Painters Union Deposit Fund v. G & T Commercial Coatings, Inc. et al
Filing
54
OPINION and ORDER INTERPRETING THE FRINGE BENEFIT CLAUSE OF THE COLLECTIVE BARGAINING AGREEMENT Signed by District Judge Patrick J. Duggan. (MOre)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
TRUSTEES OF THE PAINTERS,
UNION DEPOSIT FUND,
Plaintiff,
Civil Action No.
13-CV-13261
vs.
Honorable Patrick J. Duggan
G&T COMMERCIAL COATINGS,
INC. and ANASTASIOS G. LIANGIS,
Defendants.
_________________________________/
OPINION AND ORDER INTERPRETING THE FRINGE BENEFIT
CLAUSE OF THE COLLECTIVE BARGAINING AGREEMENT
I. INTRODUCTION
This is an action for unpaid fringe benefit contributions. Plaintiffs, the
Trustees of the Painters Union Deposit Fund, filed this lawsuit on July 30, 2013,
alleging that Defendants G&T Commercial Coatings, Inc. (G&T) and Anastasios
G. Liangis, its principal, failed to make fringe benefit contributions as required
under the terms of the parties’ collective bargaining agreement (CBA).
The
Trustees seek $159,378.24 in allegedly unpaid contributions on behalf of thirtytwo G&T employees for the period beginning January 1, 2012 through May 9,
2013, and liquidated damages in the amount of $31,875.65, for a total of
$191,253.89.1 The Trustees also seek costs and attorney fees. Defendants argue
that they paid all the fringe benefit contributions to which the Trustees are entitled
during the relevant time period.
In its Opinion and Order issued on June 17, 2014, the Court asked the parties
to submit briefs regarding the proper interpretation of the following provision of
the CBA:
Fringe Benefit Contribution Rate
For Commercial, Industrial Painters
Employer shall contribute monthly or weekly or at such other
intervals as shall be required by the Trustees to Painters Union
Deposit Fund, in accordance with Article XX hereof, the sum of
[$16.08] for each hour worked during that month or other interval by
all employees employed by him and covered by this Agreement . . .
The Court hereinafter refers to this provision as “the fringe benefit clause.”
As noted in the Court’s June 17 Opinion, the parties disagree about the
meaning of the fringe benefit clause.
Defendants argue that the phrase “and
covered by this Agreement” modifies “each hour worked,” thus requiring G&T to
contribute only for hours spent performing work that is covered by the CBA.
Conversely, the Trustees argue that the phrase “and covered by this Agreement”
1
Since this lawsuit was filed, Defendants have paid to the Trustees a portion of the
allegedly unpaid benefits sought in this case. Ruehle Aff. ¶¶ 12-14 (ECF No. 27
Page ID 448). For this reason, the total amount sought by the Trustees has
decreased from $191,253.89 to $180,628.65. Id.
2
modifies “employees employed by him,” thus requiring G&T to contribute for all
work performed by covered employees regardless of the nature of the work.2
In light of this disagreement and the insufficient briefing on point, the Court
asked the parties to brief the following issues:
(1) Should the fringe benefit clause be interpreted to require
contributions only for hours spent performing work that is covered
under the CBA, or should it be interpreted to require contributions for
all work performed by covered employees?
(2) If the former, what work is “covered”? If the latter, who is a
“covered employee” and is there any dispute whether the thirty-two
employees involved in this case are covered?
Regarding the first issue, the Court noted that the rules of construction articulated
in International Union v. Yard-Man, Inc., 716 F.2d 1476, 1479-80 (6th Cir. 1983)
likely apply and, pursuant to that authority, invited the parties to address the
following six considerations:
(1) which interpretation is supported by the language of the fringe
benefit clause; (2) the context giving rise to the inclusion of the fringe
benefit clause in the CBA; (3) the degree to which the urged
interpretation of the fringe benefit clause is consistent with the entire
CBA and the relative positions and purposes of the parties; (4) other
words or phrases found in the CBA that may shed light on the
meaning of the fringe benefit clause; (5) the degree to which the urged
2
As stated in the Court’s June 17 Opinion, if Defendants’ interpretation is
accepted, the Court would need to know the kind of work the employee was doing
to determine whether Defendants were under an obligation to contribute for a
given hour of work. If the Trustees’ interpretation is accepted, the relevant
question in determining whether Defendants were under an obligation to contribute
for a given hour of work would be whether the employee performing the work was
a covered employee at the time the work was performed.
3
interpretation is consistent with federal labor policy; and (6) any other
indicia of the parties’ intent.
