Filed: Apr. 20, 2000
Latest Update: Feb. 21, 2020
Summary: PUBLISH IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT FILED U.S. COURT OF APPEALS _ ELEVENTH CIRCUIT APR 20 2000 THOMAS K. KAHN No. 98-5189 CLERK _ D. C. Docket No. 88-06602-CV-NCR ANGELO PERRINO, STEPHEN PLACIDO, EDNA SHEPARD, ARTHUR WILSON, Plaintiffs-Appellants, versus SOUTHERN BELL TELEPHONE & TELEGRAPH CO., Defendant-Appellee, _ Appeal from the United States District Court for the Southern District of Florida _ (April 20, 2000) Before BIRCH and MARCUS, Circuit Judges, and
Summary: PUBLISH IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT FILED U.S. COURT OF APPEALS _ ELEVENTH CIRCUIT APR 20 2000 THOMAS K. KAHN No. 98-5189 CLERK _ D. C. Docket No. 88-06602-CV-NCR ANGELO PERRINO, STEPHEN PLACIDO, EDNA SHEPARD, ARTHUR WILSON, Plaintiffs-Appellants, versus SOUTHERN BELL TELEPHONE & TELEGRAPH CO., Defendant-Appellee, _ Appeal from the United States District Court for the Southern District of Florida _ (April 20, 2000) Before BIRCH and MARCUS, Circuit Judges, and M..
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PUBLISH
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
APR 20 2000
THOMAS K. KAHN
No. 98-5189 CLERK
________________________
D. C. Docket No. 88-06602-CV-NCR
ANGELO PERRINO,
STEPHEN PLACIDO,
EDNA SHEPARD,
ARTHUR WILSON,
Plaintiffs-Appellants,
versus
SOUTHERN BELL TELEPHONE
& TELEGRAPH CO.,
Defendant-Appellee,
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(April 20, 2000)
Before BIRCH and MARCUS, Circuit Judges, and MILLS*, Senior District Judge.
MARCUS, Circuit Judge.
This appeal concerns whether plaintiffs who bring a federal suit based on
claims arising under the Employee Retirement Income Security Act of 1974
(“ERISA”) are required to exhaust available administrative remedies when their
employer fails to comply with all of ERISA’s procedural requirements for
establishing a reasonable claims procedure, 29 U.S.C. § 1133; 29 C.F.R. §
2560.503-1. In this case, the district court granted summary judgment to BellSouth
Telecommunications, Inc. on the ERISA claims of four plaintiffs, Angelo Perrino,
Stephen Placido, Edna Shepard, and Arthur Wilson, who failed to exhaust a
grievance and arbitration procedure contained in the company’s collective
bargaining agreement. The plaintiffs had sought a termination pay allowance
based on a provision of the agreement--a provision which constituted, as BellSouth
concedes, an ERISA welfare benefits plan. We conclude that because the
grievance and arbitration procedure afforded the plaintiffs access to an
administrative scheme from which they could have received an adequate legal
remedy for their ERISA claims, plaintiffs were required to exhaust this scheme
*
Honorable Richard Mills, Senior U.S. District Court Judge for the Central District of Illinois,
sitting by designation.
2
prior to filing suit in federal court. Accordingly, we affirm the judgment of the
district court.
I.
The facts of this case are straightforward. Angelo Perrino, Stephen Placido,
Edna Shepard, and Arthur Wilson (“Appellants”) are four former employees of
BellSouth Communications Inc. (“Appellee”) who became disabled during the
course of their employment with BellSouth in the 1980's.1 At the time, BellSouth
maintained a Sickness and Accident Disability Benefit Plan (the “STD” plan)
which provided short-term disability benefits to employees for up to one year.
After a year, BellSouth would remove a disabled employee from the company
payroll and the ex-employee then would become eligible for long-term, disability-
related pension benefits. In this case, all of the named Appellants received both
short-term and long-term, disability-related pension benefits from BellSouth.2
At the time of Appellants’ employment, BellSouth did not maintain a formal
ERISA plan. Instead, the terms and conditions of Appellants’ employment were
1
During the period of Appellants’ employment, BellSouth was known as Southern Bell
Telephone and Telegraph.
