LABORERS' COMBINED FUNDS OF WESTERN PENNSYLVANIA v. MACSON CORPORATION

Filing 44

MEMORANDUM OPINION re 26 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM, for Failure of a Condition Precedent, and Motion for Failure to Exhaust Administrative Remedies filed by MACSON CORPORATION, renamed as a Motion to Compel Arbitration--see errata entry at ECF No. 37 . Signed by Magistrate Judge Lisa Pupo Lenihan on 4/30/18. (clh)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
LABORERS’ COMBIND FUNDS OF
WESTERN PENNSYLVANIA, as agent
for PHILIP AMERIS and PAUL V.
SCABILLONI, trustees ad litem,
LABORERS’ DISTRICT COUNCIL OF
WESTERN PENNSYLVANIA WELFARE
AND PENSION FUNDS, THE
CONSTRUCTION INDUSTRY
ADVANCEMENT PROGRAM OF
WESTERN PENNSYLVANIA, and its
affiliated local unions,
Plaintiff,
v.
MACSON CORPORATION,
Defendant.

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Case No. 2:16-cv-01506
Magistrate Judge Lisa Pupo Lenihan

ECF No. 26

OPINION
LENIHAN, M.J.
Currently before the Court for disposition is the Motion to Compel Arbitration
(ECF No. 26) filed by Defendant Macson Corporation (“Macson”). Macon contends that
the West Jefferson Hills School District Project Labor Agreement (“PLA”), which contains
a mandatory arbitration provision, governs the parties’ dispute here, and therefore,
Plaintiff is required to arbitrate its claim against Macson. Because Plaintiff has failed to
submit its dispute to arbitration, Macson contends this Court lacks subject matter
jurisdiction, and requests that this case be dismissed with prejudice, and attorneys’ fees
be awarded to it pursuant to 29 U.S.C. § 1132(g)(1). For the reasons set forth below, the

Court will deny Defendant’s motion to compel arbitration.
I.

FACTUAL BACKGROUND & PROCEDURAL HISTORY
Plaintiff, the Laborers’ Combined Funds of Western Pennsylvania (“Laborers’

Combined Funds”), instituted this suit against Macson under §§ 502 and 515 of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”), 29 U.S.C. §§
1132 and 1145, and also under § 301 of the Labor-Management Relations Act of 1947
(“LMRA”), 29 U.S.C. § 185. The Laborers’ Combined Funds administers various fringe
benefit funds, including the Laborers’ District Council of Western Pennsylvania Welfare
and Pension Funds (“Welfare & Pension Funds”),1 and acts as a collection agent for such
funds as well as for certain employer associations and unions, including the Laborers’
District Council of Western Pennsylvania and its affiliated local unions, the Construction
Industry Advancement Program of Western Pennsylvania. (Compl., ¶¶ 2-5, ECF No. 1.)
Macson, a contractor engaged in the construction business, allegedly entered into
a labor agreement with the Laborers’ Union.2 (Id., ¶¶ 6-7.) Plaintiff contends that
pursuant to that agreement, Macson was obligated to submit certain monthly payments
to it for pension, welfare, industry and dues for the benefit of employees covered under
said agreement. (Id., ¶ 7.)

Plaintiff further contends that based on that agreement and

the provisions of ERISA, it has the right to examine and audit Macson’s books and payroll
records to determine whether Macson has made proper deductions, contributions,

The Welfare & Pension Funds are employee fringe benefit plans established and
maintained within the meaning of ERISA. (Compl., ¶ 5.)
2 It is unclear to which labor agreement Plaintiff is referring, as it has not attached any
“labor agreement” to the Complaint.
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payments and remittances for all employees covered by the agreement. (Id., ¶ 8.)
Nonetheless, Plaintiff contends that Macson has failed to submit such reports and has
refused to make available its books and payroll records for an audit, in violation of the
agreement. (Id., ¶ 9.) In addition, Plaintiff contends that Macson is obligated to it for all
reasonable auditing and attorney’s fees and other legal expenses incurred in securing the
audit and collecting any delinquencies determined to be owed by Macson. (Id., ¶ 10.)
For relief, the Plaintiff seeks injunctive relief to enjoin Macson from violating the
terms of the labor agreement and directing Macson to make immediate payments of all
monies past due and timely payments of all monies that become due to Plaintiff, pursuant
to the labor agreement, among other things. (Compl., Ad damnum cl., ¶¶ (a) – (c).)
Plaintiff also seeks a money judgment in its favor for (1) the amounts shown to be owed
as a result of any audit, plus interest; (2) liquidated damages/late charges at 10 percent
of the principal amount owed; (3) reasonable auditing fees and attorneys’ fees equal to 20
percent of the total delinquency, but not less than $1,000.00; and, (4) costs of suit. (Id., Ad
damnum cl., ¶ (d).)
In response, Macson filed an Answer, and subsequently, a motion to compel
arbitration which is the subject of this opinion. 3 Relevant to this pending motion, Macson

