Markt v. Ro-Mart, Inc.

• Decision Date: 01 June 1979
• Docket Number: No. C78-1007 AJZ.,C78-1007 AJZ.
• Citation: 471 F. Supp. 1292
• Court: U.S. District Court — Northern District of California
• Parties: Ray MARKT, Trustee, on behalf of himself and James Bigelow, et al., Plaintiffs, v. RO-MART, INC., and Fred Mantezani, Individually and doing business as 39 Main Street, Defendants.

471 F. Supp. 1292

Ray MARKT, Trustee, on behalf of himself and James Bigelow, et al., Plaintiffs, v. RO-MART, INC., and Fred Mantezani, Individually and doing business as 39 Main Street, Defendants.

No. C78-1007 AJZ.

United States District Court, N. D. California.

June 1, 1979.

COPYRIGHT MATERIAL OMITTED

Leonard & Patsey, John A. Toker, San Francisco, Cal., for plaintiffs.

William B. Peavey, Jr., San Francisco, Cal., for defendants.

MEMORANDUM OPINION

ZIRPOLI, District Judge.

Plaintiffs, trustees of a health and welfare fund and a pension fund for the Bartenders and Culinary Workers Union Local 126, filed this suit to collect allegedly unpaid contributions from defendant Ro-Mant, Inc., erroneously sued as "Ro-Mart, Inc.," a corporation that operates a tavern known as "39 Main Street" in Tiburon, California. Jurisdiction is based upon section 301 of the Labor Management Relations Act, 29 U.S.C. section 185. The case was tried to the court, post-trial memoranda were filed, and the case was submitted. The court finds for the plaintiff and orders relief as hereinafter designated.

The Bartenders and Culinary Workers Union Local 126 ("Union") entered into a collective bargaining agreement effective July 1, 1974, with the Marin County Restaurant and Tavern Owners Association, Inc. ("Association"). This agreement was admitted into evidence as Plaintiffs' Exhibit 1. Section 23 of that agreement provides for the Health and Welfare trust, and specifically states in section 23(a):

The plan will be financed by Employer contributions to a Trust Fund. Said contributions shall be paid by each Employer beginning July 1, 1962, at the rate of, and in no case less than, fifty-three cents ($.53) per shift for each shift worked by each and every employee during the current month. . . .

Subsection (d) of section 23 further provides:

All employees shall be paid for, at the applicable rate according to subparagraph (a) of this Section, immediately upon their employment and shall be eligible and covered in accordance with the Group Insurance Plan.

Section 25 provides for a pension plan trust, as follows:

Effective July 1, 1962, the Employer shall contribute twenty-five cents ($.25) per shift for each employee, to provide a pension plan. . . .

Defendant Ro-Mant, Inc. was not a party to this agreement when it was originally signed in 1974, as Ro-Mant did not acquire 39 Main Street until 1975. When Ro-Mant took over the tavern, it entered into a Memorandum Agreement with the Union. Section 1 of the Memorandum Agreement recognized the Union as the sole collective bargaining agent of its employees. Section 2(a) was an agreement to apply the terms of the collective bargaining agreement between the Union and the Association as they related to wages, hours, and working conditions, "including . . . the health and welfare and pension plans and contributions thereto, of all the employees employed by the Employer." Section 2(b) states that the employer agrees to be bound by the terms of the trust agreements. The Memorandum Agreement was admitted into evidence as Plaintiffs' Exhibit 2. Plaintiffs' Exhibit 3, also in evidence, is the trust agreement itself.

It is undisputed that defendant has made contributions to the trust funds on behalf of each Union member employed. It is also undisputed that defendant has not made contributions on behalf of workers who were not at the time members of the Union, save some made by clerical oversight. The dispute in this case is whether or not contributions are due on behalf of employees who are not also members of the Union. It is clear that such contributions are required.

The defendant offers three arguments in support of the position that payments are required only on behalf of workers who are union members. First, it argues that the contracts can be read to so state. Second, it argues that even if the contracts need not be read this way, there is sufficient ambiguity to permit the introduction of parol evidence that will support defendant's interpretation. Third, defendant argues that even if the contracts require payments on behalf of all workers, the plaintiffs are estopped to make such a claim at this time. Each argument must be rejected.

