HUDSON VALLEY DIST. COUNCIL v. UW Marx, Inc.

• Decision Date: 03 May 1994
• Docket Number: No. 93 Civ. 6572 (VLB).,93 Civ. 6572 (VLB).
• Citation: 851 F. Supp. 133
• Parties: TRUSTEES OF the HUDSON VALLEY DISTRICT COUNCIL OF BRICKLAYERS AND ALLIED CRAFTSMEN, RETIREMENT, WELFARE AND APPRENTICE TRAINING AND JOURNEYMEN UPGRADING FUNDS, and Hudson Valley District Council Bricklayers and Allied Craftsmen, Plaintiffs, v. U.W. MARX, INC., Defendant.
• Court: U.S. District Court — Southern District of New York

851 F. Supp. 133

TRUSTEES OF the HUDSON VALLEY DISTRICT COUNCIL OF BRICKLAYERS AND ALLIED CRAFTSMEN, RETIREMENT, WELFARE AND APPRENTICE TRAINING AND JOURNEYMEN UPGRADING FUNDS, and Hudson Valley District Council Bricklayers and Allied Craftsmen, Plaintiffs, v. U.W. MARX, INC., Defendant.

No. 93 Civ. 6572 (VLB).

United States District Court, S.D. New York.

May 3, 1994.

COPYRIGHT MATERIAL OMITTED

David R. Wise, Gellert & Cutler, Poughkeepsie, NY, for plaintiffs.

Gerald H. Katzman, Pattison, Samson, Troy, NY, for defendant.

MEMORANDUM ORDER

VINCENT L. BRODERICK, District Judge.

I

This case presents the questions of whether or not employers can be required to pay duplicate wages if they have hired workers not members of the correct union, and if not what remedies would be appropriate, as well as questions concerning what constitutes a withdrawal from an otherwise automatically self-extending collective bargaining agreement.

Plaintiff Hudson Valley District Council, Bricklayers and Allied Craftsmen ("District Council") and its associated welfare funds filed this suit against an employer, U.W. Marx, Inc. Plaintiffs seek relief under ERISA, 29 U.S.C. § 1001 et seq., § 301 of the Taft-Hartley Act (29 U.S.C. § 185), and under state law. They base their claims upon alleged delinquencies in employee benefit contributions, and upon the alleged violation by the employer of the collective bargaining agreements in hiring employees other than members of the District Council.

An original collective bargaining agreement was negotiated between the employer and the District Council in 1983. Other collective bargaining agreements between the employer and the District Council ensued in the course of which the employer delegated its bargaining functions to the Construction Contractors' Association of the Hudson Valley (the "Association"), which negotiated a 1990 contract (hereinafter the "collective bargaining agreement" unless otherwise indicated) which was operational at least up through May 31, 1993.

The collective bargaining agreement specified various percentages of employees to be hired from the membership of the District Council including a percentage from the area where the work was to be done. It contained a provision that it would be "automatically renewed yearly thereafter unless written notice of decision to negotiate a new Agreement ... is given in writing by Certified or Registered mail ... not later than sixty (60) days nor more than ninety (90) days prior to the expiration date or any anniversary date thereafter."

In this action, the District Council seeks the amount of wages its members would have received had those members been hired in place of others whom the employer had hired, allegedly in violation of the collective bargaining agreement. The total amount demanded in the original complaint was $9,799.61.¹ Plaintiffs thereafter moved to amend the complaint under Fed.R.Civ.P. 15(a) to add claims for additional sums based on additional work done by employees hired from sources other than the District Council, increasing the amount claimed to $75,287.90.

The employer responded by arguing (1) that the current collective bargaining agreement expired on May 31, 1993 because of prior termination pursuant to the provisions quoted above, and (2) that the relief sought by plaintiffs would be inappropriate even if the collective bargaining agreement had been violated. The latter question is pertinent whether or not the collective bargaining agreement in fact expired on May 31, 1993, since the complaint includes claims of violation prior to that date. Both sides have submitted factual material concerning these issues extending beyond the pleadings.

Counsel for the parties have agreed to the following:

(a) plaintiffs' motion to amend the complaint under Rule 15 be treated as granted;

(b) the employer's objections be treated as a motion to dismiss under Fed.R.Civ.P. 12(b)(6) which is converted into a motion for summary judgment under Fed.R.Civ.P. 56 by virtue of consideration of matter beyond the pleadings;

(c) the employer's Rule 12(b)(6) motion and plaintiffs' responses be treated as cross-motions for summary judgment with respect to the two issues mentioned above;

(d) the question of whether or not any collective bargaining contract provisions were actually violated is not before the court for determination at this time.