The parties have filed briefs discussing these factors and the matter is now ready
for decision.
II. LEGAL STANDARD GOVERNING INTERPRETATION
OF COLLECTIVE BARGAINING AGREEMENTS
In interpreting the fringe benefit clause, the Court applies the following rules
of construction:
Many of the basic principles of contractual interpretation are fully
appropriate for discerning the parties’ intent in collective bargaining
agreements. For example, the court should first look to the explicit
language of the collective bargaining agreement for clear
manifestations of intent. The intended meaning of even the most
explicit language can, of course, only be understood in light of the
context which gave rise to its inclusion. The court should also
interpret each provision in question as part of the integrated whole. If
possible, each provision should be construed consistently with the
entire document and the relative positions and purposes of the parties.
As in all contracts, the collective bargaining agreement’s terms must
be construed so as to render none nugatory and avoid illusory
promises. Where ambiguities exist, the court may look to other words
and phrases in the collective bargaining agreement for guidance.
Variations in language used in other durational provisions of the
agreement may, for example, provide inferences of intent useful in
clarifying a provision whose intended duration is ambiguous. Finally,
the court should review the interpretation ultimately derived from its
examination of the language, context and other indicia of intent for
consistency with federal labor policy. This is not to say that the
collective bargaining agreement should be construed to affirmatively
promote any particular policy but rather that the interpretation
rendered not denigrate or contradict basic principles of federal labor
law.
Yard-Man, 716 F.2d at 1479-80 (citations omitted).
4
III. ANALYSIS
A. Does “Covered by this Agreement”
Modify “Hour Worked” or “Employees”?
The Court now addresses the above six considerations under the Yard-Man
framework to determine whether the phrase “covered by this Agreement” modifies
“each hour worked,” as urged by Defendants,” or “employees employed by him,”
as urged by the Trustees.
1. Yard-Man Consideration (1) – Express Language
The Sixth Circuit has held that “court[s] should first look to the explicit
language of the collective bargaining agreement for clear manifestations of intent.”
Yard-Man, 716 F.2d at 1479. The Trustees argue that their interpretation is more
plausible as a matter of grammar and syntax because “it would be highly unusual
for the modifying phrase of ‘covered by this Agreement’ to appear thirteen words
after the phrase . . . it is supposed to be modifying.” 7/11/14 Supp. Br. at 4-5 (ECF
No. 49 Page ID 1275-76). The Trustees also argue that their interpretation is
consistent with: (1) the union’s intent “to provide fringe benefits for as many
workers as possible . . . and to protect workers so that they receive all fringe
benefits to which they are entitled,” id. at Page ID 1275, and (2) the holding of the
only other case that has interpreted materially identical fringe benefit language,
Painters Union Deposit Fund v. D.P.L. Painting, Inc., No. 83-CV-0374 (E.D.
5
Mich. Apr. 1, 1985) (unpublished) (attached at Exhibit H to Trustees’ Motion for
Summary Judgment, see ECF No. 27-1 Page ID 482-497).
Defendants contend that the Court has a duty to avoid interpretations that
render words or phrases nugatory, and argue that if the Trustees’ interpretation is
accepted by the Court, the modifying phrase “and covered by this Agreement”
would be rendered nugatory. Defendants point out that the term “employee” is
expressly defined in the CBA; thus, there is no difference between the CBA’s use
of “employee” and “employee covered by this Agreement” because all
“employees,” as defined in the CBA, are necessarily “covered.”3 Defendants also
argue that if, in fact, the parties intended to require fringe benefit contributions for
all hours worked by covered employees, as the Trustees urge, clearer and more
efficient language could have been used to convey that intent.
The Court is persuaded by the grammar and syntax argument made by the
Trustees. “Operating on the assumption that most contracts follow most rules of
grammar, courts tend to prefer interpretations that conform to those rules.”
Payless Shoesource, Inc. v. Travelers Cos., Inc., 585 F.3d 1366, 1371 (10th Cir.
2009). Relevant for the present purposes is the grammatical rule that “a qualifying
or modifying phrase be construed as referring to its nearest antecedent.” New
3
“Employee” is defined in Article I of the CBA as follows: “The term ‘Employee’
shall include all journeymen, foremen, or any employee who acts in the capacity of
foreman, supervising the men directly on the job and apprentices as hereinafter set
forth.” CBA at 1 (ECF No. 25 Page ID 396).
6
Castle Cnty. v. Nat’l Union Fire Ins. Co. of Pittsburgh, 174 F.3d 338, 348 (3d Cir.
1999).
