Painters Trust v. Sandvig-Ostergard, Inc.

• Decision Date: 30 January 1990
• Docket Number: No. C88-1125M.,C88-1125M.
• Citation: 737 F. Supp. 1131
• Parties: PAINTERS TRUST, WESTERN WASHINGTON, Painters Pension Trust, Western Washington, Apprenticeship and Training Trust, Plaintiffs, v. SANDVIG-OSTERGARD, INC., a Washington corporation; Wayne C. Sandvig and Jane Doe Sandvig, his wife, Defendants.
• Court: U.S. District Court — Western District of Washington

737 F. Supp. 1131

PAINTERS TRUST, WESTERN WASHINGTON, Painters Pension Trust, Western Washington, Apprenticeship and Training Trust, Plaintiffs, v. SANDVIG-OSTERGARD, INC., a Washington corporation; Wayne C. Sandvig and Jane Doe Sandvig, his wife, Defendants.

No. C88-1125M.

United States District Court, W.D. Washington, at Seattle.

January 30, 1990.

John Ranquet, Seattle, Wash., for plaintiffs.

Herman L. Wacker, Riddell, Williams, Bullitt & Walkinshaw, Seattle, Wash., for defendants.

ORDER

McGOVERN, District Judge.

THIS MATTER comes on for consideration by the undersigned Judge of the above-entitled court upon motions, that of the defendants denominated a motion for summary judgment dismissing the plaintiffs' claims for delinquent trust fund contributions "on the grounds that this court lacks jurisdiction over the subject matter of the dispute", and that of the plaintiffs, denominated a cross motion for summary judgment "for contributions". The defendant employer also seeks Rule 11 sanctions against the plaintiff trusts and their attorney "for filing a baseless claim."

Facts material both to the jurisdictional and delinquency issues are not in genuine dispute.

Defendant employer Sandvig-Ostergard is a small construction company engaged in the business of supplying and installing wall coverings for contractors, decorators and building owners in the Seattle-Tacoma area. Organized in 1979, the company shortly thereafter initiated a labor agreement with the Painters District Council No. 5.

A Registration and Counterpart Agreement was executed on May 15, 1979, and another was executed on January 19, 1981. The last written agreement between the company and the painters' union was the Western Washington Area Agreement for the Painting and Drywall Industry, effective July 1, 1983 to May 31, 1986. From the inception of the collective bargaining agreement, the company assigned its bargaining rights to the Painting and Decorating Contractors of America (PDCA). The PDCA is an industry group which engages in multi-employer collective bargaining with the painters union.

By letter dated January 6, 1986, the company gave the union notice of termination of the 1983-1986 collective bargaining agreement, effective May 31, 1986. That letter included the following declarations.

You are also hereby notified that this employer no longer intends to engage in collective bargaining with your organization or any of its constituents through multi-employer bargaining. We are withdrawing from the multi-employer bargaining unit, however, we are not withdrawing recognition of your organization as the collective bargaining representative of our employees. We will recognize and bargain for a new agreement in a bargaining unit limited to the operations of this employer i.e. bargaining on a single-employer basis.

By this letter this company reaffirms that the Western Washington PDCA Labor Relations Board is our exclusive representative for collective bargaining, however, the bargaining will henceforth be a single-employer unit bargaining. Our negotiator is free to negotiate with you separately for our company, or for convenience purposes, simultaneously with other employers it represents.

The union by letter dated February 13, 1986, acknowledged receipt of the company's letter dated January 6, 1986, terminating the 1983-1986 Western Washington Area Agreement for Painting and Drywall Industry, effective May 31, 1986, and declared,

We will negotiate with the P.D.C.A. for your firm.

On June 25, 1986, the Painters' District Council No. 5 struck the painting industry.

At Sandvig-Ostergard all of the employees covered by the union contract, except my brother, Warren Sandvig, withheld services on the first day of the strike. A short time later, one of the union employees, Jim Poston, returned to work. None of the other union employees has returned to work. In order to continue the operations of Sandvig-Ostergard, the company hired temporary strike replacements to fill the positions vacated by the striking employees.

Affidavit of Wayne C. Sandvig in Support of Defendants' Motion for Summary Judgment and Sanctions, dated January 24, 1989, at page 3.

By letter dated July 16, 1986, the company withdrew its bargaining rights from the Washington State Council PDCA and declared its wish to negotiate with the union individually and separately. Responding by letter dated July 17, 1986, the executive secretary of the union acknowledged receipt of the company's July 16 notice of withdrawal of bargaining rights from the PDCA, and offered what the company president describes as "dates for bargaining sessions." Sandvig Affidavit at 4.