2
At the time of summary judgment, Angelo Perrino and Edna Shepard still were receiving
these long-term benefits. Stephen Placido and Arthur Wilson received these same benefits until the
time of their deaths.
3
governed solely by the collective bargaining agreement (“Agreement”) between
Bell South and their union, Communication Workers of America (“Union”).
Article 8.07A2 of the Agreement contains a termination pay provision, the subject
of this litigation. The provision allows certain classes of employees, for example,
laid-off workers, to receive a termination pay allowance separate and apart from
the short-term and long-term disability benefits received by Appellants. The
provision reads in part:
8.07 Employment Termination Allowance
A. Basis of Payment. A termination allowance shall be
paid to a regular or temporary employee whose service is
terminated under any of the conditions outlined below;
moreover, service pension eligibility will not be a factor
in determining whether an employee is eligible for a
termination allowance, except as described in 8.06A2.
...
2. As an inducement proposed, or agreed to, by the
Company to an employee to resign because of inability or
unadaptability to perform properly the duties of the job as
distinguished from misconduct.
For purposes of this litigation, BellSouth concedes that these termination pay
provisions constitute an employee welfare benefit plan under ERISA.3
3
BellSouth also admitted before the district court that there were no formal ERISA plan
documents aside from the Agreement, for the relevant time period, and that, during this period, the
company did not strictly comply with ERISA provisions codified at 29 U.S.C. § 1133 or at 29 C.F.R.
§ 2560.503-1. Bell South subsequently promulgated a summary plan description on August 9, 1992,
which outlined all of the statutorily-required, ERISA-plan features including an ERISA claims
4
The Agreement also specifies a grievance and arbitration procedure for
resolving any disputes as to “the true intent and meaning” of the Agreement or
disputes “adversely affect[ing] the rights of any employee” such as a dispute over
the eligibility of disabled ex-employees to receive termination pay allowances.4
procedure.
4
Article 21.01 of the Agreement describes the grievance procedure in great detail. It reads:
21.01 Grievance Levels.
The parties agree that in the handling and adjustment of grievances by the Union
the following procedures shall be followed.
A. An employee or group of employees shall have the right to present and adjust
with the management any grievances as provided in Section 9(a) of
the National Labor Relations Act, as amended, provided, however,
that no adjustment shall be made with the employee or group of
employees involved which is inconsistent with the terms of any
collective bargaining agreement between the parties then in effect,
and provided further that the Union has been given an opportunity to
be present at such an adjustment.
B. After an employee or employees have presented a grievance to the
Union for settlement and a Union representative has informed the
Company that the Union represents the employee, or employees, the
Company will not discuss or adjust such grievance, with said
employee, or employees, unless the aggrieved employee, or
employees, initiate a request that the Company discuss and adjust
such grievance directly with him, or them, but in no event shall an
adjustment be made unless a Union representative is afforded an
opportunity to be present at such an adjustment.
C. All grievances, other than discipline related grievances and those
involving the true intent and meaning of this agreement between the
parties or adversely affecting the rights of other employees, shall be
handled under the procedure set forth
below. . . .
(emphasis added). Article 21.01 then proceeds to describe the available four-level grievance
5
Previously, BellSouth has been involved in several grievance proceedings with ex-
employees who sought termination allowance pay, including two cases which
proceeded to arbitration. According to the terms of the Agreement, a person has
sixty days, from the last occurrence on which the grievance is based, to present a
grievance for review.
On August 5, 1988, Appellants filed a class action suit against BellSouth
under § 301 of the Labor-Management Relations Act (“LMRA”), 29 U.S.C. § 185,
and § 502 of the Employment Retirement Income Security Act (“ERISA”), 29
U.S.C. § 1132. Appellants alleged that they were entitled to termination pay
pursuant to the collective bargaining agreement in effect during the tenure of their
employment with BellSouth and sought injunctive, declaratory, and compensatory
relief. Appellants also sought a judgment that the termination pay provisions of
the Agreement constituted an employee welfare benefit plan under ERISA and that
they were entitled to benefits thereunder. Appellants asserted, based largely on a
BellSouth memorandum from Assistant BellSouth VP Joe Walling, that disabled
procedure in intricate detail. Grievances which cannot be resolved through the provisions outlined
in Article 21.01 may be arbitrated by an independent arbitrator at the request of either the Union or
BellSouth. This arbitration procedure is outlined in detail in Article 23 of the Agreement.