See also W. Strunk & E. White, The Elements of Style 30 (50th
anniversary ed. 2009) (“Modifiers should come, if possible, next to the words they
modify.”).
Applying this basic rule to the present construction problem, the
nearest antecedent to the modifying phrase “and covered by this Agreement” is
“employees employed by him.” As the Trustees point out, if the Court were to
accept Defendants’ interpretation, it would have to conclude that the modifying
phrase “and covered by this Agreement” modifies an antecedent phrase placed
thirteen words earlier in the sentence, not the antecedent phrase found immediately
before the modifying phrase. Based on the structure of the sentence and the
placement of the modifying phrase relative to the phrase “hour worked,”
Defendants’ proposed interpretation is not as plausible as the Trustees’ suggested
interpretation.
The Court rejects Defendants’ argument that the Trustees’ interpretation
renders the phrase “and covered by this Agreement” unnecessary. This argument
ignores the fact that the drafters of the CBA unambiguously use the phrase
“covered by this Agreement” to modify “employee” or “employees” throughout
the CBA. By the Court’s count, the exact phrase “employee covered by this
Agreement” or “employees covered by this Agreement” is employed no less than
seven times throughout the CBA. See CBA at 3, 4, 5, 7, 11 (ECF No. 25 Page ID
7
398, 399, 400, 402, 406). Unlike the wording of the fringe benefit clause, where it
is not entirely clear what the phrase “and covered by this Agreement” modifies, it
is very clear in at least seven other places in the CBA that the drafters used the
phrase “and covered by this Agreement” to modify “employee” or “employees.”
The use of the phrase “employee covered by this Agreement” or “employees
covered by this Agreement” throughout the CBA indicates that the drafters either
did not view the use of the phrase “and covered by this Agreement” to modify
“employee” or “employees” as a superfluous use of words or did view it as a
superfluous use of words but opted to use those words anyway.4 See Yard-Man,
716 at 1480 (“Where ambiguities exist, the court may look to other words and
phrases in the collective bargaining agreement for guidance.”).
4
The Court notes that, on at least one occasion, the CBA unambiguously refers to
“covered” work. See CBA at 7 (ECF No. 25 Page ID 402) (“To protect and
preserve for the employees covered by this Agreement, all work they have
performed and all work covered by this Agreement and to prevent any device or
subterfuge to avoid the protection and preservation of such work, it is agreed as
follows: . . .”). While Defendants’ urged interpretation is not unprecedented in the
CBA, the structure of the sentence at issue here strongly supports the interpretation
proposed by the Trustees.
The Court further notes that the drafters of the CBA use language elsewhere in the
document that would be considered nugatory under Defendants’ logic. For
example, the CBA uses the phrase “employer signatory to this Agreement.” See,
e.g., CBA at 11 (ECF No. 25 Page ID 406). Like the word “employee,” the word
“employer” is defined in the CBA. See id. at 1 (Page ID 396). In the same way
that it is unnecessary to refer to employees as “covered under this Agreement”
given that “employee” is defined in the CBA, it would also be unnecessary under
Defendants’ logic to refer to “employers signatory to this Agreement” given that
“employer” is defined in the CBA.
8
Moreover, Defendants cite no authority supporting their argument that the
efficiency with which a right is conveyed in a contract is relevant to discerning the
intent of the parties.
Thus, the Court rejects Defendants’ argument that the
interpretation urged by the Trustees should not prevail merely because the drafters
of the CBA could have conveyed the right more efficiently.
For these reasons, the Court concludes that the language of the fringe benefit
clause strongly favors the interpretation urged by the Trustees. However, the
Court acknowledges “that grammatical rules are bent and broken all the time, and
[courts] will not enforce the more grammatical interpretation of a contract ‘when
evident sense and meaning require a different construction.’” Payless Shoesource,
585 F.3d at 1371 (quoting Link, Inc. v. City of Hays, 266 Kan. 648, 654, 972 P.2d
753, 758 (Kan. 1999)). Therefore, the Court does not rely on grammar and syntax
alone and examines the remaining Yard-Man considerations.
