Orrand et al v. Hunt Construction Group, Inc.
Filing
45
OPINION AND ORDER granting (36) Motion for Summary Judgment in case 2:13-cv-00481-JLG-KAJ; granting (37) Motion for Summary Judgment; granting (38) Motion for Summary Judgment in case 2:13-cv-00489-JLG-KAJ; granting (35) Motion for Summary Judgme nt; granting (36) Motion for Summary Judgment in case 2:13-cv-00556-JLG-KAJ; granting (33) Motion for Summary Judgment; granting (34) Motion for Summary Judgment in case 2:13-cv-00864-JLG-NMK; granting (33) Motion for Summary Judgment; granting (34) Motion for Summary Judgment in case 2:13-cv-00900-JLG-NMK. Signed by Judge James L. Graham on 6/21/2016. Associated Cases: 2:13-cv-00481-JLG-KAJ, 2:13-cv-00489-JLG-KAJ, 2:13-cv-00556-JLG-KAJ, 2:13-cv-00864-JLG-NMK, 2:13-cv-00900-JLG-NMK (ds)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
Raymond Orrand, et al.,
Plaintiffs,
v.
Case No. 2:13-cv-481
Hunt Construction Group, Inc.,
Defendant.
Raymond Orrand, et al.,
Plaintiffs,
v.
Case No. 2:13-cv-489
Donley’s, Inc.,
Defendant.
Raymond Orrand, et al.,
Plaintiffs,
v.
Case No. 2:13-cv-556
Cleveland Concrete
Construction, Inc.,
Defendant.
Raymond Orrand, et al.,
Plaintiffs,
v.
Case No. 2:13-cv-864
B&B Wrecking & Excavating,
Inc.,
Defendant.
Raymond Orrand, et al.,
Plaintiffs,
v.
Case No. 13-cv-900
Precision Environmental
Company,
Defendant.
OPINION AND ORDER
The above actions have been brought pursuant to the Employee
Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §1001,
et seq., by Raymond Orrand, Administrator of the Ohio Operating
Engineers Health and Welfare Plan, Pension Fund, Apprenticeship
Fund, and Education and Safety Fund (“the Funds”), and the trustees
of those Funds against defendants Hunt Construction Group, Donley’s
Inc.,
Cleveland
Concrete
Construction,
Inc.,
B&B
Wrecking
&
Excavating, Inc., and Precision Environmental Company (hereinafter
“defendants” or “employers”). Defendants are construction industry
employers which hire workers who are members of various unions.
Plaintiffs allege that under ERISA §515, 29 U.S.C. §1145,
defendants are required to make contributions to the Funds under
the
terms
of
collective
bargaining
agreements
between
the
Construction Employers Association (“CEA”) and the International
Union of Operating Engineers, Local 18 and its branches (“Operating
Engineers”), to which defendants are signatory employers.
The
collective bargaining agreements, attached as Exhibits 1 and 2 to
the Amended Complaint, were in effect from May 1, 2009, through
April 30, 2012, and from May 1, 2012, through April 30, 2015.
Plaintiffs seek contributions under those agreements for work
2
(forklift and skid steer operation) which was allegedly within the
jurisdiction of Operating Engineers but was performed by employees
who were represented by the Laborers’ International Union of North
America, Local 310 (“Laborers”).
Plaintiffs request payment of
contributions allegedly owed the funds, access to defendants’
records for the purpose of conducting an audit, statutory interest,
costs and attorney’s fees, and injunctive relief.
I. Case History
After the filing of plaintiffs’ amended complaint in Case No.
2:13-cv-481, this court entered an order on September 26, 2013,
denying the motion to dismiss filed by Hunt Construction, but
granting Hunt Construction’s motion to stay proceedings.
No. 2:13-cv-481, Doc. 20.
See Case
On December 16, 2013, the other four
cases were also stayed on motion of the defendants.
The purpose of
the stay was to await a decision of the National Labor Relations
Board (“NLRB”) regarding charges of unfair labor practices filed by
defendants against Operating Engineers and Laborers pursuant to the
National Labor Relations Act (“NLRA”) §8(b)(4)(ii)(D), 29 U.S.C.
§158(b)(4)(ii)(D).