1. Construction of the Agreements

Defendant acknowledges that if section 23(a), requiring contributions on behalf of "each and every employee," were read in isolation from the remainder of the agreement, there would be no question that defendant owed contributions on behalf of non-union as well as union employees. Defendant argues, however, that section 23 must be read in light of other provisions of the agreements, particularly section 3(a) of the collective bargaining agreement between the Association and the Union, incorporated by reference into the Memorandum Agreement signed by defendant. That section provides:

SECTION 3. UNION SHOP AND HIRING:

(a) It shall be a condition of employment that all employees of the Employer covered by this Agreement who are members of the Union in good standing on the effective date of this Agreement shall remain members in good standing, and those who are not members on the effective date of this Agreement shall, on or after the thirtieth (30th) day following the effective date of this Agreement, become and remain members in good standing in the Union. It shall also be a condition of employment that all employees covered by this Agreement and hired on or after its effective date shall, on or after the thirtieth (30th) day following the beginning of such employment, become and remain members in good standing in the Union.

Defendant argues that this provision defines the term "employee" as it is used throughout the balance of the collective bargaining agreement, and that this definition limits the term to include only members of the Union.

A careful reading of this provision reveals that it neither defines terms nor limits the term "employee" to any meaning other than that typically expected—one who performs work for compensation. The language of section 3(a) indicates that the paragraph has substantive content: it describes the requirement that the Employer not retain in its hire for more than thirty days persons who do not become and remain members of the Union. Such a "Union Shop" clause is a common feature of collective bargaining agreements and is present not to assist in interpreting the subsequent provisions of the agreement, but to define the interrelationship between the union, the employer, and the employees.

Furthermore, even if some delineation of terms can be derived from section 3(a), it cannot be the interpretation that defendant seeks. The union shop clause finds its origin in section 8(a)(3) of the National Labor Relations Act, 29 U.S.C. section 158(a)(3), wherein Congress permitted one exception to the rule that an employer may not encourage or discourage union membership, that being that an employer may enter into a collective bargaining agreement providing that membership may be required after the thirtieth day of employment, and permitting termination for non-payment of dues. This has been interpreted to mean that an employee may not be fired where union dues have been tendered, even though the employee otherwise declines to become affiliated with the union. National Labor Relations Board v. Hershey Foods Corp., 513 F.2d 1083 (9th Cir. 1975). Thus, collective bargaining agreements typically include a union shop clause in order to guarantee payment of union dues; the language of the clause notwithstanding, union membership may not be required.

The union shop clause in section 3(a) therefore does not define "employee" and in any event does not require that anyone become a union member. Rather, the clause requires that union dues be paid by persons who were (1) members of the union at the effective date of the agreement; (2) not members at the effective date of the agreement, but continued to work for the employer for thirty days after the effective date of the contract; or (3) hired after the effective date of the contract and thereafter worked for thirty days. No phrase of section 3(a) can be read as excluding from the class of "employees" those who were not union members, or those who had accrued less than thirty days' service. Furthermore, the language of the section would be meaningless if "employees" were only union members, for the section requires that "employees covered by this Agreement . . . shall, on or after the thirtieth (30th) day following the beginning of such employment, become and remain members . . . of the Union." If all "employees" were union members by definition, this phrase would be meaningless.

Other documents support plaintiffs' position that "employee" is used in the usual sense rather than in the limited manner for which defendant argues. The Trust Agreement, made binding upon defendant by section 23 of the collective bargaining agreement between the Association and the Union, and by section 2(b) of the Memorandum Agreement, does contain a definition clause. Section I, subsection C, of the Trust Agreement defines "employee" as follows:

The term "employee" as used in this agreement means 1 members of the said Union and/or 2 employees who are eligible under union rules and regulations for insurance in accordance with this Declaration of Trust and Trust Agreement, and 3 employees who perform, for any employer who is a party to the collective bargaining agreement with the Union, work which is under the jurisdiction of the Union, and 4 any persons who are eligible under the rules adopted by the trustees as provided in the insurance contracts providing group insurance hereunder.

Plaintiffs claim that the third category, that of persons performing work under the jurisdiction of the union, encompasses workers who have not yet completed their thirtieth day of employment, and hence who are not yet union members. The court agrees with this interpretation. While it is certainly...