Laborers Health and Welfare Trust Fund for Northern California v. Advanced Lightweight Concrete Co., Inc.
| Decision Date | 26 December 1985 |
| Docket Number | Nos. 84-2403,s. 84-2403 |
| Citation | 779 F.2d 497 |
| Parties | 121 L.R.R.M. (BNA) 2276, 54 USLW 2361, 104 Lab.Cas. P 11,752, 106 Lab.Cas. P 12,234, 6 Employee Benefits Ca 2657 LABORERS HEALTH AND WELFARE TRUST FUND FOR NORTHERN CALIFORNIA; Laborers Pension Trust Fund for Northern California; and Laborers Training and Retraining Trust Fund for Northern California, Plaintiffs-Appellants, v. ADVANCED LIGHTWEIGHT CONCRETE CO., INC., Defendant-Appellee, CEMENT MASONS HEALTH AND WELFARE TRUST FUND FOR NORTHERN CALIFORNIA; Cement Masons Pension Trust Fund for Northern California; Cement Masons Vacation Trust Fund for Northern California; and Cement Masons Apprenticeship and Training Trust Fund for Northern California, Plaintiffs-Appellants, v. ADVANCED LIGHTWEIGHT CONCRETE CO., INC., Defendant-Appellee. to 84-2406. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Barry E. Hinkle, Blythe Mickelson, Michael B. Roger, Van Bourg, Allen, Weinberg & Roger, San Francisco, Cal., for plaintiffs-appellants.
Mark S. Ross, Schachter, Kristoff, Ross, Sprague & Curiale, San Francisco, Cal., for defendant-appellee.
An Appeal From United States District Court for the District of California.
Before CHAMBERS, TANG, and PREGERSON, Circuit Judges.
In this case of first impression for an appellate court, we hold that the primary jurisdiction of the National Labor Relations Board preempts a trust fund's suit in district court under sections 502 and 515 of the Employee Retirement Income Security Act ("ERISA") to recover delinquent contributions accrued after a collective bargaining agreement has expired.
As a member of the Associated General Contractors of California ("AGC"), Advanced Lightweight Concrete Co. ("Advanced") was a signatory both to the 1980-83 Laborers Master Labor Agreement and to the 1980-83 Cement Masons Master Labor Agreement ("master agreements"). These multi-employer collective bargaining agreements included a requirement that Advanced contribute on behalf of its employees to: the Laborers Health and Welfare Trust Fund for Northern California; the Laborers Pension Trust Fund for Before the expiration of the master agreements, Advanced withdrew AGC's authority to bargain on its behalf, and notified the Northern California District Council of Laborers of the Laborers International Union of North America AFL-CIO, the District Council of Plasterers and Cement Masons of Northern California, and the relevant local unions ("the unions") that it would not be bound by either the master agreements or any successor agreements beyond their June 15, 1983 expiration date. Advanced also declared to the unions its readiness to negotiate independently.
Northern California; the Laborers Vacations-Holiday-Dues Trust Fund for Northern California; and the Laborers Training and Retraining Trust Funds for Northern California; and to the Cement Masons' Health and Welfare Trust Fund for Northern California; the Cement Masons Pension Trust Fund for Northern California; the Cement Masons Vacation-Holiday-Supplemental Dues Trust Fund for Northern California; and the Cement Masons Apprenticeship and Training Trust Fund for Northern California Fund ("trust funds"). The master agreements both incorporated the terms of the trusts by reference and specified the contributions due per employee hour worked from a signatory employer to the funds during the term of the agreement.
While the parties disagree as to the nature of further contacts between Advanced and the unions, 1 it is not disputed that Advanced has not signed any collective agreement with either the Laborers' or Cement Masons' unions. There is also no dispute that Advanced has paid no contributions to either trust fund since June 15, 1983.
In December 1983, the trust funds filed separate suits against Advanced seeking unpaid contributions from June 15, 1983. In March and April 1984, the trust funds filed two further complaints demanding an audit of Advanced's books in accordance with the terms of the master agreements. 2 The former cases alleged jurisdiction based on ERISA Sec. 502, 29 U.S.C. Sec. 1132, and Sec. 515, 29 U.S.C. Sec. 1145, and Labor Management Relations Act ("LMRA") Sec. 301, 29 U.S.C. Sec. 185. In May 1984, the four cases were consolidated as related cases under local rules.
Relying entirely on Cement Masons Health and Welfare Trust Fund for Northern California v. Kirkwood-Bly, Inc., 520 F.Supp. 942 (N.D.Cal.1981), aff'd for the reasons stated in the district court's opinion, 692 F.2d 641 (9th Cir.1982), the district court held that it had no jurisdiction over the four related suits and granted summary judgment to Advanced. Trust funds timely appealed.
