QUAD-CITY BUILDERS ASS'N, INC. v. TRI-CITY BRICKLAYERS U. NO. 7
| Decision Date | 10 July 1969 |
| Docket Number | Civ. No. 3-772-D. |
| Citation | 302 F. Supp. 1031 |
| Parties | QUAD-CITY BUILDERS ASSOCIATION, Inc., Plaintiff, v. TRI-CITY BRICKLAYERS UNION NO. 7, AFL-CIO, et al., Defendants. |
| Court | U.S. District Court — Southern District of Iowa |
Charles Rehling, Davenport, Iowa and Charles Lindberg, Cincinnati, Ohio, for Quad-City Builders Ass'n.
Marvin S. Andich, Rock Island, Ill., Law Firm of Woll & Mayer, Washington, D.C., for Tri-City Bricklayers Union.
Dennis Eslick, Chicago, Ill., for Quad-City Ass'n of Mason Contractors.
This matter is before the Court on the motion of plaintiff Quad-City Builders Association, Inc. (hereinafter referred to as the "Builders Association") for summary judgment. The defendants, Tri-City Bricklayers Union No. 7, AFL-CIO (hereinafter referred to as the "Union") and the Quad-City Association of Mason Contractors (hereinafter referred to as the "Mason Contractors"), have likewise filed motions for summary judgment. Numerous briefs have been filed and the motions were argued orally before the Court on May 21, 1969, by counsel for the respective parties. In addition a number of depositions, affidavits, and pleadings have been filed and reviewed by the Court. The motions, therefore, are properly before the Court for disposition.
This is an action based on alleged violations of § 302(a) (c) of the Labor-Management Relations Act of 1947 (), 29 U.S.C.A. § 186. Jurisdiction is conferred upon this Court by virtue of § 302(e) of the Act. See Memorandum and Order filed herein on June 17, 1968. The material facts of the controversy are not in dispute, and it appears the matter is appropriate for disposition by summary judgment.
The plaintiff Builders Association is a non-profit corporation formed by general contractors engaged in the building and construction industry in Scott County, Iowa, and Rock Island County, Illinois. One of the functions of the Builders Association is to negotiate on behalf of its members collective bargaining agreements with labor organizations representing employees of the member general contractors.
In 1967 the Builders Association and the defendant Union entered into and executed a new collective bargaining agreement. This agreement provided, in part, that each employer member of the Builders Association would as of May 1, 1967, "pay into a Mutually Agreeable Trust Fund, to be established for health and welfare benefits, a sum equal to 15¢ per hour for each hour worked by his bricklayer employees."
During this period of time negotiations were likewise taking place between the Mason Contractors and the Union. These negotiations resulted in a collective bargaining agreement and an Agreement and Declaration of Trust, to become effective May 1, 1967, which created a trust for health and welfare benefits for members of the Union. Under the provisions of this Trust, it is to be administered by three trustees selected by the Union and three trustees selected by the Mason Contractors. The trustees appointed by the Union were defendants Prahl, Neyrinck and Fest, and the trustees appointed by the Mason Contractors were defendants Marolf, Brandt and Flaatten. The defendant Robert Meese is the administrative assistant and agent of the trustees.
Subsequent to the execution of the contract with the Builders Association, the Union insisted that the "Mutually Agreeable Trust Fund," to which the Builders Association members under their collective bargaining contract should make health and welfare payments was the Trust Fund established by the Union and the Mason Contractors. The Builders Association resisted this demand and the funds were placed in escrow pending agreement. Finally, on January 24, 1968, the Builders Association, under protest, agreed to the Union-Mason Contractors Trust Fund as the "Mutually Agreeable Trust Fund" to which payment should be made, and on that same date instituted this action.
By this action the Builders Association seeks a declaratory judgment, and remedial orders in connection therewith, that the Trust Fund established by the Union and the Mason Contractors, known as the Tri-City Bricklayers Local Union No. 7 Welfare Fund, has been established and is being administered in violation of § 302(c) (5) (B) of the Act, 29 U.S.C.A. § 186(c) (5) (B), which requires that "employees and employers are equally represented in the administration of such fund, * * *." The Builders Association contends that the Trust Fund does not comply with this requirement because one of the three "employer" representative trustees is a member of the Union and a majority of the members of the Mason Contractors, who have the sole power to appoint and remove "employer" representative trustees, are also members of the Union. Furthermore, the members of the Mason Contractors who are likewise members of the Union have been allowed to participate in and receive the health and welfare benefits furnished by the Trust Fund.
Generally, § 302(a) and (b) of the Act, 29 U.S.C.A. § 186(a) and (b), prohibits both payments by an employer to a representative of employees and the acceptance of such payments.1 The only exceptions to the broad prohibition of § 302(a) and (b) are listed in § 302(c); 29 U.S.C.A. § 186(c). The pertinent provision thereof, § 302(c) (5) (B), 29 U.S.C.A. § 186(c) (5) (B), provides as follows:
"(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): * * * (B) the detailed basis on which such payments are to be made is specified in a written agreement with the employer, and employees and employers are equally represented in the administration of such fund, together with such neutral persons as the representatives of the employers and the representatives of the employees may agree upon and in the event the employer and employee groups deadlock on the administration of such fund and there are no neutral persons empowered to break such deadlock, such agreement provides that the two groups shall agree on an impartial umpire to decide such dispute, or in event of their failure to agree within a reasonable length of time, an impartial umpire to decide such dispute shall, on petition of either group, be appointed by the district court of the United States for the district where the trust fund has its principal office, and shall also contain provisions for an annual audit of the trust fund, a statement of the results of which shall be available for inspection by interested persons at the principal office of the trust fund and at such other places as may be designated in such written agreement; * * *."
Payments to a trust fund of the type here under consideration have been held to be violative of § 302(a), 29 U.S.C.A. 186(a), if such fund does not completely and fully meet the requirements of § 302(c) (5) (B), 29 U.S.C.A. 186(c) (5) (B). Local No. 2 of Operative Plasterers & Cement Masons International Assoc. v. Paramount Plastering, Inc., 310 F.2d 179 (9th Cir. 1962), cert. denied 372 U.S. 944, 83 S.Ct. 935, 9 L.Ed.2d 969 (1963); see generally Annot., 88 A.L.R. 2d 493 (1963). Section 302(e), 29 U.S. C.A. § 186(e),2 gives this Court specific jurisdiction to restrain violations of § 302(a), 29 U.S.C.A. § 186(e), and, in doing so, the Court must in effect render a declaratory judgment as requested by the Builders Association as to the validity of the trust fund under § 302.
Section 302 was enacted by Congress "as part of a comprehensive revision of federal labor policy in the light of experience acquired during the years following passage of the Wagner Act, and was aimed at practices which Congress considered inimical to the integrity of the collective bargaining process." Arroyo v. United States, 359 U.S. 419, 425, 79 S.Ct. 864, 868, 3 L.Ed.2d 915 (1959). The Court noted further that Congress was particularly concerned "with the possible abuse by union officers of the power which they might achieve if welfare funds were left to their sole control." Arroyo v. United States, supra at 426, 79 S.Ct. at 868. It is for this reason that Congress set specific standards and requirements on trust funds that were to be exempt from the prohibition of § 302(a), 29 U.S.C.A. § 186(a). The intent of § 302 is set out clearly in Employing Plasterers' Ass'n, etc. v. Journeymen, etc., 279 F.2d 92, 97 (7th Cir. 1960), as follows:
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