The proceedings before the NLRB under NLRA
§10(k), 29 U.S.C. §160(k), involved a jurisdictional dispute between
the two unions as to which union’s members should be assigned work
operating forklifts and skid steers on construction sites run by
defendants in the Cleveland, Ohio, area. The employers alleged that
Operating
Engineers
violated
§8(b)(4)(ii)(D)
by
engaging
in
proscribed activity, including threats of strikes and the filing of
“pay-in-lieu [of work]” grievances, with the object of forcing or
requiring defendants to assign the forklift and skid steer work to
Operating Engineers members rather than Laborers members.
3
On May 22, 2014, Hunt Construction filed a notice in Case No.
2:13-cv-481 stating that the NLRB had rendered a decision on May 15,
2014.
See Case No. 2:13-cv-481, Doc. 28.
The NLRB resolved the
§10(k) jurisdictional conflict by awarding the disputed work to
defendants’ employees who are represented by Laborers in the area
of defendants’ operations where the jurisdiction of Laborers Local
310 and Operating Engineers Local 18 overlap.
7.
Doc. 28, Ex. 1, p.
A related case memorandum order filed on June 18, 2014,
transferred Case Nos. 2:13-cv-489, 2:13-cv-556, and 2:13-cv-900 to
the docket of the undersigned judge.
By order filed on August 8,
2014, this court granted defendants’ motion to consolidate the five
cases.
Because
additional
proceedings
before
the
anticipated, the stay in the five cases was continued.
NLRB
were
The court
also granted the NLRB’s motion to intervene in Case Nos. 2:13-cv489, 2:13-cv-556, 2:13-cv-864 and 2:13-cv-900.
Following
a
status
conference
on
December
19,
2014,
the
magistrate judge assigned to these cases directed defendants to file
a motion to continue the stay, and, if appropriate, a motion for
summary judgment, by January 30, 2015.
On January 30, 2015,
defendants filed a motion for summary judgment and for a continuance
of the stay.
In response to defendants’ motion, the NLRB, as
intervenor, filed a motion for summary judgment on February 20,
2015.
The NLRB’s motion addressed the issue of whether the NLRB
proceedings were dispositive of the claims presented in this case,
and
also
supported
judgment motion.1
the
arguments
made
in
defendants’
summary
Plaintiffs filed responses in opposition to both
1
The court notes that the NLRB’s motion was timely filed as a response to
defendants’ motion, and was appropriately filed based on the NLRB’s status as an
intervenor.
4
motions.
On May 11, 2016, defendants filed a notice of an NLRB
order dated May 6, 2016.
See Case No. 2:13-cv-481, Doc. 44.
This
order adopted the April 9, 2015, decision of the administrative law
judge
(“ALJ”)
who
presided
over
later
proceedings
involving
defendants’ complaints that Operating Engineers refused to comply
with the NLRB’s May 15, 2014, decision by continuing to pursue “payin-lieu” grievances.
maintaining
Doc. 44, Ex. 1, p. 4.
grievances
after
the
NLRB’s
The NLRB found that by
§10(k)
determination,
Operating Engineers violated §8(b)(4)(ii)(D).
These cases are now before the court on the pending motions for
summary judgment and to continue the stay.
II. Summary Judgment Standards
“The court shall grant summary judgment if the movant shows
that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
P. 56(a).
Fed. R. Civ.
No genuine dispute of fact is presented by the summary
judgment motions.
Rather, the issues presented by the motions for
summary judgment are legal questions for the court.
III. Plaintiffs’ ERISA Claims
As ERISA fiduciaries, plaintiffs may bring a civil action
(A) to enjoin any act or practice which violates any
provision of this subchapter or the terms of the plan, or
(B) to obtain other appropriate equitable relief (i) to
redress such violations or (ii) to enforce any provisions
of this subchapter or the terms of the plan[.]
29 U.S.C. §1132(a)(3).
The Funds represented by plaintiffs are ERISA “employee benefit
plans” as defined in 29 U.S.C. §1002(3).
The Funds are also
“multiemployer plans” as defined in 29 U.S.C. §1002(37)(A).
§515, 29 U.S.C. §1145, provides:
5
ERISA
Every employer who is obligated to make contributions to
a multiemployer plan under the terms of the plan or under
the terms of a collectively bargained agreement shall, to
the extent not inconsistent with law, make such
contributions in accordance with the terms and conditions
of such plan or such agreement.
29 U.S.C. §1145.
The fringe benefit provisions of the applicable collective
bargaining agreements governing contributions to the Funds apply to
the defendant employers. Amended Complaint, Exs. 1 and 2, §§37, 38.
