Bronk v. Mountain States ( 2000 )

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
JUN 27 2000
TENTH CIRCUIT
PATRICK FISHER
Clerk
CLAY BRONK; MAURINE BURK; MARK
DAMILINI; JACQUELINE ENRIQUEZ;
CHUCK FLETCHER; NATALIE FRANZ;
JOHN GIERKA; RANDOLPH GILMORE;
MARK HAY; KIM JOHNSON; JOHN
KENNEDY; JANE KNUTSON; CAROL
MAJOR; SANDRA MARTINSKIS;
ALFRED MULFORD; TERRY REYES;
ROY R. SALINAS; LARRY SANCHEZ;
LYNN SAXE; JOHN SAXE; LING
SIGSTEDT; STEVEN STOLLMAN;
DONNA SLY; LYDIA THOMAS; ROBERT
TOANNON; FRANK VIGIL; CYNTHIA
VOIGT; COLISSION WELLS; LYNN G.
WULF, individually and as representatives
of a Class,
Plaintiffs-Appellants,
v. No. 99-1236
MOUNTAIN STATES TELEPHONE AND (D.C. No. 93-D-1961)
TELEGRAPH, INC., doing business as U.S. (D. Colo.)
West Communications, a Colorado
corporation; U.S. WEST, INC., a Colorado
corporation; U.S. WEST, INC.,
EMPLOYEES’ BENEFIT COMMITTEE;
U.S. WEST FINE CONTRIBUTIONS PLAN
COMMITTEE; U.S. WEST
COMMUNICATIONS BASE BENEFIT
COMMITTEE,
Defendants-Appellees.
ORDER AND JUDGMENT *
Before KELLY , ** BRISCOE , and ALARCON , Circuit Judges. ***
Plaintiffs filed suit under the Employee Retirement Income Security Act of
1974 (ERISA), 29 U.S.C. § 1001 et seq., challenging the denial of their request to
participate in defendants’ employee welfare and pension plans. On the parties’
cross-motions for summary judgment, the district court held that plaintiffs were
properly excluded from defendants’ employee welfare plans, but would be entitled
to participate in defendants’ pension plans if they could demonstrate they were
common-law employees of defendants. Defendants filed an interlocutory appeal
challenging the district court’s holding regarding the pension plans. This court
reversed and remanded for further proceedings. Bronk v. Mountain States Tel.
and Tel., Inc., 140 F.3d 1335 (10th Cir. 1998) (Bronk I). On remand, the district
court entered judgment in favor of defendants, concluding plaintiffs were not
entitled to participate in either the welfare plans or the pension plans. Plaintiffs
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
**
The Honorable Robert H. McWilliams, Senior Circuit Judge, has
recused.
***
The Honorable Arthur L. Alarcón, Senior United States Circuit Judge
for the Ninth Circuit, sitting by designation.
2
now appeal from that judgment. We exercise jurisdiction pursuant to 28 U.S.C. §
1291 and affirm.
I.
Plaintiffs are twenty-nine individuals who, at various times between
January 1984 and June 1991, performed services for defendant US West, Inc. (US
West) and its wholly-owned subsidiary Mountain States Telephone and Telegraph,
Inc. (Mountain States). Plaintiffs were not hired directly by Mountain States or
US West, but instead were hired by various leasing companies who, in turn,
entered into leasing contracts with US West and Mountain States. 1 The leasing
contracts typically provided that the leasing company was the “employer” of the
leased workers and that the workers were considered to be employees only of the
leasing company. Bronk I, 140 F.3d at 1337.
During this period of time, US West had in place various employee welfare 2
and pension 3 plans. It is uncontroverted that all of these plans had some type of
1
For example, plaintiff Clay Bronk, working through a leasing company
called The Temporary Market, performed services for US West between June 27,
1988, and May 5, 1991. West did not pay a salary directly to Bronk. Instead, US
West paid a fee to The Temporary Market, who, after retaining a portion of the
fee, paid Bronk for his services.
2
The employee welfare plans include the US West Health Care Plan
(Health Plan), the US West Group Life Insurance Plan (Life Plan), and the US
West Sickness and Accident Disability Benefit Plan (Disability Plan).
3
The pension plans include the US West Pension Plan (Pension Plan), the
(continued...)