2. Yard-Man Consideration (2) – Context
The Sixth Circuit has noted that CBA language “can . . . only be understood
in light of the context which gave rise to its inclusion.” Yard-Man, 716 F.2d at
1479. Defendants argue, without citation to evidence, that the interpretation urged
by the Trustees would cause harm to the intended beneficiaries of the fringe benefit
clause. Defendants contend that an interpretation of the fringe benefit clause
requiring contributions for all work, regardless of type of work involved, would:
9
(1) “harm the Union because employers would employ non-Union
members to perform non-covered work on worksites, resulting in
decreased dues paid [to the union under the CBA]”;
(2) “harm the [Michigan Alliance of Union Painting Contractors]
because fewer employees would agree to a CBA with such a
provision, and [Michigan Alliance of Union Painting Contractors]
would therefore receive fewer payments to its industry advancement
fund from member-employers under [the CBA]”; and
(3) “harm employees and employers because it would be
economically infeasible for an employer to assign ‘employees’ to
perform non-covered work, resulting in a segregated workforce and
decreased productivity and flexibility. In turn, ‘employees’ would be
denied the opportunity to perform and be paid to perform non-covered
work when non-covered work is the only type of work available.”
7/11/14 Supp. Br. 6-7 (ECF No. 50 Page ID 1298-99).
In the section of their brief devoted to context, the Trustees state, without
citation to evidence, that the fringe benefit clause was the result of a compromise
between employers, who wanted to limit their costs, and the union, who wanted to
provide fringe benefits to as many workers as possible. The Trustees state that
these “competing interests were reconciled in a negotiated fringe benefit rate,
currently $16.08 per hour” – a rate that “provides a contractually agreed-upon
compromise allowing the Union to provide fringe benefits to as many workers as
possible while limiting the cost for participating employers.” 7/11/14 Supp. Br. at
6 (ECF No. 49 Page ID 1277). The Trustees accuse Defendants of now trying to
“punch holes in the Agreement’s meaning to save money,” and argue that the
fringe benefit clause would have been worded differently – by using the phrase
10
“covered work” – if the drafters intended to require contributions based on the
nature of the work performed, as Defendants urge. Id. at 7 (Page ID 1278).
The Court concludes that the parties’ arguments regarding the context giving
rise to the fringe benefit clause do not shed light on the meaning of the provision
because the arguments asserted by both parties are devoid of evidentiary support.5
Defendants’ argument, which focuses on who the drafters of the CBA intended to
benefit and the deleterious effects that would follow if the Court adopted the
Trustees’ interpretation, is speculative and entirely unsupported by evidence.
Likewise, the Trustees’ argument about the goals of the contracting parties is
devoid of evidentiary support. For these reasons, the “context” inquiry under the
Yard-Man framework does not weigh in either party’s favor.
3. Yard-Man Considerations (3) & (4) – Consistency and Other
Words/Phrases in the CBA
“[C]ourt[s] should also interpret each [CBA] provision in question as part of
the integrated whole” and, “[i]f possible, each provision should be construed
consistently with the entire document and the relative positions and purposes of the
parties.” Yard-Man, 716 F.2d at 1479. Moreover, “[w]here ambiguities exist, . . .
court[s] may look to other words and phrases in the [CBA] for guidance” because
5
In the Court’s June 17, 2014 Opinion requiring the parties to brief this
construction issue, the Court invited the parties to “attach supporting evidence to
their brief.” 6/17/14 Op and Or. at 9 (ECF No. 47 Page ID 1265). Neither party
did so.
11
“[v]ariations in language used in other durational provisions of the agreement may,
for example, provide inferences of intent useful in clarifying a provision whose
intended duration is ambiguous.” Id. at 1480.
The Trustees argue that the reference in the fringe benefit clause to Article
XX of the CBA supports their proposed interpretation that contributions are
required for covered employees and not covered work.
Article XX – which
addresses technical details relating to the Painters Union Deposit Fund and other
trust funds, audit rights, and penalties for failure to contribute – does not discuss
what type of work would trigger an obligation to contribute, suggesting that the
CBA’s contribution requirement is not tied to the nature of the work performed.
The Trustees also point out that Article XX refers to “each hour worked” as the
measure by which the employer shall contribute for fringe benefits, suggesting
again that the nature of the work performed is not a relevant consideration in
determining whether contributions are necessary.6
6
The provision to which the Trustees refer containing the phrase “each hour
worked” is similar to the language of the fringe benefit clause:
In addition to all other payments required by this Agreement, each
Employer shall contribute monthly, or weekly, or at such other
intervals as shall be required by the Trustees, on forms provided by
the Trustees of Painters Union Deposit Fund, that amount of money
shown in Article III, Section 3 and Section 5 thereof, as the Total
Fringe Benefit Package, for each hour worked during that month or
other interval by all employees employed by him and covered by this
Agreement . . .