The collective bargaining agreements also provide that “[f]ringe
benefit contributions shall be paid at the following rates for all
hours paid to each employee by the Employer under this Agreement[.]”
Amended Complaint, Exs. 1 and 2, §39.
Defendants correctly note
that no hours were paid to employees under “this Agreement,” i.e.,
the Operating Engineers agreement, for the forklift and skid steer
work at issue here because employees represented by Laborers were
assigned to and paid for that work under defendants’ collective
bargaining agreements with Laborers.
This provision in itself does
not support plaintiffs’ claims for contributions to the Funds.
However, the collective bargaining agreements also provide that
the Employer shall employ Operating Engineers for the
erection, operation, assembly and disassembly, and
maintenance and repair of ... Forklifts [and] Skidsteers
... [which] shall be the work of the Operating Engineers
(only applies to in-house crew), and within the
jurisdiction as assigned to the Union by the American
Federation of Labor.
Amended Complaint, Exs. 1 and 2, §10.
This clause specifies that
forklift and skid steer work is to be assigned to employees
represented by Operating Engineers.
agreements further state:
6
The collective bargaining
If the Employer assigns any piece of equipment to someone
other than the Operating Engineer, the Employer’s penalty
shall be to pay the first qualified registered applicant
the applicable wages and fringe benefits from the first
day of violation.
Amended Complaint, Exs. 1 and 2, §21.
Plaintiffs claim that under
this “penalty” language, defendants made an unambiguous promise to
pay fringe benefit contributions to the Funds for forklift and skid
steer work awarded to Laborers-represented employees.
Plaintiffs
claim these contributions even though defendants made benefit
contributions to the Laborers’ funds for that work pursuant to the
collective bargaining agreements between defendants and Laborers.
The Sixth Circuit has noted that “courts have held that the
mere fact that an award of benefits could cause an employer to ‘pay
double’ would not be sufficient to relieve the employer of its
contractual obligation to make contributions to the ERISA funds.”
Trustees of B.A.C. Local 32 Insurance Fund v. Ohio Ceiling and
Partition Co., Inc., 48 F. App’x 188, 196-97, 2002 U.S. App. LEXIS
21095 at **24 (6th Cir. 2002)(citing Brogan v. Swanson Painting Co.,
682 F.2d 807, 809-10 (9th Cir. 1982)).
In situations where an
employer is exposed to conflicting collective bargaining agreements
that purport to impose a duty to “double pay” for the same job, the
collecting
trustee
must
show
that
the
agreement
created
a
contractual obligation for the employer to make contributions to
both plans, even though only one union did the work.
Trustees for
Michigan BAC Health Care Fund v. v. OPC Contractors, Inc., 136 F.
App’x 849, 851 (6th Cir. 2005).
Assuming arguendo that §21, at least on its face, imposes a
liability on defendants to pay contributions to the Funds for work
performed by Laborers members, defendants and the NLRB argue that
7
the NLRB’s resolution of the NLRA §10(k) jurisdictional dispute can
be raised by defendants as a bar to plaintiffs’ contractual claims.
The NLRB further submits that such a bar is necessary to protect the
NLRB’s §10(k) jurisdiction. Plaintiffs note in opposition that this
court, not the NLRB, has jurisdiction over plaintiffs’ ERISA claims.
However, defendants do not dispute that, pursuant to 29 U.S.C.
§1132(e), United States district courts have exclusive jurisdiction
to hear civil actions brought by a fiduciary under §1132(a)(3)
seeking to enforce an employer’s obligations to contribute to an
ERISA fund.
Plaintiffs also argue that the NLRB decision cannot be
used as a res judicata bar in this case, but defendants have not
asserted res judicata as a defense.
Rather, the question here is
whether the NLRB’s resolution of the work jurisdiction dispute poses
a bar to the recovery of contractual damages under the collective
bargaining
Therefore,
agreement
some
as
a
discussion
matter
of
of
the
federal
labor
nature
of
policy.
the
§10(k)
jurisdictional proceedings relevant to this case is warranted.
IV. NLRB Proceedings
The NLRB proceedings at issue here arose from a jurisdictional
dispute between Operating Engineers and Laborers regarding the
assignment of forklift and skid steer work where their jurisdictions
overlapped in Northeast Ohio.
May 15, 2014, NLRB Decision.
Under
the collective bargaining agreements between CEA and Operating
Engineers, the operation of forklifts and skid steer loaders was to
be assigned to Operating Engineers members. Amended Complaint, Exs.
1 and 2, §10.