Originally, Macson’s motion to compel arbitration was titled, “Motion to Dismiss for
Lack of Jurisdiction, for Failure of a Condition Precedent, and Motion for Failure to
Exhaust Administrative Remedies,” and was docketed at ECF No. 26 on 9/19/17.
Subsequently, counsel for Macson made an Errata entry at ECF No. 37 on 10/27/17
attaching a Motion to Compel Arbitration in which he incorporated the motion and
exhibits previously docketed at ECF No. 26, and requested that the Clerk of Court refile
the motion at ECF No. 26 as a Motion to Compel Arbitration.
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attached a copy of the Project Labor Agreement for the West Jefferson Hills School
District Project, see Def.’s Ex. B to Motion to Compel Arbitration (ECF No. 26-2), and
subsequently, filed a Brief in Support of its Motion to Compel Arbitration (ECF No. 32).
Plaintiff has filed a response and brief in opposition to the motion to compel
arbitration (ECF Nos. 39 and 40). Macson has filed a reply to Plaintiff’s opposition to the
motion to compel arbitration (ECF No. 41) and a supporting brief (ECF No. 43). As the
motion to compel arbitration has been fully briefed, it is now ripe for disposition.
II.

LEGAL STANDARD – MOTION TO COMPEL ARBITRATION
In Guidotti v. Legal Helpers Debt Resolution, LLC, 716 F.3d 764, 771 (3d Cir. 2013),

the court of appeals clarified which standard of review should be applied in evaluating
motions to compel arbitration:
[W]hen it is apparent, based on “the face of a complaint, and
documents relied upon in the complaint,” that certain of a
party's claims “are subject to an enforceable arbitration
clause, a motion to compel arbitration should be considered
under a Rule 12(b)(6) standard without discovery's delay.”
Somerset, 832 F. Supp.2d at 482. But if the complaint and its
supporting documents are unclear regarding the agreement
to arbitrate, or if the plaintiff has responded to a motion to
compel arbitration with additional facts sufficient to place the
agreement to arbitrate in issue, then “the parties should be
entitled to discovery on the question of arbitrability before a
court entertains further briefing on [the] question.” Id. After
limited discovery, the court may entertain a renewed motion
to compel arbitration, this time judging the motion under a
summary judgment standard. In the event that summary
judgment is not warranted because “the party opposing
arbitration can demonstrate, by means of citations to the
record,” that there is “a genuine dispute as to the
enforceability of the arbitration clause,” the “court may then
proceed summarily to a trial regarding ‘the making of the
arbitration agreement or the failure, neglect, or refusal to
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perform the same,’ as Section 4 of the FAA envisions.” Id.
(quoting 9 U.S.C. § 4).
Id. at 776. Thus, “[m]otions to compel arbitration are reviewed under the Rule 12(b)(6)
standard ‘[w]here the affirmative defense of arbitrability of claims is apparent on the face
of a complaint (or . . . documents relied upon in the complaint).’” Gordon v. Kohl’s Dep’t
Stores, Inc., 119 F. Supp. 3d 356, 361 (E.D.Pa. 2015) (quoting Guidotti, 716 F.3d at 773-74)
(internal quotation marks omitted).
In evaluating a motion to compel arbitration under the Rule 56 standard, courts
“’may consider all affidavits, exhibits and discovery in the record.’” Quilloin v. Tenet
HealthSystem Philadelphia, Inc., 763 F.Supp. 2d 707, 715 (E.D.Pa. 2011) (quoting Hopkins v.
New Day Fin., 643 F.Supp. 2d 704, 713-14 (E.D.Pa. 2009) (citing Par-Knit Mills, Inc. v.
Stockbridge Fabrics Co., 636 F.2d 51, 54 & n. 9 (3d Cir.1980))), rev’d on other grounds, 673 F.3d
221 (2012). A motion to compel arbitration should be granted only where there is “‘no
genuine issue of fact concerning the formation of the agreement’” to arbitrate. Kirleis v.
Dickie, McCamey & Chilcote, 560 F.3d 156, 159 (3d Cir. 2009) (quoting Par-Knit Mills, 636
F.2d at 54). “In making this determination, the party opposing arbitration is entitled to
‘the benefit of all reasonable doubts and inferences that may arise.”’ Id.
Here Plaintiff submits that the standard for a Rule 12(b)(6) motion to dismiss
should be applied to Macson’s motion to compel arbitration. However, the Complaint
on its face fails to assert any allegations suggesting that the stated claims may be subject

