Mazzei v. Rock-n-Around Trucking Inc., ROCK-N-AROUND

• Decision Date: 06 April 2001
• Docket Number: No. 00-1473,ROCK-N-AROUND,00-1473
• Citation: 246 F.3d 956
• Parties: (7th Cir. 2001) LOU MAZZEI, TRUSTEE OF THE LOCAL 786 BUILDING MATERIAL TEAMSTERS AND HELPERS WELFARE FUND AND LOCAL 786 BUILDING MATERIAL TEAMSTERS AND HELPERS PENSION FUND, Plaintiff-Appellant, v.TRUCKING, INC., an Illinois corporation, Defendant-Appellee
• Court: U.S. Court of Appeals — Seventh Circuit

Page 956

246 F.3d 956 (7th Cir. 2001)

LOU MAZZEI, TRUSTEE OF THE LOCAL 786 BUILDING MATERIAL TEAMSTERS AND HELPERS WELFARE FUND AND LOCAL 786 BUILDING MATERIAL TEAMSTERS AND HELPERS PENSION FUND, Plaintiff-Appellant, v. ROCK-N-AROUND TRUCKING, INC., an Illinois corporation, Defendant-Appellee.

No. 00-1473

In the United States Court of Appeals For the Seventh Circuit

Argued October 27, 2000

Decided April 6, 2001

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 99 C 1975--David H. Coar, Judge. [Copyrighted Material Omitted] Before Easterbrook, Kanne, and Rovner, Circuit Judges.

Kanne, Circuit Judge.

Lou Mazzei, Trustee of the Local 786 Building Material Teamsters and Helpers Welfare Fund and Local 786 Building Material Teamsters and Helpers Pension Fund ("the Funds"), filed suit against Rock N' Around Trucking ("RNA"), claiming that pursuant to the terms of the collective bargaining agreement (the "CBA") RNA entered into with the International Brotherhood of Teamsters, Local 786 ("Local 786"), RNA owes the Funds $669,030 in contributions on behalf of its owner-drivers. The district court found that the CBA obligates RNA to contribute to the Funds on behalf of its owner-drivers. The court concluded, however, that such contributions would violate section 302 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. sec. 186, because RNA's owner-drivers are independent contractors. Therefore, the court granted RNA's motion for summary judgment. Mazzei now appeals the district court's decision. Because we agree with the district court's conclusion that the contributions called for in the CBA are illegal under section 302 of the LMRA, we affirm its decision granting RNA's motion for summary judgment.

I. History

RNA is an Illinois Corporation that provides trucking services to the construction industry. In April 1996, RNA entered into the CBA with the Local 786, a labor union representing truck drivers and yard employees engaged in the processing and delivery of building materials. The controversy in this case centers around what obligation, if any, RNA has, under the terms of the CBA, to contribute to the Funds on behalf of its owner-drivers, those individuals who own and drive their own trucks.

Most of RNA's hauling operations are performed by owner-drivers. These individuals sign "Equipment Leases" with RNA and operate under RNA's license to operate as a motor carrier.¹. The lease term is for three years, though either party may terminate the lease at any time without penalty. Additionally, owner-drivers are free to lease their services to other carriers during this term, and they can refuse to work for RNA for any reason. Owner-drivers working for RNA store and maintain their own trucks, pay for their own gas, pay their own taxes, and provide their own insurance coverage. With regard to compensation, owner-drivers are paid on a Form 1099 basis and receive a gross percentage of the payments RNA receives from its customers, rather than an hourly wage.

An owner-driver who accepts an assignment from RNA is told the location and time of the pick-up and/or delivery of his or her respective load. When an owner-driver accepts an assignment from RNA, that owner-driver is required by Illinois law to place a sign on the side of the truck cab that reads: "Leased To & Operated By Rock N' Around Trucking, Inc." This sign must be covered up or removed, however, whenever an owner-driver is not performing work for RNA under RNA's ILCC license; and owner-drivers must return these signs along with all other RNA materials at the end of a lease term.

The Funds are multiemployer benefit plans as defined in 29 U.S.C. sec. 1003(37)(A), and therefore, they are governed by the Employee Retirement Income Security Act of 1974 ("ERISA"). 29 U.S.C. sec. 1003(a). In the course of auditing employers contributing to the Funds, Local 786 concluded that RNA owed $669,030 in delinquent contributions on behalf of its owner-drivers. Mazzei, a Trustee of the Funds, filed suit in the Northern District of Illinois pursuant to section 502 of ERISA, 29 U.S.C. sec. 1132, alleging that RNA violated section 515 of ERISA, 29 U.S.C. sec. 1145, by failing to make contributions required by the CBA on behalf of its owner-drivers. RNA disputed Mazzei's claim, advancing three reasons why it should not be required to make these contributions: (1) the contract language is ambiguous and does not require contributions; (2) the owner-drivers signed waivers of contributions, and thus, none are required; and (3) the owner-operators are independent contractors and not employees, thereby making the contributions illegal. The parties filed cross- motions for summary judgment. The district court granted RNA's motion, finding that although the CBA unambiguously obligates RNA to contribute to the Funds for each of its owner-drivers, the form of contribution called for in the CBA is illegal under section 302 of the LMRA because RNA's owner-drivers are independent contractors. 29 U.S.C. sec. 186. Mazzei now appeals the court's decision, challenging its determination that the owner-drivers are independent contractors instead of employees and its conclusion that the contributions called for in the CBA violate federal law.

