CARPENTERS AMENDED, ETC. v. Cope & Smith, Inc.
| Decision Date | 08 July 1982 |
| Docket Number | Civ. A. No. CA-3-81-0118-D. |
| Citation | 544 F. Supp. 442 |
| Parties | The CARPENTERS AMENDED AND RESTATED HEALTH BENEFIT FUND, and its Trustees; the North Texas Carpenters Apprentice and Training Fund, and its Trustees; the North Texas Carpenters Amended and Restated Pension Trust, and its Trustees, Plaintiffs, v. COPE & SMITH, INC., Defendants. |
| Court | U.S. District Court — Northern District of Texas |
Jerry L. Carlton, Dallas, Tex., for plaintiffs.
Steven M. Carsey, Fort Worth, Tex., for defendants.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
This action having been heard by the Court without a jury, the Court hereby makes the following findings of fact and conclusions of law.
1. Plaintiffs, Carpenters Amended and Restated Health Benefit Fund ("the Trustees"), have brought this action pursuant to § 301 of the Labor Management Relations Act of 1947 ("LMRA"), as amended, 29 U.S.C. § 185(a), and § 502(e) of the Employees Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132(e).
2. This action arises out of a short form agreement entered into in 1972 by Defendant Cope & Smith ("the Employer") and the Carpenters District Council of North Central Texas, United Brotherhood of Carpenters & Joiners of America ("CDC"). Pursuant to this short form agreement, the Employer, who performs construction contracts as a general contractor, agreed to abide by the terms of a collective bargaining agreement between the North Texas Contractors Association ("NTCA") and the CDC. The Employer agreed to pay stipulated rates per hour for each hour worked by certain employees covered by the agreement and contribute to certain welfare funds, including a Health and Welfare Fund, an Apprenticeship Contribution Fund, and a Pension Fund. The collective bargaining agreement covered employees, union and non-union, who performed "carpenters" work within specified geographical areas.
3. The Employer entered into the 1972 short form agreement because representatives of the CDC threatened to shut down one of the Employer's jobsites if the Employer did not sign.
4. The Employer did not read the contents of the collective bargaining agreement prior to the institution of this lawsuit. It was the usual practice of the CDC to send to an employer copies of any collective bargaining agreement entered into by the CDC and NTCA.
5. At the time the Employer executed the 1972 short form agreement, it had an unstable work force consisting primarily of laborers or carpenters hired to work on a specific job rather than employees who were kept on the Employer's payroll and assigned to different jobs as they became available.
6. The Trustees failed to establish that a majority of the Employer's carpenter employees were represented by or sought to be represented by the carpenters' union, the CDC, at any time between 1972 and 1980.
7. The Employer never assigned its bargaining rights to the NTCA as a multi-employer bargaining representative on behalf of the Employer for purposes of dealing with the CDC.
8. The termination clause of the 1972 short form agreement provides in relevant part:
In the event that either party to this Agreement desires to cancel this Agreement at its expiration, it is agreed that such party shall notify the other party in writing not less than ninety (90) days prior to the expiration date. If such notice is not given by either party as outlined, this Agreement shall remain in force from year to year and shall be subject to the terms and agreements as negotiated with the North Texas Contractors Association.
9. The collective bargaining agreement between the CDC and NTCA, as referenced in the 1972 short form agreement, was by its own terms effective through April 30, 1973. Subsequent collective bargaining agreements were executed for 1973-75, 1975-78, and 1978-81.
10. In 1975, the members of the Carpenters Union went on strike. Without signing any collective bargaining agreement, the Employer agreed to abide by the wages to be established in the forthcoming 1975 collective bargaining agreement between the NTCA and the CDC. The Employer made this agreement with the CDC representative in order to prevent a disruption in work by union employees who would otherwise strike on the Employer's jobsite. The Employer also agreed to pay retroactively the wages and benefits agreed upon in the 1975 collective bargaining agreement.
11. Prior to the execution of the 1972 short form agreement, the Employer made contributions of health and pension benefits on behalf of its union employees. These funds, however, were not paid to the Trustees in this action.
