated arguments advanced in its
memoranda. Docs. 572, 576. Plaintiffs’ response can be found at
docket 573. The court is satisfied that ordering arbitration would
have been a complete waste of time and resources.
-33-

arbitration and the right to assert plaintiffs’ failure to arbitrate
as a defense.

Therefore, the court finds that there are material

disputes of fact which preclude summary judgment for plaintiffs on the
issue of waiver.
iii. Collateral Estoppel
1.

Arbitration of the Oklahoma Sale

Initially,

plaintiffs

contend

in

their

motion

for

summary

judgment on the breach of contract claims that the decision of the
Seventh Circuit in Boeing v. UAW, 600 F.3d 722 (7th Cir. 2010), has
collateral estoppel effect in this case.

Boeing disagrees.

Collateral estoppel will bar a claim if the following elements
are met: (1) the issue previously decided is identical with the one
presented in the action in question, (2) the prior action has been
finally adjudicated on the merits, (3) the party against whom the
doctrine is invoked was a party or in privity with a party to the
prior adjudication, and (4) the party against whom the doctrine is
raised had a full and fair opportunity to litigate the issue in the
prior action.

Moss v. Kopp, 559 F.3d 1155, 1161-62 (10th Cir. 2009).

The first element is not met in this case.
determine whether a breach of the CBAs occurred.
was not faced with that issue.
of

the

district

court,

Here, the court must
The Seventh Circuit

As set forth clearly in the decision

“Boeing

disagreed

with

the

arbitrator’s

decision [which concluded it breached the CBA] but acknowledges that
it has no legal ground to contest it.

Therefore, the arbitrator’s

decision that Boeing breached the CBA by classifying the employees as
terminated is final and uncontested.”

Boeing v. UAW, No. 09-2213,

2009 WL 3027446 (N.D. Ill. Sept. 16, 2009). The only issue before the
-34-

court was the “relief ordered by the arbitrator.”

Id.

Therefore,

Boeing is not precluded from arguing that it did not breach the CBAs.
2.

Apsley

Next, plaintiffs contend that Boeing is precluded from asserting
that plaintiffs were not “laid off” because Boeing took that position
in the Apsley case.
is not met.

Again, the first element of collateral estoppel

Plaintiffs have not established that their status of

“laid off” was at issue in that case.

Although Boeing did refer to

all employees as “laid off”43 in some filings, the court in Apsley did
not face the issue which is before this court.

In Apsley, Judge

Melgren granted Boeing’s and Spirit’s motion for summary judgment on
the plaintiffs’ ERISA claim of implementing the Wichita sale to
interfere with their pension benefits, plaintiffs’ ADEA claims and
plaintiffs’ claim of breach of contract for failing to allow them to
vote on the new CBA after they did not receive offers of employment
from Spirit.

At no point in the decision by Judge Melgren did he

determine whether all employees at Boeing were laid off at the time
of the sale.

Therefore, the first element has not been met and the

Apsley decision has no preclusive effect44.
43

Boeing also referred to the same employees as terminated.

44

Plaintiffs’ position on this issue is difficult to understand.
Plaintiffs pick out the times that Boeing has used the words “laid
off” in its briefs in Apsley and asks the court to conclude that
Boeing can’t reverse course and say plaintiffs are not “laid off.”
Boeing, however, correctly points out that it has always been its
position that the Apsley plaintiffs were laid off because they never
received job offers from Spirit even though they had submitted consent
forms.
Plaintiffs have not submitted any authority which would
preclude a defendant from taking a different position in a different
lawsuit. Contrary to plaintiffs’ belief, collateral estoppel is the
preclusive effect of an issue decided by a court and not a party’s
isolated statements in a brief.
-35-

iv.

Breach of CBA Provision Concerning Laid Off Status

Section 301 of the LMRA “governs claims founded directly on
rights created by collective-bargaining agreements [CBAs], and also
claims substantially dependent on analysis of a collective-bargaining
agreement.”

Caterpillar, Inc. v. Williams, 482 U.S. 386, 394 (1987).

This requires the court to analyze the CBAs to determine what the
parties agreed to and the legal consequences that were intended by
referring to uniform federal law.

Johnson v. Beatrice Foods Co., 921

F.2d 1015, 1019 (10th Cir. 1990)(citing Allis-Chalmers Corp. v. Lueck,
471 U.S. 202, 211, 105 S. Ct. 1904 (1985)).
Actions under section 301 typically have been analogized to
actions for breach of contract.