3
eligibility requirement for participation. Although the specific language of the
plans varied, the pension plans generally required an individual to be an employee
in the “active service” of, and receive a regular and stated compensation from, US
West or one of its subsidiaries. Appellants’ App. at 64-66 (discussing specific
eligibility requirements of each pension plan). Similarly, the welfare plans
generally required an individual to be classified as a “regular employee”
according to the payroll records of US West or one of its subsidiaries. Id. at 66-
67 (discussing specific eligibility requirements of each welfare plan).
In December 1990, and June and July 1991, plaintiffs filed administrative
claims seeking to participate in and receive benefits under the various employee
welfare and pension plans provided by US West to its “regular employees.”
Plaintiffs claimed they performed the same or similar functions as US West’s
regular employees and were therefore entitled to participate in the plans.
Plaintiffs’ claims were initially denied by US West’s Communications Base
Benefits Committee (BBC), which had the delegated authority to initially review
claims for benefits under the various plans. Plaintiffs appealed the BBC’s
decision to US West’s Employee Benefit Committee (EBC). The EBC denied the
appeal, concluding that plaintiffs were not “regular employees” of US West or its
(...continued)
3
US West Savings & Security Plan/ESOP (ESOP), and the US West Payroll Stock
Ownership Plan (PAYSOP).
4
subsidiaries. 4
Plaintiffs filed this action on September 17, 1993, asserting they had been
wrongfully denied participation in US West’s plans and requesting that
defendants “be enjoined from refusing to allow [them] to participate in The
Plans.” Appellants’ App. at 9. After engaging in limited discovery, the parties
filed cross-motions for summary judgment. Plaintiffs asserted three related
arguments: (1) that the term “employee,” as used in the various plans, should be
defined to mean a person who is a common-law employee (and thus any express
requirements set forth in the plans for determining who was an employee should
be ignored); (2) because each plaintiff satisfied the common-law definition of the
term “employee,” he or she should be considered eligible to participate in the
various plans, notwithstanding the fact that most of the plans expressly required
that an employee receive a regular compensation from US West or one of its
subsidiaries; and (3) in any event, each plaintiff satisfied the eligibility
requirement because he or she received regular compensation from US West or
one of its subsidiaries, albeit primarily through the conduit of one of the leasing
4
Each of the individual plans had slightly different requirements for
participation. It appears, however, that all of the plans (except for possibly the
ESOP) essentially required an individual to be an “employee” of US West and to
have received regular compensation from US West or one of its subsidiaries. It is
uncontroverted that plaintiffs were not maintained on US West’s official service
records and did not receive salaries from US West or its subsidiaries.
5
companies.
The district court granted defendants’ motion for summary judgment and
denied plaintiffs’ motion for summary judgment with respect to the employee
welfare plans. With respect to the pension plans, the district court concluded they
were subject to ERISA’s “minimum participation, vesting and funding
requirements . . . regardless of the language of the plan,” and that “these
minimum standards require[d] the inclusion in the case at hand of leased
employees who meet the definition of common law employees under law.” Id. at
455-56. Because, however, it was unable to determine from the record whether
plaintiffs satisfied the common-law definition of the term “employee,” the district
court ordered supplemental briefing on the issue and delayed a final ruling on this
aspect of the motions for summary judgment.
Pursuant to the defendants’ request, the district court certified for
interlocutory appeal the portion of its summary judgment ruling pertaining to the
pension plans. More specifically, the district court certified for interlocutory
appeal “the issues of (1) whether the minimum participation, vesting and funding
requirements of ERISA must be complied with by the plan administrator,
regardless of the language of the plan, and (2) whether these minimum standards
require the inclusion of leased employees who meet the definition of common law
employee.” Id. at 496-97. This court subsequently granted defendants permission
6
to file an interlocutory appeal.
On appeal, this court reversed the district court’s decision regarding
plaintiffs’ entitlement to benefits under the pension plans. In doing so, this court
held that “ERISA does not prohibit an employer from distinguishing between
groups or categories of employees, providing benefits for some but not for
others.” Bronk I, 140 F.3d at 1338. More specifically, the court emphasized, “an
employer need not include in its pension plans all employees who meet the test of
common law employees.” Id. This court further rejected the district court’s
conclusion that ERISA implicitly incorporates Internal Revenue Code provisions
and accompanying Treasury regulations pertaining to tax-qualification for
employer-provided pension plans (which, in pertinent part, contain minimum age
and service requirements for participation in a qualified plan, and which treat, for
tax qualification purposes, leased employees as employees of the entity to whom
they provide services). In short, the court concluded that “the tax-qualification
provisions of the [Internal Revenue] Code do not rewrite pension plans under
ERISA . . . to mandate inclusion of employees, leased or otherwise, whom the
plans have permissibly excluded.” Id. at 1339-40. Finally, although this court
acknowledged that pension plans could expressly provide for compliance with all
relevant ERISA and Internal Revenue Code provisions, it concluded that plaintiffs
had failed to demonstrate that the plans at issue contained any such provision:
7
At oral argument, the [Plaintiffs’] counsel argued that U.S. WEST’s
pension plans contained . . . language requiring the plans to comply
with all Internal Revenue Code and Treasury regulations, as well as
ERISA. US WEST’s counsel vigorously denied that. The document
in the record to which the [Plaintiffs’] counsel refers us as supporting
his argument does not demonstrate that the plans here included any
obligation, explicit or otherwise, to maintain tax-qualified status.
