Martin v. Benesh & Bruns, Inc.

• Citation: 532 F. Supp. 408
• Decision Date: 06 January 1982
• Docket Number: No. 80 C 1994.,80 C 1994.
• Court: U.S. District Court — Northern District of Illinois
• Parties: William F. MARTIN, et al., Plaintiffs, v. BENESH & BRUNS, INC., a corporation, Defendant.

532 F. Supp. 408

William F. MARTIN, et al., Plaintiffs, v. BENESH & BRUNS, INC., a corporation, Defendant.

No. 80 C 1994.

United States District Court, N. D. Illinois, E. D.

January 6, 1982.

Bernard M. Baum, Walter J. Reum, Chicago, Ill., for plaintiffs.

Gerard C. Smetana, Chicago, Ill., for defendant.

MEMORANDUM OPINION

MARSHALL, District Judge.

In this action, plaintiffs seek to compel defendant Benesh & Bruns, Inc. to make the contributions to various pension and welfare funds of the International Union of Operating Engineers, Local 150, which defendant allegedly contracted to make. Defendant claims it need not honor the contract, since the union in question did not enjoy the support of a majority of defendant's employees.

For the purposes of this motion, the relevant facts are as follows. Defendant was party to a contract between the I.U.O.E., Local 150, and certain employer associations. The contract required the defendant to make contributions to the union's Welfare Fund, Pension Trust Fund, Apprenticeship Fund, and Vacation Savings Fund. Defendant has not made the required contributions. As a result, plaintiffs¹ filed suit to recover the amounts due and owing on the contract. This court has jurisdiction under § 301(a) of the Labor Management Relations Act, 29 U.S.C. § 185(a) (1976), and § 502(f) of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1132(f) (1976).

Defendant moved for summary judgment on the ground, inter alia, that the union did not have the support of a majority of defendant's employees, and therefore could not enforce the contract. In an opinion dated September 22, 1981, this court ruled that the alleged nonmajority status of the union was not a defense to this action.² Defendant has moved the court to reconsider its earlier ruling.

In suits under § 301, a federal common law of labor relations is applied. Textile Workers Union v. Lincoln Mills of Alabama, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957). This common law is formulated by reference to § 301's ultimate purpose of furthering the goals of national labor policy. Id. at 456-57, 77 S.Ct. at 917-18. One of the fundamental goals of national labor policy is protecting the freedom of choice of employees. The National Labor Relations Act is intended to protect the principle that the majority of employees should be free to decide whether they wish to be represented by a union, and, if so, which union will be chosen to provide representation. In order to protect the will of the majority, the Act makes it an unfair labor practice for an employer to sign a labor contract with a nonmajority union. See International Ladies' Garment Workers' Union v. NLRB, 366 U.S. 731, 737-38, 81 S.Ct. 1603, 1607, 6 L.Ed.2d 762 (1961). This result is dictated by the "generally prevailing statutory policy that a union should not purport to act as the collective bargaining agent for all unit employees, and may not be recognized as such, unless it is the voice of the majority of the employees in the unit." NLRB v. Local Union No. 103, International Association of Bridge, Structural & Ornamental Iron Workers, 434 U.S. 335, 344, 98 S.Ct. 651, 657, 54 L.Ed.2d 586 (1978) hereinafter Higdon. See Connell Construction Co. v. Plumbers & Steamfitters Union, Local 100, 421 U.S. 616, 632-33, 95 S.Ct. 1830, 1839-40, 44 L.Ed.2d 418 (1975).

However, § 8(f) of the National Labor Relations Act, 29 U.S.C. § 158(f) (1976), is an exception to the general rule requiring majority representation. Higdon, 434 U.S. at 345, 98 S.Ct. at 657; Connell, 421 U.S. at 632, 95 S.Ct. at 1839. Section 8(f) provides:

It shall not be an unfair labor practice under subsections (a) and (b) of this section for an employer engaged primarily in the building and construction industry to make an agreement covering employees engaged (or who, upon their employment, will be engaged) in the building and construction industry with a labor organization of which building and construction employees are members (not established, maintained, or assisted by any action defined in subsection (a) of this section as an unfair labor practice) because (1) the majority status of such labor organization has not been established under the provisions of section 159 of this title prior to the making of such agreement, or (2) such agreement requires as a condition of employment, membership in such labor organization after the seventh day following the beginning of such employment or the effective date of the agreement, whichever is later, or (3) such agreement requires the employer to notify such labor organization of opportunities for employment with such employer, or gives such labor organization an opportunity to refer qualified applicants for such employment, or (4) such agreement specifies minimum training or experience qualifications for employment or provides for priority in opportunities for employment based upon length of service with such employer, in the industry or in the particular geographical area: Provided, That nothing in this subsection shall set aside the final proviso to subsection (a)(3) of this section relating to invalid dismissals pursuant to union security clauses: Provided further, That any agreement which would be invalid, but for clause (1) of this subsection, shall not be a bar to a petition filed pursuant to section 159(c) or 159(e) of this title.