II. Analysis

A. Standard of Review

We review the district court's decision to grant RNA's motion for summary judgment de novo. See Contreras v. Suncast Corp., 237 F.3d 756, 759 (7th Cir. 2001). Summary judgment is proper when the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). A genuine issue of material fact exists, and summary judgment is improper, if a reasonable jury could return a verdict in favor of the non- moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). In making this determination, we review the record in the light most favorable to the non-moving party, in this case Mazzei, drawing all reasonable inferences in his favor. See Amadio v. Ford Motor Co., 238 F.3d 919 921 (7th Cir. 2001); see also Liberty Lobby, Inc., 477 U.S. at 255.

B. RNA's Obligation to Contribute Under the CBA

Mazzei alleges that RNA's failure to contribute to the Funds on behalf of its owner-drivers violates the terms of the CBA and section 515 of ERISA. Section 515 "requires employers to comply with the terms of their agreements to make contributions to funds," Cent. States, Southeast & Southwest Areas Pension Fund v. Transp. Inc., 183 F.3d 623, 627 (7th Cir. 1999), to the extent that such terms are not inconsistent with the law.². See Cent. States, Southeast & Southwest Areas Pension Fund v. Hartlage Truck Serv., Inc., 991 F.2d 1357, 1360 (7th Cir. 1993). Thus, we must first review the language of the CBA and determine whether it obligates RNA to contribute to the Funds on behalf of its owner-drivers. See Ill. Conference of Teamsters & Employers Welfare Fund v. Mrowicki, 44 F.3d 451, 458 (7th Cir. 1994).

The district court found that the terms of the CBA unambiguously obligates RNA to contribute to the Funds on behalf of its owner-drivers. See Mazzei v. Rock-N-Around Trucking, Inc., No. 99 C 1975, 2000 WL 152137, *3-5 (N.D. Ill. Feb. 4, 2000). RNA disputes the district court's finding with respect to this issue. Instead, RNA contends that the CBA unambiguously establishes that RNA does not have to contribute to the Funds on behalf of its owner-drivers.

We review the district court's interpretation of the CBA de novo. See Cent. States, Southeast & Southwest Areas Pension Fund v. Kroger Co., 226 F.3d 903, 910 (7th Cir. 2000). We will enforce the terms of a collective bargaining agreement if those terms are unambiguous. See Young v. N. Drury Lane Prod., 80 F.3d 203, 205 (7th Cir. 1996). The CBA is unambiguous if it "is susceptible to only one reasonable interpretation." Moriarty v. Svec, 164 F.3d 323, 330 (7th Cir. 1998). Furthermore, if we find no ambiguity in the terms of the CBA, then, in determining its meaning as a matter of law, we need not review extrinsic evidence suggesting how those terms should be interpreted. See Mrowicki, 44 F.3d at 459.

Article 16 of the CBA, entitled "Health and Welfare and Pension," obligates RNA to contribute "into a trust . . . for the payment of Health and Welfare or Pension benefits . . . for an employee covered by this Agreement." In Article 1, "employee" is defined as "the employee or employees in the classifications of work covered" by the CBA. While this definition does not address whether RNA's owner-drivers are considered covered employees, Article 24, entitled "Owner-Drivers," explains that "Owner- Drivers operating their own vehicles and who are not certified carriers with proper Illinois Commerce Commission authority are covered within the terms and conditions of this Agreement, including Union security, hours, wages, overtime, Health & Welfare and Pension and working conditions." CBA sec. 24.1 (emphasis added). Article 24 clearly extends RNA's responsibilities under Article 16, Health and Welfare or Pension, to the terms of employment for RNA's owner- drivers. Therefore, we find that there can be no mistaking the fact that the CBA attempts to impose an obligation on RNA to contribute to the Funds for each of its owner-drivers.

Furthermore, we agree with the district court's determination that this interpretation of the CBA is "straightforward and not inconsistent with other provisions therein." Mazzei, 2000 WL 152137, at *5. RNA disagrees, arguing that sections 24.1-4 and 24.3 conflict with our interpretation and demonstrate that the terms of the CBA do not obligate it to contribute...