12
Defendants’ argument on the “consistency” and “other words/phrases”
element of the Yard-Man framework is difficult to follow. They state in their brief:
The fact that the language of other provisions within the CBA was
drafted to apply to all “employees” (as defined in CBA, Art. I, § 3)
regardless of whether they perform covered work, demonstrates that
the term “and covered by this Agreement,” was included in the Clause
for a purpose, and that purpose was to modify “hour worked.”
An example of such a variation in language can be found in Article
XII, Section 1 of the CBA, which states in relevant part: “To protect
and preserve for employees covered by this Agreement, all work they
have performed and all work covered by this Agreement . . . it is
agreed as follows.” In this Section, “employees covered by this
Agreement” is necessary to clarify that the provision applies to work
performed by “employees,” even if that work is not “covered by th[e]
Agreement,” as well as all work “covered by th[e] Agreement,” even
if the employee performing the work is not an “employee” “covered
by th[e] Agreement” because he or she does not perform the work of a
“journeyman, foreman, or . . . apprentice.”
7/11/14 Def. Br. at 4 (ECF No. 50 Page ID 1296). Defendants also refer the Court
to sections seven through ten of Article III of the CBA, which address fringe
benefit rates for three specific kinds of work. CBA at 3 (ECF No. 25 Page ID
398).7 According to Defendants, “[t]his provides additional evidence that the
CBA at 10 (ECF No. 25 Page ID 405).
7
These sections provide:
Wallcovering Work
SECTION 7: Fringe Benefit contributions for wallcovering work shall
be as follows: June 1, 2008 – the total or Wages and Benefits requires
13
Clause intended to require contributions based on the type of work performed
rather than the status of [the] employee who performs the work.” 7/11/14 Def. Br.
at 5 (ECF No. 50 Page ID 1297).
The Court concludes that words and phrases found outside the fringe benefit
clause suggest that the requirement to make fringe benefit contributions is not tied
to the nature of the work being performed.
Although the CBA contains very
detailed provisions in Articles III and XX addressing fringe benefit contributions,
there is no provision in those articles, or anywhere else in the CBA, even arguably
suggesting that the requirement to make fringe benefit contributions depends on
the nature of the work being performed. If the requirement to make fringe benefit
contributions is, in fact, dependent on to the type of work performed, as
one (1) hour of fringe benefit contributions and each year thereafter
will increase per Contract.
Waterblasting and Deep Cleaning
SECTION 8: The wage rates and provisions for fringe benefit
contributions for Insurance, Pension and Vacation are on file at
Painters District Council No. 22 and they will be furnished, on
request.
SECTION 9: Overtime rates, refer to Article VI.
SECTION 10: When there are six (6) or more men on a job or project,
one (1) man shall be designated as a chargeman or foreman and shall
be paid Fifty Cents (50¢) per hour in addition to regular wages.
CBA at 3 (ECF No. 25 Page ID 398).
14
Defendants urge, such a basic aspect of the CBA’s fringe benefit framework would
undoubtedly be conveyed in a CBA as detailed as the present one, and the CBA
would contain language distinguishing between work that triggers an obligation to
contribute and work that does not trigger an obligation to contribute.
Defendants argue that the following CBA provision defines “covered” work
– work for which fringe benefit contributions are required under a fringe benefit
contribution framework that ties the obligation to contribute to the type of work
performed: “[A]ny preparatorial work, wall washing, painting, hanging of
wallpaper, or wall covering, removal of wallpaper or paper cleaning.”
language is contained in the following CBA provision:
Article XIII
Trade Practices
The Employer agrees that it will not SUBLET OR SUBCONTRACT
to any of it’s [sic] employees or to any other individual or business
entity of any type not signatory to this Agreement by contract or
otherwise, any preparatorial work, wall washing, painting, hanging of
wallpaper, or wall covering, removal of wallpaper or paper cleaning,
unless such person or sub-contractor is party to a signed agreement
with the Union.
CBA at 7 (ECF No. 25 Page ID 402). According to Defendants:
It is unsurprising that we find the most succinct statement of what is
‘covered work’ in the subcontracting clause because through that
clause the Union is attempting to assure that an employer will not
avoid the CBAs’ wage and benefit obligations by simply assigning the
work to another person or entity. The Union is not interested in
whether the employer subcontracts any other kinds of work because
other kinds of work are simply not “covered by th[e] Agreement.”
15
This
7/11/14 Def. Br. at 14 (ECF No. 50 Page ID 1306). While Defendants may be
correct that this provision was meant to describe work that is “covered” under the
CBA, Defendants fail to point to any CBA language suggesting that fringe benefit
contributions are required only for the type of work described.