The parties' respective motions are granted to the extent of the following, and in all other respects denied:

(1) the collective bargaining agreement between the parties expired on May 31, 1993 unless plaintiffs can establish that the employer failed to notify the multi-employer association involved, resulting in confusion;

(2) sums are due to the plaintiff ERISA employee benefit funds for work, if any, performed by nonmembers of the District Council prior to May 31, 1993, and may be recovered by such funds;

(3) the District Council's request for relief for failure of the employer to pay to its members monies which would have been earned by them, assuming that the provisions of the collective bargaining agreements during their periods of effectiveness were not honored, may proceed subject to the conditions set forth in this memorandum order, including among other matters (a) the need to resolve the question of laches, and (b) determination of whether or not a jurisdictional dispute is involved and if it is, whether or not notice to or joinder of other unions is necessary.

Questions of whether the contracts were violated prior to May 31, 1993, and if so what remedy should be provided, remain open.

II

The National Labor Relations Act, as amended by the Taft-Hartley Act of 1947, has as a major objective protection of the rights of employees to form and join labor organizations and to bargain collectively with their employers; employers in turn are required to bargain in good faith with duly chosen representatives of their employees. See 29 U.S.C. §§ 157-158. These rights, hard-won after decades of effort, are grounded in the ability of employees to choose their own representatives and in the obligation of employers to deal with those representatives. See R. Dulles, Labor in America (1949).

In most industries, the workforce is sufficiently stable to permit elections supervised by the National Labor Relations Board to function as the primary means of employee indication of choice of representatives, if any. See 29 U.S.C. § 159. The building and construction industry, however, has historically involved a large number of short-term jobs. This phenomenon both increases the cost of construction and has led to efforts to create greater job security through longer-term commitments which will both restrain costs and provide protection for employees. See sources cited, Riddick v. Summit House, 835 F.Supp. 137 (S.D.N.Y.1993); Federal Trade Commission, New York Regional Office, Report on Hearings on Obstacles to Expansion of the Building & Construction Industry (1973). In some instances, longer-term labor agreements are sought as part of a joint effort to increase productivity, employee job security, and union stability, thus ameliorating the need for strict application of traditional but expensive job-preserving work rules. See Building & Construction Trades Council v. Massachusetts Water Resources Authority, ___ U.S. ___, 113 S.Ct. 1190, 122 L.Ed.2d 565 (1993); G. Barnett, Machinery and Labor (1926).

Because of the unpredictable and short-term nature of much of the work in the construction industry, collective bargaining based on organizing after employees are hired is an incomplete means to protect the rights of employees. For this reason, exceptions to many otherwise applicable rules governing relationships among employers, trade unions and employees have been adopted by Congress. See 29 U.S.C. § 158(e), (f). These rules permit pre-hire agreements requiring employers to obtain their workforce from among union members. See Building & Construction Trade Council v. Massachusetts Water Resources Authority, ___ U.S. ___, 113 S.Ct. 1190, 122 L.Ed.2d 565 (1993); McNeff v. Todd, 461 U.S. 260, 103 S.Ct. 1753, 75 L.Ed.2d 830 (1983); NLRB v. Local Union No. 103, 434 U.S. 335, 98 S.Ct. 651, 54 L.Ed.2d 586 (1978). Such arrangements are vital to insuring to employees and their representatives the ability to bargain effectively in a volatile job environment, see Rottenberg, "Property in Work," 15 Ind'l & Labor Rel. Rev. 402 (1962). They have, indeed, replaced the raw conflict of earlier eras which often led to violence. See P. Zausner, Unvarnished (1941).

Pre-hire commitments to obtain workers from given sources, should they be deemed effectively non-cancellable and enforceable notwithstanding efforts by employers to extricate themselves from the arrangements at contractually defined times, would create self-perpetuating structures.² Such a situation would be adverse to the interests of both employers and employees, since a union would no longer need the support of employees within the collective bargaining unit to retain its position. The sole input from the workers whose interests are to be protected would then be through internal union political action on the part of members (not necessarily the entire workforce hired under union auspices), which Congress sought to protect in the Bill of Rights of Members of Labor Organizations, Title II of the Labor Management Reporting and Disclosure Act of 1959, Public Law 86-257, 73 Stat. 522, 29 U.S.C. §§ 411-415.³

These safeguards standing alone provide an incomplete counterpart to the realistic opportunity to select one's collective bargaining representative (or no representative) under 29 U.S.C. § 159. See Weyand, "Majority Rule in Collective Bargaining," 45 Colum.L.Rev. 556 (1945). The chief additional safeguard against ossification in the industry is the necessity for a union to retain the support of workers in the industry so as to be able to induce...