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to an enforceable arbitration agreement.4 As such, the Court is unable to rule on the
merits of Macson’s motion merely on the factual allegations in the Complaint.
Moreover, Macson has relied on documents not referenced in the Complaint
which it attached as exhibits to its motion to compel arbitration. Macson submits that the
Court may take judicial notice of these documents because they were received from
Plaintiff’s counsel and are not subject to reasonable dispute, citing Fed. R. Evid. 201(b).
As such, Macson submits that the Court may consider these documents in deciding the
motion to compel arbitration, see Affidavit of Kevin Fiore, ECF No. 37-3 at 2, but does not
indicate which legal standard the Court should apply.
Although the Court “may consider an undisputedly authentic document that a
defendant attaches as an exhibit to a motion to dismiss if the plaintiff’s claims are based
on the document[,]” Pension Ben. Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192,
1196 (3dCir. 1993), here Plaintiff’s claims are not based on the documents Macson has
attached to its motion to compel arbitration. Therefore, the Court may not consider the
exhibits attached to its motion to compel arbitration under the Rule 12(b)(6) standard.
In response to Macson’s motion to compel arbitration and supporting exhibits,
Plaintiff has attached copies of the PLA, as well as copies of the relevant Trust
Agreements. See ECF Nos. 39-2 & 39-3.5 Moreover, both parties appear to be making

The Complaint does not refer to or rely upon any documents that indicate the claims
set forth in the Complaint are subject to arbitration.
5 The relevant Trust Agreements consist of the Trust Agreement and Pension Plan (ECF
No. 37-2) and the Laborers’ District Council of Western Pennsylvania Welfare Fund
Agreement and Declaration of Trust (ECF No. 39-3).
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legal arguments based on the PLA and Trust Agreements, and neither party has indicated
that discovery is necessary to decide the motion.

As such, the Court will decide the

motion to compel arbitration on the current record under the Rule 56 legal standard.
III.

DISCUSSION
The Federal Arbitration Act (“FAA”) “‘creates a body of federal substantive law

establishing and regulating the duty to honor an agreement to arbitrate . . ..’” 9 U.S.C. §
1, et seq.; John Hancock Mut. Life Ins. Co. v. Olick, 151 F.3d 132, 136 (3d Cir. 1998) (quoting
Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25 n.32 (1983)). The FAA
provides that a written arbitration provision in any contract “evidencing a transaction
involving commerce is valid and enforceable, except upon “such grounds as exist at law
or in equity for the revocation of any contract.” 9 U.S.C. § 2.6

In addition, the FAA

favors the enforcement of arbitration agreements, requiring that such agreement be
enforced to the same extent as other contracts. Harris v. Green Tree Fin. Corp., 183 F.3d
173, 178 (3d Cir. 1999). The FAA also provides that “[a] party aggrieved by the alleged
failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration
may petition any United States District Court . . . for an Order directing that such
arbitration proceed in the manner provided in the agreement.” 9 U.S.C. § 4.
The FAA clearly reflects a “strong policy in favor of the resolution of disputes
through arbitration.” Kirleis, 560 F.3d at 160 (quoting Alexander v. Anthony Int’l, L.P., 341
F.3d 256, 263 (3d Cir. 2003)). “[T]his presumption in favor of arbitration ‘does not apply
to the determination of whether there is a valid agreement to arbitrate between the
parties.’” Id. (quoting Fleetwood Enters., Inc. v. Gaskamp, 280 F.3d 1069, 1073 (5th Cir.
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2002)). See also Schneider Moving & Storage Co. v. Robbins, 466 U.S. 364, 372 (1984) (“the
presumption of arbitrability is not a proper rule of construction in determining whether
arbitration agreements between the union and the employer apply to disputes between
trustees and employers, even if those disputes raise questions of interpretation under the
collective-bargaining agreements.”)
As a threshold matter, the FAA requires the court to make the following
determinations before ordering arbitration: (1) whether the parties entered into a valid
arbitration agreement; and (2) whether the specific dispute falls within the scope of that
agreement. Olick, 151 F.3d at 136 (explaining that a “district court need only engage in a
limited review to ensure that the dispute is arbitrable”).
As to whether a valid and enforceable agreement to arbitrate exists between
Plaintiff and itself, Macson contends that the PLA is the controlling document in this
action and contains an alternative dispute resolution provision which governs any
disputes arising out of the interpretation or application of the PLA between the unions
and contractors. PLA, Art. VII, § 2 (ECF No. 26-2 at 11-12). Under that provision, if the
dispute is not resolved between the representative for the union, the contractor’s
representative, and the owner (school district) within 10 days, the matter must be referred
to binding arbitration before the designated arbitrator.