Id. at 1338.
On remand, defendants filed a motion for entry of judgment, arguing that in
light of the appellate reversal, the “case turn[ed] on whether the EBC properly
determined that the Pension Plans’ eligibility rules excluded leased workers.”
Appellees’ Supp. App. at 2115. Defendants pointed out that the district court, in
its previous order addressing the parties’ cross-motions for summary judgment,
had stated that “[i]f the issue presented to the Court was whether under the terms
of its Plans US West must include all employees, . . . I would have to conclude
that the answer is no and grant summary judgment in favor of US West.” Id. at
2112.
Plaintiffs filed a response to defendants’ motion for entry of judgment,
arguing that the statement contained in the district court’s prior order, and relied
upon by defendants, was not meant to be dispositive. Plaintiffs asserted that, in
its previous order, the district court had failed to address all of the arguments
presented by plaintiffs in their original motion for summary judgment. Consistent
with these arguments, plaintiffs filed a renewed motion for summary judgment,
8
essentially asking the district court to address the substantive arguments asserted
in plaintiffs’ previous motion for summary judgment. Plaintiffs argued that the
pension plans in question “incorporate[d] the Internal Revenue Code and/or
require[d] that [they] be interpreted in accordance with the Internal Revenue
Code.” Appellants’ App. at 526. In their opposition to plaintiffs’ renewed
motion for summary judgment, defendants asserted, in part, that the plan language
relied on by plaintiffs was “irrelevant because it did not exist until years after the
EBC denied their claims and because it [wa]s not part of the administrative record
that was before the EBC.” Appellees’ Supp. App. at 1989. 5
On March 25, 1999, the district court conducted a hearing on the parties’
motions. During the hearing, the district court asked plaintiffs’ counsel the
following question: “When you prepared your record for the [interlocutory]
appeal, did you include as a part of the record this US WEST pension plan which
says amended and restated effective January 1, 1989? Was that made a part of the
5
According to defendants, the cited language came from a 1994
amendment to US West’s Pension Plan which was made retroactive to 1989. The
sole purpose of this amendment, according to defendants, was to comply with IRS
regulations issued in 1993 outlining how plan sponsors were to conform to
statutory changes implemented by Congress in 1988. In short, “the 1994
Restatement was prepared solely for tax purposes – to reflect the Pension Plan’s
qualified status between 1988 and 1993, so that an IRS determination letter could
be obtained.” Appellees’ Supp. App. at 2008. The 1994 amendment “was never
used for plan administration purposes, and was not effective in 1989 for any
purpose other than those required by recent tax legislation and the implementing
regulations.” Id.
9
record?” Appellants’ App. at 707. Plaintiffs’ counsel did not remember whether
it was included, but acknowledged that even if it was included he did not point it
out to the appellate panel. The district court then asked plaintiffs’ counsel
whether there was “any evidence which would show that the [EBC] when it
considered the status of these leased workers considered the” 1994 amendments
which plaintiffs were relying upon in their renewed motion for summary
judgment. Id. at 711. Plaintiffs’ counsel responded “No.” Id. Ultimately, the
district court found
that the plan that plaintiff now relies on was not a plan that the plan
administrator used when it made its decision regarding the plaintiffs.
And so, therefore, to the extent the Tenth Circuit in its decision that
overruled me found that there cannot be any reliance on Internal
Revenue Code provisions or Treasury regulations absent an explicit
reference in an applicable plan, it seems to me that that holding is
still applicable and has not been distinguished by the plaintiffs’
renewed motion.
Id. Accordingly, the district court denied plaintiffs’ renewed motion for summary
judgment and granted defendants’ motion for entry of judgment in their favor.
