Shipman et al v Logan et al
OPINION AND ORDER by Chief Judge Gregory K Frizzell ; denying 38 Motion for Summary Judgment; granting 40 Motion for Summary Judgment (kjp, Dpty Clk)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OKLAHOMA
ALAN SHIPMAN, and
GREG LOGAN, GENE BRENT,
and JERRY BROWN, in their capacity
as employer-trustees of the NECA-IBEW
Local Union No. 584 Pension Plan and
the NECA-IBEW Local Union No. 584
Profit Sharing Plan; JOHN HARRIS and
JOHNNY PATTERSON, in their capacity
as putative union-trustees of the NECAIBEW Local No. 584 Pension Plan and the
NECA-IBEW Local Union No. 584 Profit
Sharing Plan; NECA-IBEW LOCAL
UNION NO. 584 PENSION PLAN; and
NECA-IBEW LOCAL UNION NO. 584
PROFIT SHARING PLAN,
Case No. 16-CV-79-GKF-FHM
OPINION AND ORDER
Before the court are the parties’ Motions for Summary Judgment [Doc. Nos. 38, 40]. For
the reasons set forth below, plaintiffs’ motion [Doc. No. 38] is denied and defendants’ motion
[Doc. No. 40] is granted.
This dispute arises from an intra-union squabble between rival factions of Local 584 of
the International Brotherhood of Electrical Workers (“Local 584”). Specifically, it concerns the
attempted removal of defendant Johnny Patterson (“Patterson”) as employee trustee of Local
584’s Pension and Profit Sharing Plans.
In summer 2014, Patterson resigned as business manager of Local 584 in connection with
settlement of unfair labor practices charges he alleged against the union. [Doc. No. 38, p. 2];
[Doc. No. 43, p. 10]. Patterson was replaced as business manager by plaintiff Alan Shipman
(“Shipman”). Under Art. 17, § 8 of the IBEW Constitution, a local business manager, among
other things, “serve[s] . . . as trustee on all trust funds . . . provided for in [ ] collective
bargaining agreements” negotiated by the union. [Doc. No. 38-1, p. 118]. To that end, in
addition to serving as business manager, Patterson served as trustee of Local 584’s Pension and
Profit Sharing Plans (“Trust Agreements”). [Doc. No. 38, p. 2]; [Doc. No. 43, p. 11]. However,
while he resigned as business manager, Patterson never resigned his trustee position.
In October 2014, plaintiff Garry Langston (“Langston”)— Local 584’s President—
notified the trustees of the Pension and Profit Sharing Plans of Patterson’s removal as trustee and
Shipman’s appointment. [Doc. No. 38, pp. 3–4]; [Doc. No. 43, pp. 13–14]; [Doc. No. 38-1, pp.
226 –227]. The trustees responded on November 14, 2014, informing Langston that the removal
and appointment were ineffective. [Doc. No. 38-1, p. 247]. The trustees explained that under
the terms of the Trust Agreements, Patterson’s removal could only be accomplished by
“affirmative action of [union] membership.” [Id. at 246–47]. Following this correspondence,
the trustees exercised their authority to interpret provisions of the Trust Agreements. [Doc. No.
43-1, p. 17]; [Doc. No. 43-2, p. 22]. On December 3, 2014, the trustees voted that “affirmative
action by [union] membership”—under the removal provisions—“means a closed ballot vote of a
duly called” Local 584 meeting “with 21 days prior written notice advising the membership that
the ballot would be for the removal of a [t]rustee.” [Doc. No. 38-1, p. 252]. Local 584 was
advised of this interpretation on December 5, 2014. [Id. at 254].
Langston, however, was undeterred. On August 7, 2015, he moved to remove Patterson
and appoint Shipman as trustee of the Pension and Profit Sharing Plans. [Id. at 256–63]. That
effort did not provide 21 days’ notice of the removal initiative, and was therefore rejected by the
trustees. [Id.]. The trustees explained—in accordance with their December 3, 2014 guidance—
that a proper “written ballot would need to specifically contain the purpose of the vote—that is, it
should clearly state a vote will be held for the removal of Johnny Patterson as [t]rustee.” [Id. at
262]. Notwithstanding this impasse, Shipman was seated as an employee trustee in October
2015, upon the resignation of another union trustee. [Doc. No. 38, p. 6]; [Doc. No. 43, p. 16].