Efforts by representatives of the union and the company through December, 1986, to meet for purposes of negotiating a renewed labor agreement were unsuccessful. Some inaction on both sides in this respect appears in the record. Id., at 4, 5; and Exhibits G and H.

Crucial to the resolution of the matters before the Court for consideration is the defendant employer's conduct following the expiration of the 1983-1986 collective bargaining agreement on May 31, 1986. In that respect, the affidavit of defendant Wayne Sandberg reads, in part, at pages 4 through 6, as follows:

Sandvig-Ostergard paid the union employees who continued to work during the strike the existing wages and benefits they had been receiving under the expired contract. The company regularly and timely paid contributions for Warren Sandvig and Jim Poston to the plaintiff trust funds on the same basis as was required under the terminated 1983-1986 collective bargaining agreement. The strike replacements were paid according to individual arrangements between the strike replacement and the company. When the strike replacements were hired, I assumed their employment would be for a very short term. Initially, the strike replacements were not provided with medical benefits. This status continued through December, 1986.

. . . . .

By January, 1987, the lack of any interest by the union in bargaining with Sandvig-Ostergard as reflected by its failure to attend two bargaining meetings and its failure to make any attempt to reschedule negotiations, led me to conclude that the dispute would not reach resolution with a renewed collective bargaining agreement in the near future. It was necessary to develop a set of fringe benefit programs for uniform application to all Sandvig-Ostergard employees, especially to provide health insurance benefits to the temporary strike replacement employees. Effective January, 1987, Sandvig-Ostergard implemented a King County Medical Health Insurance program for all the employees and ceased making benefit payments on behalf of Poston and Sandvig. Poston and Sandvig were provided the same benefits as the strike replacement employees.

That the company reported and paid contributions on behalf of its union employees for the months of June, 1986, through March, 1987, is not denied. See, id., Exhibits I(a) through (g); Bruens Affidavit, Exhibits I(h) through (j).

That contributions on behalf of strike replacements were not reported or paid under the 1983-1986 labor and trust agreements is not denied. An audit, authorized under the agreements, disclosed contributions due and owing on strike replacements for the period March through December, 1986, in the amount of $10,155.15. See, Elia Certificate signed February 24, 1989, and attachments.

From June, 1986 through March, 1987, the trust paid health and welfare claims on behalf of Wayne Sandvig, Warren Sandvig, Jim Poston, Donald Kelly, William Tews, and M. Mailtaud. Bruens Certificate at 8.

In January, 1987, the union filed unfair labor practice charges against various employer members of the PDCA, including Sandvig-Ostergard. The union claimed that the employers violated Section 8(d)(4) of the National Labor Relations Act by deviating substantially from the terms of the preexisting contract. After an investigation, the NLRB refused to issue a complaint against defendant Sandvig-Ostergard.

A letter dated April 9, 1987, from the defendant employer to the union reads in part as follows:

I have reviewed the recent PDCA agreement with District Council No. 5.

I have determined not to enter into a new agreement at this time and therefore decline to bargain for a new contract.

I may have a need for specific job agreements in the future and would appreciate the opportunity to discuss this with you as the need arises.

We will no longer be bound by the terms of the expired agreement and will discontinue fringe reports or payments to the trusts.

Please call me if you have any questions.

On August 11, 1988, the plaintiff trusts filed this lawsuit alleging delinquent contributions, including but not limited to those disclosed by the audit as due and owing from March through December, 1986. The trusts allege that the federal court has jurisdiction under Section 502 of ERISA, 29 U.S.C. § 1132, and Section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185.

DISCUSSION

The defendant employer's jurisdictional argument is narrowly drawn.

This lawsuit arises out of events that occurred after a collective bargaining agreement had expired. The sole issue in this case concerns an employer's duties after the expiration of an agreement. Defendant Sandvig-Ostergard, Inc. ("Sandvig-Ostergard") asks the court to grant its Motion for Summary Judgment on the grounds that this court lacks jurisdiction over the subject matter of the dispute.

More specifically, courts have no jurisdiction to determine an employer's post-contractual duties. Such a determination requires interpretation of the National Labor Relations Act ("NLRA"). Since the National Labor Relations Board has exclusive jurisdiction over violations of the NLRA, this court should dismiss plaintiffs claim. Sandvig-Ostergard also requests sanctions against plaintiff and/or its counsel for filing this lawsuit. Despite having knowledge

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