II.
Because this case was decided in the context of a summary judgment ruling,
we turn first to the well-established standard of review applicable to such rulings.
“Review of a grant of summary judgment is de novo, applying the same legal
standard used by the district court.” Kimber v. Thiokol Corp., 196 F.3d 1092,
1097 (10th Cir. 1999). “Summary judgment is appropriate ‘if the pleadings,
10
depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue of material fact and that the
moving party is entitled to a judgment as a matter of law.’” Id. (quoting Fed. R.
Civ. P. 56(c)).
Notwithstanding the fact that we review de novo the district court’s
summary judgment ruling, we are also bound by a second, and more limited,
standard of review. “A court reviewing a challenge to a denial of employee
benefits under 29 U.S.C. § 1132(a)(1)(B) applies an ‘arbitrary and capricious’
standard to a plan administrator’s actions if the plan grants the administrator
discretionary authority to determine eligibility for benefits or to construe the
plan’s terms.” Charter Canyon Treatment Ctr. v. Pool Co., 153 F.3d 1132, 1135
(10th Cir. 1998) (citing Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115
(1989)); see also Millensifer v. Retirement Plan, 968 F.2d 1005, 1009 (10th Cir.
1992) (stating “if the Plan gives the retirement committee discretion to construe
doubtful provisions of the plan itself, the committee’s decision must be upheld
unless it was arbitrary and capricious, not supported by substantial evidence, or
erroneous on a question of law”) (internal quotations omitted).
Here, the uncontroverted facts demonstrate that the EBC had discretionary
authority under each of the plans at issue to determine eligibility for benefits and
to construe the plans’ terms. Under the arbitrary and capricious standard of
11
review, we will not set aside a benefit committee’s decision if it was based on a
reasonable interpretation of the plan’s terms and was made in good faith. See
Jones v. Kodak Med. Assistance Plan, 169 F.3d 1287, 1292 (10th Cir. 1999);
Averhart v. U.S. West Management Pension Plan, 46 F.3d 1480, 1485 (10th Cir.
1994). “[I]n reviewing decisions of plan administrators under the arbitrary and
capricious standard, [we] may consider only the evidence that the administrators
themselves considered” on or before the final decision denying benefits.
Chambers v. Family Health Plan Corp., 100 F.3d 818, 823, 823-24 (10th Cir.
1996); see also Sandoval v. Aetna Life & Cas. Ins. Co., 967 F.2d 377, 380-81
(10th Cir. 1992).
III.
In order to properly address the arguments asserted by plaintiffs in this
appeal, we find it useful to briefly revisit the rulings previously handed down in
this case. In initially ruling on the parties’ cross-motions for summary judgment,
the district court concluded that if an employee satisfied the minimum
participation requirements of ERISA § 202(a) 6, the employee was entitled to
6
Section 202(a) of ERISA imposes on employer-provided pension plans
what are referred to as minimum participation requirements:
(a)(1)(A) No pension plan may require, as a condition of
participation in the plan, that an employee complete a period of
service with the employer or employers maintaining the plan
extending beyond the later of the following dates
(continued...)
12
participate in the employer’s pension plan regardless of any other eligibility
requirements that might be contained in the pension plan itself. The district court
concluded that the minimum participation requirements of § 202(a) implicitly
incorporated Internal Revenue Code (IRC) §§ 410 and 414 (26 U.S.C. §§ 410 and
414) and Treasury Department regulations promulgated thereunder. Section 410
of the IRC is similar to § 202(a) of ERISA in that it sets forth minimum
participation requirements which are used by the IRS to determine whether a
pension plan will receive preferential tax treatment. Section 414 of the IRC
provides that, for purposes of applying § 410 of the IRC, leased employees are to
be treated as employees of the company for whom they perform services. Taking
all of these provisions together, the district court concluded that § 202(a) of
ERISA required “the inclusion in the case at hand of leased employees who [met]
6
(...continued)
(i) the date on which the employee attains the age of 21; or
(ii) the date on which he completes 1 year of service.
***
(4) A plan shall be treated as not meeting the requirements of
paragraph (1) unless it provides that any employee who has satisfied
the minimum age and service requirements specified in such
paragraph, and who is otherwise entitled to participate in the plan,
commences participation in the plan no later than the earlier of–
(A) the first day of the first plan year beginning after the date
on which such employee satisfied such requirements, or
(B) the date 6 months after the date on which he satisfied such
requirements.
