Mo-Kan Teamsters Pen. Fund v. Botsford Ready Mix Co.

• Decision Date: 02 April 1985
• Docket Number: No. 84-0193-CV-W-3.,84-0193-CV-W-3.
• Citation: 605 F. Supp. 1441
• Parties: MO-KAN TEAMSTERS PENSION FUND, et al., Plaintiffs, v. BOTSFORD READY MIX CO., et al., Defendants.
• Court: U.S. District Court — Western District of Missouri

605 F. Supp. 1441

MO-KAN TEAMSTERS PENSION FUND, et al., Plaintiffs, v. BOTSFORD READY MIX CO., et al., Defendants.

No. 84-0193-CV-W-3.

United States District Court, W.D. Missouri, W.D.

April 2, 1985.

Albert J. Yonke, Kansas City, Mo., for plaintiffs.

John Bestor, Kansas City, Mo., for defendants.

ORDER

ELMO B. HUNTER, Senior District Judge.

Before the Court is defendants' motion to dismiss for lack of subject matter jurisdiction. Defendants assert that the statutes claimed by the plaintiffs to support jurisdiction are inapplicable to this cause and that the conduct complained of is within the exclusive jurisdiction of the N.L.R.B. The parties have filed a stipulation of uncontroverted facts for the Court's use in ruling on the motion.

This is an action to collect 20% of fringe benefit contributions covering a period of twenty-two days, liquidated damages, and attorney's fees. Plaintiffs are the Mo-Kan Teamsters Pension Fund, the Mo-Kan Teamsters Health and Welfare Fund (collectively referred to herein as the "Funds," and individually referred to as the "Pension Fund" and "Health and Welfare Fund") and the respective Trustees of each of the Funds. Each of the defendants is an employer that has contributed, and presently contributes to the Funds on behalf of its employees who are represented for purposes of collective bargaining by the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America Local Union No. 541 ("Local 541").

Prior to April 1, 1983, defendants were bound by the terms of a collective bargaining agreement negotiated by The Builders Association of Missouri (the "Builders Association") and Local 541, or by separate agreements incorporating identical terms regarding the payment and reporting of fringe benefits to the Funds. On or about January 25, 1983, each of the defendants wrote to Local 541, giving notices pertinent to that defendant's termination of the existing collective bargaining agreement, its withdrawal from the Builders Association, and its intention regarding the negotiation of a new agreement with Local 541. Each of the letters was identical in content. The letters of January 25, 1983 were timely notices and did effect a termination of the collective bargaining agreement with respect to each of the defendants effective April 1, 1983.

Upon withdrawing from the group of employers that were represented for purposes of collective bargaining by the Builders Association, the defendants and some other employers in the same business (production and sale of ready-mix concrete) formed the Concrete Producers Association of Metropolitan Kansas City, Inc. (Producers Association"). Defendants' negotiations for new collective bargaining agreement with unions representing their employees, including Local 541, were conducted through a bargaining committee of that organization.

As of April 1, 1983, representatives of the Producers Association and Local 541 had not agreed to the terms of a new collective bargaining agreement. Effective April 1, 1983, each of the defendants notified Local 541 and its individual employees that it would not make contributions to the Funds until it had entered into a new agreement with Local 541, and that it would pay the amount of the contribution ($1.50 per hour to the Pension Fund and $1.25 per hour to the Health and Welfare Fund) directly to its employees. Also, effective April 1, 1983, each of the defendants notified Local 541 and its employees that it was placing into effect the terms and provisions of its last written contract proposal to Local 541. The contract proposal had included the obligation and requirement to make fringe benefit contributions to the Funds. The obligation and requirement was identical to that required by each defendant's prior contract with Local 541 and by a later contract that became effective April 22, 1983.

On or about April 11, 1983, Local 541, through its attorney Michael C. Arnold, filed identical unfair labor practice charges against each of the defendants alleging that it had violated Sections 8(a)(1) and (5) of the National Labor Relations Act, 29 U.S.C. § 158(a)(1) and (5). Each charge stated:

Since on or about April 1, 1983, the above-named Association and/or Employer through its agents and/or representatives has refused to bargain in good faith with LOCAL 541 of the INTERNATIONAL BROTHERHOOD OF TEAMSTERS, the bargaining representative of its employees, by unilaterally changing the terms and conditions of employment of its employees.