6
workers, at the time of Appellants’ disability-related terminations, were eligible for
the termination pay allowances in addition to disability-related pension benefits.5
On April 14, 1989, Appellants amended their complaint to assert an
additional theory of recovery, claiming that BellSouth had changed its
interpretation of the termination pay provisions after Appellants had filed this suit
for termination allowance benefits. Specifically, Appellants contended that
BellSouth secretly tried to rescind Walling’s interpretive memorandum after they
had filed suit, an act which constituted a breach of BellSouth’s fiduciary
obligations under ERISA. Appellants then sought a permanent injunction
requiring BellSouth to administer the plan in accordance with its prior
interpretation of the termination pay provisions.
5
Appellants argue that the December 16, 1986 memo from Walling explains that disabled
workers may receive both the termination allowance and pension benefits. The memo states in part:
This [Article 8.07A] language was clearly intended to mean that we
would pay an employee termination allowance if eligible under
Article 8.07A, whether or not that employee might receive a pension
in addition to the termination allowance. One example of when this
might occur would be in the case of an employee who is unable to
return to work after exhausting 52 weeks of benefits. Such an
employee if still disabled after 52 weeks would be dropped from the
payroll and if pension eligible, would receive a pension in addition
to termination allowance under Article 8.07A4.
7
On June 30, 1992, BellSouth filed a motion for summary judgment. It
argued that the Agreement never has allowed disabled workers to receive
termination pay allowances. Moreover, BellSouth contended that Appellants’
claims were barred in federal court by their failure to exhaust available
administrative remedies prior to filing suit. Specifically, BellSouth argued that
Appellants had not filed grievances pursuant to the Agreement under which they
were seeking termination pay. On July 9, 1998, the district court entered summary
judgment in favor of BellSouth on this basis.
Prior to filing suit, only one of the Appellants, Angelo Perrino, actually
requested a termination pay allowance from BellSouth. Perrino’s request was made
on January 29, 1988, four years after he was terminated by BellSouth, and was
denied on March 7, 1988. In its letter denying Perrino the termination pay
allowance, BellSouth informed Perrino that the Agreement did not authorize
termination allowance payments to ex-employees with long-term disabilities, but
that if he had made a timely request for a termination pay allowance, Perrino would
have been able to invoke the Agreement’s grievance and arbitration procedure to
challenge the denial of the pay allowance.
Before the district court, Appellants claimed that because the Agreement did
not adhere to all of the procedural requirements of ERISA, they need not have
8
resorted to the Agreement’s administrative process for handling employment-
related grievances. Appellants also argued that the grievance and arbitration
procedure specified in the Agreement only applied to disputes or controversies
between the Union and the Company, and that arbitration only can occur upon
written request of either the Union or BellSouth. In response, BellSouth observed
that the plain language of Article 21.01 of the Agreement grants an “employee” or
“group of employees” the right to file “any” grievance, including grievances over
the denial of termination pay allowances, with or without Union involvement, and
that BellSouth has been involved in several such grievance and arbitration
procedures with ex-employees over denials of termination pay allowances.
In granting BellSouth summary judgment on Appellants’ claims, the district
court concluded that Appellants had failed to exhaust available administrative
remedies in the form of the Agreement’s grievance and arbitration procedure. The
district court made several pertinent factual findings in connection to its ruling.
First, the district court determined that despite its technical noncompliance with
ERISA regulations, “the Agreement sets forth with sufficient clarity the provisions
for termination pay and the grievance procedures to be followed,” and that despite
this clarity, Appellants failed to file grievances for termination pay allowances.
Second, the district court found that Appellants’ failure to exhaust this
9
administrative scheme was not due to a lack of knowledge about the scheme or a
lack of access to the scheme. The district court observed:
[T]here has been no evidence that the plaintiffs did not
have access to the agreement or that the defendant failed
to provide a copy upon request from the plaintiffs. When
plaintiff Perrino made his request for termination pay, he
cited the provisions of the Collective Bargaining
Agreement. Consequently, he was well aware of the
grievance procedures in the Bargaining Agreement.
