Nat'l Elec. Annuity Plan v. Henkels & McCoy, Inc.

• Decision Date: 16 February 2021
• Docket Number: No. 20-1024,20-1024
• Parties: NATIONAL ELECTRICAL ANNUITY PLAN, Plaintiff-Appellant, v. HENKELS & MCCOY, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

NATIONAL ELECTRICAL ANNUITY PLAN, Plaintiff-Appellant, v. HENKELS & MCCOY, INC., Defendant-Appellee.

No. 20-1024

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

February 16, 2021

NOT RECOMMENDED FOR PUBLICATION

File Name: 21a0091n.06

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN

BEFORE: BOGGS, DONALD, and THAPAR, Circuit Judges.

BOGGS, Circuit Judge.The National Electrical Annuity Plan ("NEAP") seeks contributions that it alleges Henkels & McCoy, Inc.("H & M") owes NEAP for work performed by H & M's union employees under a collective-bargaining agreement.Whether H & M owes NEAP these contributions hinges on the validity of a memorandum of understanding between H & M and two local unions as well as the meaning of an undefined term in that memorandum.In the district court, the parties brought cross-motions for summary judgment.NEAP's was denied, and H & M's was granted.

The district court erred in finding "outside telephone work" unambiguous and construing the agreement in H & M's favor.Because "outside telephone work" is ambiguous and there is a genuine dispute of material fact over its meaning, we reverse the district court's grant of judgment to H & M, affirm its denial of judgment to NEAP, and remand for further proceedings.

I.FACTUAL AND PROCEDURAL SUMMARY

NEAP is a trust fund established under and administered according to the Labor-Management Relations Act of 1947, as amended, and the Employee Retirement Income Security Act of 1974("ERISA").H & M is a Pennsylvania corporation certified to do business in Michigan.The International Brotherhood of Electrical Workers ("IBEW") is a labor union representing about 775,000 active and retired American and Canadian workers in various fields including utilities, construction, and telecommunications.IBEW > Who We Are, http://www.ibew.org/Who-We-Are (last visited Feb. 16, 2021).IBEW Local Unions 17 and 876 ("the locals") are branches of the IBEW with jurisdiction in Michigan.Locals 17 and 876 are "outside locals": they perform work outside buildings, while other IBEW locals perform work inside buildings.

A.The Agreements

In 1995, IBEW and H & M entered into a national collective-bargaining agreement.In early 2011, H & M and the locals signed a set of supplementary appendices (the "2011 appendices") to the 1995 national agreement between H & M and IBEW.The three signatories¹ also signed several memoranda of understanding that also purported to supplement the agreement—two in late 2011(the "first 2011 memorandum" and the "second 2011 memorandum," respectively) and one in late 2014 and early 2015(the "2014 memorandum").²And in 2017, the signatories signed a new set of appendices (the "2017 appendices"), amending the agreement once more.

We describe the relevant contents of each agreement in more detail, beginning with the scope of the 1995 national agreement between IBEW and H & M.That agreement purported to

cover[] low voltage construction, installation, maintenance and removal of teledata facilities (voice, data and video) including outside plant, telephone and data insidewire, interconnect, terminal equipment, central offices, PABX, fiber optic cable and equipment, railroad communications, micro waves, V-SAT, by- pass, [sic] CATV, WAN (Wide area networks), LAN (local area networks), and ISDN (integrated systems digital network).

(R. 10-2, PageID 125.)But it "does not apply to new construction nor to retrofits in those locals where the Inside Local Union has control of the work."(Ibid.)The national agreement took effect on March 1, 1995, and it has remained in effect since.There is a formal mechanism for amendment or termination after advance notice, and the agreement is also "subject to change or supplement at any time by mutual consent of the parties."(Id. at PageID 126.)

The 2011 appendices took retroactive effect November 29, 2010, were to "remain in effect until November 27, 2011, unless otherwise specifically provided for [t]herein," and would "continue in effect from year to year thereafter, from November 29, through November 27 of each year unless changed or terminated in the way later provided [t]herein."(R. 10-3, PageID 143.)As with the 1995 agreement, the 2011 appendices contained a formal mechanism for amendment or termination after advance notice and were "subject to change or supplement at any time by mutual consent of the parties."(Ibid.)Section 5.07 of the 2011 appendices obligated H & M to contribute 16.5% of gross monthly labor payroll to NEAP "unless [NEAP] authorized otherwise."(Id. at PageID 154-55.)