Chauffeurs, Teamsters and Helpers,

Local No. 391 v. Terry, 494 U.S. 558, 569-570, 110 S. Ct. 1339, 1347
(1990); Held v. Mfrs. Hanover Leasing Corp., 912 F.2d 1197, 1206 (10th
Cir.

1990).

Therefore,

the

enforcement

and

interpretation

of

collective bargaining agreements are governed by traditional rules of
contract

interpretation

as

long

as

inconsistent with federal labor policy.
F.2d 1476, 1479 (6th Cir. 1983).

their

application

is

not

UAW v. Yard-Man, Inc., 716

When a dispute arises as to a

provision in the CBA, the court is to first look at the explicit
provisions in the CBA in making a determination as to the intended
meaning of the parties.

Winnett v. Caterpillar, Inc., 553 F.3d 1000,

1008 (6th Cir. 2009).

When the term is ambiguous, the court may turn

to extrinsic evidence.

Webb v. ABF Freight Sys., Inc., 155 F.3d 1230

(10th Cir. 1998); UAW v. BVR Liquidating, 190 F.3d 768, 772, 774 (6th
Cir. 1999).
The Tenth Circuit has held that with respect to labor contracts,
-36-

“a fact-finder is entitled-and indeed, in some cases required-to look
to the past practices of the parties and the common law of the shop
to determine the parties' contractual obligations.”

Webb, 155 F.3d

at 1243-44 (citing United Steelworkers v. Warrior & Gulf Navigation
Co., 363 U.S. 574, 581-82 (1960) (holding that the interpretation of
contract terms “is not confined to the express provisions of the
contract, as the industrial common law-the practices of the industry
and the shop-is equally a part of the collective bargaining agreement
although not expressed in it”); Nat’l Labor Relations Bd. v. NE Okla.
City Mfg. Co., 631 F.2d 669, 676 (10th Cir. 1980) (“Where past
practice has established a meaning for language that is used by the
parties in a new agreement, the language will be presumed to have the
meaning given it by such past practice.”))

If the court decides that

the language is ambiguous, “then resolution of the ambiguity is a
question of fact to be determined by the jury.”

John Morrell & Co.

v. Local Union 304A of United Food and Commercial Workers, AFL-CIO,
913 F.2d 544, 551 (8th Cir. 1990).
In this case, the contracts in question are the CBAs and the
fundamental issues resolve around the meaning and effect of the terms
“laid off” and “layoff,” which appear numerous times in the CBAs as
well as in Boeing documents. It is reasonable to assume that when the
CBAs were negotiated, the parties were aware of the history of layoffs
in the aircraft industry in general and Boeing in particular. But for
some reason, the terms are not defined, either in the CBAs or in
various Boeing documents.

Because of that lack of clarity, the CBAs

are ambiguous.
The court has carefully and repeatedly reviewed the parties’
-37-

arguments relating to the section 301 question.
556 at 76-86; 566 at 23-33).

(Docs. 552 at 60-68;

Clearly, the parties have different

views as to the meaning of the terms “laid off” or “layoff.”

Boeing

contends that the court must look to the ordinary meaning of the
terms, including the definition of layoff in Black’s Law Dictionary
and Webster’s Third New International Dictionary.

(Doc. 556 at 99).

The court is not persuaded by Boeing’s argument because of the lack
of any indication in the CBAs that the parties intended the terms to
be interpreted according to dictionary definitions.

The parties had

the ability to define the terms in the CBAs and the term “laid off”
has been defined in at least one prior case.

See Garvin v. American

Tel. & Tel. Co., 174 F.3d 1087 (10th Cir. 1999).

But far more

persuasive is the Circuit’s decision in McIlravy v. Kerr-McGee Coal
Corp., 204 F.3d 1031 (10th Cir. 2000).

At the outset, the Circuit,

in an earlier decision (119 F.3d 876), reversed Judge Brimmer’s grant
of summary judgment on the breach of contract claim and sent the case
back for a jury trial.