Finally, the district court determined based on record evidence that the
Agreement’s grievance and arbitration procedure previously had been employed by
similarly-situated ex-employees to challenge the denial of termination pay
allowances. The district court explained that “former employees of defendant have
availed themselves of the grievance procedure in similar circumstances as those
presented by plaintiffs,” making the grievance and arbitration procedure an
available administrative remedy for Appellants’ claims.
II.
We review the district court’s grant of summary judgment de novo, viewing
the evidence in the light most favorable to the party opposing the motion. See
Counts v. Amer. Gen. Life & Accident Ins. Co., 111 F.3d 105, 108 (11th Cir.
1997) (citing Harris v. Board of Educ. of Atlanta,
105 F.3d 591, 595 (11th
10
Cir.1997)). In this case, however, it is undisputed that Appellants failed to exhaust
the administrative remedy outlined in their ERISA plan. Appellants concede that
they did not pursue a grievance over the denial of termination pay benefits through
the grievance and arbitration procedure explained in BellSouth’s collective
bargaining agreement. Both parties also concede that this Agreement constituted
an ERISA plan for the relevant time period. Our law is well-settled that “plaintiffs
in ERISA actions must exhaust available administrative remedies before suing in
federal court.” Counts, 111 F.3d at 108; see also Springer v. Wal-Mart
Associates’ Group Health Plan,
908 F.2d 897, 899 (11th Cir.1990); Mason v.
Continental Group, Inc.,
763 F.2d 1219, 1225-27 (11th Cir.1985). However, a
district court has the sound discretion “to excuse the exhaustion requirement when
resort to administrative remedies would be futile or the remedy inadequate,”
Counts, 111 F.3d at 108, or where a claimant is denied “meaningful access” to the
administrative review scheme in place, Curry v. Contract Fabricators, Inc. Profit
Sharing Plan,
891 F.2d 842, 846-47 (11th Cir.1990).
In this case, the district court did not excuse the exhaustion requirement, and
granted summary judgment on this basis. On appeal, Appellants challenge this
decision for two principal reasons: first, they claim that exhaustion should not be
required where an ERISA plan fails to comply in full with all ERISA regulations,
11
and second, they argue that the grievance and arbitration procedure contained in
the ERISA plan was not available to ex-employees, making resort to this procedure
futile. The decision of a district court to apply or not apply the exhaustion of
administrative remedies requirement for ERISA claims is a highly discretionary
decision which we review only for a clear abuse of discretion. See Springer, 908
F.2d at 899;
Curry, 891 F.2d at 846. After carefully reviewing the record, we
conclude that the district court did not abuse its discretion in applying the
exhaustion requirement to Appellants’ claims.
First, our caselaw makes plain that as a general rule plaintiffs in ERISA
actions must exhaust available administrative remedies before suing in federal
court. See Counts, 111 F.3d at 108;
Springer, 908 F.2d at 899;
Mason, 763 F.2d at
1225-27. This rule is grounded in several important policy rationales, and also is
consistent with Congressional intent. As we explained in Mason:
Compelling considerations exist for
plaintiffs to exhaust administrative remedies
prior to instituting a lawsuit. Administrative
claim-resolution procedures reduce the
number of frivolous lawsuits under ERISA,
minimize the cost of dispute resolution,
enhance the plan's trustees’ ability to carry
out their fiduciary duties expertly and
efficiently by preventing premature judicial
intervention in the decisionmaking process,
and allow prior fully considered actions by
12
pension plan trustees to assist courts if the
dispute is eventually litigated. In addition,
imposing an exhaustion requirement in the
ERISA context appears to be consistent with
the intent of Congress that pension plans
provide intrafund review procedures.
Id. at 1227 (internal citation omitted). As a result, we strictly enforce an
exhaustion requirement on plaintiffs bringing ERISA claims6 in federal court with
certain caveats reserved for exceptional circumstances. See
Springer, 908 F.2d at
899. Thus far, our circuit has recognized exceptions only when “resort to
administrative remedies would be futile or the remedy inadequate,”
Counts, 111
F.3d at 108, or where a claimant is denied “meaningful access” to the
administrative review scheme in place,
Curry, 891 F.2d at 846-47.