The absence of any provision of the CBA describing a framework in which
the requirement to make fringe benefit contributions is tied to the nature of the
work being performed suggests that such a framework was not intended. By the
same token, the presence of a reasonably discernable framework in the CBA
suggesting a system whereby fringe benefit contributions are required for all work
performed by covered employees leads the Court to believe such a framework was
intended. The Court believes the framework is reasonably discernable because, as
discussed, grammar and syntax support the conclusion that contributions are
required for work performed by covered employees, and the word “employee” is
explicitly defined in the CBA.
4. Yard-Man Consideration (5) – Federal Labor Law
The Sixth Circuit has stated that a court’s interpretation of a CBA should be
consistent with federal labor policy in that it should “not denigrate or contradict
basic principles of federal labor law.” Yard-Man, 716 F.2d at 1480. Defendants
argue that the Trustees’ urged interpretation denigrates federal labor policy
because it ties the right to fringe benefit contributions to union membership:
16
An interpretation of the Clause that determines compensation based
on the type of work performed furthers federal labor policy; an
interpretation of the Clause that determines compensation based on
union status or past performance denigrates federal labor policy.
It is the official “policy of the United States to eliminate the causes of
certain substantial obstructions to the free flow of commerce . . . by
encouraging the practice and procedure of collective bargaining and
by protecting the exercise by workers of full freedom of association.”
29 U.S.C. § 151(d). The interpretation urged by Defendants furthers
this policy by “protecting the exercise by workers of full freedom of
association.” It does so by allowing employees to choose whether or
not they wish to become union members, and by compensating
employees based on the work they perform, and it protects fringe
benefit funds by securing contributions for covered work.
7/11/14 Def. Br. at 10 (ECF No. 50 Page 1302).
Defendants’ argument is unpersuasive. One flaw in Defendants’ argument
lies in the belief that their proposed interpretation of the fringe benefit clause
“allow[s] employees to choose whether or not they wish to become union
members.” Defendants do not explain why they believe this to be so. Notably, the
CBA contains a so-called “union-shop” clause:
The employer agrees that for the duration of this Agreement, he will
require all employees hired by him to be members in good standing,
or to become members in good standing of the International Union of
Painters and Allied Trades (AFL-CIO) after the seventh (7th) day
following the beginning of their employment or the effective date of
this Agreement, whichever is later, and to remain members in good
standing thereafter, for the duration of their employment.
CBA at 1 (ECF No. 25 Page ID 396). Union-shop clauses like the one here are
permissible, except that employees must be allowed at least thirty days from the
17
beginning of their employment (and not seven, as the CBA here provides) to join
the union:
Sections 8(a)(3) and 8(b)(2) authorize collective bargaining parties to
enter into agreements by which employees working under such
agreements may be required, as a condition of employment, to obtain
and maintain “membership” in a union. The Act itself limits that
authority, however, in several important respects. First, employees
subject to union-shop clauses must be allowed at least 30 days to join
the union. Furthermore, only when loss of union membership results
from the member’s failure to pay union dues or initiation fees may the
union-shop clause be invoked to cause the employee’s discharge, and
only if the requirement is enforced on a uniform, nondiscriminatory
basis. Finally, the union’s authority to enter into a union-shop
agreement may be discontinued by majority vote of the affected
employees in an election held pursuant to Section 9(e) of the Act.
2 Patrick Hardin & John E. Higgins, Jr., The Developing Labor Law 1968 (4th ed.
2001) (footnote omitted). Therefore, under this CBA, no one can choose whether
to become a union member, so it cannot be the case that the interpretation of the
fringe benefit clause urged by Defendants gives an employee that choice.
Another problem with Defendants’ argument is the assumption that the
Trustees’ proposed interpretation “determines compensation based on union status
or past performance.” Under the Trustees’ proposed interpretation, fringe benefit
contributions must be made for all hours worked by “employees covered by this
Agreement.” As noted above, the word “employee” is defined in the CBA as
follows: “The term ‘Employee’ shall include all journeymen, foremen, or any
employee who acts in the capacity of foreman, supervising the men directly on the
18
job and apprentices as hereinafter set forth.” CBA at 1 (ECF No. 25 Page ID 396).
This definition, which uses the word “include” in an illustrative sense and is
therefore not necessarily an exhaustive list of who may be deemed an “employee”
under the CBA, see Trustees of Laborers Pension Trust Fund v. Metallizers of
Mid-America, Inc., No. 13-CV-14874, 2014 WL 4059864, at *4 (E.D. Mich. Aug.