It also made the following very pertinent

observation about use of dictionary definitions and the term “layoff:”
In the present case, an inquiry into the plain
meaning of the term “layoff” reveals that that term can
denote either a permanent or a temporary termination of
employment.
The term is variously defined as “[a]
termination of employment at the will of employer. Such may
be temporary ... or permanent,” Black's Law Dictionary 888
(6th ed. 1990), and “the act of laying off an employee or
workforce,” to wit, “to cease to employ (a worker)
usu[ally] temporarily,”
Webster's Ninth New Collegiate
Dictionary 679 (1991).
Because the term “layoff” may denote either a
permanent or temporary termination of employment, that term
is ambiguous in the present case. We cannot say here that
“the evidence points but one way and is susceptible to no
reasonable inferences supporting” appellees' position.
(“[I]n case of doubt as to the meaning of an instrument,
-38-

the doubt will be resolved against the scrivener....”). We
agree with the district court that it was appropriate to
submit the breach of contract claim to the jury.
Id. at 1038 (internal citations omitted).
The parties also have different positions concerning the evidence
to be considered in determining the meaning of the terms.

For

example, plaintiffs urge the court to consider Boeing’s actions and
practices in connection with the sales of Boeing’s Kent and Spokane,
Washington facilities which plaintiffs say were “identical” to the
Wichita sale.

Not so, says Boeing: “But the Kent and Spokane

transactions were structured differently. . . .”

Many other examples

can be cited, but to no purpose.
The court finds that there are disputes of material fact which
preclude summary judgment on the section 301 breach of contract claims
and a trial is necessary.
In the amended complaint, plaintiffs seek a jury trial.
responds that a jury trial is not available.

Boeing

Therefore, the parties

will be allowed to file memoranda on plaintiffs’ right to a jury trial
on the section 301 claims as well as any other claims45.
memoranda may not exceed ten double-spaced pages.

Both

Footnotes may not

be used to get around the page limits.

No replies will be allowed.

Plaintiffs’ brief is due on January 7.

Defendants must respond by

January 18.
v.

No requests for additional time will be considered.

Breach of the CBAs due to the Amendment of the Plan

Next, the Harkness class and the unions assert that Boeing

45

The court presumes that plaintiffs are not seeking a jury
trial on the ERISA claims.
If this presumption is in error,
plaintiffs may inform the court in their memoranda.
-39-

breached the CBAs by unilaterally changing provisions in the BCERP.
Boeing moves for summary judgment on the basis that plaintiffs should
be

estopped

from

proceeding

on

their

benefitted from the Spirit transaction.

claim

because

they

have

Plaintiffs move for summary

judgment on the basis that the CBAs required all parties to agree to
an amendment and Boeing breached the CBAs by changing the language of
the BCERP.
Boeing unilaterally added the following amendment to the BCERP
which states as follows:
14.4 Release of Liability
After a Transfer occurs, the Plan fully relinquishes
liabilities associated with Transferred Persons.
As a
result, the Plan will not be liable for the liabilities
that are transferred or spunoff, even as a secondary payor
should
the
Recipient
Plan
fail
to
pay
benefits.
Transferred
Persons
will
no
longer
be
considered
participants or beneficiaries under sections 3(7) and 3(8)
of ERISA, and will not have standing under sections 502 and
503 of ERISA with respect to this Plan.46
(Doc. 552, exh. L-5 at 2).
Boeing also deleted a portion of the definition of an “inactive
participant” in the BCERP.

The BCERP defines “inactive participant”

as a prior Active Participant who is on an Authorized Period of
Absence, which includes an employee who is absent which is authorized
by [Boeing] due to a “layoff not to exceed six years duration.” (Doc.
562, exh. QQ-1 at ¶ 1.7).

Prior to the deletion, the definition

continued as follows: "Any discretion of the Company under the
provisions of this definition will be exercised without discrimination

46

With respect to the IAM-represented employees, the amendment
states that those liabilities and assets will be transferred to the
IAM plan.
-40-

and

in

accordance

with

definitely

established

rules

uniformly

applicable to Employees or Participants whose approved periods of
absence were occasioned by similar circumstances."

(Doc. 562, exh.

QQ-1 at ¶ 1.7).
These changes were made by Boeing without any negotiation with
the Unions.47

Boeing, however, cites no provision in the CBAs which

would authorize it to make unilateral changes to the plan.

In fact,

the CBAs specifically state that the plan was to “remain unchanged”
with a few negotiated exceptions that were listed in the CBAs.
e.g., Doc. 552, exh. R-1 at sec. 10.5.