The charges against defendants were assigned case numbers 17-CA-11570-2 through 17-CA-11570-11.

Representatives of the Concrete Producers Association and of Local 541 continued their negotiations and agreed to the terms of a new contract that was effective April 22, 1983. Payments by defendants of contributions to the Funds resumed effective April 22, 1983. Payments of the contribution amounts directly to employees were discontinued effective that date.

On July 28, 1983, the Regional Director of the National Labor Relations Board issued a Consolidated Complaint and Notice of Hearing against all the defendants in this action. The Complaint alleged, in pertinent part:

8.

(a) On or about April 1, 1983, and continuing through April 22, 1983, each Respondent individually, instituted the following changes in the established wages, hour of employment and other terms and conditions of employment:

(1) Paid the $1.50 per hour pension benefits directly to the employees described above in paragraph 5 who were working for each Respondent individually during this period of time.

(2) Paid the $1.25 per hour health and welfare benefits directly to the employees described above in paragraph 5 who were working for each Respondent individually during the above period of time.

(b) Each Respondent individually engaged in the acts and conduct described above in paragraph 8(a) without prior notice to the Union and without having afforded the Union an opportunity to negotiate and bargain as the exclusive representative of Respondent's employees with respect to such acts and conduct and the effects of such acts and conduct....

9.

By the acts and conduct described above in paragraph 8, and by each of said acts, each Respondent has failed and refused, and is failing and refusing, to bargain collectively with the representatives of its employees, and each Respondent thereby has been engaging in unfair labor practices within the meaning of Section 8(a)(1) and (5) of the Act.

The Complaint was subsequently amended in a manner not here pertinent, and the hearing was postponed until February 6, 1984.

On February 6, 1984, defendants (respondents in the N.L.R.B. proceeding) and Counsel for the General Counsel agreed upon a proposed informal settlement. Among other things, it provided that defendants would pay to the Funds an amount equal to eighty percent (80%) of the contributions that would have been paid for the period April 1, 1983, through April 22, 1983, if contributions to the Funds had not been discontinued, and that the N.L.R.B. Complaint against defendants would be withdrawn. Local 541 objected to the proposed settlement.

On February 9, 1984, the Regional Director approved the proposed settlement. On February 21, 1984, Local 541, through its attorney, filed with the General Counsel of the National Labor Relations Board an appeal from the Regional Director's approval of a settlement agreement that provided for less than one hundred percent (100%) restitution to the Funds.

On March 21, 1984, the General Counsel, through the Office of Appeals, denied the appeal filed by Local 541. The proceedings before the National Labor Relations Board have been completed.

It appears that the central issue in this dispute is the nature of the obligation to continue the fringe benefit payments in accordance with the terms of the terminated contract.¹ Defendants contend that no agreement existed between the parties which required contributions to be paid to the funds during the period between April 1 and April 22, 1983. Plaintiffs assert that an obligation under federal labor law will suffice to bring this action within the purview of ERISA.

Plaintiffs point to 29 U.S.C. §§ 1132 and 1145 as supporting subject matter jurisdiction. Section 1145 requires employers to comply with their promises to make fringe benefits contributions:

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 on such agreement.

Section 1132 provides that a civil action may be brought to redress violations of the subchapter or the terms of the plan and provides for an award of liquidated damages, interest and attorney's fees. The question then becomes whether section 1145 pertains to contribution obligations arising under section 8(a)(5) of the NLRA.

It appears that the only reported case on point is Laborers Health & Welfare Trust Fund v. Hess, 594 F.Supp. 273 (N.D.Cal. 1984). In Hess, the court interpreted "Every employer who is obligated to make contributions ... under the terms of a collectively bargained agreement" to include employers obligated to contribute as a result of a duty under applicable labor-management relations law.

The well-researched and well-written Hess opinion relied on an analysis of the language, legislative history, and purpose of the statute. The court supported its holding with the following reasons:

1. The definition of "obligation to contribute" contained in a different title of ERISA includes obligations arising as a result of a duty under applicable labor law 2. The language of the statute in question refers to obligations under the terms of a collective bargaining agreement, and not obligations under a collective bargaining agreement; and

3. The

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