Likewise, under the collective bargaining agreements
between CEA and Laborers, the operation of forklifts and skid steers
was to be the work of employees represented by Laborers.
8
May 15,
2014, Decision, p. 6.
Donley’s filed charges with the NLRB on
October 18, 2012, alleging that both unions had engaged in unfair
labor practices in violation of NLRA §8(b)(4)(ii)(D).
Section
§8(b)(4)(ii)(D) prohibits “a labor organization or its agents” from
engaging in, inducing or encouraging a strike or refusal to work or
threatening, coercing or restraining an employer where an object of
that action is
(D) forcing or requiring any employer to assign
particular work to employees in a particular labor
organization or in a particular trade, craft, or class
rather than to employees of another labor organization or
in another trade, craft, or class[.]
29 U.S.C. §158(b)(4)(ii)(D).
Additional charges were filed by the
other employers on October 19, 2012, and the cases were consolidated
for a hearing before an NLRB hearing officer.
In addressing the defendants’ charges, the NLRB rejected the
argument made by Operating Engineers that the employers and Laborers
colluded to create a sham jurisdictional dispute.
Decision,
pp.
5-6.
The
NLRB
also
disagreed
May 15, 2014,
with
Operating
Engineers’ contention that the pay-in-lieu grievances were lawful
attempts to preserve work for its members, noting evidence that
Laborers-represented employees had long performed forklift and skid
steer work at all of defendants’ construction projects.
May 15,
2014, Decision, pp. 4-5. The NLRB found reasonable cause to believe
that NLRA §8(b)(4)(ii)(D) had been violated due to the filing of
pay-in-lieu grievances by Operating Engineers and strike threats by
representatives of both unions over the assignment of the disputed
work.
May 15, 2014, Decision, pp. 4-6.
Because
the
NLRB
found
reasonable
cause
to
believe
that
§8(b)(4)(ii)(D) had been violated, it was authorized to address the
9
merits of the jurisdictional dispute pursuant to NLRA §10(k), and
to make an affirmative award of the disputed work.
Section 10(k)
provides in relevant part:
Whenever it is charged that any person has engaged in an
unfair labor practice within the meaning of paragraph
(4)(D) of section 158(b) of this title, the Board is
empowered and directed to hear and determine the dispute
out of which such unfair labor practice shall have
arisen, unless, within ten days after notice that such
charge has been filed, the parties to such dispute submit
to the Board satisfactory evidence that they have
adjusted, or agreed upon methods for the voluntary
adjustment of, the dispute.
29 U.S.C. §160(k).
After considering relevant factors, including
the language of the applicable collective bargaining agreements with
the two unions, employer preference and past practice, area and
industry practice, relative skills and training, and economy and
efficiency of operations, the NLRB awarded the disputed work to
employees represented by Laborers. May 15, 2014, Decision, pp. 6-7.
Operating Engineers refused to comply with the NLRB’s award by
maintaining previously filed pay-in-lieu grievances and filing new
grievances.
After new charges were filed by the employers, the
consolidated cases were brought before the ALJ for a hearing.
The
ALJ filed a decision on April 9, 2015, and his decision was adopted
by the NLRB on May 6, 2016.
1.
See Case No. 2:13-cv-481, Doc. 44, Ex.
The ALJ and the NLRB again rejected Operating Engineers’
arguments concerning collusion and work preservation.
NLRB Decision, pp. 2-4.
May 6, 2016,
In particular, the NLRB quoted the ALJ’s
finding that, in light of evidence of defendants’ consistent and
long-time practice of assigning forklift and skid steer work to
Laborers’-represented employees, Operating Engineers’ “‘objective
was not that of work preservation, but rather work acquisition.’”
10
May 6, 2016, Decision, p. 3. The NLRB also agreed with the ALJ that
Operating Engineers had violated §8(b)(4)(ii)(D) by maintaining
prior grievances and filing new grievances in an effort to undermine
the NLRB’s §10(k) awards and to coerce the employers to reassign
work
awarded
by
the
NLRB
to
Laborers’
represented by Operating Engineers.
members
to
employees
May 6, 2016, Decision, p. 4.
The NLRB ordered Operating Engineers to cease and desist from unfair
labor practices, such as threats to picket or strike or maintaining
or filing pay-in-lieu grievances, for the purpose of forcing or
requiring defendants to re-assign forklift and skid steer work to
its members.
