CENTRAL STATES SOUTHEAST v. Hitchings Trucking

• Decision Date: 20 July 1979
• Docket Number: Civ. A. No. 7-71951.
• Citation: 472 F. Supp. 1243
• Parties: CENTRAL STATES SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and John E. Dwyer, Plaintiffs, v. HITCHINGS TRUCKING, INC., a Michigan corporation, and Fred Hitchings, jointly and severally, Defendants.
• Court: U.S. District Court — Western District of Michigan

472 F. Supp. 1243

CENTRAL STATES SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, and John E. Dwyer, Plaintiffs, v. HITCHINGS TRUCKING, INC., a Michigan corporation, and Fred Hitchings, jointly and severally, Defendants.

Civ. A. No. 7-71951.

United States District Court, E. D. Michigan, S. D.

July 20, 1979.

Russell N. Luplow, Bloomfield Hills, Mich., Robert J. Lenihan, II, Birmingham, Mich., for plaintiffs.

Lewis R. Thumm, Canyock & Thumm, Utica, Mich., for defendants.

MEMORANDUM OPINION AND ORDER

JOINER, District Judge.

Counsel suggests that this case involves the actuarial solvency of union pension plans. It involves the question of whether there is an obligation on the part of an employer to continue to pay into a union pension fund in accordance with the terms of a collective bargaining agreement after that agreement has expired and before another agreement is negotiated.

The defendant and Teamsters Local 339 entered into a collective bargaining agreement to be bound by the provisions of a master collective bargaining agreement negotiated between the Labor Relations Division of the Michigan Road Builders Association and the Michigan Teamsters Conference, Joint Council 43. This master agreement was effective June 1, 1974 and expired June 1, 1977. The defendant is a small independent aggregate hauler employing only a few employees.

The master collective bargaining agreement between the Michigan Road Builders Association and Joint Council 43 contains a provision relating to pension funds in the following language:

ARTICLE XII

Health and Welfare and Pension

* * * * * *

(b) The Contractor agrees to pay into the Central States Southeast and Southwest Areas Pension Fund the weekly contribution shown below for each regularly employed Company Driver and each regularly employed Owner-Operator:

* * * * * *

At the same time the defendant signed a participation agreement whereby he agreed to participate in the "Central States Southeast and Southwest Areas Pension Fund." The participation agreement contained the following language:

1. The Union and the Employer agree to be bound by, and hereby assent to, all of the terms of the Trust Agreement creating said CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND

* * * * * *

7. This Participation Agreement shall continue in full force and effect during the life of the current collective bargaining agreement between the parties and during all renewals and extensions thereof . . ..

The trust agreement referred to in the participation agreement contains the following language:

ARTICLE III

Contributions and Collections

Sec. 1. Amount of Contributions— Each Employer shall make continuing and prompt payments to the Trust Fund as required by the applicable collective bargaining agreement between the parties. The obligation to make such contributions shall continue during periods when the collective bargaining agreement is being negotiated, but such contributions shall not be required in case of strike after contract termination unless the parties mutually agree otherwise.

Finally, the collective bargaining agreement itself contains a provision relating to its termination:

ARTICLE XXV

Termination

This Agreement shall remain in full force and effect until June 1, 1977, and thereafter shall continue in force from year to year, unless either party hereto shall notify the other party in writing at least sixty (60) days prior to the end of the current term, or as the case may be, sixty (60) days prior to the end of any additional contract year, of its intention to make changes in or terminate this Agreement. Such written notice shall specify any changes or amendments desired by the party giving such notice and shall be sent by registered or certified mail to the other party.

The facts show that the defendant failed to make payments from June 1, 1977, the expiration date of the old agreement, to April 1, 1978, when a new collective bargaining agreement was signed. The new agreement was an agreement to be bound by a different master contract. At the same time the new contract was signed, a new participation agreement was signed indicating that the effective date of the new participation agreement would be April 1, 1978. The new agreement contained the same terms as did the old one, except providing for a higher rate of contribution.

On February 1, 1977, Teamsters Local 339 forwarded to the defendant what is called a sixty day notice letter to comply with Article XXV of the master contract. It contained the following statements:

This is to advise you that Teamsters Local 339 . . . desires to continue its existing agreement, but also desires to negotiate changes or revisions in such agreement. The particular contract provisions concerning which we desire to negotiate are the clauses relating to HOURS, WAGES, and WORKING CONDITIONS and any other subject matter that might be considered a subject for negotiation.

We shall be pleased to meet with you at any reasonable time convenient to you.

The defendant did not respond and ceased making contributions to the pension fund as of June 1, 1977. The defendant, however, continued to check off dues of the employees in accordance with Article II(g) of the expired collective bargaining agreement and continued to make payments to the Teamsters health and welfare funds provided for in the same article as in the provisions for funding the pension fund, Article XII.

The next contact between the union and the employer occurred June 27, 1977, when the union sent to the defendant a new Michigan Conference of Teamsters Welfare Fund Contribution agreement, a new Pension Participation agreement, and a new Michigan Road Builders Memorandum of Understanding requesting signatures. The defendant did not respond; however, he continued to check off dues and to make payments to the welfare fund on behalf of his employees.

This action is to recover on behalf of the pension fund the amounts they contend are due at the rate defined in the first participation agreement from June 1, 1977 to April 1, 1978.

The plaintiff contends that the defendant is liable to it on two theories:

1. The obligation to make contributions to the pension fund, which obligation is a part of a collective bargaining agreement, survives the expiration date of that agreement.

2. The defendant is estopped from asserting that the collective bargaining agreement was terminated because of his acts and conduct inconsistent with such an assertion.

3. The Employee Retirement Income Security Act of 1974 suggests reasons why payments should continue.

The participation agreement provides that the employer will be bound by the terms of the trust agreement. It in turn obligates the employer to continue making payments to the trust fund as provided in the collective bargaining agreement and during the periods when a collective bargaining agreement is being negotiated.

The participation agreement also provides that it shall continue in effect during the life of the collective bargaining agreement and renewals and extensions thereof.

Finally, the collective bargaining agreement is to remain in effect until June 1, 1977 and thereafter from year to year unless a sixty day letter indicating...