See,

Instead of asserting that it

had a right to make the changes, Boeing contends that plaintiffs
should be estopped from challenging the transfer of the pension
assets.
Boeing cites to In re Sampson, 997 F.2d 717 (10th Cir. 1993), a
bankruptcy decision, which referred to a Fifth Circuit case that
disallowed a bankruptcy discharge on alimony payments.
opinion,

however,

does

not

discuss

the

connection with a breach of an agreement.

defense

of

The Sampson
estoppel

in

The court finds that the

Tenth Circuit’s discussion in a footnote in Sampson is not applicable.
The court, however, declines to grant summary judgment in favor
of plaintiffs.

Plaintiffs are unable to establish that the breach

47

The IAM terminated its CBA with Boeing effective September 1,
2005.
Therefore, there was no CBA in effect at the time of the
amendments. Because Boeing made the changes after September 1, the
IAM plaintiffs’ claim of breach of contract on this issue fails as a
matter of law. Boeing’s motion for summary judgment on the IAM claim
of breach of contract is granted. Plaintiffs’ motion is denied.
-41-

caused any damages at this stage of the proceedings.48

Contempo

Design, Inc. v. Chicago and N.E. Ill. Dist. Council of Carpenters,
226 F.3d 535, 554 (7th Cir. 2000)(Under § 301, the measure of damages
recoverable for a breach of contract is the actual loss sustained as
the direct result of the breach.)

The Harkness Class’ damages are

dependent on their success on the layoff claim.

If the fact finder

determines that they were in fact “laid off” from their employment
with Boeing, their damages would presumably equal the amount of
benefits they should have received if they were able to retire under
the BCERP as an eligible participant.

However, the court presumes

that the damages would be nonexistent if the Harkness Class was not
“laid off” because their benefits were frozen and transferred to the
Spirit Plan.49
Boeing’s and plaintiffs’ motions for summary judgment on this
claim are denied.
B.

ERISA Claims

i.

Harkness Class

Plaintiffs also bring various ERISA claims against Boeing.
Boeing moves for summary judgment on the basis that the Harkness Class
does not have standing to bring ERISA claims because they are no
longer participants in the BCERP.

In order to have standing under

ERISA, the Harkness Class must have been participants of the plan at
the time the complaint was filed.
48

Hansen v. Harper Excavating, Inc.,

The parties have not yet conducted discovery on damages.

49

At no point do plaintiffs make the alternative argument that
they should be able to retire under the BCERP as a terminated vested
participant in the event that the fact finder determines that they
were not “laid off” from employment with Boeing.
-42-

641 F.3d 1216, 1226 (10th Cir. 2011).

The complaint was filed in

August 2005, which was prior to the amendment of the BCERP and prior
to the transfer of the funds to the new Spirit plan.

The Harkness

Class also must fall into one of four categories: (1) an employee
currently in covered employment; (2) an employee reasonably expected
to be in covered employment; (3) a former employee with a reasonable
expectation of returning to covered employment; or (4) a former
employee with a colorable claim to vested benefits, which is to say
a former employee with a colorable claim that (a) he will prevail in
a suit for benefits, or (b) his eligibility requirements will be
fulfilled in the future.

Id. (citing Firestone Tire & Rubber Co. v.

Bruch, 489 U.S. 101, 117–18 (1989).
Plaintiffs argue that the third or fourth category is applicable
in this case.

Although the IAM and IBEW employees were subject to

recall rights, there is no evidence that there was a “reasonable”
expectation that the employees would be recalled. With respect to the
fourth category, the court finds that the Harkness Class could
potentially fulfil the requirements of a claim in the future and/or
prevail in a suit for benefits.

However, this is dependent upon

Boeing’s contractual obligation to treat the Harkness class as “laid
off.”

If Boeing is successful at trial, the Harkness Class members

would not have standing to bring ERISA claims.
Therefore, the court declines to rule on the claims of the
Harkness Class because the court finds that the outcome at trial would
most likely dispose of these claims. If Boeing prevails, the Harkness
Class’ ERISA claims would be subject to dismissal for lack of
standing.

If the Harkness Class prevails on their breach of contract
-43-

claims, they have agreed that a recovery under ERISA may not be
allowed as it would be a duplicative.
and

Boeing’s

motions

for

summary

(Doc. 552 at 100). Plaintiffs
judgment

are

denied,

without

prejudice.
ii.

McCartney-Boone Plaintiffs

The McCartney-Boone plaintiffs bring individual claims for early
retirement benefits, severance benefits and a claim of interference
with their ERISA rights.
on

the

basis

that

Boeing initially moves for summary judgment

several

plaintiffs

failed

to

exhaust

their

administrative remedies with the EBPC. Plaintiffs Boone, Carselowey,
Gray, Kerns, Leavell, Moore, Norman, Queen, Sanders, Stoner, Stocking,
and Wright did not file a claim with the EBPC requesting pension and
medical benefits.

