73 F.3d 727 (7th Cir. 1996), 95-1936, Central States, Southeast and Southwest Areas Pension Fund v. Kroger Co.

Docket Nº:95-1936.
Citation:73 F.3d 727
Party Name:CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, trustee, Plaintiffs-Appellants, v. The KROGER CO., an Ohio corporation, Defendant-Appellee.
Case Date:January 10, 1996
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

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73 F.3d 727 (7th Cir. 1996)


and Howard McDougall, trustee, Plaintiffs-Appellants,


The KROGER CO., an Ohio corporation, Defendant-Appellee.

No. 95-1936.

United States Court of Appeals, Seventh Circuit

January 10, 1996

Argued Sept. 28, 1995.

Rehearing and Suggestion for Rehearing En Banc Denied March 1, 1996.

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Albert M. Madden (argued), Robert A. Coco, Patrick J. Connor, Central States, Southeast & Southwest Area Pension Fund, Rosemont, IL, for Plaintiffs-Appellants.

Kirk D. Messmer, Jeffrey L. Madoff (argued), Beth E. Koch, Matkov, Salzman, Madoff & Gunn, Chicago, IL, for Defendant-Appellee.

Before WOOD, Jr., COFFEY and RIPPLE, Circuit Judges.

RIPPLE, Circuit Judge.

Central States, Southeast and Southwest Areas Pension Fund ("the Fund" or "Central States") brought this action under Sec. 515 of ERISA, 29 U.S.C. Sec. 1145, against the Kroger Company ("Kroger"). The Fund claims that Kroger has not met its obligation to contribute to the Fund on behalf of certain Kroger employees. Kroger's obligation to make pension contributions is defined by the terms of the Collective Bargaining Agreement ("CBA") negotiated between Kroger and International Brotherhood of Teamsters Local 528. The district court examined the CBA and determined that, under its terms, Kroger was not obligated to make the pension contributions the Fund claimed were due. The district court, therefore, granted Kroger's motion for summary judgment. Central States appeals that judgment. For

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the reasons set forth in the following opinion, we reverse the judgment of the district court, and remand the case for proceedings consistent with this opinion.



  1. Facts

    Kroger is a national grocery store chain. It operates a distribution and warehouse center in Atlanta. The warehouse employees and truck drivers who work at the Atlanta facility are represented by the Local 528 chapter of the International Brotherhood of Teamsters. Their employment relationship with Kroger is governed by a collective bargaining agreement. The CBA consists of two parts: first, a Master Agreement, which was negotiated by Kroger and the Teamsters and covers several facilities nationwide in addition to the Atlanta facility; second, a Local Supplement, which applies to the Atlanta facility alone.

    The Master Agreement of the CBA describes, in addition to regular employees, two other types of employees: "probationary" and "casual." Probationary employees are defined as new employees who work on a trial basis for thirty to sixty days and may be discharged at the employer's discretion. After the trial period ends, however, probationary employees become regular employees and "shall be placed on the regular seniority list." CBA Sec. 2.2. Casual employees, in contrast, are "hired on a short-term basis." CBA Sec. 2.3. They are permitted only at locations with a past practice of hiring casuals, and the total number of casuals is limited to ten percent of the work force. Most importantly, the CBA provides that casuals do not receive fringe benefits or accrue seniority. CBA Sec. 2.3. Under the terms of the Master Agreement, Kroger was obligated to make pension contributions on behalf of all employees who had worked for thirty days or more and who had been placed on the regular seniority list. CBA Sec. 31.1. The effect of this provision is that Kroger is required to make contribution to the Fund on behalf of all probationary employees who had completed their trial period, but not on behalf of casual employees.

    The Local Supplement uses different terminology to describe the workers--a situation which the district court described as creating "confusion." Instead of the distinction between regular, probationary, and casual employees found in the Master Agreement, the Local Supplement refers to "full-time" and "part-time" employees. Neither of these terms is defined. However, two characteristics of part-time employment emerge from the Local Supplement. Part-time employees are permitted a limited form of seniority: They may accrue seniority "only among other part-time employees." CBA II.D.2. They also must follow certain job-bidding procedures. When a permanent job becomes available, the most senior part-timer must bid on the position. Failure to bid or to bid successfully results in termination from Kroger.

    Prior to 1977, all newly hired warehouse employees were designated as probationary. In 1977, Kroger changed that designation and classified all newly hired warehouse employees as casuals. Many of the employees hired as casuals remained with Kroger for a lengthy period of time and eventually became regular employees; once an employee became a regular employee and was placed on the regular seniority list, Kroger made pension contributions on behalf of the employee to Central States. However, as long as the employee was designated as a casual--often a...

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