What is the effect of a union collective bargaining agreement (CBA) on an ERISA claim? The claim might be arbitrated rather than venued in federal court, especially if the benefits are “predicated entirely” upon the terms of a Collective Bargaining Agreement (CBA).

Here’s the case of Audia et. al v. NEWCOR, Inc., F. Supp. 2nd, (E. D. Mich. July 23, 2010)(ERISA claim arbitrated based on collective bargaining unit venue provision). This case highlights that if you get in a dispute like this, make sure the ERISA plan documents are made a part of the record. It also shows what happens when plan documents are not made a part of the record.

FACTS: Twelve plaintiffs sought to enforce a benefit of lifetime medical insurance, contained in a CBA. The CBA required arbitration of disputes. The plaintiffs contended they should not have to arbitrate ERISA claims. The ERISA plan documents, if they existed, were NOT made a part of the record.

ISSUE: Whether an ERISA plan beneficiary can bring an independent claim for contractual benefits conferred under a CBA, where the CBA requires “arbitration of disputes” provision?

HOLDING: NO

RATIONALE:

  1. Burcicki v. Newcor, Inc., __ F. Supp. 2d (2010 WL 1131451 (E. D. Mich. March 23, 2010) applies here. In that case the Court held that two retirees were required to submit ERISA claims to arbitration by virtue of the CBA arbitration provision.
  2. ERISA beneficiaries seeking benefits from a CBA are third party beneficiaries and have no greater rights than does the promisee. A promisor may assert against any beneficiary any defense that he or she could assert against the promisee. Op. at 11.
  3. Defendant is entitled to assert any contract-based defense against the these plaintiffs, including that the claims should be arbitrated. Op. at 12.
  4. The ERISA benefits sought here are “predicated entirely” upon promises allegedly made in the CBA, and not the terms of any ERISA plan. No ERISA plan documents were part of the record. Op. at 14.