12. After the execution of the 1972 short form agreement, the Employer made contributions to the Trustees' funds on behalf of its employees who were members of the carpenters' union. The Trustees demonstrated that the Employer filed reports indicating it made contributions from January 1974- May 1978 on behalf of its carpenters who were union employees. In addition, the Employer made the following certification in its 1974-78 contributions report:
We certify that to the best of our knowledge and belief this report is a true and complete report of the hours worked by employees represented in collective bargaining by the Local Union shown above and such other employees as may be approved by the Board of Trustees but in no event includes any other employees, owners, partners, or proprietors of this form. We hereby adopt the Texas Carpenters Health Benefit Fund, agree to be bound by all the terms, provisions, limitations and conditions of said Trust, agree that Employer Trustees appointed under the Trust shall represent the undersigned, and agree to contribute the sums stipulated in the Agreement for each hour worked by carpenters who are employed by the undersigned and represented in collective bargaining by a Local Union for payroll time accumulated within the territorial jurisdiction of the Local from this date until expiration of the contract.
13. The Employer has never made contributions on behalf of its non-union employees.
14. The Employer took into account the fact that it did not make contributions for non-union carpenters when it bid jobs in 1978-80. It has calculated its costs of labor and profit margins on contracts it has performed without including the extra costs associated with the trust fund contributions in behalf of non-union employees.
15. After May 1978, the Employer continued to make contributions on behalf of its union employees, but the Employer paid the contributions directly to some of its union employees. The direct payments were the result of certain agreements entered into by the Employer and these employees.
16. The Trustees seek to recover from the Employer unpaid contributions for the period between January 1, 1978 — December 31, 1980, together with interest thereon, audit fees and attorneys' fees.
17. As part of its regular business procedures, the CDC keeps records of various employers who are late in making trust fund contributions to the CDC. Part of the CDC's information is derived from stewards who are present at all times on contractors' job sites; the stewards maintain records of all employees on a particular job site. The steward then submits the list of employees to the CDC, and the CDC checks the steward's list against the CDC's records of contributions paid by the employer. Any discrepancy with respect to employees and specifically non-union employees whose names do not appear on both the steward's and CDC's lists will result in a CDC audit.
1. The Court has jurisdiction of this action pursuant to § 301 of the LMRA, 29 U.S.C. § 185(a) and § 502(e) of the ERISA, 29 U.S.C. § 1132(e).
2. The Trustees are parties in interest and fiduciaries within the meaning of ERISA, 29 U.S.C. § 1002. The Trustees are third party beneficiaries to the 1972 short form agreement. See Huge v. Long's Hauling Co., Inc., 590 F.2d 457, 459 (3d Cir. 1978), cert. denied, 442 U.S. 918, 99 S.Ct. 2840, 61 L.Ed.2d 285 (1979).
3. The Employer was and is an employer in an industry affecting commerce and a party in interest within the meaning of ERISA, 29 U.S.C. §§ 1002, 1132.
4. The Employer's principal defense rests on the contention that the 1972 short form agreement and its referenced collective bargaining agreement(s) constitute an unenforceable prehire agreement. Section 8(f) of the National Labor Relations Act ("NLRA"), 29 U.S.C. § 158(f)1 permits an employer in the construction industry to negotiate a collective bargaining agreement with a labor organization before the organization establishes majority status pursuant to § 9 of the NLRA, 29 U.S.C. § 159. Section 8(f) is an exception to the national labor law scheme which requires that a labor organization be designated or selected for the purposes of collective bargaining by a majority of the employees in the unit the organization seeks to represent; thus, an employer may not bargain or enter into a collective bargaining agreement with a minority union, even if the parties in good faith believe that the union represents a majority of the employees. International Ladies' Garment Workers' Union v. NLRB, 366 U.S. 731, 738-39, 81 S.Ct. 1603, 1607-08, 6 L.Ed.2d 762 (1961). Congress acknowledged that an exception was necessary for the construction industry, because the short periods of actual employment by specific employers inherent in the construction industry make impracticable representation elections. Todd v. Jim McNeff, Inc., 667 F.2d 800, 802 (9th Cir. 1982); Trustees of Atlanta Iron Workers Local 387 Pension Fund v. Southern Stress Wire Co., 509 F.Supp. 1097, 1101-02 (N.D.Ga.1981). The prehire agreement established by § 8(f) was enacted to accommodate the needs of the employer, the employee, and the union, and it may be signed before a majority of workers selects its union representative. The prehire agreement assures the employer it will have a...
To continue reading
Request your trial
-
Carpenters Amended & Restated Health Ben. Fund v. Cope & Smith, Inc.
...Amended & Restated Health Benefit Fund v. Cope & Smith, Inc. 82-1419 UNITED STATES COURT OF APPEALS Fifth Circuit 7/25/83 N.D.Tex., 544 F.Supp. 442 * Fed.R.App. P. 34(a); 5th Cir. R. 34.2. ...