Flynn v. Dick Corp.

• Decision Date: 20 March 2007
• Docket Number: No. 05-7187.,05-7187.
• Citation: 481 F.3d 824
• Parties: John FLYNN et al., Appellants v. DICK CORPORATION, Appellee.
• Court: U.S. Court of Appeals — District of Columbia Circuit

481 F.3d 824

John FLYNN et al., Appellants v. DICK CORPORATION, Appellee.

No. 05-7187.

United States Court of Appeals, District of Columbia Circuit.

Argued November 7, 2006.

Decided March 20, 2007.

Appeal from the United States District Court for the District of Columbia (No. 03cv01718).

Ira R. Mitzner and Joseph E. Kolick, Jr. argued the cause for the appellants.

Charles F. Walters and Jessica R. Hughes argued the cause for the appellee.

Before: HENDERSON, TATEL and GRIFFITH, Circuit Judges.

Opinion for the court filed by Circuit Judge HENDERSON.

KAREN LeCRAFT HENDERSON, Circuit Judge.

The appellants, John Flynn (Flynn) et al., trustees of the Bricklayers & Trowel Trades International Pension Fund (IPF or the Fund), sued Dick Corporation (Company) under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1001 et seq., seeking employee benefit contributions, id. § 1145, based on the Company's construction projects in Florida. In response, Dick Corporation challenged its liability under a Florida collective bargaining agreement (CBA), claimed that the requested contributions violated the Labor Management Relations Act (LMRA), 29 U.S.C. § 186, and asserted that the IPF failed to exhaust required arbitration procedures. The district court agreed that no Florida CBA bound the Company and that the requested contributions violated the LMRA, granting summary judgment to Dick Corporation. Thereafter, the IPF filed a motion for reconsideration, which the district court granted in part — recognizing a genuine issue of material fact as to the existence of a valid Florida CBA — but it reaffirmed its conclusion that the contributions violated the LMRA and thus affirmed its grant of summary judgment to the Company. The Fund appeals. We reverse the district court, concluding that the requested contributions are valid under the LMRA, and remand for further proceedings.

I.

The factual history of this contract dispute is cumbersome but essential to a proper understanding of the issues raised on appeal. In 2002, Dick Corporation, a Pennsylvania-based construction company, became the general contractor on two construction projects in Florida. The Company decided to subcontract the craftwork involved in the Florida projects. Its chosen subcontractors, like all of the subcontractors submitting bids on the two projects, did not employ members of the International Union of Bricklayers and Allied Craftworkers (BAC). In the past, however, the Company had used its own employees to perform the type of work it subcontracted on the two projects. Its employees were members of local bricklayer unions, including BAC Local 1 of Northern New England, with which the Company had a CBA. Under the CBA, it paid employee benefit contributions into the Fund, thereby entitling its employees to benefits under the Fund. See Second Decl. of David F. Stupar, Exs. 3 & 4, reprinted in Joint Appendix (JA) at 540, 542.

In December 1989 the Company signed an Independent Agreement (1989 IA) with the local BAC affiliates in eastern Massachusetts, agreeing "to be bound by all the terms and conditions of the effective Collective Bargaining Agreement and any ... successor agreements." Independent Agreement Between Dick Corp. and Dist. Council of E. Mass. Bricklayers & Allied Craftsmen Local Unions (Dec. 1, 1989) ¶ 1, reprinted in JA at 11. The CBA referenced in the 1989 IA was executed in August 1989 (1989 CBA).¹ Similarly, in September 2000, Dick Corporation signed another Independent Agreement (2000 IA), this time with the local BAC affiliate in western Massachusetts. See Independent Agreement Between Dick Corporation and Bricklayers & Allied Craftworkers Local 1 Mass., reprinted in JA at 71-74. The 2000 IA bound the Company to a CBA executed in 1992 (1992 CBA) and any successor CBA. Eventually, the 1989 CBA referenced in the 1989 IA was succeeded by an August 2002 CBA (August 2002 CBA) with the local BAC affiliate in eastern Massachusetts, while the 2000 CBA tied to the 2000 IA was succeeded by a September 2002 CBA (September 2002 CBA).²

Both successor CBAs — the August 2002 CBA and the September 2002 CBA — contain a "traveling contractor's clause," which requires that a signatory employer with "any work [covered by the CBA] to be performed outside of the geographic area" of the CBA and "within the geographic area covered by an Agreement with another affiliate of [the BAC] ... abide by the full terms and conditions of the Agreement in effect in the job site area." JA 195, § 10; see also JA 410, art. I-D. Pursuant to both clauses, the IPF sued the Company for failure to make employee contributions consistent with the terms of a Florida CBA between the local BAC in the area of Dick Corporation's Florida projects and the local employers of BAC members in that area. See Flynn v. Dick Corp., 384 F.Supp.2d 189, 192 (D.D.C.2005). The Fund claimed that the traveling contractor's clauses bound Dick Corporation to the Florida CBA and, accordingly, the Fund charged the Company with violating the Florida CBA's subcontracting clause, which prohibits signatory employers from using non-union subcontractors for work performed within the area covered by the Florida CBA. See Pls.' Mot. for Summ. J. at 13-14. Dick Corporation, the Fund asserted, was "barred from evading this contribution obligation through the use of non-union subcontractors." Id.