If Operating Engineers refuses to comply with the NLRB order,
the NLRB can petition the Sixth Circuit Court of Appeals to enforce
the order.
29 U.S.C. §160(e).
Operating Engineers can also seek
review of the NLRB order in the Sixth Circuit Court of Appeals.
29
U.S.C. §160(f).
V. NLRB Order as a Bar to Recovery
Defendants and the NLRB argue that the §10(k) award of work to
Laborers
members
insulates
the
defendants
from
claims
for
contractual damages in the form of contributions to the Funds as a
matter of federal labor policy.
Section 10(k) requires the NLRB to
decide jurisdictional disputes on their merits.
N.L.R.B. v. Radio
& Television Broadcast Eng. Union, Local 1212, 364 U.S. 573, 579
(1961).
Section 10(k) “quite plainly emphasizes the belief of
Congress
that
it
is
more
important
to
industrial
jurisdictional disputes be settled permanently[.]”
peace
that
Id. at 577.
“Congress enacted section 10(k) to provide the means by which an
employer could protect itself from being caught in the middle of a
11
dispute
between
unions.”
International
Union
of
Operating
Engineers, Local No. 714 v. Sullivan Transfer, Inc., 650 F.2d 669,
(5th Cir. Unit A, 1981).
a
dispute
involving
The Supreme Court has held that although
work
assignment
can
be
the
subject
of
arbitration, “[t]he superior authority of the Board may be invoked
[by the employer] at any time.”
Carey v. Westinghouse Electric
Corp., 375 U.S. 261, 272 (1964).
The remedy afforded by §10(k)
proceedings before the NLRB, “if invoked by the employer, will
protect him.”
Id. at 286.
In keeping with Carey, courts have held that a §10(k) award of
work by the NLRB takes precedence over a conflicting arbitration
award. In International Union, United Auto., Aerospace and Agr.
Implement
Workers
(UAW)
and
Its
Local,
1519
v.
Rockwell
International Corp., 619 F.2d 580, 583 (6th Cir. 1980), the Sixth
Circuit stated that once the NLRB decides a work assignment dispute,
its determination takes precedence over a contrary arbitrator’s
award.
The court noted that it is the “Congressional policy
enunciated in Section 10(k) that makes the statutory jurisdictional
dispute procedure take precedence over contractual arbitration.”
Id. at 585.
See also Sheet Metal Workers Int’l Ass’n Local Union
No. 27 v. E.P. Donnelly, Inc., 737 F.3d 879, 898-99 (3d Cir.
2013)(district court erred in enforcing arbitration award of work
which squarely conflicted with a later NLRB §10(k) ruling); T.
Equipment Corp. v. Massachusetts Laborers’ District Council, 166
F.3d 11, 15-19 (1st Cir. 1999)(§10(k) decision of NLRB awarding work
to members of carpenters’ union prevailed over arbitration decision
awarding
assignment
contractual
of
work
damages
dispute);
to
laborers’
International
12
union
members
Longshoremen’s
in
and
Warehousemen’s Union v. N.L.R.B., 884 F.2d 1407, 1411-1415 (D.C.
Cir. 1989)(NLRB’s §10(k) award of work to teamsters took precedence
over arbitrator’s award of work to longshoremen).
An NLRB §10(k) determination also precludes a conflicting
action for damages pursuant to the National Management Relations Act
(“NMRA”) §301, 29 U.S.C. §185, based on a collective bargaining
agreement. Rockwell International, 619 F.2d at 585 (an employer who
has been acting in accord with the NLRB’s order in a §10(k)
proceeding is not liable to the disappointed union for damages in
a §301 action).
“Any counts found repugnant must be dismissed.”
Sullivan Transfer, 650 F.2d at 678.
Where the NLRB has made a
determination in a jurisdictional dispute, “the employer would not
be liable for damages under section 301 if its actions conformed to
the Board determination.”
Id., 650 F.2d at 677 (citing Carey, 375
U.S. at 272). Congress intended to afford employers protection when
their actions conform to an NLRB §10(k) award, and “[t]o allow a
nonprevailing union to sue an employer for damages when that
employer acts in conformity with a section 10(k) determination would
run counter to that clearly-expressed congressional policy.”
Id.
As the D.C. Circuit stated in International Longshoremen’s and
Warehousemen’s Union, “the section 10(k) award trumps the collective
bargaining agreement” relied upon the longshoremen, and “a union
cannot force an employer to choose between a Board section 10(k)
award and a squarely contrary contract claim.”