Plaintiffs Carselowey, Leavell, Moore, Norman,

Queen, Stocking, and Stoner did not file a request for severance
benefits.
1.
ERISA

Exhaustion

does

not

contain

an

express

exhaustion

requirement.

However, the Tenth Circuit has held that “exhaustion of administrative
(i.e., company-or plan-provided) remedies is an implicit prerequisite
to seeking judicial relief.”

McGraw v. Prudential Ins. Co. of Am.,

137 F.3d 1253, 1263 (10th Cir. 1998).
exhaustion requirement, however.

There are exceptions to the

The court has the discretion to

excuse a plaintiff from exhausting his or her administrative remedies
when it would be futile or the remedy would be inadequate.

Id.

Plaintiffs contend that exhaustion would be futile in this case.
Essentially, plaintiffs argue that the EBPC denied all claims for the
same reasons and that further claims or appeals would be futile.
-44-

The

court agrees. Based on the evidence before the court, the EBPC issued
denials to McCartney, Stevens, Wieland and Palmer.

Those denials

included sections which were either verbatim or almost verbatim.
(Docs. 560 at A-44; 561 Y-2; 562 at DD-1, GG-1).

Boeing has not

provided any significant reason for the court to conclude that other
claims would have been handled differently. With respect to the claim
for severance benefits, plaintiffs McCartney, Palmer and Stevens all
filed claims.

Based on the EBPC’s decisions on those claims, the

court finds that any claim for severance benefits would have also been
denied

and

presumably

would

have

included

the

same

boilerplate

language.
Therefore, Boeing’s motion for summary judgment on the basis that
plaintiffs failed to exhaust their administrative remedies is denied.
2.

Unlawful Interference

In addition to the individual ERISA claims, the McCartney-Boone
plaintiffs bring a claim of unlawful interference of pension benefits
in violation of ERISA.

Section 510 provides: “[i]t shall be unlawful

for any person to discharge, fine, suspend, expel, discipline, or
discriminate against a participant or beneficiary for exercising any
right to which he is entitled under the provisions of an employee
benefit plan . . . or for the purpose of interfering with the
attainment of any right to which such participant may become entitled
under the plan.”
Both plaintiffs and Boeing move for summary judgment on this
claim. Plaintiffs assert that Boeing differentiated between the
employees in order to interfere with their receipt of the layoff
bridge and health insurance.

To prevail on a § 510 interference
-45-

claim, plaintiffs must show that Boeing had the specific intent to
interfere with their protected ERISA rights. See Phelps v. Field Real
Estate Co., 991 F.2d 645, 649 (10th Cir. 1993).

Boeing argues that

a sale of a company does not result in a violation of section 510 and
cites to Apsley, 722 F. Supp.2d 1218, 1232 (D. Kan. 2010). Plaintiffs
must show some characteristic which would support that Boeing sold the
Wichita division to avoid paying the pension benefits, i.e. high
number of employees about to vest or high pension costs.
Plaintiffs

have

not

done

so.

Rather,

plaintiffs

arguments

Id.
in

opposition are quite cursory.
Boeing’s

motion

is

therefore

granted

with

McCartney-Boone plaintiffs’ interference claim.

respect

to

the

Plaintiffs’ motion

for summary judgment on this claim is accordingly denied.
3.

Individual Claims under § 502
Severance Benefits Claims

Boeing

moves

for

summary

judgment

on

plaintiffs’ claims for severance benefits.50
and Palmer’s claim for severance benefits.51

the

McCartney-Boone

Boeing denied McCartney
Plaintiffs’ complaint

seeks benefits for all McCartney-Boone plaintiffs who did not receive
an offer of employment with Spirit, i.e. those who refused to sign the
consent form.52
50

Plaintiffs did not move for summary judgment on this claim.