Id. at § 3.

The parties to the PLA are the West Jefferson Hills School District (“Owner”) and
the Pittsburgh Regional Building and Construction Trades Council (the ”Unions”). In
addition, all contractors hired to work on the Project were required to agree to execute
and become bound by the PLA. PLA, Art. I, § 1 (ECF No. 26-2 at 1). Macson executed a
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Letter of Assent in which it agreed to be bound by the PLA. See Letter of Assent, Ex. 1 to
Def.’s Reply Br. (ECF No. 43-1).
Macson submits that Plaintiff’s claims involve a dispute that arises out of the
interpretation or application of the PLA between the Unions and contractors, and
therefore, Plaintiff’s claims must be settled by the arbitration procedure set forth under
the PLA, despite the fact that Plaintiff is not a signatory to the PLA, because Plaintiff is
admittedly the union’s agent. For support, Macson quotes the following language from
Article XIII6 of the PLA, which provides:
Each contractor will also pay all required contributions in the
amounts required by Section 1 of this Article to the
established employee benefit funds that accrue to the direct
benefit of the employees (such as pension and annuity, health
and welfare, vacation, apprenticeship, training funds).. . . This
section does not apply to core employees unless any core
employee voluntarily elects to join and become a member of
any local union signatory to this Agreement, in which event
this Section shall immediately apply with respect to any such
core employee.
PLA, Art. XIII, § 2 (ECF No. 26-2 at 17). Macson argues that the $15,000 deficiency, which
Plaintiff contends is owed based on its audit, is comprised of unpaid contributions for the
employee benefits set forth in Section 2 above, and therefore, is subject to the ADR
provision in the PLA. Thus, Macson contends that because (1) it has not waived its right
to arbitration or the ADR procedures set forth in the PLA, (2) the parties have provided
for arbitration in their agreement that is the exclusive remedy, and (3) Plaintiff has failed

Macson refers to Article XII in paragraph 5 of its motion to compel arbitration but in
actuality it has quoted Article XIII of the PLA. The Court believes this to be an
inadvertent error.
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to comply with the PLA’s ADR provision, this Court lacks jurisdiction over the subject
matter of this dispute and this case should be dismissed.
However, Macson conveniently excludes the second sentence of Section 2 quoted
above, which provides that “[w]ith respect to contributions required in this Section to
Employee-Union jointly trusted funds, the contractor adopts and agrees to be bound by
the written terms of the legally established trust agreement specifying the detailed basis
on which payments are to be made into, and benefits paid out of such Trust Funds.” Id.
(ECF No. 26-2 at 17-18).

In the Court’s opinion, the excluded language is fatal to

Macson’s argument, especially since the trust agreements explicitly disclaim any
obligation on the part of the trustees to invoke or exhaust any grievance or arbitration
procedure contained in any CBA or other written agreement with an employer, in order
to compel an audit of the employer’s records or collect unpaid contributions.
In response to the motion to compel arbitration, Plaintiff has attached two trust
agreements which it claims are determinative of the outcome here:

(1) The Trust

Agreement and Pension Plan between the Master Builders Association of Western
Pennsylvania and the Laborers’ District Council of Western Pennsylvania (“Pension
Trust Agreement”); and (2) the Laborers’ District Council of Western Pennsylvania
Welfare Fund Agreement and Declaration of Trust (“Welfare Trust Agreement”). Exs. 2
& 3 to Pl.’s Opp’n to Def.’s Mot. to Compel Arb. (ECF Nos. 39-2 & 39-3). Article XII of
the Pension Trust Agreement sets forth the provisions governing the collection of
employer contributions or remittances. Article XII provides, among other things, that the
trustees shall have the right to determine, verify, or audit the amounts of contributions
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paid or payable by each employer and that each employer shall make available to the
trustees its payroll records and federal and state payroll tax returns.