884 F.2d at 1413,
1414.
Similarly, in Local 30, United Slate, Tile and Composition
Roofers, Damp and Waterproof Workers Ass’n, AFL-CIO v. N.L.R.B., 1
F.3d 1419 (3d Cir. 1993), the court stated that “section 10(k)
13
proceedings are intended to resolve competing claims to work, even
if both groups of employees claiming the work have legitimate
contractual claims.”
1 F.3d at 1428.
The court noted that if the
union disappointed by a §10(k) decision is permitted to seek a
contractual remedy, “the section 10(k) hearing would not be serving
its intended purpose of preventing work disruption by quickly and
finally
resolving
jurisdictional
disputes”
and
the
policy
of
“protecting employers from the detrimental economic impact of
jurisdictional disputes would be severely undermined.”
Id.
In
fact, pursuit of a §301 breach of contract suit that directly
conflicts with a §10(k) determination has an illegal objective and
can be enjoined as an unfair labor practice.
737
F.3d
at
892
(citing
Bill
Johnson’s
Sheet Metal Workers,
Restaurants,
Inc.
v.
N.L.R.B., 461 U.S. 731, 737 n. 5 (1983)).
Plaintiffs argue that there is a split among the circuits as
to whether a §10(k) award takes precedence over a claim for damages
under a collective bargaining agreement.
They rely on Hutter
Construction Co. v. International Union of Operating Engineers Local
139, AFL-CIO, 862 F.2d 641 (7th Cir. 1988), in which the court drew
a distinction between claims for work as opposed to claims for
payment for work.
See also Miron Construction Co., Inc. v.
International Union of Operating Engineers, Local 139, 44 F.3d 558
(7th
Cir.
1995);
Brogan,
682
F.2d
at
809-10.
However,
the
distinction between work and payment for work has been rejected by
courts in other circuits.
See T. Equipment Corp., 166 F.3d at 19
(holding that there can be “no logical distinction” between seeking
the work and seeking payment for the work); Local 30, United Slate,
Tile and Composition Roofers, 1 F.3d at 1427 (distinction “between
14
seeking the work and seeking payment for the work is ephemeral”);
N.L.R.B. v. Local 1291, Int’l Longshoremen’s Ass’n, 368 F.2d 107,
110 (3d Cir. 1966)(the valuable part of a right to a particular job
is the right to be paid for it, and a jurisdictional dispute between
two groups of employees as to which is entitled to certain work is
in essence a dispute as to which shall receive compensation for that
work).
split
The Sixth Circuit in Ohio Ceiling recognized the circuit
but
noted
that
the
decision
in
Rockwell
International
suggested that the Sixth Circuit would not adopt the distinction
made by the court in Hutter. See Ohio Ceiling, 2002 U.S. App. LEXIS
21095 at **26-27.
This court concludes that there should be no distinction
between seeking work and seeking payment for work in determining
whether a §10(k) order can bar a contractual claim.
In any event,
the cases relied on by plaintiffs which make that distinction are
themselves distinguishable from the instant case on their facts.
In Hutter, the Seventh Circuit upheld an arbitration award of
damages in favor of one union against a general contractor even
though the NLRB had awarded the work to another union in §10(k)
proceedings involving a subcontractor who had the sole authority to
assign the work.
As the Seventh Circuit explained in Miron,
a union’s mere pursuit of its contractual remedies
against the general contractor, absent a demand that the
subcontractor reassign the work, does not amount to
coercion in contravention of the §10(k) award. Since the
subcontractor has complete control over which union
actually performs the work, maintenance of an action
against the general contractor cannot be viewed as a
veiled attempt to force reassignment of the work.
Miron, 44 F.3d at 566.
However, the Seventh Circuit later vacated
an arbitration award entered against an employer which was in
15
conflict with an NLRB §10(k) award of work in proceedings involving
that
same
employer.
See
Advance
Cast
Stone
Co.
v.
Bridge,
Structural and Reinforcing Iron Workers, Local Union No. 1, 376 F.3d
The court noted that Hutter and Miron were
734 (7th Cir. 2004).
premised “on the unique subcontracting context in which they arose”
and that they therefore did not involve a direct conflict between
the arbitrator’s and the NLRB’s awards.
376 F.3d at 742.
As in
Advance Cast Stone, the defendants in this case were general
contractors involved in the §10(k) proceedings, not subcontractors.
Brogan and the supplemental authority cited by plaintiffs are also
distinguishable, as they did not involve conflicting §10(k) awards.