14, 2014) (unpublished) (discussing the meaning of the contractual term
“including”), does not itself require union membership; rather, it is the union-shop
clause that requires union membership. It is possible that, under the Trustees’
interpretation of the fringe benefit clause, fringe benefit contributions may be
required for hours worked by employees in the first thirty days of their
employment, before they are required to join the union. In sum, Defendants’
assumption that the Trustees’ interpretation would provide fringe benefits only to
union members is unexplained and flawed.
For these reasons, Defendants have not convincingly argued that accepting
the Trustees’ proposed interpretation of the fringe benefit clause would “denigrate
or contradict basic principles of federal labor law.” Yard-Man, 716 F.2d at 1480.
5. Yard-Man Consideration (6) – Other Indicia of Intent
Under the Yard-Man framework, courts may look to other indicia of intent,
such as “the bargaining history, the context in which the contract was negotiated,
the interpretation of the contract by the parties, and the conduct of the parties
19
bearing upon its meaning.” Int’l Bhd. of Elec. Workers v. Nat’l Labor Relations
Bd., 788 F.2d 1412, 1414 (9th Cir. 1986). Defendants argue that the conduct of the
Trustees, counsel for the Trustees, the auditor of the Trustees, and Defendants’
employees reflect their understanding that contributions are required for covered
work. Specifically, Defendants point out:
The following two statements made by counsel for the Trustees in briefs
submitted in connection with this matter indicate that counsel is under the
impression that fringe benefit contributions are required only for covered
work: (1) “Under the governing [CBA], Defendant G&T is obligated to
make fringe benefit payments at the designated hourly rate for each hour
of covered work performed,” Pl. Resp. Br. at 1-2 (ECF No. 37 Page ID
812-813); (2) “The collective bargaining agreement at issue requires
payments according to each hour paid each employee performing covered
work . . .” Pl. Mot. for Summ. J. at 6 (ECF No. 24 Page ID 382).
The following statement made by the Trustees’ auditor, Jeffrey Ruehle,
indicates that Mr. Ruehle is under the impression that the nature of the
work performed determines whether fringe benefit contributions must be
made: “I amended the debit memo downward because I was satisfied to
the extent of the amount of the reduction given . . . that payments made to
the employees through the general register were not for covered work.”
Ruehle Aff. ¶ 13 (ECF No. 27 Page ID 448).
One of Defendants’ employees is under the impression that fringe benefit
contributions must be made on his behalf only for covered work
performed. Israel Barajas, an employee of Defendants, testified that he
would sometimes receive two paychecks covering the same time period,
one compensating him for his painting work, in which fringe benefit
contributions would be made, and another compensating him for nonpainting work, in which contributions would not be made. Barajas Dep.
at 11-12 (ECF No. 22-8 Page ID 242-243).
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Based on this, Defendants argue that the conduct of the Trustees during the course
of this litigation indicates their agreement with Defendants’ proposed interpretation
of the fringe benefit clause.
The Trustees do not offer an explanation for the statements made by their
counsel and auditor, which clearly evince their understanding that fringe benefit
contributions are required for covered work.
With regard to Mr. Barajas’
deposition testimony, the Trustees argue that “contributions are due to [him] even
if he does not understand he is eligible for fringe benefits that were not paid on his
behalf.” 7/28/14 Supp. Resp. Br. at 4 (ECF No. 52 Page ID 1326).
The Court agrees with Defendants that the Trustees’ attorney and auditor
have made statements during the course of this litigation that undercut the
interpretation for which the Trustees are advocating. This Yard-Man consideration
weighs in favor of construing the fringe benefit clause in accordance with
Defendants’ position.
Having conducted the required analysis, the Court concludes that the
interpretation proposed by the Trustees should prevail. Although one of the YardMan factors favors the interpretation proposed by Defendants, that one factor is not
enough to overcome the other factors weighing in the Trustees’ favor.
In
particular, the Court places a heavy emphasis on the express language of the fringe
benefit clause. Based on the phrasing of the clause at issue, the Court concludes
21
that the parties intended to require the payment of fringe benefit contributions for
work performed by “employees,” as that word is defined in the CBA, and not
based on the nature of the work performed.
The Court’s construction of the fringe benefit clause is consistent with the
only other case to have interpreted a materially identical clause – D.P.L. Painting –
a case involving the same Plaintiff as in the present case. There, U.S. District
Judge Philip Pratt interpreted the following CBA language:
[E]ach Employer shall contribute monthly or weekly or at such other
intervals as shall be required by the Trustees, to the Painters Union
Deposit Fund, in accordance with Article XVIII hereof, the sum of
[$4.00] for each hour worked during that month or other interval by
all employees employed by him and covered by this agreement . . .