Pension Trust

Agreement, Art. XII, § 5 (ECF No. 39-2 at 29). If an employer is determined to be
delinquent with its required contributions, the trustees have the power to take any steps
necessary to collect the delinquent contributions from the employer, including instituting
a legal action either in federal or Pennsylvania state court. Id. at §§ 8-9 (ECF No. 39-2 at
30). In addition, Article XII provides: “The Trustees shall not be obligated to invoke or
exhaust any grievance or arbitration procedure that might be contained in any Collective
Bargaining Agreement or other written agreement with an Employer in order to compel
an audit of the Employer’s records or to collect unpaid Contributions or other
remittances.” Id. at § 12 (ECF No. 39-2 at 30).
Similarly, the Welfare Trust Agreement contains provisions for the collection of
employer contributions that are almost identical to those contained in the Pension Trust
Agreement, including a provision disclaiming any obligation to invoke or exhaust any
grievance or arbitration procedures. See Welfare Trust Agreement, Art. VI, §§ 5, 8-9, 12
(ECF No. 39-3 at 8-10). Thus, the Trust Agreements, which Macson adopted and agreed
to by signing the Letter of Assent (ECF No. 43-1), clearly state that the trustees are not
required to exhaust any grievance or arbitration requirements in any written agreement
with the employer, which clearly encompasses the PLA.
In order to avoid the application of Article XIII, Macson raises two arguments,
Initially, Macson points to language that states that Section 2 does not apply to “core
employees,” and then argues that the employees for whom Plaintiff seeks unpaid
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contributions are “core employees” as defined under Article VI, Section 9 of the PLA.
Therefore, Macson submits that the issues raised by Plaintiff’s claims are subject to the
PLA’s arbitration provision. As Plaintiff points out, there are several flaws in Macson’s
argument. First, Macson’s suggested interpretation of Section 2 is overly broad and
unreasonable. Section 2 requires contractors to pay all required contributions (at the
prevailing wage and benefits rates according to job classification) to established
employee fringe benefit funds. Section 2 further states that “[t]his section does not
apply to core employees . . ..” To find, as Macson argues, that this latter statement
precludes the trustees from exercising their authority under the Trust Agreements to
bring legal action in federal court in order to conduct an audit and collect any
delinquent employer contributions, and instead subjects them to arbitration procedures
in an agreement to which they are not signatories, would be an unreasonable
interpretation of Section 2, especially when read in context with scope and purpose of
the PLA. Indeed, the preeminent purpose of the PLA is to promote efficiency in the
construction of the project, by providing a means for peaceful settlement of any and all
labor disputes and grievances between the Unions and Owner, or between the Unions and
contractors, and the avoidance of any strikes or work stoppage. See PLA, Art. I, § 1; Art.
2, § 2; Art. VII, §§ 1 & 2. See also Discussion infra at 15-16. Nowhere in the PLA,
including Article VII which sets forth the grievance and arbitration procedures, are
Plaintiff or the trustees mentioned by name, nor are they signatories to the PLA.
Rather, the Court finds that a reasonable interpretation of “[t]his section does not apply
to core employees” is simply that contractors do not have to make the required
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contributions to established employee fringe benefit funds for core employees.
Second, Macson’s argument assumes that the classification of its employees as core
employees is an undisputed, proven fact. However, the exhibits submitted by Macson
do not provide any evidence that its employees are core employees, and this fact is clearly
disputed by Plaintiff. In reality, Macson’s argument is nothing but a red herring, as it
attempts to divert the Court’s attention away from the real issue—whether there is an
agreement to arbitrate between Plaintiff and Macson—which brings the Court to the final
flaw in Macson’s argument.
Macson’s core employee argument goes to the substantive issue between it and
Plaintiff—whether Macson owed any unpaid, required contributions to employee fringe
benefit funds—not to whether an agreement to arbitrate exists in the first place. In this
respect, Macson has put the proverbial cart before the horse. Therefore, even if Macson
is not disputing the amounts owed for two union employees, and Plaintiff admits that no
contributions are owed for core employees, that does not make the issue of whether
Macson’s other employees are core employees arbitrable, because that issue is not
dispositive of whether an agreement to arbitrate exists in the first place.

In addition,

Macson’s position would require piecemeal adjudication of this case—the union
employees’ contributions are not subject to arbitration but the core employees’
contributions would be. That approach would be inconsistent with the intent of Congress
in passing the FAA.
Next, Macson submits that Article XIII, Section 2 fails to properly incorporate the
particular trust agreement(s) referenced therein, as Section 2 neither identified the
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specific trust agreements nor attached them to the PLA. Moreover, Macson submits that
the language of Section 2 should be interpreted to include only the Wage and Benefits
section of the trust agreements, “specifying the detailed basis on which payments are to
be paid into and paid out of such funds” (Def.’s Reply Br. at 9, ECF No. 43), not the entire
trust agreement, including its litigation provisions. Because the PLA failed to clearly
identify and therefore incorporate the trust agreements, Macson contends that the only
remaining dispute resolution provision is the arbitration provision in the PLA. Macson’s
argument, while perhaps superficially appealing, lacks substance.
The Court finds it highly unlikely that contractors in the construction industry
would not know which unions their trades people are affiliated with. Thus, a contractor
engaged in the construction business, like Macson, would likely have employed similar
trades people and made contributions to the same employee fringe benefit trust funds on
other construction projects.

