Central States, Southeast and Southwest Areas Pension Fund v. Independent Fruit and Produce Co., FRIEDMEYER-SELLMEYER

• Decision Date: 06 December 1990
• Docket Number: Nos. 89-1927,FRIEDMEYER-SELLMEYER,s. 89-1927
• Citation: 919 F.2d 1343
• Parties: 13 Employee Benefits Ca 1158 CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. INDEPENDENT FRUIT AND PRODUCE CO., a Missouri corporation, Appellee. CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. Walter A. RUBIN, d/b/a M.J.M. Produce Exchange, Appellee. CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. SUGAR RIPE BANANA COMPANY, Appellee. CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. N.E.DISTRIBUTING COMPANY, Appellee. CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. Salvatore PUPILLO, d/b/a Pupillo Fruit Company, Appellee. CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. GEORGE A. HEIMOS PRODUCE COMPANY, INC., Appellee. CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. WILLIAM MANTIA FRUIT COMPANY, INC., Appellee. CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. ST. LOUIS BANANA AND TOMATO COMPANY, INC., Appellee. CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. LAMPERSON FRUIT & PRODUCE COMPANY, Appellee. CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. LOMBARDO FRUIT AND PRODUCE COMPANY, Appellee. CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. JOHN MOON PRODUCE COMPANY, Appellee. CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. STANLEY PRODUCE, INC., Appellee. CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. Robert JOHNSON, d/b/a J.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1343

919 F.2d 1343

13 Employee Benefits Ca 1158

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. INDEPENDENT FRUIT AND PRODUCE CO., a Missouri corporation, Appellee.

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. Walter A. RUBIN, d/b/a M.J.M. Produce Exchange, Appellee.

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. SUGAR RIPE BANANA COMPANY, Appellee.

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. N.E. FRIEDMEYER-SELLMEYER DISTRIBUTING COMPANY, Appellee.

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. Salvatore PUPILLO, d/b/a Pupillo Fruit Company, Appellee.

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. GEORGE A. HEIMOS PRODUCE COMPANY, INC., Appellee.

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. WILLIAM MANTIA FRUIT COMPANY, INC., Appellee.

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. ST. LOUIS BANANA AND TOMATO COMPANY, INC., Appellee.

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. LAMPERSON FRUIT & PRODUCE COMPANY, Appellee.

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. LOMBARDO FRUIT AND PRODUCE COMPANY, Appellee.

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. JOHN MOON PRODUCE COMPANY, Appellee.

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. STANLEY PRODUCE, INC., Appellee.

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. Robert JOHNSON, d/b/a J. Johnson, Fruit & Produce Company, Appellee.

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. Adolph A. SOLOMON and Irl S. Solomon, statutory trustees for

Adolph & Ceresia Produce Co., Appellees.

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. UNITED FRUIT & PRODUCE COMPANY, Appellee.

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. GOLDMAN FRUIT & PRODUCE CO., INC., Appellee.

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. Jules J. SCHWARTZ and Joseph F. Schwartz, d/b/a New Market

Produce Company, Appellees.

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. FRANKLIN PRODUCE COMPANY, a Missouri Corporation, Appellee.

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellants, v. MARSKE PRODUCE COMPANY, INC., Appellee.

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellees, v. GEORGE A. HEIMOS PRODUCE CO., INC., Appellant.

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and Howard McDougall, Trustee, Appellees, v. N.E. FRIEDMEYER-SELLMEYER DISTRIBUTING COMPANY, Appellant.

Nos. 89-1927 to 89-1929, 89-1933 to 89-1937, 89-2204 to

89-2210, 89-2438, 90-1160 to 90-1162, 89-2839 and 89-2840.

United States Court of Appeals,

Eighth Circuit.

Submitted Sept. 10, 1990.

Decided Dec. 6, 1990.

Albert M. Madden, Margaret M. Fahrenbach, Neal S. Deodhar, Rosemont, Ill., for appellants.

Mark Pasewark, St. Louis, Mo., for appellee.

Before FAGG and BEAM, Circuit Judges, and WOODS, ^* District Judge.

BEAM, Circuit Judge.