The first 2011 memorandum states that it

serve[s] as an addendum to the Teledata Agreement, hereafter referred to as "Agreement", between Employer and Union (which Agreement takes the form of Appendices to the National Teledata Agreement between Employer and the IBEW International), and all successor Agreements, the expiration date of which Agreement is November 27, 2011.

(R. 10-4, PageID 166.)The second 2011 memorandum contains identical language except that it omits "the expiration date of which Agreement is November 27, 2011."The 2014 memorandum has slightly different language: it

serve[s] as an addendum to the Teledata Agreement, hereinafter referred to as ["]Agreement", between Employer and Union, which Agreement takes the form of Appendices to the National Teledata Agreement between Employer and the IBEW International, the expiration date of which Agreement is November 23, 2014.

(R. 10-6, PageID 170.)Unlike the two 2011 memoranda, the 2014 memorandum lacks a clause purporting to supplement "all successor Agreements."

Two of these memoranda extended the duration of the "Agreement."The first 2011 memorandum extended the Agreement for three years, setting November 23, 2014, as its expiration date.The 2014 memorandum extended the Agreement for another two years, until November 20, 2016.³

All three memoranda purport to change the amount of wages paid to workers.The first 2011 memorandum expressly increased wages by 2% "effective the first year" and by 2.25% "effective the second and third years."(R. 10-4, PageID 166.)The second 2011 memorandum changed H & M's obligations for "outside telephone work":

It is agreed and understood that for all outside telephone work performed by Employer:

1) Employer shall not be required to make any contributions to the National Electrical Annuity Plan (NEAP)

2) The wages shall be ninety one per cent (91%) of the wage rates of all classifications contained in the aforementioned Agreement and all successor Agreements

(R. 10-5, PageID 168.)And the 2014 memorandum contains the following changes:

2) Effective November 24, 2014, there shall be a wage increase of two per cent (2%).

3) Effective November 24, 2015, there shall be a wage increase of two per cent (2%), and a NEAP increase of one half of one percent (.5%).

4) Effective November 24, 2014, the classification of Certified Crane Operator is established, with an hourly wage that is one dollar ($1.00) less than the wage rate of Construction Foreman.

(R. 10-6, PageID 170.)

Last, all three memoranda conclude with a clause aimed at resolving conflicts between the terms: "In the event of any conflict between the provisions of this [memorandum] and the provisions of the aforementioned Agreement, the provisions of this [memorandum] shall prevail and take precedence."(R. 10-4, PageID 166;R. 10-5, PageID 168;R. 10-6, PageID 170.)

Finally, the 2017 appendices took effect retroactively on November 21, 2016.They were to "remain in effect until November 25, 2018, unless otherwise specifically provided for [t]herein," and "continue in effect from year to year thereafter, from November, through November of each year unless changed or terminated in the way later provided [t]herein."(R. 10-7, PageID 172.)The formal amendment and termination procedure for the 2017 appendices, as well as the language allowing the signatories to change or supplement the appendices by mutual consent, is the same as that in the 1995 national agreement and the 2011 appendices.And, as with the 2011 appendices, section 5.07 of the 2017 appendices purports to obligate H & M to contribute a percentage of gross monthly labor payroll to NEAP.For the 2017 appendices, the contribution rate began at 17% and increased to 18% on November 24, 2017.

B.The Litigation

NEAP filed suit against H & M in November 2018 over its alleged failure to pay contributions for work that H & M performed in Michigan.That work, much of which is for Verizon, includes installing a 5G network, MCI small-cell equipment, and over 1,500 miles of overhead and underground fiber-optic cable.NEAP alleges that H & M owes over $350,000 in contributions for the Verizon project and other work between November 2016 and July 2019.H & M denies that it owes contributions for that work, claiming that the second 2011 memorandum exempts it fromthe contribution requirement for "outside telephone work."In fact, H & M did contribute for several projects between 2012 and 2016 that it now classifies as "outside telephone work," but it contends that those contributions were an administrative error.

After NEAP's complaint survived a motion to dismiss, the parties filed cross-motions for summary judgment.The district court denied judgment to NEAP and granted judgment to H & M. NEAP appeals the district court's ruling on both motions.

II.LEGAL BACKGROUND

A.Reviewing Cross-Motions for Summary Judgment

We review de novo a district court's grant of summary judgment.Jones v. Clark Cnty., 959 F.3d 748, 756(6th Cir.2020).Summary judgment is granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law."Fed. R. Civ. P. 56(a).A genuine dispute exists if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party."Anderson v. Liberty Lobby, 477 U.S. 242, 248(1986).The court...