Indeed, Macson’s president admitted that Macson made

contributions to the funds for both the Mt. Lebanon and Jefferson Hills Projects. Aff. of
David Macioce, ¶¶ 4-9 (ECF No. 43-2 at 2-3). In addition, the Court rejects Macson’s
argument that the language in Section 2 should be narrowly interpreted to include only
the Wage and Benefits section of the trust agreements. Section 2’s reference to the trust
agreements’ “written terms . . . specifying the detailed basis on which payments are to be
made into, and benefits paid out of, such Trust Funds” (emphasis added) can reasonably
be construed to include any efforts needed to collect such payments owed but not
contributed. More importantly, however, Macioce’s understanding of the meaning of
Art. XIII is not relevant to whether the Owner and Unions intended that Plaintiff would
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be bound by the arbitration provisions in the PLA. Macson did not participate in the
negotiations and drafting of the PLA but assented to its terms after its execution.
Finally, even if the court was to find that the trust agreements were not properly
incorporated by reference, as explained below, there is no language in the PLA that
subjects a claim brought by trust funds/trustees against a contractor to the arbitration
provisions in the PLA. In this regard, Macson’s argument attempts to divert the Court’s
attention away from the threshold issue of whether Plaintiff agreed to arbitrate its claims
against contractors for unpaid contributions to the trust funds.
To that end, the Court turns to the plain language of the PLA to determine whether
the parties to that agreement intended that the dispute between the Laborers’ Combined
Funds and/or its trustees and Macson over the audit and collection of Macson’s
contributions to employer-union fringe benefit plans would be subject to the grievance
and arbitration procedures set forth in Article VII of the PLA. An examination of the
relevant provisions of the PLA shows that it “applies exclusively to the construction work
within the scope of this Agreement to be performed and related to the [Thomas Jefferson
High School] Project[,] and its intended purpose is “to promote efficiency in the
construction of the project . . . , to provide for the peaceful settlement of any and all labor
disputes and grievances without strikes or lockouts, and to create uniformity in work
rules, . . ..” PLA, Art. I, § 1 (ECF No. 26-2 at 1). The PLA also provides that the Unions
and their members “agree not to initiate, authorize, sanction, participate in or condone,
or permit their members to engage in, any strike [or work stoppage or slowdown, or
disruptive activity of any kind]. PLA, Art. II, § 2 (ECF No. 26-2 at 3). The scope of the
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PLA “is specifically defined and limited to onsite construction work bid and contracted
for by, or otherwise under the direction and control of the Owner for this Project.” PLA,
Art. IV, § 1 (ECF No. 26-2 at 4).
In Article VII, the PLA sets forth the Grievance and Arbitration Procedure, which
Macson contends applies to Plaintiff’s claim. Section 1 sets forth the procedure where the
union has a “claim, dispute, question or other matter against the Owner under this
Agreement[.]” Clearly, this section is not applicable here as the Laborers’ Combined
Funds is not a union7 and, in any event, it has not brought suit against the Owner, West
Jefferson Hills School District. Section 2, upon which Macson relies, provides:
It is specifically agreed that in the event any disputes arise out
of the interpretation or application of this Agreement between
the unions and contractors, the same shall be settled by means
of the procedures set out herein. No such grievance shall be
recognized unless called in writing to the attention of the
parties to the Agreement (or to the attention of the union by
the contractor) within five (5) business days of the alleged
violation was committed.