Patterson also continues to serve as a trustee.
Plaintiffs filed the instant suit on February 9, 2016, alleging violations of Pension and
Profit Sharing Plan terms, fiduciary duties under the Employee Retirement Income Security Act
(“ERISA”), 29 U.S.C. § 1104(a)(1), and the equal representation provisions of the Labor
Management Relations Act (the “Taft-Hartley Act”), 29 U.S.C. § 186. Both parties now move
for summary judgment.
II. Legal Standard
Summary judgment shall be granted if “there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56 (a). A dispute is
“genuine” if the evidence permits a rational trier of fact to resolve the issue either way. Adler v.
Wal-Mart Stores, Inc., 144 F.3d 644, 670 (10th Cir. 1998). A fact is “material” if it is “essential”
to the outcome of the case. Id. On review, a court must examine the record in the light most
favorable to the party opposing summary judgment. Wolf v. Prudential Ins. Co. of Am., 50 F.3d
793, 796 (10th Cir. 1995). But “the nonmoving party may not rest on its pleadings [and] must
set forth specific facts showing that there is a genuine issue for trial[.]” See Applied Genetics
Int’l, Inc. v. First Affiliated Secs., Inc., 912 F.2d 1238, 1241 (10th Cir. 1990).
Summary judgment is particularly appropriate where relevant material facts are
undisputed and a motion presents a pure question of law. See QuikTrip Corp. v. Javaher, No.
14-V-674-JHP-PJC, 2015 WL 7103558, at *3 (N.D. Okla. Nov. 13, 2015). Here, “the material
facts consist solely of the terms of the Trust [Agreements].” See Holcomb v. Un. Auto. Ass’n of
St. Louis, Inc., 658 F.Supp. 84, 87 (E.D. Miss. 1987). “Summary judgment should, therefore, be
granted in favor of whatever party”: (1) properly construes the terms of those Agreements; and
(2) “establishe[s], as a matter of law, that it is entitled to a judgment on” plaintiffs’ claims. See
The terms of the Pension and Profit Sharing Trust Agreements govern the appointment
and removal of union trustees. With respect to appointment, trustees are “designated by the
Union,” and “continue to serve until” resignation or removal. [Doc. No. 43-1, p. 9]; [Doc. No.
43-2, p. 11]. In contrast, trustees are “removed . . . by affirmative action of [union]
membership,” “duly certified by the President or Secretary of the Local Union, in writing, and
delivered to the Secretary of the Board of Trustees.” [Doc. No. 43-1, p. 9]; [Doc. No. 43-2, p.
11]. In the event of removal, successor trustees are to “be named and appointed . . . by the same
party . . . which named and appointed his predecessor.” [Doc. No. 43-1, p. 10]; [Doc. No. 43-2,
p. 13]. Upon accepting his trusteeship in writing, a successor “immediately . . . become[s] vested
with all the rights, title, powers and duties of a Trustee.” [Doc. No. 43-1, p. 10]; [Doc. No. 43-2,
p. 13]. The Trust Agreements do not define “affirmative action of [union] membership.”
Plaintiffs do not clearly articulate a construction of the Trust Agreements. But those the
court can divine are unpersuasive. First, plaintiffs suggest unilateral action by Langston—Local
584’s President—qualifies as “affirmative action” by union membership. See [Doc. No. 38, p.
4]. Nonsense. Action by “membership” contemplates some role for rank-and-file union
members and flatly contradicts plaintiffs’ l’état cest moi conception of union politics. [Doc. No.
40-4, Langston Dep. at 63:22] (“I am the union.”); [id. at 23:4-24:21]; see Culinary & Serv.
Emps. Union, AFL-CIO Local 555 v. Hawaii Emp. Benefit Admin., Inc., 688 F.2d 1228, (9th Cir.
1982) (“[T]he power to appoint or remove trustees remains with the union membership absent a
delegation to union officers.” (citing Nat’l Bank v. Employing Bricklayers’ Ass’n, 169 F.Supp.
591 (E.D. Pa. 1959)). Indeed, the fact Langston was required to certify any removal action by
union membership makes the distinction all the more clear. See [Doc. No. 43-1, p. 9]; [Doc. No.
43-2, p. 11].