The exception created by § 8(f) allows employers and nonmajority unions to sign contracts, which are commonly referred to as "pre-hire agreements." However, the exception is a limited one. In Higdon, the Supreme Court held that union picketing aimed at requiring an employer to adhere to a pre-hire contract was an unfair labor practice under § 8(b)(7)(C) of the Act, 29 U.S.C. § 158(b)(7)(C) (1976) (prohibiting picketing where an object thereof is forcing an employer to bargain with or recognize a union). Defendant concedes that the holding of Higdon does not reach this case, since Higdon was decided under a statute which prohibits certain forms of picketing, and no picketing is present in this case. However, defendant argues that the free choice rationale of Higdon reaches attempts to enforce contracts made with nonmajority unions under § 301. This is a question on which courts have split.³ It is the view of this court that national labor policy favors the enforcement of pre-hire contracts. Therefore, the motion to reconsider is denied.

Our analysis is essentially in two parts. First, in suits to enforce pre-hire agreements, there is present a strong national labor policy favoring enforcement of labor contracts, which was not at issue in Higdon. Second, we find that the national labor policy favoring free choice which was at the core of Higdon is not present in this case.

It is beyond doubt that there is a strong national labor policy favoring the enforcement of labor contracts and the removal of defenses to enforcement. See Lewis v. Benedict Coal Co., 361 U.S. 459, 80 S.Ct. 489, 4 L.Ed.2d 442 (1960); Textile Workers Union of Lincoln Mills of Alabama, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957); Pennington v. United Mine Workers, 325 F.2d 804, 819 (6th Cir. 1963), rev'd on other grounds, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965); Trustees of the Atlanta Iron Workers Local 387 Pension Fund v. Southern Stress Wire Corp., 509 F.Supp. 1097, 1100-01 (N.D.Ga.1981). Moreover, basic fairness dictates that these contracts should be enforced; employers should not be allowed to break their promises with impunity. See Contractors, Laborers, Teamsters & Engineers Health & Welfare Fund v. Associated Wrecking Co., 638 F.2d 1128, 1134 (8th Cir. 1980) ("An employer who accepts the benefits of such an agreement must also honor the obligations under that agreement").⁴ The strength of the national labor policy favoring enforcement of contracts is heightened in this case for two reasons. First, this case involves contributions to various welfare funds, and the national labor policy favoring enforcement of contracts applies "with even greater force to protecting the interests of beneficiaries of the welfare fund, many of whom may be retired, or may be dependent ...." Lewis v. Benedict Coal Co., 361 U.S. at 470, 80 S.Ct. at 496. Second, the policy is especially relevant here because of the risk of unjust enrichment. If the defense of nonmajority status is allowed, defendant will be relieved of having to pay money due and owing to the various pension funds. However, this money is not rightfully the defendant's. Rather, these "payments are really another form of compensation to the employees, and as such the obligation to pay royalty might be thought to be incorporated into the individual employment contracts." Id. at 469, 80 S.Ct. at 495, see Huge v. Long's Hauling Co., 590 F.2d 457, 464-65 (3d Cir. 1978) (Adams, J., concurring); Lewis v. Seanor Coal Co., 382 F.2d 437, 441 (3d Cir. 1967), cert. denied, 390 U.S. 947, 88 S.Ct. 1035, 19 L.Ed.2d 1137 (1968). Defendant's obligation was really to its individual employees, who were the ultimate beneficiaries of the contract, and it is unfair that they should lose past compensation due and owing because of the union's status.

Higdon simply did not involve these considerations. There, the Court was addressing the question of whether picketing to enforce a pre-hire agreement by a minority union was the sort of coercion forbidden by § 8(b)(7)(C). The national labor policy favoring enforcement of contracts was not at issue, because Higdon was not an enforcement action. Higdon was a case about picketing, which Congress has specifically labelled as unduly coercive in § 8(b)(7)(C). Higdon was decided in a context very different from the context of this case. See Associated Wrecking, 638 F.2d at 1132-33; Southern Stress, 509 F.Supp. at 1103-04; Eastern District Council of the United Brotherhood of Carpenters & Joiners of America v. Blake Construction Co., 457 F.Supp. 825, 829 (E.D.Va.1978).⁵...