“Under the pertinent provisions of both the Labor Management Relations Act and the
Employee Retirement Income Security Act of 1974, it is clear that trust funds for the
benefit of employees are separate entities apart from labor organizations.” NLRB v.
Constr. & Gen. Laborers’ Union Local 1140, 577 F.2d 16, 20 n. 6 (8th Cir. 1978). See also
Talarico v. United Furniture Workers Pension Fund A, 479 F. Supp. 1072, 1079 (D. Neb.
1979) (pension fund was a distinct and independent entity separate from the union and
its local, and as such, was not bound by agreements entered into by the local affiliates of
the union); Huge v. Overly, 445 F. Supp. 946, 947 (W.D.Pa. 1978) (trust fund constituted a
distinct and independent entity separate from the union); Zaucha v. Polar Water Co., 444
F. Supp. 602, 606 (W.D.Pa. 1978) (same) (citations omitted); Teamsters Local Union No.
688 v. Mizerany Warehouse, Inc., 413 F. Supp. 911, 913 (E.D. Mo. 1974) (noting that
pension fund was an entity separate from a labor union and holding that a release
agreement entered into by the union and the employer was not binding on the pension
fund).
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PLA, Art. VII, § 2 (ECF No. 26-2 at 11-12). The Court construes this section to require
that written notice of the grievance must be given to the parties to the PLA, or to the
attention of the union by the contractor, in order for a grievance between the unions and
contractors to move forward. As Plaintiff is neither a party to the PLA nor a union, it
would not receive notice of any grievance, and therefore, could not be expected to comply
with the arbitration provisions set forth Section 3 of Article VII.
Moreover, the plain language of Section 2 contemplates that the contractor will be
making a grievance against the union, since it requires that the grievance be brought to
the attention of the union by the contractor. Thus, even if the Laborers’ Combined Fund
was the Unions’ agent, which it is not,8 the situation here is distinguishable as the
Laborers’ Combined Funds brought suit against the contractor, and not vice versa.
Article XIII, Section 2 of the PLA sets forth the contractors’ obligations with regard
to contributions to “established employee benefit funds that accrue to the direct benefit
of the employees (such as pension and annuity, health and welfare, vacation,
apprenticeship, training funds).” PLA, Art. XIII, § 2 (ECF No. 26-2 at 17). That section
further provides: “With respect to contributions required in this Section to EmployeeUnion jointly trusted funds, the contractor adopts and agrees to be bound by the written
terms of the legally established trust agreement specifying the detailed basis on which

Plaintiff has admitted only that it is the collection agent for various fringe benefit funds,
including the Welfare & Pension Funds, and certain employer associations and unions,
including the Laborers’ District Council of Western Pennsylvania and its affiliated local
unions, the Construction Industry Advancement Program of Western Pennsylvania.
(Compl., ¶¶ 3-5.) See Discussion infra at 18-20.
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payments are to be made into, and benefits paid out of such Trust Funds.” Id. (ECF No.
26-2 at 17-18). By including this language in the PLA, it is clear that the Owner, Unions,
and Macson—by executing the Letter of Assent—did not intend for the PLA to govern
the collection of employer contributions to pension and welfare funds, but rather,
specifically agreed that a contractor’s contributions to trust funds would be governed by
the terms of the trust agreements.

Thus, the adoption of, and agreement to be bound

by, the trust agreements in Article XIII, and the lack of any reference to disputes between
the trust funds/trustees and contractors in Article VII governing grievances and
arbitration procedures, provides further evidence that the parties to the PLA did not
intend that the PLA arbitration provision would govern Plaintiff’s claim against Macson.
Moreover, since Plaintiff was not a signatory to the PLA, it could not agree to
arbitrate its claim against Macson. Nonetheless, Macson attempts to circumvent this fact
by arguing that Plaintiff was acting as the Unions’ agent. The Court does not find any
merit to this argument. Macson relies solely on Plaintiff’s statement in the Complaint
that it is the collection agent for various fringe benefit funds, to support its position that
Plaintiff has admitted its agency, presumably for all purposes, and therefore is bound to
arbitration. Macson’s position is not supported by applicable precedent.
Macson relies on Bouriez v. Carnegie Mellon University, 359 F.3d 292 (3d Cir. 2004)
for the proposition that common law principles of agency apply to arbitration
agreements and can support an obligation of an agent to be bound by an arbitration
provision. Although the court of appeals in Bouriez acknowledged that a “party . . . can
be compelled to arbitrate under an agreement, even if he or she did not sign that
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agreement if common law principles of agency and contract support such an obligation
on his or her part, id. at 294, it emphasized that “an agent can only be bound by the
agreements of his principal when that principal acted with the agent’s actual, implied,
or apparent authority[,]” id. (citing Bel-Ray Co. v. Chemrite, 181 F.3d 435, 445 (3d Cir.
1999)). In Bouriez, as in the case at bar, there is no evidence that the principal—here, the
Unions—was acting with implied, actual or apparent authority for its alleged agent—
here, Laborers’ Combined Funds—when the Unions signed the PLA. Indeed, the
Plaintiff’s only alleged agency relationship with certain employer associations and
unions is that of collection agent for contributions owed by employers for various
employee fringe benefit and pension plans. Moreover, Laborers’ Combined Funds
never became involved in the construction project which is the subject of the PLA, but
rather, attempted to audit and collect alleged unpaid contributions to various fringe
benefit funds from Macson, a contractor, sometime after execution of the PLA.
Macson, as the party asserting an agency relationship, bears the burden of proof
on that issue. Apex Fin. Corp., 369 A.2d at 485 (citing Girard Trust Bank v. Sweeney, 231
A.2d 407 (Pa. 1967)).9 Nothing in either the pleadings or the parties’ filings indicates
that Plaintiff serves as the Unions’ agent for any purpose other than for the limited

