Appeal from a summary judgment entered in the United States District Court for the Eastern District of New York (Nickerson, J.) dismissing plaintiffs' claims for sick leave and vacation wages under the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq. (1982), as not within the purview of the statute. Affirmed.
Before MESKILL, MINER and ALTIMARI, Circuit Judges.
Plaintiffs-appellants, former employees of Wells Fargo Armored Service Corporation, appeal from a summary judgment entered in the United States District Court for the Eastern District of New York (Nickerson, J.) in favor of defendant-appellee Wells Fargo. The district court's opinion is reported at 637 F. Supp. 73 (E.D.N.Y. 1986). Appellants' complaint asserted violations of the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq. (1982) ("ERISA"), and pendent state claims resulting from appellee's refusal to pay accumulated sick leave and vacation benefits. Appellants' state contract, fraud, and misrepresentation claims were dismissed. The district judge also dismissed the ERISA claims, holding that the benefits upon which the suit was predicated did not constitute an "employee welfare benefit plan" within ERISA coverage. The district court therefore granted Wells Fargo's motion for summary judgment.
On appeal, appellants challenge the district court's dismissal of the ERISA claims by renewing their assertion that the benefits at issue are within the purview of ERISA. We affirm.
At all times relevant to this action, appellants were members of Truck Drivers Union Local 807, International Brotherhood of Teamsters. As of January 1, 1980, all had completed at least ten years of service for their employer, appellee Wells Fargo Armored Service Corporation. From March 4, 1977 until April 13, 1980, a collective bargaining agreement governed appellants' sick leave and vacation wages, among other terms of employment. Under the contract, employees were entitled to a maximum of five days of sick leave each year. Any unused sick leave either could be carried over to the following year, or be "cashed out" at the employee's current wage. The contract permitted accumulation of no more than one year's benefits, and it did not allow payment for unused sick leave upon termination of employment.
With respect to vacation pay, employees were given a maximum of four weeks of annual vacation, depending upon seniority. In lieu of using vacation time during the year in which it was earned, employees were allowed either to carry all or some of it over to the following year, or, with the employer's approval, the employee could forgo all or some vacation and be paid for it. The contract provided that upon termination of employment for any reason employees would be paid on a prorated basis for all vacation time earned during the year in which termination occurred, in addition to any accumulated vacation time carried over from the proceeding year. The agreement also contained arbitration provisions requiring either party to notify the other of an intent to arbitrate a dispute arising under the contract within ten days after written rejection of the grievance.
On April 14, 1980, the members of Local 807, including appellants, began a strike against Wells Fargo. Wells Fargo withdrew recognition from Local 807 on June 2, 1980 and subsequently began to hire new employees to replace the strikers. Throughout June of 1980, the union's business manager repeatedly demanded payment of the sick leave and vacation pay that had accrued during 1980. Officers of Wells Fargo, including its vice president for operations, assured the union's business agent that the accrued benefits for 1980 would be paid at the end of the year. Wells Fargo made payment to the union in July for unused sick leave and vacation pay that had accrued in 1979.
On December 21, 1980, Local 807 demanded in writing that Wells Fargo make payment for 1980 sick pay owned under the collective bargaining agreement. Wells Fargo refused, by letter dated January 12, 1981, claiming that no monies were owned to the "former employees." On February 5, 1981, the union served written demand on Wells Fargo for the vacation pay that had accrued during 1980 under the contract. Again, Wells Fargo rejected the demand in a letter dated March 19, 1981.
On January 28, 1982, ten months after the date of Wells Fargo's second letter, Local 807 served notice of its intention to arbitrate the refusal to make payment for the sick leave and vacation wages that had accrued between January 1, 1980 and April 13, 1980. Relying on the time limitations contained in the grievance procedure and arbitration provisions of the labor contract, the arbitrator on May 18, 1983 found that appellants' attempt to arbitrate was untimely and that he was therefore without authority to rule on the merits of the claims.
Appellants then filed suit to recover these payments on October 14, 1983 in the United States District Court for the Eastern District of New York. In addition to unsuccessful fraud and misrepresentation claims, which are not before us on appeal, appellants contended that Wells Fargo's refusal to pay the accrued 1980 benefits violated ERISA, 29 U.S.C. § 1001 et seq. (1982). Judge Nickerson determined that the sick pay and vacation wages at issue did not constitute an "employee welfare benefit plan" under ERISA, and instead characterized them as "payroll practices," which are excluded from ERISA coverage. Because the judge determined that appellants had no independent statutory action under ERISA, and that they had failed to comply with the ten day time limitation provisions of the labor agreement, he dismissed appellants' claims and granted Wells Fargo's motion for summary judgment. Before us on appeal is Judge Nickerson's determination that the contractual provisions for accumulated sick leave and vacation wages do not establish an employee welfare benefit plan subject to ERISA coverage.
Appellants' attempt to compel payment of the sick leave and vacation pay through arbitration was denied because of their failure to comply with the ten-day time limitation contained in the collective bargaining agreement. Wells Fargo rejected their demands for payment of accrued sick leave in writing on January 12, 1981, and for vacation wages on March 19, 1981. Under the labor contract, appellants were required to serve notice of intent to arbitrate within ten days. Because appellants did not serve notice until January 28, 1982--nearly ten months after the ten-day limitation ...