51

Stevens was paid severance benefits; however, Boeing asserts
that Stevens was not due benefits under the CBA.
52

Plaintiffs Norris Palmer, Bradley Stevens, Gary Leavell,
Russell Norman, Marlon Stocking, William Stoner, Larry Moore, James
Queen, and Bruce Carselowey did not sign the Consent to Release
Information form required for them to be considered for employment by
Spirit.
-46-

The CBAs provide the following severance benefits for unionrepresented employees:
All bargaining unit employees who have at least one
(1) years of Company service and who are involuntary laid
off from the Company (other than a temporary layoff under
Section 22.8, but including employees laid off because of
a declining a downgrade offer as allowed under Section
22.6) are eligible to receive the benefit described in
Section 23.3; provided, however, the following employees
shall not be eligible for the benefit: employees who upon
their layoff become employed by a subsidiary or affiliate
of the Company; employees who are laid off from the Company
because of a merger, sale or similar transfer of assets and
are offered employment with the new employer, employees who
are laid off because of an act of God, natural disaster or
national emergency; employees who are laid off because of
a strike, picketing of the Company’s premises, work
stoppage or any similar action which would interrupt or
interfere with any operation of the Company; and employees
who terminate employment for any reason other than layoff,
including, but not limited to, resignation, dismissal,
retirement, death, or leave of absence.
(Doc. 552, exh. R-1)(IAM CBA).53
Boeing

argues

that

the

EBPC’s

decisions

denying

severance

benefits were not arbitrary and capricious because it was reasonable
to conclude that the employees were not laid off because they did not
experience a layoff event when they chose not to pursue employment
with Spirit.54 As discussed, supra, the question of whether plaintiffs
experienced a layoff is a question which must be resolved at trial.
Therefore, Boeing’s motion for summary judgment on these claims is
denied.
Early Retirement Benefits
53

All CBAs have virtually identical provisions.
exhs. B-1, B-2 and E-1.
54

See Doc. 552,

Boeing also argues that the McCartney-Boone plaintiffs who
refused job offers are not eligible for the severance benefits.
Plaintiffs, however, are not seeking benefits for these individuals.
See Doc. 372 at ¶ 202.
-47-

Both parties move for summary judgment on the McCartney/Boone
plaintiffs’ claims for early retirement benefits under the BCERP.
Plaintiffs contend that the decision finding the McCartney/Boone
plaintiffs were not laid off was arbitrary and capricious.
asserts in its

Boeing

motion that the decision was not arbitrary and

capricious because the McCartney/Boone plaintiffs failed to accept an
offer of employment by Spirit or failed to sign the consent form in
good faith.
The BCERP provides the following:
A Participant may retire on an Early Retirement Date
which, subject to his or her election, may be the first day
of any month coincident with or next following the later of
the Participant’s 55th birthday or the date of the
Participant’s Termination of Employment, provided that if
the Participant is less than age 62, the Participant must
either:
(a) have ten or more Years of Service,
(b) have some Credited Service and have been
issued a declaration of permanent and total
disability . . . or
(c) have some Credited Service and be laid
off on or after the date the Participant
attains age 55.
(Doc. 562, exh. QQ-1 at ¶ 3.2)(emphasis supplied).
Again, the court has determined that there is a genuine dispute
of material fact as to the meaning of “layoff” and “laid off” which
must be resolved at trial.

Therefore, the court denies Boeing’s

motions for summary judgment on the McCartney/Boone plaintiffs’
individual claims for retirement benefits under the BCERP.
IV. Conclusion
Plaintiffs’ motion for partial summary judgment on plaintiffs’
section 301 claims is denied.

Boeing’s motion for summary judgment

-48-

on plaintiffs’ section 301 claims is denied in part and granted in
part.

Boeing’s motion for summary judgment on the IAM section 301

claim of breach of contract by amending the BCERP is granted.
Boeing’s motion for summary judgment as to all other section 301
claims is denied.
Boeing’s motion for summary judgment and plaintiffs’ motion for
summary judgment on the Harkness Class’ ERISA claims is denied.
Boeing’s

motion

for

summary

judgment

on

the

plaintiffs’ individual ERISA claims is denied.

McCartney/Boone

Boeing’s motion for

summary judgment is granted on the McCartney/Boone plaintiffs’ claim
of interference with ERISA rights.
A motion for reconsideration of this order is not encouraged.
Any such motion shall not exceed 10 double-spaced pages and shall
strictly comply with the standards enunciated by this court in Comeau
v. Rupp, 810 F. Supp. 1172, 1174 (1992) and this court’s Rule 7.3.
The response to any motion for reconsideration shall not exceed 10
double-spaced pages.

No replies shall be filed.

IT IS SO ORDERED.
Dated this 11th

day of December 2012, at Wichita, Kansas.

s/ Monti Belot
Monti L. Belot
UNITED STATES DISTRICT JUDGE

-49-