The party with the burden of establishing an agency relationship need not provide
direct proof of specific authority, as long as “’it can be inferred from the facts that at
least an implied intention to create the relationship of principal and agent existed.’”
Walton v. Johnson, 66 A.3d 782, 787 (Pa. Super. Ct. 2013) (quoting Commw. v. Maker, 716
A.2d 619, 623 (Pa. Super. Ct. 1998), aff’d per curiam 761 A.2d 1167 (Pa. 2000)). Agency
cannot be assumed, however, merely by showing that one person has done an act for
another. Id. (citing Ferry v. Fisher, 709 A.2d 399, 405 n. 5 (Pa. Super. Ct. 1998)).
9

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purpose of collecting employers’ contributions to various fringe benefit funds.
Plaintiff’s limited role as the Unions’ collection agent stands in stark contrast to the role
of the agent in Hinnant v. Am. Ingenuity, LLC, 554 F. Supp. 2d 576, 582 n. 4 (E.D.Pa.
2008), cited by Macson, whom the court held was subject to the arbitration agreement.
In that case, the agent signed the agreement containing an arbitration provision as
general manager of company, was sole owner and officer of the company, and his
alleged misconduct was integral to and coextensive with the alleged misconduct of the
company. Unlike the agent in Hinnant, here Plaintiff—the Unions’ alleged agent—is not
charged with any misconduct, and therefore, there can be no misconduct by Macson
that is integral to and coextensive with any misconduct by the Unions. Therefore, the
Court will not assume, merely from Plaintiff’s limited role as collection agent, that an
agency relationship existed between the Unions and Plaintiff. See Walton, 66 A.3d at
787.10

Similarly, Macson’s reliance on Alfarone v. Bernie Wolf Constr. Corp., 788 F.2d 76 (2d
Cirl 1986), and Central States Southeast & Southwest Areas Pension Fund v. Goggin Truck
Line, Inc., 140 F.R.D. 362, (N.D. Ill. 1991), is misplaced. Notwithstanding that neither
case is binding upon this Court, the cases are factually distinguishable, and therefore
inapposite. In Alfarone, the trust agreements contained a provision that if the trustees
were deadlocked as to whether to take any action to enforce payment of contributions
to the funds, the trustees must submit the dispute to arbitration. 788 F.2d at 78. By
contrast here, there is no such provision in trust agreements at issue. In Goggin, the
CBA specifically stated that the union, employer, or trustee may invoke ADR, and one of
the trustees participated in the negotiations of the CBA, and therefore the pension and
health funds could not claim ignorance of the arbitration provision. Unlike the CBA in
Goggin, the PLA does not mention the Laborers’ Combined Funds or their trustees in
the arbitration provision, and there is no evidence that any of the named trustees
participated in the negotiation of the PLA. As discussed above, the plain language of
the PLA does not manifest an intent to require the Plaintiff/trustees to arbitrate its
contribution claims. Thus, like the trustees in Schneider Moving & Storage Co. v. Robbins,
10

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As such, the Court concludes that no reasonable jury could find, on this record,
that the Unions were acting with implied, actual, or apparent authority for Plaintiff in
negotiating and agreeing to the terms of the PLA. Therefore, Macson’s attempt to show
that Plaintiff agreed to arbitrate disputes over the collection of unpaid contributions to
the trust funds based on an agency theory fails.
IV.

CONCLUSION
In light of the explicit incorporation by the PLA of the trust agreement provisions

governing employer/contractor contributions to trust funds, the lack of any explicit
language in Article VII of the PLA making the grievance and arbitration procedure
applicable to non-party trust funds, and the lack of any evidence to establish that Plaintiff
was the agent of the unions for any purpose other than collecting employers’
contributions to various fringe benefit funds, the Court concludes that the PLA does not
govern Plaintiff’s claim against Macson. Accordingly, the Court finds that a valid and
enforceable agreement to arbitrate does not exist between Plaintiff and Macson.
Therefore, the Court will deny Defendant’s motion to compel arbitration. An appropriate
order will follow.
Dated: April 30, 2018

BY THE COURT:

/s Lisa Pupo Lenihan
LISA PUPO LENIHAN
United States Magistrate Judge

Plaintiff was not required to arbitrate its contribution claim against Macson before
bringing this suit in federal court under Section 502 of ERISA. 466 U.S. 364, 376 (1984).
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