Central States et al v. Kroger Co.

• Decision Date: 02 February 2001
• Docket Number: 99-3014,Nos. 99-2257,s. 99-2257
• Citation: 226 F.3d 903
• Parties: (7th Cir. 2000) CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and HOWARD MCDOUGALL, Plaintiffs-Appellees, v. KROGER COMPANY, Defendant-Appellant
• Court: U.S. Court of Appeals — Seventh Circuit

Page 903

226 F.3d 903 (7th Cir. 2000)

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and HOWARD MCDOUGALL, Plaintiffs-Appellees, v. KROGER COMPANY, Defendant-Appellant.

Nos. 99-2257, 99-3014

In the United States Court of Appeals For the Seventh Circuit

Argued February 17, 2000

Decided September 15, 2000

As Corrected February 2, 2001

NOTE: ALSO SEE OPINION AT 241 F.3d 842.

Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. No. 93 C 3669--John F. Grady, Judge. [Copyrighted Material Omitted]

[Copyrighted Material Omitted] Before HARLINGTON WOOD, JR., COFFEY and RIPPLE, Circuit Judges.

RIPPLE, Circuit Judge.

Central States, Southeast and Southwest Areas Pension Fund (the "Fund") brought this action under sec. 515 of ERISA, 29 U.S.C. sec. 1145, against the Kroger Co. ("Kroger") to recover delinquent pension contributions for certain employees at Kroger's warehouse center in Atlanta, Georgia. Kroger's obligation to make these contributions is defined by a Collective Bargaining Agreement ("CBA") negotiated by Kroger and the union representing the Atlanta employees.

This is a successive appeal; familiarity with our first opinion is assumed. See Central States, Southeast & Southwest Areas Pension Fund v. Kroger Co., 73 F.3d 727 (7th Cir. 1996) ("Kroger I"). In that opinion, we held that the meaning of "part-time," as used in the CBA, was ambiguous. We explained that "part-time" could refer either to regular employees who worked a shorter week or to "casual" employees. See id. at 732. Because of this ambiguity we remanded the case to the district court for a determination of the meaning of part-time. See id. at 733.

After additional discovery and a bench trial, the district court resolved the ambiguous meaning of "part-time" in favor of the Fund by holding that "part-time" employees were "regular employees," not casual employees, and that the Fund, therefore, was entitled to the disputed contributions. The district court entered a judgment in favor of the Fund on liability and later supplemented its judgment with an award of attorneys' fees and costs to the Fund. For the reasons set forth in the following opinion, we affirm the judgment of the district court.

I BACKGROUND

A.

Kroger is a national grocery store chain with operations in several states, including Georgia. The warehouse employees and truck drivers at Kroger's warehouse center in Atlanta are represented by the Local 528 chapter of the International Brotherhood of Teamsters (the "Union"). Since 1967, the employment relationship between Kroger and its employees at this facility has been governed by a CBA negotiated by Kroger and the Union. Kroger's participation in the Fund began in 1971, and the CBA has defined Kroger's obligation to make pension contributions to the Fund on behalf of the Atlanta employees. The CBA between Kroger and the Union, although one document, consists of two parts. The first part, the Master Agreement, was negotiated by Kroger and the Union and covers the Atlanta facility as well as several other Kroger facilities nationwide. The second part of the CBA, the Local Supplement, applies only to the Atlanta facility. As we explained in our previous opinion, both the Master Agreement and the Local Supplement form "a single, unitary contract" and, consequently, must be read together. Kroger I, 73 F.3d at 731.

The Master Agreement defines who is a regular employee and also differentiates between two other types of employees--"probationary" and "casual." Probationary employees are defined as "new" employees who work on a trial basis for 30 to 60 days and who may be discharged at Kroger's discretion. CBA sec. 2.2. They become regular employees at the end of their trial period and, according to the Master Agreement, "shall be placed on the regular seniority list." CBA sec. 2.2. On the other hand, "casual" employees are defined as employees "hired on a short term basis." CBA sec. 2.3. The Master Agreement states that casual employees "may be employed from time to time" for those facilities with a past practice of hiring casuals. It contains no specific limit on the duration of a casual employee's service. The number of casual employees is limited to 10 percent of the work force. See CBA sec. 2.3. The CBA provides that casual employees "shall not receive fringe benefits or accrue seniority." CBA sec. 2.3.