D.P.L. Painting, slip op. at *2. The dispute in D.P.L. Painting was the same as
here – whether “and covered by this agreement” modifies “each hour worked,” as
urged by the employer, or “employees employed by him,” as urged by the
Trustees:
Plaintiff urges that the agreement be interpreted so that if any covered
employee performed work – covered or uncovered – fringe benefit
contributions for each hour worked would be required. As noted, the
defendant argues that plaintiff’s position is only the first step in this
court’s inquiry; and that the court must next ask if the work performed
was covered work, and only then would it be liable for the work
performed by its employees.
Id. at *5. In reaching its ultimate conclusion in favor of the construction urged by
the Trustees (i.e., “and covered by this agreement” modifies “employees employed
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by him”), the court did not engage in the analysis required by the Sixth Circuit in
Yard-Man even though Yard-Man predated D.P.L. Painting.
Instead, D.P.L.
Painting relied on a number of other cases interpreting remotely similar – but by
no means materially similar – CBA language. See Waggoner v. C & D Pipeline
Co., 601 F.2d 456 (9th Cir. 1979) (interpreting CBA language requiring fringe
benefit contributions for “hours worked by (or paid) each employee under this
Agreement”); Kemmis v. McGoldrick, 706 F.2d 993 (9th Cir. 1983) (same); Burke
v. Lenihan, 606 F.2d 840 (9th Cir. 1979) (same); Teamster’s Local 348 Health &
Welfare Fund v. Kohn Beverage Co., 749 F.2d 315 (6th Cir. 1984) (failure of CBA
to distinguish between union members and non-union members led to conclusion
that CBA covered both).
Because D.P.L. Painting did not engage in the required analysis pursuant to
Yard-Man, the Court does not find the case particularly instructive. The Court
does, however, agree with D.P.L. Painting’s observation that the CBA’s “silence
on covered and uncovered work suggests, at least by inference, that the agreement
covers all work performed by covered employees.” Id. at *8. This is a permissible
consideration under the Yard-Man framework and an observation that the Court
has made in its analysis above.8
8
Because this Court’s decision is not heavily influenced by D.P.L. Painting, it is
not necessary to address Defendants’ argument attacking the reasoning of that
case.
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B. Who is an “Employee” who is “Covered by this Agreement”?
In light of the Court’s interpretation of the fringe benefit clause to require
fringe benefit contributions for all work performed by covered employees, the final
issue that must be addressed is who qualifies as an “employee” who is “covered by
this Agreement.” The answer is found in the CBA. As discussed, the CBA defines
“employee” as follows: “The term ‘Employee’ shall include all journeymen,
foremen, or any employee who acts in the capacity of foreman, supervising the
men directly on the job and apprentices as hereinafter set forth.” CBA at 1 (ECF
No. 25 Page ID 396).
Pursuant to this definition, the Court concludes that
“employee covered by this Agreement” includes, at a minimum, the categories of
workers described. See Metallizers of Mid-America, 2014 WL 4059864, at **4-5
(discussing the meaning of the participle “including,” noting that it typically
“indicates a partial list”) (quoting Black’s Law Dictionary (9th ed. 2009).
However, the class of workers for whom fringe benefit contributions must be made
pursuant to the fringe benefit clause is limited by the title of the clause, which
clarifies that fringe benefit contributions under that particular provision of the CBA
are only required for “Commercial, Industrial Painters.” The words “commercial”
and “industrial” are undefined in the CBA.9
9
The Court notes that the CBA contains a definition for the word “residential.”
See CBA at 1 (ECF No. 25 Page ID 396).
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IV. CONCLUSION
For the reasons discussed above, the Court construes the fringe benefit
clause, found at Article III, section three of the CBA, to require fringe benefit
contributions for all hours worked by “employees” who are “covered by this
Agreement.” Covered employees “shall include all journeymen, foremen, or any
employee who acts in the capacity of foreman, supervising the men directly on the
job and apprentices as hereinafter set forth,” subject to the limitation that
contributions are only required under the fringe benefit clause for employees who
are “commercial, industrial painters.”
The Court will issue a notice setting a status conference for the purpose of
discussing how the parties wish to proceed. The parties shall confer prior to the
status conference and attempt to agree on a mutually agreeable course of action.
SO ORDERED.
Dated: September 17, 2014
s/PATRICK J. DUGGAN
UNITED STATES DISTRICT JUDGE
Copies to:
Stephen D. Kursman, Esq.
Daniel G. Helton, Esq.
Robert E. Day, Esq.
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