Appellants do not dispute this precedent. However, Appellants argue that
we should recognize a new exception to our exhaustion requirement; namely, that
6
We apply this exhaustion requirement to both ERISA claims arising from the substantive
provisions of the statute, and ERISA claims arising from an employment and/or pension plan
agreement. See Counts, 111 F.3d at 109;
Springer, 908 F.2d at 899;
Mason, 763 F.2d at 1225-27;
see also Lindemann v. Mobil Oil Corp.,
79 F.3d 647, 650 (7th Cir.1996) (finding that rationale for
exhaustion applies equally to claims for benefits and claims based upon ERISA itself). However,
several other circuits do not apply the exhaustion requirement to causes of action based on statutory
violations. See Held v. Manufacturers Hanover Leasing Corp.,
912 F.2d 1197, 1205 (10th
Cir.1990); Zipf v. American Tel. & Tel. Co.,
799 F.2d 889, 891-94 (3rd Cir.1986); Amaro v.
Continental Can Co.,
724 F.2d 747, 750-53 (9th Cir.1984). This circuit split, however, is irrelevant
to this dispute since Appellants’ claims are based on the termination allowance provision of a
collective bargaining agreement and not on a substantive violation of ERISA.
13
an employer’s noncompliance with ERISA’s technical requirements (for example,
creating a summary plan description, or delineating a formal claims procedure)
should excuse a plaintiff’s duty to exhaust administrative remedies. Under ERISA,
an employer is required to furnish employees with a “Summary Plan Description”
that gives details of the benefits provided by the company, and articulates the
claims procedure available to present and adjudicate ERISA claims. See 29 U.S.C.
§ 1021-22; 29 C.F.R. § 2560.503-1. Federal regulations also mandate certain
requirements for an ERISA claims procedure in order to ensure the procedure is
“reasonable.” According to federal regulations, “a plan established and
maintained pursuant to a collective bargaining agreement,” in order to comply with
ERISA’s requirements for a reasonable claims procedure, must “set[] forth or
incorporate[] by specific reference”:
(A) Provisions concerning the filing of benefit claims and
the initial disposition of benefit claims, and
(B) A grievance and arbitration procedure to which
denied claims are subject.
29 C.F.R. § 2560.503-1(b)(2)(A)-(B).
Before the district court, BellSouth conceded that the Agreement, at the time
of Appellants’ employment and termination, did not comply strictly with all of
ERISA’s regulations. For instance, the termination benefits provision never was
14
formalized by a separate summary plan description. In addition, although the
Agreement contained a detailed provision explaining the terms and conditions
under which employees could receive termination allowances as well as a detailed
grievance and arbitration procedure available for “any” employment-related
grievance, these provisions did not state explicitly that employees could file
termination allowance claims or obtain independent review of these claims if they
were denied by the plan administrator.
Because of these technical deficiencies, Appellants contend that the ERISA
exhaustion requirement ought to be waived. They claim that because the
Agreement’s provisions do not explicitly aver that termination allowance claims
can be filed or receive review and arbitration, the Agreement does not contain a
“reasonable” claims procedure. Appellants also assert that because BellSouth did
not promulgate and distribute a summary plan description, they should not be
compelled to exhaust the plan’s administrative remedy procedures.7
7
In support, Appellants cite proposed federal regulations which state:
A failure to provide the procedures mandated by the [ERISA]
regulations effectively denies participants and beneficiaries access to
the process mandated by the [ERISA] Act. It is the view of the
Department that claimants should not be required to continue to
pursue claims through an administrative process that fails to meet the
minimum standards of the regulation.