29 U.S.C. § 1052(a)(1)(A) & (4).
13
the definition of common law employees under law.” Appellants’ App. at 456.
In Bronk I, this court rejected the district court’s conclusions, holding that
ERISA § 202(a) simply prevents an employer from making participation
“distinctions based upon age or length of service.” 140 F.3d at 1338. This court
further rejected the notion that the minimum participation requirements of ERISA
§ 202(a) were implicitly modified by IRC §§ 410 and 414. In particular, this
court concluded that, “absent explicit indication by Congress, the tax-
qualification provisions of the [IRC] do not rewrite pension plans under ERISA
§ 202(a) to mandate inclusion of employees, leased or otherwise, whom the plans
have permissibly excluded.” Id. at 1339-40.
In reaching its conclusions, the court in Bronk I distinguished an earlier
circuit case, Crouch v. Mo-Kan Iron Workers Welfare Fund, 740 F.2d 805 (10th
Cir. 1984), upon which the district court had relied. In Crouch, this court held
that the plaintiff, a secretary in a local union’s office, was entitled to benefits
under her employer’s pension plan even though her employer had rejected her
claim for benefits on the grounds she was not a union officer. The Crouch
decision rested on two related grounds: (1) the pension plan at issue expressly
indicated that it must comply with ERISA, the IRC, and accompanying Treasury
regulations regarding tax qualification (in other words, it must maintain tax-
qualified status), and (2) precluding plaintiff from participating in the pension
14
plan would result in the plan failing to meet the tax qualification requirements.
The court in Bronk I concluded that, unlike Crouch, there was no evidence that
the pension plans at issue in this case “contained similar language requiring the
plans to comply with all [IRC] and Treasury regulations, as well as ERISA.” 140
F.3d at 1338 n.5. In reaching this conclusion, the court in Bronk I rejected
plaintiffs’ counsel’s argument to the contrary, and specifically noted that “[t]he
document in the record to which the [plaintiffs’] counsel refers us as supporting
his argument does not demonstrate that the plans here included any obligation,
explicit or otherwise, to maintain tax-qualified status.” Id.
On remand, plaintiffs adopted two strategies. First, they attempted to
present new evidence (i.e., evidence not considered by the EBC or previously
presented to the district court or this court) indicating that amendments made to
the Pension Plan in 1994, but which were retroactive to January 1, 1989,
specifically required the Pension Plan to comply with ERISA and the IRC. In
other words, plaintiffs attempted to present new evidence to the district court in
an effort to persuade it that the Pension Plan was like the pension plan at issue in
Crouch. Second, plaintiffs argued that, even ignoring the 1994 amendment to the
Pension Plan, the EBC’s decision was arbitrary and capricious because the facts
demonstrated that they were “regular employees” of the defendants and were
entitled to participate in the pension plans. As previously noted, the district court
15
rejected both of these strategies and entered judgment in favor of defendants.
Plaintiffs reassert these same arguments on appeal. First, they contend the
district court erred in failing to take into account the 1994 amendment to the
Pension Plan. According to plaintiffs, the 1994 amendment demonstrates that the
Pension Plan is similar to the plan at issue in Crouch, and must be construed to
comply with ERISA and IRC §§ 410 and 414. Second, plaintiffs argue that, even
ignoring the 1994 amendment to the Pension Plan, the facts demonstrate they
were “regular employees” of defendants and were entitled to participate in and
receive benefits under the pension and welfare plans. For the reasons that follow,
we reject these arguments.
The Bronk I panel effectively concluded that none of the pension plans at
issue (including the Pension Plan) included an express obligation to maintain tax-
qualified status. Under the law of the case doctrine, this same issue could not be
relitigated on remand. See Phelps v. Hamilton, 122 F.3d 1309, 1322 (10th Cir.