Second, plaintiffs argue Patterson’s resignation as business manager functionally
removed him as trustee. [Doc. No. 38, at 4]. Specifically, Art. 17, § 8 of the IBEW Constitution
provides that a local business manager “shall serve . . . as trustee on all trust funds . . . provided
for in [ ] collective bargaining agreements.” [Doc. No. 38-1, p. 118]. And that is true, as far as
it goes. But it is not very far. For one thing, the IBEW Constitution and Trust Agreements are
“governed by two entirely distinct and separate contracts with different parties.” See Aluminum
Co. of Am. v. Electro Flo Corp., 451 F.2d 1115, 1118 (10th Cir. 1971). And plaintiffs offer no
basis for the contention that the internal operating procedures of IBEW control the terms of the
Trust Agreements. For another, plaintiffs conflate appointment and removal authority. [Doc.
No. 42, p. 6] (“While Defendants intimate that there is some difference between the removal of a
trustee and the appointment of a trustee, they are not different.”) (emphasis omitted). Such a
reading is belied by the plain text of the Agreements. [Doc. No. 43-1, p. 9]; [Doc. No. 43-2, p.
Third, plaintiffs contend the trustees’ construction of the Trust Agreements—to require
notice and closed-ballot voting on removal—lacks a textual basis, violates the equal
representation provisions of the Taft-Hartley Act, and violates fiduciary duties under ERISA.
Plaintiffs’ arguments lack merit. As noted above, the Trust Agreements do not define
“affirmative action of [union] membership” for purposes of removal. But trustees may “construe
the provisions” of the Agreements, which becomes “final and binding upon” any individual or
group “affected.” [Doc. No. 43-1, p. 17]; [Doc. No. 43-2, p. 22]. Even more specifically,
trustees “may inquire into the accuracy and circumstances of any” certified removal. [Doc. No.
43-1, p. 9]; [Doc. No. 43-2, p. 11]. Pursuant to that authority, the trustees interpreted
“affirmative action of [union] membership” to mean “a closed ballot vote of a duly called
meeting . . . with 21 days prior written notice advising membership that the ballot would be for
the removal of a [t]rustee[.]” [Doc. No. 32-8, p. 2]. Plaintiffs’ removal efforts—first by fiat,
then by no-notice vote—were rejected on that basis. For this reason, plaintiffs’ claim to enforce
the terms of the Pension and Profit Sharing Agreements (Counts I & III) fail. The only
remaining question is whether the trustees’ interpretation violates the Taft-Hartley Act or
With respect to Taft-Hartley, plaintiffs argue that employer trustees impermissibly
participated in the selection of union trustees. [Doc. No. 38, pp. 8–9]; [Doc. No. 42, p. 2]. That
is not so. At most, trustees exercised their contractual authority to prescribe a removal process;
employers did not cast a vote in the actual ballot initiative for removing or selecting union
trustees. That distinguishes this case from those cited by plaintiffs, in which employer or union
representatives impermissibly selected or served as an adverse party’s trustee. See Quad City
Builders Ass’n v. Tri City Bricklayers Union No. 7, AFL-CIO, 431 F.2d 999, 1003 (8th Cir.
1970) (barring union member from serving as “employer” trustee); Mobile Mech. Contractors
Ass’n, Inc. v. Carlough, 456 F.Supp. 310, 326 (S.D. Ala. 1978) (prohibiting union selection or
removal of employer trustee), rev’d on other grounds by 664 F.2d 481 (5th Cir. 1981); Holcomb
v. Un. Auto. Ass’n of St. Louis, Inc., 658 F.Supp. 84, 87 (E.D. Miss. 1987) (“Defendants admit
that the Board of Trustees . . . does not satisfy the ‘equal representation’ requirement[.]”). Such
is not the case here.
At bottom, the Taft-Hartley Act requires “employers and employees be equally
represented in the administration of a trust fund.” See Mech. Contractors Ass’ns v. Huico, Inc.,
No. C75-667S, 1976 WL 1627, at *3 (W.D. Wash. Aug. 27, 1976). And plaintiffs make no
contention here that the trusts themselves are being administered without equal
employer/employee representation. See id. Indeed, the Trust Agreements plainly provide for an
equal number of employer and employee trustees. [Doc. No. 43-1, p. 9]; [Doc. No. 43-2, p. 11].
