Quad City Builders Ass'n v. Tri City Bricklayers U. No. 7

• Decision Date: 25 September 1970
• Docket Number: No. 19972,19973.,19972
• Citation: 431 F.2d 999
• Parties: QUAD CITY BUILDERS ASSOCIATION, Inc., Appellee, v. TRI CITY BRICKLAYERS UNION NO. 7, AFL-CIO, et al., Appellants.
• Court: U.S. Court of Appeals — Eighth Circuit

431 F.2d 999 (1970)

QUAD CITY BUILDERS ASSOCIATION, Inc., Appellee, v. TRI CITY BRICKLAYERS UNION NO. 7, AFL-CIO, et al., Appellants.

Nos. 19972, 19973.

United States Court of Appeals, Eighth Circuit.

September 25, 1970.

Laurence Gold, Washington, D. C., for appellants in No. 19972; Morton Teitle, Davenport, Iowa, and Marvin S. Andich, Rock Island, Ill., on brief.

George L. Plumb, Chicago, Ill., for appellants in No. 19973; Peer Pedersen and Dennis J. Eslick, Chicago, Ill., on brief.

Charles D. Lindberg, Cincinnati, Ohio, for appellee; Thomas Y. Allman, Cincinnati, Ohio, and Charles G. Rehling, Davenport, Iowa, on brief.

Before JOHNSEN, Senior Circuit Judge, and VAN OOSTERHOUT and HEANEY, Circuit Judges.

VAN OOSTERHOUT, Circuit Judge.

This is an appeal by all defendants from final judgment determining that defendants are maintaining and administering Tri City Bricklayers Union No. 7 welfare fund in violation of the equal representation requirement of § 302(c) (5) (B) of the Labor Management Relations Act (29 U.S.C.A. § 186(c) (5) (B)) hereinafter called the Act, and from the remedial relief granted. This case was tried by Judge Stephenson without a jury. His memorandum opinion is reported at 302 F.Supp. 1031.

The facts are fully and fairly stated in the trial court's opinion. This action was brought by plaintiff Quad City Builders Association, Inc. (Builders Association), against Tri City Bricklayers Union No. 7, AFL-CIO (the Union), Quad City Association of Mason Contractors (Mason Contractors), and the trustees appointed pursuant to a declaration of trust setting up the welfare fund which was entered into by the Union and Mason Contractors arising out of a collective bargaining agreement entered into by them on April 12, 1967. Such agreement provides for three trustees to be elected by the Union and three trustees to be elected by the Mason Contractors.

Mason Contractors has ten members. Eight of these members are active members of the Union and at times such members serve as employees. Mason Contractors, pursuant to the agreement, elected three trustees, Flaatten, Marolf and Brandt. It is undisputed that Flaatten is an active Union member and that at times he acts as a contractor, and at other times when no contract work is available he serves as an employee. The other two trustees elected by the Mason Contractors are members of that association and are not members of the Union.

Builders Association is composed of general contractors engaged in the building and construction industry in the Quad City area. It bargains collectively with the Union. Builders Association entered into a new collective bargaining agreement with the Union on April 20, 1967, which includes an agreement that employers pay into a "Mutually Agreeable Trust Fund" for welfare purposes fifteen cents per hour for each hour worked by each bricklayer. Builders Association under protest on January 24, 1968, agreed to the Union demand that the trust fund created by the Union and Mason Contractors constitute the "Mutually Agreeable Trust Fund." On the same day it commenced this action. Section 302 imposes civil and criminal liability upon employers who make contributions to employees which do not conform to the provisions of the Act.

The records of the trust fund show that for the year ending April 1968 contributions to the welfare fund were received upon the basis of 320,128 hours of work. Contributions covering 112,628 hours were made by the members of the Mason Contractors. Substantial contributions were made to the welfare fund by members of the Builders Association and contributions were also made by employers who belong to none of the organizations involved in this litigation. Builders Association has no voice in the election of management trustees under the existing agreement between Mason Contractors and the Union.

Jurisdiction in the trial court is established under § 302(e) of the Act.

Each of the parties moved for summary judgment. The record consists of the pleadings, affidavits and depositions. The trial court properly determined that the material facts are not in dispute. The court sustained Builders Association's motion for summary judgment and denied defendants' motion for summary judgment. A judgment entry was filed on August 19, 1969, after all parties had been afforded an opportunity to make suggestions as to the form of the judgment. The judgment by way of affirmative relief provides:

"1. The defendant Ronald G. Flaatten be and he hereby is restrained and enjoined from serving or acting as an Employer Trustee of the Tri-City Bricklayers Local No. 7 Welfare Fund so long as he also maintains his membership in the Tri-City Bricklayers Union No. 7 and its parent International Union.

"2. The defendants Waldo J. Marolf and Henry Brandt be and they hereby are restrained and enjoined from serving or acting as Employer Trustees of the Tri-City Bricklayers Local No. 7 Welfare Fund unless and until reappointed as provided in paragraph 3 below; and

"3. The defendants and each of them be and they hereby are restrained and enjoined from requesting, demanding, receiving, accepting or agreeing to receive or accept any payments of money from any employer to the Tri-City Bricklayers Local No. 7 Welfare Fund and from expending any funds of said Welfare Fund until such time as (a) employer representative trustees, none of whom are members of the defendant Tri-City Bricklayers Union No. 7 nor its parent International Union, have been mutually appointed by majority vote of all those employer members of the plaintiff Quad-City Builders Association, Inc., and of the defendant Quad-City Association of Mason Contractors, voting together as a group, who contribute to said Welfare Fund and who are not individually members of defendant Tri-City Bricklayers Union No. 7, nor its parent International Union, nor operated by principals who are such members, but excluding from the total number of non-union member employers upon which majority is to be determined by any employer who after notice fails or refuses to vote, (b) such Trustees have agreed to and have commenced to serve, and (c) the Agreement and Declaration of Trust, effective as of May 1, 1967, has been amended to provide for appointment of Employer Trustees as aforesaid."

The issues presented by this appeal are: (1) Does the requirement of § 302(c) (5) (B) of the Act for equal representation in the administration of the trust fund disqualify Flaatten from serving as an employer trustee? (2) Does the equal representation requirement disqualify members of the Mason Contractors who are active members of the Union and who at times serve as employees and who obtain benefits from the welfare fund from voting for trustees representing the employer?

As clearly pointed out in the trial court's well-reasoned opinion § 302(a) and (b) of the Act prohibits payments by representatives of employers and the acceptance of such payments by the representatives of employees. Exceptions to such broad prohibition are contained in § 302(c). The exception here pertinent reads:

"(c) The provisions of this section shall not be applicable * * * (5) with respect to money or other thing of value paid to a trust fund established by such representative, for the sole and exclusive benefit of the employees of such employer, and their families and dependents (or of such employees, families, and dependents jointly with the employees of other employers making similar payments, and their families and dependents): Provided, That (A) such payments are held in trust for the purpose of paying, either from principal or income or both, for the benefit of employees, their families and

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