1997) (“The law of the case doctrine provides that when a court decides upon a
rule of law, that decision should continue to govern the same issues in subsequent
stages of the same case.”) (internal quotation omitted); Rohrbaugh v. Celotex
Corp., 53 F.3d 1181, 1183 (10th Cir. 1995) (“[W]hen a case is appealed and
remanded, the decision of the appellate court establishes the law of the case and
ordinarily will be followed by both the trial court on remand and the appellate
16
court in any subsequent appeal.”). An “important corollary” to the law of the case
doctrine, “known as the ‘mandate rule,’ provides that a district court ‘must
comply strictly with the mandate rendered by the reviewing court.’” Ute Indian
Tribe v. State of Utah, 114 F.3d 1513, 1520-21 (10th Cir. 1997) (quoting
Colorado Interstate Gas Co. v. Natural Gas Pipeline Co. of America, 962 F.2d
1528, 1534 (10th Cir. 1992)), cert. denied, 522 U.S. 1107 (1998). Although there
are a few narrow exceptions to the law of the case doctrine, none are applicable
here. See United States v. Monsisvais, 946 F.2d 114, 116-17 (10th Cir. 1991)
(holding that a court will depart from the law of the case doctrine: (1) when the
evidence in a subsequent trial is substantially different; (2) when controlling
authority has subsequently made a contrary decision of the law applicable to such
issues; or (3) when the decision was clearly erroneous and would work a manifest
injustice).
Further, the amendment was not considered by the EBC in denying
plaintiffs’ administrative appeal (and indeed could not have been considered
because the EBC’s decision was rendered in September 1991). It is well
established that, in determining whether ERISA plan administrators acted
arbitrarily and capriciously in making eligibility and/or benefit determinations,
this court “may consider only the evidence [and arguments] that the
administrators themselves considered.” Chambers, 100 F.3d at 823. “An
17
administrator’s decision is not arbitrary or capricious for failing to take into
account evidence not before it.” Sandoval, 967 F.2d at 381. There was no basis
for the district court (or this court) to consider the 1994 amendment.
Even assuming, arguendo, the 1994 amendment should have been
considered, and further assuming the 1994 amendment could be construed as
requiring the Pension Plan to maintain tax-qualified status, it is clear that it would
not have made any difference in the outcome of this case. In Bronk I, the panel
noted that IRC §§ 410 and 414 do not necessarily require the inclusion in a
pension plan of all persons who meet the definition of common-law employee.
140 F.3d at 1339. Rather, common-law employees must be included only when
the pension plan at issue expressly includes an obligation to maintain tax-
qualified status, and where the exclusion of common-law employees would
jeopardize the plan’s tax-qualified status. Here, defendants presented evidence,
unchallenged by plaintiffs, that the Pension Plan maintained its tax-qualified
status at all times relevant to this lawsuit, notwithstanding the exclusion of the
plaintiffs. Thus, the EBC’s decision to exclude plaintiffs did not violate the terms
of the Pension Plan, even as amended in 1994. The terms of the 1994 amendment
expressly exclude leased employees from participating in the Pension Plan.
The remaining issue is whether the EBC acted arbitrarily and capriciously
when it determined that plaintiffs were not “regular employees” for purposes of
18
the pension and welfare plans. Plaintiffs’ arguments on this point are, at best,
confusing. Plaintiffs rely on Nationwide Mutual Insurance Co. v. Darden, 503
U.S. 318, 319 (1992), in which the Supreme Court construed the term
“employee,” as used in ERISA, “to incorporate traditional agency law criteria for
identifying master-servant relationships.” The problem is that Darden does not in
any way alter the specific eligibility requirements in the plans at issue. Even
though plaintiffs may in fact qualify as “employees” under Darden (for purposes
of ERISA generally), that does not mean they otherwise satisfy the plans’
eligibility requirements. Ultimately, it appears that plaintiffs are relying on an
equitable argument, i.e., that because they were in fact common-law employees of
defendants, it would be unfair to exclude them from participation in the
defendants’ pension and employee benefit plans. This argument, though perhaps
appealing in some respects, simply ignores applicable law and the specific
eligibility requirements of the plans at issue.
Focusing on the evidence contained in the record on appeal that was
presented to the EBC, we conclude the EBC did not err in concluding that
plaintiffs were ineligible for benefits under the plans at issue. Although plaintiffs
may have been similar in many respects to defendants’ ordinary or “regular”
employees, it is uncontroverted that plaintiffs were hired as employees of the
various leasing companies, who in turn entered into leasing contracts with
19
defendants. Under this arrangement, plaintiffs were not on the payroll records of
defendants and did not receive compensation directly from defendants. Instead,
defendants paid the leasing companies in accordance with the leasing contracts
and, in turn, the leasing companies paid plaintiffs for their work. Plaintiffs did
not receive a regular and stated compensation from defendants, were not
classified as employees according to the defendants’ payroll records, and, in
short, were not “regular employees” of the defendants.
III.
The judgment of the district court is AFFIRMED.
Entered for the Court
Mary Beck Briscoe
Circuit Judge
20