Plaintiffs further argue that Congress intended for actions
under
ERISA
§515
to
be
unaffected
by
conflicting
law
or
determinations such as the NLRB §10(k) proceedings in this case, and
that defendants should not be permitted to raise the §10(k) decision
as a bar.
Courts have limited defenses that employers may raise in
ERISA collection actions to permit the efficacious recovery of
delinquent contributions.
Laborers Pension Trust Fund-Detroit and
Vicinity v. Interior Exterior Specialists Construction Group, Inc.,
394 F. App’x 285, 286 (6th Cir. 2010).
However, some defenses have
been permitted, including the illegality of the contributions, fraud
in the execution of the contract, and certain contract termination
defenses.
Operating Engineers Local 324 Health Care Plan v. G & W
Constr. Co., 783 F.3d 1045, 1052 (6th Cir. 2015).
In Kaiser Steel Corp. v. Mullins, 455 U.S. 72 (1982), the
Supreme Court rejected a similar argument that ERISA §515 should
prevail over labor law.
In that case, Kaiser argued that a
requirement in the collective bargaining agreement for contributions
16
to union trust funds based on coal purchased from suppliers who did
not have a contract with the union violated NLRA §8(e), 29 U.S.C.
§158(e), the “hot-cargo” provision. “The ‘touchstone’ and ‘central
theme’ of §8(e) is the protection of neutral employers, such as
Kaiser, which are caught in the middle of a union’s dispute with a
third party.”
Id. at 84.
Kaiser contended that the contributions
requirement penalized Kaiser for dealing with other employers who
do not have a contract with the union and defeated the major purpose
of
prohibiting
“hot-cargo”
provision,
that
being
to
protect
employers such as Kaiser from being coerced into aiding the union
in its organizational or other objectives with respect to other
employers.
Id. at 78.
The Supreme Court held that a federal court could entertain the
merits of Kaiser’s defense that the contributions provision was
illegal under NLRA §8(e).
Id. at 83-86.
The Supreme Court noted
that ERISA §515 “explicitly requires employers to contribute to
pension funds only where doing so would not be ‘inconsistent with
law[.]’” Id. at 87-88. The Court discussed the legislative history
behind §515 and noted that the “legislators did not say that
employers should be prevented from raising all defenses; rather they
spoke in terms of ‘unrelated’ and ‘extraneous’ defenses.”
88 (citing 126 Cong. Rec. 23039 (1980)).
Id. at
See also Operative
Plasterers’ and Cement Masons’ Local #18 Annuity Fund v. J.P.
Phillips, Inc., 573 F.Supp.2d 1059, 1064 (C.D. Ill. 2008)(employer
could assert arbitration award and consent decree which settled
jurisdictional dispute and established that Local #18 had no right
to the work in question as defense to fund’s §515 action seeking
payment of contributions);
Cement Mason’s Union Local No. 592
17
Pension
Fund
v.
Zappone,
501
F.Supp.2d
714,
720-723
(E.D.Pa.
2007)(employer seeking to bar §515 claim for contributions may raise
national arbitration panel award of work to a different union as a
defense); Ohio Ceiling, 2002 U.S. App. LEXIS 21095 at **28 (“Looking
at the basis for the protections afforded to ERISA plans under §515,
nothing suggests that it was intended to afford ERISA fiduciaries
a weapon against employers in undeclared jurisdictional disputes
with competing unions.”)
The Supreme Court has also stated:
The power of the federal courts to enforce the terms of
private agreements is at all times exercised subject to
the restrictions and limitations of the public policy of
the United States as manifested in ... federal
statutes.... Where the enforcement of private agreements
would be violative of that policy, it is the obligation
of courts to refrain from such exertions of judicial
power.
Hurd v. Hodge, 334 U.S. 24, 34-35 (1948). Although there is nothing
illegal per se about a requirement to pay contributions to the funds
of more than one union, see Ohio Ceiling, 2002 U.S. App. LEXIS 21095
at **24, the strong congressional labor policies embodied in the
NLRB’s §10(k) jurisdiction have led courts in the previously cited
cases to give precedence to §10(k) awards and to decline to enforce
conflicting
arbitration
awards
or
to
entertain
conflicting
contractual claims.
Plaintiffs, as trustees for the Funds, attempt to distance
themselves from Operating Engineers’ efforts to obtain the disputed
work.
