Mason v. District Council 1707

Background

Plaintiffs Janice Mason, Thomas Murray, Rafael Sencion, G.L. Tyler, and Elba Serrano alleged that they had worked for District Council 1707, a labor organization, for periods ranging from five months to 16.8 years. They participated in vacation and severance benefit plans for DC 1707’s non-unionized staff.

The complaint alleged that AFSCME decided to merge DC 1707 into District Council 37, AFSCME. Plaintiffs were told that their DC 1707 employment would end on August 31, 2021, and were offered employment with DC 37 under new terms. All plaintiffs except Murray accepted the offer. Plaintiffs alleged that they were promised payment for unused vacation and severance, but received less than the amount calculated by DC 1707’s human resources director. The alleged underpayments ranged from $1,577 to $22,738. When they sought the remaining amounts from James Howell, the Administrator of DC 1707, he denied their request.

Plaintiffs asserted claims under the Employee Retirement Income Security Act (ERISA), a federal law governing certain employee benefit plans, and Article 6 of the New York Labor Law.

Defendants’ Motion

Defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(1), which addresses subject-matter jurisdiction, and Rule 12(b)(6), which addresses whether a complaint states a legally plausible claim. Defendants argued that DC 1707’s severance and vacation policies were not ERISA-covered employee benefit plans. They also argued that the New York claims should be dismissed because, without viable ERISA claims, the court would lack supplemental jurisdiction over the state-law claims.

At the motion-to-dismiss stage, the court treated the complaint’s well-pleaded factual allegations as true and drew reasonable inferences in plaintiffs’ favor. The court noted that this approach did not establish that the allegations were true.

ERISA Claims

The court concluded that it could not determine at this stage that the severance plan fell outside ERISA. Unlike a one-time severance payment tied only to a particular plant closing or merger, the complaint alleged that DC 1707’s severance plan had existed and operated for years. Accepting those allegations as true, the plan could involve an ongoing commitment to provide severance benefits to a broad group of employees under various circumstances and could require individualized review when covered employees were terminated.

The court also declined to conclude that the vacation plan was outside ERISA. The plaintiffs alleged that they had been instructed not to use their vacation before the merger. The court stated that this allegation might distinguish the plan from the vacation policy considered by the Supreme Court in Massachusetts v. Morash. The court further stated that the record did not yet provide enough evidence about how DC 1707’s vacation plan was operated or funded to resolve its ERISA status.

State-Law Claims and Disposition

Because the ERISA claims survived the motion to dismiss, the court held that the New York state-law claims survived as well. The court DENIED Defendants’ motion to dismiss. It ORDERED Defendants to file answers to the complaint within two weeks of the opinion and order.

Classification Note

This is a procedural order under the stated classification convention because the court ruled on a motion to dismiss. The court assessed whether the complaint plausibly alleged claims but did not finally decide liability or whether plaintiffs were entitled to the claimed benefits.