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Pace Industry Union-Management Pension Fund v. Robert Wood Johnson University Hospital

United States District Court, M.D. Tennessee, Nashville Division

June 12, 2017

PACE INDUSTRY UNION-MANAGEMENT PENSION FUND and BOARD OF TRUSTEES OF THE PACE INDUSTRY UNION-MANAGEMENT PENSION FUND, Plaintiffs,
v.
ROBERT WOOD JOHNSON UNIVERSITY HOSPITAL, Defendant.

          MEMORANDUM OPINION AND ORDER

          MARVIN E. ASPEN UNITED STATES DISTRICT JUDGE.

         The plaintiff pension fund, Pace Industry Union-Management Pension Fund and the Board of Trustees of the Pace Industry Union-Management Pension Fund (collectively “Plaintiff”) alleges Defendant Robert Wood Johnson University Hospital (“RWJUH” or “Defendant”) has failed to meet its contractual and statutory obligations under Section 515 of the Employee Retirement Income Security Act (“ERISA”) to make pension contributions to the Pace Industry Union-Management Pension Fund (“PIUMPF” or “the Fund”), a multiemployer pension plan that provides retirement benefits. Currently pending are the parties' cross motions for summary judgment. (Dkt. Nos. 40, 41.) Also pending is a joint motion to modify the scheduling order to extend the trial date and pretrial deadlines. (Dkt. No. 67.) Plaintiff's partial motion for summary judgment seeks judgment as a matter of law as to its claim for delinquent contributions involving several classes of nurses. Defendant's motion argues Plaintiff's one-count complaint should be dismissed in its entirety because Plaintiff has failed to put forth sufficient evidence to prove that RWJUH failed to make pension contributions on behalf of any nurses in violation of ERISA. For the reasons that follow, both summary judgment motions are granted in part and denied in part. The motion to modify is denied as moot.

         BACKGROUND

         Unless otherwise stated, the facts described herein are undisputed and culled from the parties' Local Rule 56.01 submissions. (See Pl.'s SOF (Dkt. No. 51); Def.'s SOF (Dkt. No. 44).) The Fund is a jointly trusteed multi-employer pension fund created and overseen by union-appointed and employer-appointed trustees. (Pl.'s SOF ¶ 1.) The Fund is governed by the Plan Document (which details its responsibility to pay pension benefits) and the Declaration of Trust (to which each participating employer is a party and which outlines the powers and duties of the trustees and the obligations of the participating employers). (Id. ¶¶ 6-7, 9.) Participating employers' contributions to PIUMPF are pooled in a general fund available to pay any benefit obligation of the plan. (Id. ¶¶ 1-2.) The purpose of the Fund is to provide pension and other benefits to employees in covered employment. (Id. ¶ 7.) The Fund is solely responsible for payment of pension benefits to participants, regardless of whether it receives required contributions from employers for those participants. (Id. ¶¶ 2, 8.)

         RWJUH is an acute care facility in New Brunswick, New Jersey that at all times relevant was part of the Robert Wood Johnson Health System. (Def.'s SOF ¶¶ 4-5.) From 2003 to 2012, RWJUH was party to a series of collective bargaining agreements (“CBAs”) with the local union representing its registered nurses. (Pl.'s SOF ¶¶ 17-19.) It began contributing to PIUMPF in October 2003 after RWJUH and the union entered into a CBA effective June 29, 2003 to June 30, 2006 (“2003-2006 CBA”). (Def.'s SOF ¶ 6.) The 2003-2006 CBA provided that RWJUH “agrees to contribute $1.00 per hour per employee to PACE Pension ‘Plan A' for the life of the Agreement consistent with the terms of the Standard Form of Agreement of the PACE Industry Union-Management Pension Fund.” (Pl.'s SOF ¶¶ 27-28; Def.'s SOF ¶ 7; see also 2003-2006 CBA (Dkt. No. 48-5) at Art. 16.) RWJUH and the union executed a successor agreement effective September 2006 to June 30, 2009 (“2006-2009 CBA”), and thereafter executed another CBA effective July 1, 2009 to June 30, 2012 (“2009-2012 CBA”). (Def.'s SOF ¶¶ 13, 19.) RWJUH's contribution obligation remained the same in each subsequent CBA, except the negotiated contribution rate increased under each successive CBA. (Pl.'s SOF ¶¶ 28-30.)