Under the CBA, Kroger is obligated to make pension contributions for each employee who has been employed for 30 days or more and who is on the "regular seniority list." CBA sec. 31.1. As we explained in our previous opinion, "[t]he 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." Kroger I, 73 F.3d at 729. Furthermore, the Master Agreement states that Kroger must make contributions to the Fund for "each regular or extra employee, even though such employee may work only part-time." CBA sec. 31.4 (emphasis added). No contribution is required for employees "who work either temporarily or in cases of emergency." CBA sec. 31.4.

Unlike the Master Agreement, the Local Supplement does not differentiate between "probationary" and "casual" employees. Instead, the Local Supplement refers to "part-time" and "full-time" employees, but it defines neither of these terms. The Local Supplement also refers to part-time employees as "part-timers." A few characteristics of part-time employment nevertheless emerge from the Local Supplement. First, the Local Supplement caps the number of "part-time" employees at 10 percent of the warehouse employees. See CBA II.A.6. Also, part- time employees are permitted a limited form of seniority: They may accrue seniority "only among other part time employees." CBA II.D.2. Finally, part-time employees must follow certain job- bidding procedures to obtain regular positions.

The job-bidding process for part-time employees first became part of the Local Supplement in 1985. Under the procedure established in 1985, when a permanent job became available, the most senior part-timer was required to bid on the position. See CBA II.D.1. Failure to bid or to bid successfully would result in termination from Kroger. The bidding procedure was modified in 1988 so that part-timers were given an opportunity to bid for a second regular position if they failed to obtain a position on their first bid. See CBA II.D.1 (1988). Starting in 1985 and continuing through the 1988 change, the bidding procedure set forth in the Local Supplement specified that a part-timer who had obtained a bid position was required to work in that position for a "trial period" of 21 days. CBA II.D.1. If the employee's performance proved to be unsatisfactory during this trial period, the Local Supplement allowed Kroger to return the employee to his former part-time position.

Prior to 1977, all newly hired employees at Kroger's Atlanta facility were designated as probationary. In 1977, however, Kroger began classifying all new employees at the Atlanta facility as casuals. These employees were not guaranteed fixed hours or schedules. Kroger would place the new hires on a separate seniority list, but those employees on the list did not have any seniority status over regular employees. Rather, the list was used to allow these employees, who commonly were referred to as "part-timers" at the Atlanta facility, to bid (in order of date of hire) for regular jobs as those jobs became available. Many of the employees hired as casuals remained with Kroger for a lengthy period of time and eventually became regular employees through the bidding process. Once a part-timer became a regular employee and was placed on the regular seniority list, Kroger made pension contributions on behalf of that employee to the Fund. As long as the employee was designated as a casual, however, no contribution was made.

B.

In 1991, the Fund conducted an audit of the employment records at Kroger's Atlanta facility and concluded that, between December 28, 1986, and December 30, 1989, Kroger had failed to make pension contributions required under the CBA for certain warehouse employees. The Fund therefore brought this action against Kroger under sec. 515 of ERISA; it alleged that Kroger owed the Fund over $200,000 in delinquent contributions.

In our previous opinion, we reversed the district court's grant of summary judgment in favor of Kroger. The district court had determined that the CBA was unambiguous and had declared its meaning as a matter of law. On appeal, we examined the CBA as a whole and concluded that the term "part-time," as it was used in the CBA, was susceptible to more than one reasonable meaning. "Part-time," we explained, could mean "casual" or it could refer to "a regular employee who works a shorter week." Kroger I, 73 F.3d at 732. Because the term "part- time" had more than one reasonable interpretation, we held the CBA to be ambiguous. Consequently, the meaning of the CBA could not be determined as a matter of law, and we remanded the case "for a determination of the meaning of part-time." Id. at 733.

C.

1.

On remand, the district court allowed additional discovery and then conducted a bench trial. At the conclusion of the trial, the district court announced from the bench the four findings of fact that would form the basis of its final decision. Those findings of fact were:

First, the employees in question were not "hired on a short-term basis," nor were they "employed from time to time," as defined in article 2.3 of the master portion of the [CBA].

My second finding of fact is based upon the first one. It is that the phrase "part-time" in the local portion of the agreement is not the same as and does not mean "casual" as defined in article 2.3 of the master portion of the agreement.

My third finding of fact is that the local union...