In this consolidated appeal, Central States, Southeast and Southwest Areas Pension Fund (Central States) appeals from judgments entered in favor of defendants-employers. Pursuant to sections 502 and 515 of the Employee Retirement Income Security Act, 29 U.S.C. Secs. 1132, 1145 (1988), Central States brought separate actions against more than twenty independent produce wholesalers to collect delinquent pension contributions. Central States contended that the produce companies failed to make pension contributions on behalf of certain employees as required by the governing collective bargaining agreements. Central States argued that these employees, whose questionable status was discovered in an audit, were regular employees for whom contributions were due. The employers, however, classified these employees as "casuals" for whom contributions were not required by the collective bargaining agreements. The district court found that the collective bargaining agreements were ambiguous and looked to the intent and past practice of the parties to define "casual employee." The district court held that a "casual employee" is not necessarily a person who works only intermittently or sporadically, as Central States thought, but, instead, includes those employees so designated by the employer, with the consent of the union, regardless of their work schedules. Accordingly, the district court found no contributions owing and entered judgment for defendants. We reverse. ¹

I. BACKGROUND

Due to their physical proximity on several city blocks in St. Louis, the defendants-employers in these cases, members of the St. Louis Fruit and Produce Association, are collectively known as Produce Row. Most are independently owned, family-run companies, wholesaling fresh fruits and vegetables to small, independent grocers. Central States is an employee benefit fund as defined by ERISA. See 29 U.S.C. Sec. 1002. Central States, which is headquartered in Chicago, receives more than 5,000 collective bargaining agreements for review each year, covering more than 250,000 active participants and 125,000 retired participants. In this case, contributions to the pension fund are governed by collective bargaining agreements negotiated by the employers and Local 688 of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America.

The collective bargaining agreements at issue cover the years 1973 through 1988 and are dated 1973, 1976, 1979, 1982 and 1985. Because they contain similar provisions on casual employees, the agreements dated before 1982 can be conveniently considered together. The pre-1982 agreements provide in Article IX that casual employees are to be hired subject to need, that their hiring cannot increase "the normal then existing number of working employees," that casuals cannot work more than eighty hours per month, and that casuals are to be used as replacements for regular employees. Article IX was renegotiated in 1982 so that many of these restrictions on the use of casuals were eliminated. Generally, however, all relevant agreements provide that casual employees receive neither fringe benefits nor seniority. At issue is not whether casuals are entitled to benefits, but, rather, which employees are casuals.

The dispute over the meaning of "casual employee" arose from a random audit in October 1983 of Lamperson Fruit and Produce Company. As a result of the audit, which covered September 28, 1980, to September 24, 1983, Central States claimed that Lamperson owed $73,034 for " 'non-reporting of eligible Plan Participants.' " Central States, Southeast & Southwest Areas Pension Fund v. N.E. Friedmeyer-Sellmeyer Distrib. Co., No. 84-1669 C (5), slip op. at 6 (E.D.Mo. Apr. 28, 1989). In its audit, Central States discovered employees who worked more or less full-time during the audit period but whom Lamperson classified as casuals. Because it understood casuals to be employees who worked only sporadically or intermittently as needed, Central States contended that these employees were regulars for whom contributions were due. In the resulting action to collect delinquent contributions, Central States requested audits of the Produce Row employers.

On January 16, 1985, the Chief Judge of the Eastern District of Missouri designated the case against Friedmeyer-Sellmeyer Distributing Company as "the most suitable case to try, brief and decide as a guide in the ultimate trying, briefing and decision in all of the above cases." ² Appellants' App. at 255. On January 12, 1987, the district court ordered defendant Friedmeyer-Sellmeyer to submit to an audit of its personnel records from December 28, 1980, to December 31, 1983. Central States, Southeast & Southwest Areas Pension Fund v. N.E. Friedmeyer-Sellmeyer Disib. Co., 650 F.Supp. 978, 980 (E.D.Mo.1987). The audit was later expanded to cover the years 1979 to 1986. It revealed seven employees who worked essentially full-time for some if not all of the audit period. "[T]he audit report ... revealed that six of the seven employees included in the report worked virtually every week for over one year and one of these individuals worked all but two weeks during a period of nearly six years." Brief for Appellant at 16. William Kauck, who conducted the audit of Friedmeyer-Sellmeyer, testified that the audit revealed "an inordinate use of what the employer was calling 'casual employees.' " Trial Transcript vol. 1, at 127. As a result of the audit, Central States claimed that Friedmeyer-Sellmeyer owed $24,774 in delinquent contributions.

At the bench trial, Friedmeyer-Sellmeyer contended that its use of casual employees was consistent with the collective bargaining agreements, that no dispute or misunderstanding about casuals existed between the employer and the union, that none of the casuals were confused about their status as casuals, and that the only party complaining was Central States. The evidence established that it was standard practice for the Produce Row employers to initially hire all employees as casuals, some of whom might later become regulars upon a vacancy. Trial...