Following discovery, the district court granted the Company's motion for summary judgment. See Dick Corp., 384 F.Supp.2d at 203.³ The district court found that the plain language of the September 2002 CBA's traveling contractor's clause unambiguously bound Dick Corporation to any Florida CBA (between local BAC affiliates and local employers of BAC members) that was in existence in the area — and at the time — of the Company's projects. Id. at 196-99. The district court then concluded that there was no valid CBA in existence in Florida obligating Dick Corporation to pay employee benefits into the Fund under a traveling contractor's clause. Id. at 199-202. First, the court determined that the document the Fund submitted as the applicable Florida CBA did not constitute an enforceable agreement because it lacked provisions covering wages and contract duration. Id. at 200. Instead, the court said, the document constituted only a standard form or draft agreement, "completed and made enforceable only with the addition of an addendum detailing benefit payments and contractual ratification by real parties." Id. "By design, therefore, the Florida CBA [was] not an agreement in effect (namely, a legally binding agreement), but merely provide[d] a framework for one." Id.

In addition, the district court found that the LMRA precluded the contributions the Fund sought. See id. at 200-02. First, the skeletal nature of the agreement submitted by the Fund failed to provide the "detailed basis" required for lawful contributions from an employer to a trust fund under section 302(c)(5)(B) of the LMRA. See id. at 200-01; 29 U.S.C. § 186(c)(5)(B). The district court also held that the contributions sought by the IPF were not for the "sole and exclusive benefit" of Dick Corporation's employees because the Company's Florida projects were performed entirely by the "subcontractors' ineligible non-union employees" and no Dick Corporation employee was eligible to benefit from any contributions based on the work of subcontractors on the Florida projects. Dick Corp., 384 F.Supp.2d at 201-02. Given the IPF's failure to establish that the requested contributions were for the "sole and exclusive benefit" of the Company's employees, the district court found the contributions prohibited by the LMRA. Id. at 202; 29 U.S.C. § 186(c)(5)(A).⁴

The IPF moved for reconsideration, challenging the district court's conclusion that there was no valid CBA in effect in Florida and, in any event, not one that provided a "detailed basis" for Fund contributions at the time of the Company's Florida projects. See Pls.' Mot. for Recons. The district court ultimately agreed with the IPF that it had misconstrued affidavits submitted by the Florida BAC and that the affidavits — and the rate tables from CBA appendices the Fund submitted with them — had in fact contained the required "detailed basis" for Fund contributions along with evidence of an enforceable Florida CBA. See Mem. Order on Mot. for Recons., reprinted in JA at 664-65. The district court "vacate[d]" its grant of summary judgment to Dick Corporation to the extent it was based on the absence of either an enforceable CBA or a detailed basis for benefit contributions under the LMRA. See id. at 665. It nonetheless again granted summary judgment to the Company because the requested contributions were not for the "sole and exclusive benefit" of Dick Corporation's employees as required by the LMRA. See id. at 665-66. The IPF now appeals.

II.

We review the district court's grant of summary judgment de novo, see Nat'l Ass'n of Home Builders v. Norton, 415 F.3d 8, 13 (D.C.Cir.2005), applying the same standards as the district court and drawing all inferences from the evidence in favor of the non-movant, see Shekoyan v. Sibley Int'l, 409 F.3d 414, 422-23 (D.C.Cir. 2005). We may affirm only if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. See Mylan Labs., Inc. v. Thompson, 389 F.3d 1272, 1278-79 (D.C.Cir.2004). We review the district court's ruling on a motion for reconsideration pursuant to Rule 59(e) for abuse of discretion. See Messina v. Krakower, 439 F.3d 755, 758-59 (D.C.Cir.2006). We interpret collective bargaining agreements under federal law, see, e.g., Walsh v. Schlecht, 429 U.S. 401, 406-07, 97 S.Ct. 679, 50 L.Ed.2d 641 (1977) (interpreting CBA subcontractor's clause under "federal law principles"), and "a question concerning the proper interpretation of the plain language of a contract is a question of law" subject to our de novo ...