Although benefit funds are distinct legal entities, they do
not exist in a vacuum, and their interests can overlap those of the
18
union.2
the
In this case, the Funds are third-party beneficiaries of
collective
Engineers.
bargaining
agreements
negotiated
by
Operating
See Laborers Pension Trust Fund, 394 F. App’x at 286.
Plaintiffs seek contributions for the Funds, which exist for the
benefit of Operating Engineers members, not Laborers members.
Defendants have submitted affidavits stating that the names of the
Laborers’ members listed in the amended complaint as being the
employees who performed the work for which contributions are sought
were
provided
proceedings.
to
Operating
Engineers
during
the
NLRB
§10(k)
The claims for contributions are based on the same
contract language, referred to by the ALJ as
“work preservation”
clauses, which formed the basis for the “pay-in-lieu” grievances
filed by Operating Engineers, see April 9, 2015, ALJ Decision, pp.
7, 10, 12.
The claims for contributions asserted here amount to claims for
liquidated damages for the failure to assign work to Operating
Engineers members, work which the NLRB has decided that they are not
entitled to perform.
Plaintiffs’ claims directly conflict with the
NLRB’s §10(k) determination that Operating Engineers members were
not entitled to the work in question.
2
If the Funds were to succeed
See, e.g., Rhode Island Carpenters Annuity Fund v. Trevi Icos Corp., 533
F.Supp.2d 246, 249-54 (D.R.I. 2008)(awarding attorneys fees to employer where
fund used §515 action as “a jurisdictional stalking horse” in a dispute over
work); Marshall v. Blasters, Drillrunners, and Miners Union, Local 29, No. 78
Civ. 4619, 1980 WL 2150 at *3 (S.D.N.Y. April 14, 1980)(“The Courts have
recognized the potential for close interrelationships between a union and
jointly-trusted benefit funds associated with it[.]”). Courts have even stated
that under certain circumstances, fund fiduciaries can qualify as agents of a
labor organization for purposes of engaging in §8(b)(4) unfair labor practices
within the NLRB’s jurisdiction. See Griffith Co. v. N.L.R.B., 660 F.2d 406, 410
(9th Cir. 1981)(action of trustee may be attributed to union where trustee’s acts
were directed by union officials); N.L.R.B. v. Construction and General Laborers’
Union Local 1140, 577 F.2d 16, 20-21 (8th Cir. 1978)(upholding contempt citation
against union for picketing organized by fund trustee who was also a union
officer to protest minor arrearage in employer’s fund contributions).
19
on
their
ERISA
claims,
this
would
put
economic
pressure
on
defendants to assign the disputed work to Operating Engineers
members in violation of the NLRB §10(k) order, regardless of
plaintiffs’ intentions or the merits of their contract claims.
Allowing
these
ERISA
claims
to
proceed
would
undermine
the
congressional policy behind the grant of §10(k) authority to the
NLRB,
that
being
to
definitively
and
expeditiously
resolve
jurisdictional disputes and to relieve employers of the burdens of
being caught in the middle of such disputes.
litigation,
the
NLRB’s
10(k)
award
is
For purposes of this
final.
See
Rockwell
International, 619 F.2d at 584 (rejecting argument that NLRB’s
§10(k) determination should not be treated as final because of the
possibility of later appellate proceedings); see also Advance Cast
Stone, 376 F.3d at 740 n. 5.
The court concludes that the defendants may assert the NLRB
§10(k) award awarding the disputed work to Laborers’ members as a
defense to plaintiffs’ §515 action for contributions.
The court
further concludes that the NLRB §10(k) award bars plaintiffs’ ERISA
claims for contributions in these cases.
Defendants and the NLRB
are entitled to summary judgment.
VI. Request for Continued Stay
The court’s decision to grant the motions for summary judgment
renders moot the request for a continuance of the current stay. The
court recognizes that if plaintiffs appeal this court’s decision,
defendants will be forced to incur additional litigation expenses.
However, this is unavoidable, because even if appellate proceedings
are filed by Operating Engineers or the NLRB regarding the §10(k)
order, those proceedings may not address the ERISA issues presented
20
in this case.
The court concludes that the entry of final judgment
in this case is warranted to allow appellate review of these issues
to go forward.
VII. Conclusion
In accordance with the foregoing, the motions for summary
judgment are granted, and the motion for a continued stay is denied
as moot.
The clerk shall enter judgment in favor of defendants.
Date: June 21, 2016
s/James L. Graham
James L. Graham
United States District Judge
21
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?