         Each CBA provided that RWJUH agreed to abide by the terms of a Standard Form of Agreement (“SFA”) between RWJUH and the Fund. (Id.) The SFAs provide that the employer agrees to become a party to the Fund and the Trust Agreement and detail the employers' contribution obligations. (Id. ¶¶ 35, 41-44.) All contributing employers are subject to the same SFA terms, except for the applicable dates and contribution rates, which vary depending on the employer's pension program and benefit levels offered. (Id. ¶ 10.) Section I of the SFAs in effect from 2003-2006 and from 2006-2009 provides:

Commencing with the day stated below the undersigned Employer: 1) if subject to a collective bargaining agreement with the undersigned Union (“collective bargaining agreement”) agrees to pay the PACE INDUSTRY UNION-MANAGEMENT PENSION FUND (hereinafter called the Fund) the amount stated below for each compensable hour, outlined below, for employees subject to the collective bargaining agreement.

(Def.'s SOF ¶¶ 8, 15; 2003-2006 SFA (Dkt. No. 48-6) at Section I; 2006-2009 SFA (Dkt. No. 48-9) (same).) The “compensable hours that payment to the Fund shall be based” upon include, among other things, “[a]ll hours worked, including overtime, ” and “[a]ll hours called for under the collective bargaining agreement, but no less than eight (8) hours per day for each holiday not worked.” (Id.) Section I further states:

Language in the collective bargaining agreement to the contrary notwithstanding, the Employer shall contribute on all individuals performing work covered by the collective bargaining agreement, including probationary, temporary, and part-time employees, except for those newly hired individuals in the employ of the Employer for a period of less than sixty (60) calendar days, regardless of the number of days or hours actually worked by the individual during the sixty (60) day period.

(Def.'s SOF ¶¶ 9, 16; 2003-2006 SFA at 1; 2006-2009 SFA at 1.)

         The 2003 and 2006 CBAs defined the “bargaining unit” as:

all full-time and regular part-time registered nurses and graduate nurses employed by Robert Wood Johnson Hospital at its New Brunswick location, including those registered nurses and graduate nurses employed as registered nurse first assistants, staff nurses, in-service education instructors, infection control nurses, utilization review nurses, community health nurses, urology clinical coordinator, home trainer coordinators (dialysis), home trainers renal dialysis, field service worker/discharge planning nurses, Sr. discharge planners, discharge planning nurses, assistant head nurses-operating room, scoliosis program coordinators, program coordinators, Pediatric Chronic Disease Program, Cardiac Catherization nurses, cardiac rehabilitative nurses, specials procedures nurses, vascular laboratory nurses, lithotripter nurse, oncology nurses and directors, directors of home care, administrative supervisors, head nurses, assistant head nurses (except operating room), all other professional employees other than registered nurses, technical employees, guards and supervisors within the meaning of the Act and all other employees.

(2003-2006 CBA at Art. 1.1; 2006-2009 CBA (Dkt. No. 48-8) (same).) The 2009-2012 CBA differed slightly in that it added “and all positions considered bargaining unit [sic] as of July 1, 2009” before the list of exclusions. (2009-2012 CBA (Dkt. No. 48-10) at Art. 1.1.) Each CBA stated “[w]henever the terms ‘employee' or employees' are used hereinafter in this Agreement, they shall be deemed to apply only to employees of the Hospital who are included within the bargaining unit above described.” (2003-2006 CBA at Art. 1.2; 2006-2009 CBA (same); 2009-2012 CBA (same).)

         In 2007, RWJUH's payroll for October 2003 to December 2005 was audited (the “First Audit”) to “determine the accuracy of the hours reported on the remittance reports and contributions paid by the Employer.” (Def.'s SOF ¶ 34.) The audit also examined “whether the Employer is in compliance with the Standard Form of Agreement between the Employer and [PIUMPF].” (Id. ¶ 35.) The Fund regularly engages an independent accounting firm, Bond Beebe, to audit contributing employers on a regular basis to ensure employers paid the correct amount of contributions to the fund. (Pl.'s SOF ¶¶ 11-12.) Plaintiff alleges RWJUH calculated its contributions by use of an automated process by which, for each bi-weekly pay period, it generated a “PACE Defined Benefits Report” detailing contributions by employee job code. (Id. ¶¶ 45-49.) Based on these records, the final First Audit Report concluded RWJUH failed to contribute on behalf of several job classifications: Clinical Nursing Specialist, Nursing Education Specialists, Clinical Educators of Operations, Diabetes Nurse Clinicians, and Community Health Nurse. (Id. ¶¶ 80-82.)

