Denver Metropolitan Ass'n of Plumbing, Heating, Cooling Contractors v. Journeyman Plumbers & Gas Fitters Local No. 3 & Pipefitters Local No. 208

• Decision Date: 13 November 1978
• Docket Number: No. 76-2039,AFL-CIO,76-2039
• Citation: 586 F.2d 1367
• Parties: 99 L.R.R.M. (BNA) 3239, 84 Lab.Cas. P 10,897, 1 Employee Benefits Ca 1306 DENVER METROPOLITAN ASSOCIATION OF PLUMBING, HEATING, COOLING CONTRACTORS, a Colorado Corporation and Mechanical Contractors' Association of Colorado, a Colorado Corporation, Plaintiffs- Appellants, v. JOURNEYMAN PLUMBERS & GAS FITTERS LOCAL NO. 3 & PIPEFITTERS LOCAL NO. 208 of the United Association of Journeymen & Apprentices of the Plumbing& Pipefitting Industry of the United States and Canada (), Richard T. Crabb, Ronald Solomon, Carl Reid, Don Beatty, Individually and as members of the Denver Plumbers Joint Apprenticeship Committee, Dave Schoen, Larry Schaap, H. J. Hall, Charles Recene, Jack Schofield, Gerald Emerick, Steve Silva, Harold Mowery, Individually and as members of the Denver Pipe Fitters Joint Apprenticeship Committee, Al Kitzelman, Bill Wafer, Paul Emerick, Bud Hutto, Individually and as Trustees of the Denver Pipe Industry Vacation Fund, Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1367

586 F.2d 1367

99 L.R.R.M. (BNA) 3239, 84 Lab.Cas. P 10,897,

1 Employee Benefits Ca 1306

DENVER METROPOLITAN ASSOCIATION OF PLUMBING, HEATING,

COOLING CONTRACTORS, a Colorado Corporation and

Mechanical Contractors' Association of

Colorado, a Colorado

Corporation, Plaintiffs- Appellants, v. JOURNEYMAN PLUMBERS & GAS FITTERS LOCAL NO. 3 & PIPEFITTERS

LOCAL NO. 208 of the United Association of Journeymen &

Apprentices of the Plumbing& Pipefitting Industry of the

United States and Canada (AFL-CIO), Richard T. Crabb, Ronald

Solomon, Carl Reid, Don Beatty, Individually and as members

of the Denver Plumbers Joint Apprenticeship Committee, Dave

Schoen, Larry Schaap, H. J. Hall, Charles Recene, Jack

Schofield, Gerald Emerick, Steve Silva, Harold Mowery,

Individually and as members of the Denver Pipe Fitters Joint

Apprenticeship Committee, Al Kitzelman, Bill Wafer, Paul

Emerick, Bud Hutto, Individually and as Trustees of the

Denver Pipe Industry Vacation Fund, Defendants-Appellees.

No. 76-2039.

United States Court of Appeals, Tenth Circuit.

Argued March 17, 1978.

Decided Nov. 13, 1978.

Donald B. Gentry of Grant, McHendrie, Haines & Crouse, Denver, Colo., for plaintiffs-appellants.

Martin D. Buckley, Denver, Colo. (Philip Hornbein, Jr., Denver, Colo., with him on the brief), of Hornbein, MacDonald & Fattor, Denver, Colo., for defendants-appellees.

Before HOLLOWAY, BARRETT and LOGAN, Circuit Judges.

LOGAN, Circuit Judge.

This is an appeal from a grant of summary judgment by the district court. The suit was instituted by the Denver Metropolitan Association of Plumbing, Heating, Cooling Contractors and the Mechanical Contractors' Association of Colorado (associations), whose members are certain employers in the plumbing and pipe fitting industry. They alleged that the defendants-appellees (unions and trustees of three trust funds) violated the "written agreement" and "equal representation" requirements of 29 U.S.C. § 186(c)(5)(B) in the administration of the trust funds. The failure of the union trustees to administer the trust funds in conformity with § 186 was also alleged to be a breach of the collective bargaining agreement between the parties, allowing suit to be brought under 29 U.S.C. § 185(a).

A brief background of the collective bargaining history and relevant statutes will aid in understanding our resolution of the issues. The three trusts involved are Denver Pipe Industry Vacation Fund Trust, Denver Plumbers Apprentice and Journeyman Training Fund Trust, and Denver Pipe Fitters Apprenticeship Fund Trust, all established over a period from 1963 to 1965 pursuant to collective bargaining contracts between the associations and unions. The training trusts were to provide programs for training apprenticeship plumbers and pipe fitters, while the vacation trust was to provide paid vacations for employees in the industry. Each were stated in separate trust agreements entered into by the parties.

The relevant governing statute is 29 U.S.C. § 186(a)(1) which generally prohibits payments by an employer to employee representatives. However, 29 U.S.C. § 186(c)(5) and (6) grants exceptions from the general prohibition, provided certain requirements are met, as here relevant, "the detailed basis on which such payments are to be made is specified in a Written agreement with the employer, and Employees and employers are equally represented in the administration of such fund, . . ." 29 U.S.C. § 186(c)(5)(B). (Emphasis supplied.)