Rules and Regulations for Admin. and Enforcement, Claims Procedure, 63 Fed. Reg. 48390, 48397
15
We find Appellants’ arguments unpersuasive. After reviewing the relevant
federal regulations and our prior precedent, we decline to create an exception to the
exhaustion requirement in this case. First, we stress the exceedingly technical
nature of Appellants’ contention. While the Agreement is in technical
noncompliance with some ERISA regulations, the Agreement does contain specific
provisions which explain employee eligibility for termination allowances (the
ERISA benefit at issue) as well as the process for adjudicating termination-related
grievances. Moreover, the district court determined that other similarly-situated
ex-employees had used the Agreement’s grievance and arbitration procedure to
challenge the denial of termination pay allowances, and that several of these ex-
employees had obtained independent arbitration of their claims. In addition, the
district court found that the only Appellant who even requested a termination
allowance, Angelo Perrino, had specific knowledge of the Agreement’s grievance
and arbitration procedure yet never filed a grievance. The district court also
concluded that there was no evidence that any of the Appellants lacked access to or
knowledge about the Agreement’s grievance and arbitration procedure.8
(1998) (to be codified at 29 C.F.R. pt. 2560) (proposed Sep. 9, 1998).
8
It is important to note that BellSouth did not maintain an ERISA benefits plan separate from the
collective bargaining agreement, and is not seeking to impose a “twin” exhaustion requirement on
plaintiffs requiring them to proceed through both an ERISA claims procedure and a separate
grievance and arbitration procedure contained in the collective bargaining agreement. Here, the
16
Therefore, we conclude that, while technically deficient, the Agreement’s
administrative scheme was available to Appellants for the review and arbitration of
their ERISA termination allowance claims, and that if the process had been
invoked, Appellants could have received independent arbitration and an adequate
legal remedy for their claims.
Our prior precedent makes clear that the exhaustion requirement for ERISA
claims should not be excused for technical violations of ERISA regulations that do
not deny plaintiffs meaningful access to an administrative remedy procedure
through which they may receive an adequate remedy. For instance, in Counts, the
plaintiff argued that the district court erred in not excusing the exhaustion
requirement because his employer’s termination letter failed to comply precisely
with ERISA’s notice requirements under §29 U.S.C. 1133 and §29 C.F.R.
2560.503-1(f). See Counts, 111 F.3d at 107. The district court acknowledged that
the termination letter was technically deficient in some respects, but concluded that
“the letter substantially complied with the notice requirements because, taken as a
whole, it supplied Counts ‘with a statement of reasons that, under the
circumstances of the case, [the employer’s letter] permitted a sufficiently clear
termination pay provisions of the collective bargaining agreement serve as the ERISA plan. In short,
plaintiffs wish to seek and receive ERISA benefits based on the termination provisions of the
collective bargaining agreement while ignoring the grievance and arbitration procedure clearly
explained in this same agreement for exhaustion purposes.
17
understanding of the administrator’s position to permit effective review.’” See id.
at 108.
On appeal, we affirmed the district court’s application of the exhaustion
requirement despite the employer’s noncompliance with the ERISA notice
provision. In so doing, we explained that while the “normal time limits for
administrative appeal may not be enforced” against a claimant who receives an
inadequate benefits termination letter, the “usual remedy” should not be “excusal
from the exhaustion requirement, but remand to the plan administrator for an
out-of- time administrative appeal.” Id. The clear import of our decision was the
conclusion, that though employees should not have their ERISA claims adversely
affected by an employer’s technical noncompliance with ERISA regulations, so
too, they should not be able to avoid the exhaustion requirement where technical
deficiencies in an ERISA claims procedure do not hinder effective administrative
review of their claims. See Baxter v. C.A. Muer Corp.,
941 F.2d 451, 453-54 (6th
Cir. 1991) (upholding exhaustion requirement despite the employer’s failure to
issue a written denial of an employee’s benefits where the error resulted in no
18
prejudice to the employee’s ability to obtain administrative review of the claim
denial).9
This approach conforms with the logic of our exhaustion doctrine in which
we apply the exhaustion requirement strictly and recognize narrow exceptions only
based on exceptional circumstances. See Counts, 111 F.3d at 108;
Springer, 908
F.2d at 899;
Curry, 891 F.2d at 846-47. Our exceptions to this doctrine where
resort to an administrative scheme is unavailable or would be “futile,” or where the
remedy would be “inadequate” simply recognize that there are situations where an
ERISA claim cannot be redressed effectively through an administrative scheme. In
these circumstances, requiring a plaintiff to exhaust an administrative scheme
would be an empty exercise in legal formalism. That said, it makes little sense to
excuse plaintiffs from the exhaustion requirement where an employer is technically
noncompliant with ERISA’s procedural requirements but, as the district court
determined in this case, the plaintiffs still had a fair and reasonable opportunity to
9
Analogously, several federal circuits have denied remedial relief for technical violations of
ERISA’s statutory requirements absent a showing that the violations had adversely affected the
plaintiffs’ ERISA rights. See Berger v. Edgewater Steel Co., 911 F.2d 911, 920-21 (3rd Cir.1990);
Blau v. Del Monte Corp.,
748 F.2d 1348, 1350-51 (9th Cir.1984). In addition, we have held that
procedural errors in the management of an ERISA plan did not warrant a more liberal review
standard than the traditional “arbitrary and capricious” standard for the judicial review of ERISA