         The auditor completed a second audit report on June 12, 2008 for the period of January 2006 to December 2007 (the “Second Audit”). (Id. ¶ 84.) As relevant here, the final Second Audit Report concluded RWJUH failed to contribute for “on call” hours, “weekend per diem” hours, and hours worked by “leased” nurses who were hired through staffing agencies and who are not on RWJUH's payroll. (Def.'s SOF ¶¶ 49-51.) Thereafter, a third audit report was completed on February 18, 2014 (the “Third Audit”). (Pl.'s SOF ¶ 92.) The Third Audit addressed RWJUH's records covering the period from January 2008 to December 2011, and from 2003 to 2012 for “leased” nurses. (Id.) The Third Audit Report alleged RWJUH owed $859, 483.78 in unpaid contributions for 2003 through 2012, including $162, 525.31 related to hours worked by leased nurses. (Def.'s SOF ¶ 58; Pl.'s SOF ¶¶ 93-99.)

         Plaintiff filed the instant complaint on September 25, 2015, [1] alleging RWJUH failed to make pension contributions in violation of Section 515 of ERISA. Plaintiff alleges that audits of benefits reports from 2003 to 2011 revealed RWJUH failed to remit payment for contributions due and owing to the Fund totaling $859, 483.78 in delinquent contributions. (Compl. ¶ 30.) Plaintiff also alleges RWJUH is liable interest on those delinquent contributions, an amount it claims totaled $824, 066.06 as of June 30, 2015, as well as $103, 355.45 in costs associated with the audit for the final Third Audit Report. (Id.) Finally, Plaintiff contends it is entitled to liquidated damages, interest, attorneys' fees, and costs. (Id. ¶ 31.)

         LEGAL STANDARD

         Summary judgment is proper only when “there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law.” Fed R. Civ. P. 56(c). A genuine issue for trial exists when “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510 (1986). This standard places the initial burden on the moving party to identify “those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553 (1986) (internal quotations omitted). Once the moving party meets this burden of production, the nonmoving party “may not rest upon the mere allegations or denials of the adverse party's pleading, ” but rather “must set forth specific facts showing that there is a genuine issue [of material fact] for trial.” Fed.R.Civ.P. 56(e). “Where the parties have filed cross-motions for summary judgment, we ‘evaluate each motion on its own merits and view all facts and inferences in the light more favorable to the nonmoving party.'” Bakery & Confectionery Union & Indus. Int'l Health Benefits & Pension Funds v. New Bakery Co. of Ohio, 133 F.3d 955, 958 (6th Cir. 1998) (quoting Wiley v. United States, 20 F.3d 222, 224 (6th Cir. 1994)). “The judge is not to ‘weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.'” Sagan v. United States, 342 F.3d 493, 497 (6th Cir. 2003) (quoting Liberty Lobby, 477 U.S. at 249, 106 S.Ct. at 2511).

         ANALYSIS

         “When collective-bargaining agreements create pension or welfare benefits plans, those plans are subject to rules established in ERISA.” M & G Polymers USA, LLC v. Tackett, __U.S. __, 135 S.Ct. 926, 933 (2015). Under Section 515 of ERISA, employers are obligated to make contributions in accordance with an applicable collective bargaining agreement. Brown-Graves Co. v. Cent. States, Se. and Sw. Areas Pension, 206 F.3d 680, 683 (6th Cir. 2000). Section 515 provides,

[e]very employer who is obligated to make contributions to a multiemployer plan under the terms of the plan or under the terms of a collectively bargained agreement shall, to the extent not inconsistent with law, make such contributions in accordance with the terms and conditions of such plan or such agreement.

29 U.S.C. § 1145. “Because, under [S]ection 515, multiemployer plans are entitled to rely on the literal terms of written commitments between the plan, the employer, and the union, the actual intent of and understandings between the contracting parties are immaterial.” New Bakery, 133 F.3d at 959; see also Operating Eng'rs Local 324 Health Care Plan v. G & W Const. Co., 783 F.3d 1045, 1051 (6th Cir. 2015) (“[T]he multi-employer plans may rely on the literal terms of written agreements between the employer and the union.”). Relying on the collective bargaining agreements and plans as written “serves the purpose of enabling beneficiaries to learn their rights and obligations at any time, ” and “lends certainty and predictability to employee benefit plans.” Orrand v. Scassa Asphalt, Inc., 794 F.3d 556, 561 (6th Cir. 2015) (internal quotations omitted); see also New Bakery, 133 F.3d at 959 (observing “Congress enacted Section 515 in order to permit “trustees of plans to recover delinquent contributions efficaciously, and without regard to issues which might arise under labor-management relations law” (internal quotations omitted)). “The fund thus stands much like a holder in due course in commercial law who is entitled to enforce the writing without regard to understandings or defenses applicable to the original parties.” New Bakery, 133 F.3d at 959 (further explaining that by “allowing multiemployer funds to enforce the literal terms of an employer's commitment, [S]ection 515 increases the reliability of their income streams, reduces the cost and delay ...


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