Accordingly, the court finds plaintiffs’ Taft-Hartley claim for relief fails as a matter of law.1
With respect to ERISA, plaintiffs allege the trustees breached their fiduciary duties by
imposing notice and closed-ballot removal requirements. [Doc. No. 38, pp. 9–12]. Specifically,
plaintiffs contend such procedures entrench and insulate trustees from plan beneficiaries. [Id.].
That contention is not just wrong, but backwards. Securing direct participation by union
membership in the removal process aligns trustee-beneficiary incentives. Rather than
entrenching incumbent trustees, notice, participation, and closed-ballot voting enhances trustee
accountability. See Int’l Broth. of Teamsters, Joint Council 18 v. N.Y. State Teamsters Council
Plaintiffs’ Taft-Hartley claim appears in their request for relief. See [Doc. No. 2, p. 13].
Health & Hosp. Fund, 903 F.2d 919, 923 (2d Cir. 1990) (“[T]he amendment tends to reduce, not
increase, the opportunities of employee trustees to entrench themselves.”). In this way, such
requirements meaningfully differ from structural entrenchment provisions—such as for-cause
removal or life tenure. See Levy v. Local Union No. 810, 20 F.3d 516, 520 (2d Cir. 1994)
(“[T]he trustees of the benefit plan are immune from removal, even in the event of their
malfeasance or upon the expiration of their stated terms.”); Teamsters Local No. 145 v. Kuba,
631 F.Supp. 1063, 1071–72 (D. Conn. 1986) (invalidating “proper and just cause” removal
It is true that ERISA requires benefit plan administrators to discharge fiduciary duties
“solely in the interest of [ ] participants and beneficiaries.” 29 U.S.C. § 1104(a)(1); see also
N.L.R.B. v. Amax Coal Co., 453 U.S. 322, 332–34 (1981). But it “does not place structures for
selection of ERISA trustees in a straitjacket.” See Int’l Union of Bricklayers & Allied Craftsmen
Local No. 5 v. Hudson Valley Dist. Council Bricklayers & Allied Craftsmen Joint Benefit Funds,
858 F.Supp. 377 (S.D.N.Y. 1994). The test for entrenchment is whether a trustee may be
terminated “‘on reasonably short notice . . . so that the plan would not become locked into an
arrangement that may become disadvantageous.’” See Levy, 20 F.3d at 519 (quoting Dept’s of
Labor, Pension & Benefit Welfare Programs, Op. 85-41(Dec. 5, 1985)). Put differently, a
trustee’s conduct “should be subject to effective oversight on behalf of plan participants and
beneficiaries.” See id.
The Trust Agreements—as interpreted—provide ample oversight here. Employee
trustees are neither life tenured nor removable for cause; they are terminable at will upon
affirmative action by union membership. Admittedly, such action may only take place after
three weeks’ notice and a closed-ballot vote. But that is a modest burden, and one which
facilitates employee democracy. In truth, the trustees interpretation provides substantially more
oversight that other measures—such as a fixed term of years—expressly permitted by
Department of Labor regulations. See Dept’s of Labor, Pension & Benefit Welfare Programs,
Op. 85-41(Dec. 5, 1985) (“We do not intend to suggest that trustees should serve only at will.
Limited terms, such as for a specified number of years, that are reasonable under the facts and
circumstances of the plan generally would be consistent with ERISA.”). Accordingly, the court
finds that plaintiffs’ breach of fiduciary duty claims (Counts II & IV) fail as a matter of law.2
WHEREFORE, plaintiffs’ Motion for Summary Judgment [Doc. No. 38] is denied and
defendants’ Motion for Summary Judgment [Doc. No. 40] is granted.
IT IS SO ORDERED this 16th day of February, 2017.
To the extent plaintiffs state a claim for breach of fiduciary duties under the Taft-Hartley Act,
that claim also lacks merit. See Amax, 453 U.S. at 332 (“ERISA essentially codified the strict
fiduciary standards that a § 302(c)(5) trustee must meet.”); Sutton v. Weirton Steel Div. of Nat’l
Steel Corp., 724 F.2d 406, 411 (4th Cir. 1983) (explaining that fiduciary duties imposed by
ERISA and Taft-Hartley are the same); Hurn v. Retirement Fund Trust of Plumbing, Heating &
Piping Indus. of S. Cal., 703 F.2d 386, 391 (9th Cir. 1983) (“[T]he Taft-Hartley provisions
parallel the ERISA provisions and . . . trustees must meet the requirements of each.”).
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