benefit determinations. See Anderson v. Ciba-Giegy Corp.,
759 F.2d 1518, 1520 (11th Cir. 1985);
see also Blau v. Del Monte Corp.,
748 F.2d 1348, 1352-53 (9th Cir.1984); Dennard v. Richards
Group, Inc.,
681 F.2d 306, 313-14 (5th Cir.1982).
19
pursue a claim through an administrative scheme prior to filing suit in federal
court. Cf. Curry, 891 F.2d at 846-47 (finding that “[w]hen a plan administrator in
control of the available review procedures denies a claimant meaningful access to
those procedures, the district court has the discretion not to require exhaustion”).
Therefore, if a reasonable administrative scheme is available to a plaintiff and
offers the potential for an adequate legal remedy, then a plaintiff must first exhaust
the administrative scheme before filing a federal suit.
Finally, Appellants also argue that resort to the Agreement’s grievance and
arbitration procedure would have been futile because they are ex-employees not
owed a duty of fair representation by the Union. They contend that under the
arbitration provision of the Agreement, arbitration is available only after either the
Union or BellSouth requests it in connection to an employment-related grievance,
and that the Union is not obligated legally to pursue arbitration for them.10
10
The arbitration provision states in relevant part:
23.01(B) If at any time a controversy should arise between the Union
and the Company regarding the true intent and meaning of any
provisions of this or any other agreement between the parties or a
controversy as to the performance of an obligation hereunder, which
the parties are unable to compose by full and complete use of the
grievance procedure set up by Article 21, the matter shall be
arbitrated upon written request of either party to this Agreement to
the other.
The provision goes on to explain that an “impartial arbitrator” will be chosen upon agreement of the
parties, and that if no agreement is reached, either side may apply to the Federal Mediation and
20
Appellants therefore claim that they lack access to arbitration of their ERISA
claims under the Agreement’s administrative scheme.
Based on the undisputed facts of this case, we find this argument to be
without merit. This case might be different if Appellants actually had resorted to
the grievance and arbitration procedure only to be told by the Union that it would
not seek arbitration for their benefits claims. However, none of the Appellants
even pursued the grievance and arbitration procedure available, at least, in theory.
In addition, the district court specifically found, based on the uncontroverted
affidavit of Ray Giesler, BellSouth’s Operations Manager of Labor Relations, and
the record of several prior arbitrations, that the Union filed a substantial number of
grievances on the behalf of terminated employees, and that BellSouth retirees
enjoyed the same rights as active employees with respect to filing a termination-
related grievance. The district court also noted that at least two retirees previously
had arbitrated with BellSouth over the termination pay allowance. We therefore
conclude that the futility objections raised by Appellants in terms of access to the
arbitration proceeding are merely theoretical, if present at all, and therefore do not
justify Appellants’ excusal from the exhaustion requirement.
III.
Conciliation Service for an appointed arbitrator.
21
In short, we find that Appellants were not denied access to an administrative
scheme from which they could have received an adequate legal remedy for their
ERISA claims. As such, we conclude that Appellants were compelled to first
exhaust the available administrative remedies contained in the collective
bargaining agreement prior to filing suit in federal court. We therefore AFFIRM in
full the district court’s order granting summary judgment to BellSouth on
Appellants’ ERISA claims.
AFFIRMED.
22