Freezing the status quo ante after a collective agreement has expired promotes industrial peace by fostering a non-coercive atmosphere that is conducive to serious negotiations on a new contract. Thus, an employer's failure to honor the terms and conditions of an expired collective bargaining agreement pending negotiations on a new agreement constitutes bad faith bargaining in breach of sections 8(a)(1), 8(a)(5) and 8(d) of the National Labor Relations Act ("NLRA"), 29 U.S.C. Secs. 158(a)(1), 158(a)(5) and 158(d). NLRB v. Katz, 369 U.S. 736, 743, 82 S.Ct. 1107, 1111, 8 L.Ed.2d 230 (1962). Consequently, any unilateral change by the employer in the pension fund arrangements provided by an expired agreement is an unfair labor practice. Peerless Roofing Co. v. NLRB, 641 F.2d 734, 736 (9th Cir.1981); Producer's Dairy Delivery Co. v. Western Conference of Teamsters Pension Trust Fund, 654 F.2d 625, 627 (9th Cir.1981). However, after bargaining to impasse, 3 the employer may unilaterally implement the best offer made in negotiations. Katz, 369 U.S. at 745, 82 S.Ct. at 1112.
In granting summary judgment, the district court relied on Cement Masons Health and Welfare Trust Fund for Northern California v. Kirkwood-Bly, Inc., 520 F.Supp. 942 (N.D.Cal.1981), aff'd for the reasons stated in the district court's opinion, 692 F.2d 641 (9th Cir.1982). In Kirkwood-Bly, a trust fund sued under section 301 of the LMRA to recover contributions due after a collective agreement had expired but before impasse. 520 F.Supp. at 943. The district court reasoned that a collective bargaining agreement does not "survive" in the sense that it continues as a legally operative document; rather, the agreement's terms "survive" in order to define the parameters of the employer's obligation under section 8(a)(5) to maintain the status quo during negotiations. 520 F.Supp. at 943-945. Thus, the NLRB's primary jurisdiction preempts a suit to enforce the terms of an expired collective agreement. 4
The trust funds dispute the validity of Kirkwood-Bly to their suits. Kirkwood- Bly expressly does not decide any similar trust fund suit brought under section 515 of ERISA. 520 F.Supp. at 946 n. 2. 5 Moreover, in an opinion decided after the district court's grant of summary judgment to Advanced, Chief Judge Peckham, who wrote the district court opinion in Kirkwood-Bly, held that the NLRA does not preempt a section 515 suit to recover delinquent contributions due after the expiration of a collective bargaining agreement. Laborers Health and Welfare Trust Fund v. Hess, 594 F.Supp. 273, 282 (N.D.Cal.1984). 6 Kirkwood-Bly thus is not necessarily determinative of the trust funds' suits insofar as they are based on section 515 of ERISA. However, Kirkwood-Bly does, as both parties concede, mandate affirmance of summary judgment on the trust funds' section 301-based causes of action.
Section 515 of ERISA, 29 U.S.C. section 1145, states:
Every employer who is obligated to make contributions to a multiemployer plan under the terms of the plan or under the terms of a collectively bargained agreement shall, to the extent not inconsistent with law, make such contributions in accordance with the terms and conditions of such plan or such agreement.
Section 515 was added to ERISA in 1980 by section 306(a) of the Multiemployer Pension Plan Amendment Act ("MPPAA") 7 to allow trust funds to recover delinquent contributions from employers as expeditiously as possible. 8
In Hess, the court's conclusion that the NLRA does not preempt a section 515 suit after the collective agreement has expired relied heavily on statutory analysis. Based on this analysis, the court characterized the purpose of section 515 as remedial. Three other reported decisions have dealt explicitly with this issue subsequent to Hess, and all reach the opposite conclusion. Mo-Kan Teamsters Pension Fund v. Botsford Ready Mix Co., 605 F.Supp. 1441, 1444-48 (W.D.Mo.1985); U.A. 198 Health and Welfare Education and Pensions Funds v. Rester Refrigeration Service, Inc., 612 F.Supp. 1033, 1036-38 (M.D.La.1985); Pattern Makers' Pension Trust Fund v. Badger Pattern Works, Inc., 615 F.Supp. 792, 798-800 (N.D.Ill.1985). 9
Hess rests on three premises. First, a phrase similar to "obligated to make contributions," which appears in section 515, is defined elsewhere in ERISA as "an obligation to contribute arising ... (1) under one or more collective bargaining (or related) agreements, or (2) as a result of a duty under applicable labor-management relations law." 29 U.S.C. Sec. 1392(a). Subpart (2) of this definition would seem to include obligations created by section 8(a)(5). Since no other relevant definition appears in ERISA, Hess concludes that the phrase used...
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