The parties here had a written collective bargaining agreement and written trust agreements. There were also equal numbers of association and union trustees acting with respect to each trust.

Since the establishment of the trust funds, employers who were not members of or represented by the associations have made payments into the trust funds as required by contracts they have negotiated with the unions. In this group are four types of employers (numbers are those in the group when this suit was instituted): 1) Twenty-nine independent employers who sign or "adopt" the contract negotiated between the associations and the unions; 2) thirty-three members of the Refrigeration and Air-Conditioning Contractors Association (RACCA), which negotiates separately with the unions and whose contract also requires trust fund payments; 3) twenty-two national contractors who contribute based upon a national agreement with the international union parent organization of the defendant locals; 4) forty-five employers who have not adopted the current association/union contract, but continue to contribute based on the previous contract between the associations and unions.

In 1974 the associations established a Contract Administration Fund (CAF) and sought to negotiate a change in the collective bargaining agreement which would prohibit employers from contributing to the various trust funds unless they were association members or represented by the association, such representation presumably coming from membership in the CAF which was open to all employers. The unions rejected the proposal. The issue was submitted to binding arbitration and unanimously decided against the associations.

This suit was then commenced, based on the theories stated above. As is here relevant, the district court granted summary judgment for the defendants on the question of whether the complained of actions violated the collective bargaining agreement. The court did not reach the issue of whether the written agreement or equal representation requirements of § 186(c)(5)(B) had been violated, holding that the plaintiff associations had no standing to challenge the alleged violations of that section.

I

We examine first the claim that the collective bargaining agreement has been violated. As to this the court clearly has jurisdiction under 29 U.S.C. § 185(a). It is the associations' contention that the unions are breaching the collective bargaining contract and the various trust agreements by signing contracts with employers which allow and require such employers to contribute to the trust funds even though they are neither association members nor contribute to the associations' Contract Administration Fund.

Except with respect to the legality argument considered below, the determination of this issue depends entirely upon what was the agreement of the parties. We do not quarrel with appellants' contention that a third party cannot be added to a contract without the consent of both original parties. Kruschke v. Quatsoe, 49 Colo. 312, 112 P. 769 (1911). That consent, of course, can be given in advance. The question here is what the parties contemplated with respect to nonmembers of the association.

The wording of the trust agreements and collective bargaining agreement obviously contemplates that nonassociation members can adopt the agreement. In the preamble of the collective bargaining agreement it is said:

The signing of this Agreement by an Employer not a participating member of either Association which incorporates this Joint Agreement by reference and its acceptance by the Union shall bind said Employer to comply with all the terms, conditions and provisions of this Contract and Joint Agreement including, but not limited to the assignment of bargaining rights to the Association, or either of them.

In Art. II, Sec. 3, the collective bargaining agreement states "The Unions shall upon request by the Association advise the Association of all employers who are signatory to this agreement." In several other places there are references to an employer party to the agreement "or (who) has accepted its provisions" (Art. II, Sec. 1), "or have adopted or have worked under this agreement . . ." (Art. VIII, Sec. 2. See also Art. VIII, Sec. 3.) Apparently similar language has been contained in all agreements since 1963.

The two apprentice and training fund trust agreements are virtually identical. In Section 2 of those instruments reference is made to "employers accepting the provision thereof," meaning either the associations/unions collective bargaining agreement or its provisions for contributions to this fund. Both trusts contain references in generalized form to "employers" paying into the fund, but specifically refer to the "Employer Association" as the only entity which may name employer trustees and agree to changes in the trust. The vacation fund trust indenture defines "employer" to mean "any employer in the pipe industry in Colorado who makes payments to the Vacation Fund under this Trust indenture," and "employee" as "every employee whose employment is governed by the provisions of a collective bargaining agreement."

The associations argue that no employer can make payments to the fringe benefit trusts without assigning all rights over collective bargaining generally to the associations, including obligating themselves to make payments into the Contract Administration Fund. The unions claim the reference to assignment of bargaining rights, if applicable at all to the fringe benefit fund payments, merely delegates to the associations the power to negotiate changes in the trust indentures and accepts their appointment of trustees.

In determining intent the trial court was obviously impressed, as are we with the fact that nonmember organizations were allowed to contribute to these trusts for some ten years without complaint by the associations, and only now has objection been made to the practice. The past actions and practices of the parties to a contract are to be accorded substantial weight in determining its proper interpretation, particularly if the conduct manifesting their construction occurred prior to any controversy. Fanderlik-Locke Co. v. United States, 285 F.2d 939 (10th Cir. 1960).

In negotiations with the unions the associations proposed a new preamble to Article VI of the collective bargaining contract to prohibit outside employers from contributing to these trusts. This was rejected by the union and...