Teamsters Local No. 429 v. Chain Bike Corp.

• Decision Date: 28 August 1986
• Docket Number: Civ. A. No. 85-6564.
• Parties: TEAMSTERS LOCAL NO. 429 HEALTH AND WELFARE FUND v. CHAIN BIKE CORPORATION, d/b/a Ross Bike.
• Court: U.S. District Court — Eastern District of Pennsylvania

643 F. Supp. 1337

TEAMSTERS LOCAL NO. 429 HEALTH AND WELFARE FUND v. CHAIN BIKE CORPORATION, d/b/a Ross Bike.

Civ. A. No. 85-6564.

United States District Court, E.D. Pennsylvania.

August 28, 1986.

Stephen C. Richman, Philadelphia, Pa., for plaintiff.

John S. Hayes, Allentown, Pa., for defendant.

MEMORANDUM AND ORDER

TROUTMAN, Senior District Judge.

The plaintiff, Teamsters Local No. 429 Health and Welfare Fund (hereinafter the "Fund"), instituted this action pursuant to: (1) § 301 of the Labor-Management Relations Act of 1947 (LMRA), 29 U.S.C. § 185, (2) the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq., as amended by the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA), and (3) Pennsylvania's Wage Payment and Collection Law of 1961 (WPCL), as amended, Act of July 14, 1961, P.L. 637, 43 P.S. § 260.1 et seq. The Fund charges in its complaint that the defendant failed to contribute to the Fund for the month of January, 1985, as allegedly required by the collective bargaining agreement executed on January 1, 1982, by and between the defendant corporation and Local 773, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (hereinafter the "Union"). The defendant in its answer denies that the collective bargaining agreement required any such contribution. It further claims that the plaintiff's action is barred by the principles of res judicata and/or collateral estoppel, that the action is barred by an arbitration award issued by Arbitrator Wayne E. Howard on September 25, 1985, pursuant to a grievance filed by the Union on the same issue, and that the plaintiff's pendent state law claim under Pennsylvania's WPCL is barred by the doctrine of preemption.¹ Presently before us for disposition are the parties' cross-motions for summary judgment.

Prior to addressing the plaintiff's claim that the defendant has failed to fulfill its contractual obligation to the Fund, we must first address the preemption issues raised by the defendant in its answer and cross-motion for summary judgment. We believe we must also relate the underlying, undisputed facts of this case so that our discussion of these issues might be better understood.

THE FACTS

The collective bargaining agreements between the Union and the defendant prior to the execution of the 1982-85 labor contract had required the defendant to provide Blue Cross/Blue Shield health insurance coverage for all "eligible" employees. The defendant's contract with Blue Cross/Blue Shield annually expired on February 1. During negotiations to renew the contract which expired on December 31, 1981, the Union demanded, inter alia, that the Blue Cross/Blue Shield coverage be replaced by the Teamsters Health and Welfare Fund. When the parties failed to reach an accord by December 31, 1981, they agreed to extend the existing contract daily while negotiations continued and the employees continued to work. They reached an agreement as to the terms of a new contract on January 25, 1982. For purposes of "continuity", the commencement date of the new contract was back-dated to January 1, 1982. The contract was to expire on December 31, 1984.

The 1982-1985 agreement incorporated the Union's demand that the Blue Cross/Blue Shield coverage be replaced by the Teamsters Fund. Article XVI of the 1982-85 contract, entitled "Health, Welfare and Insurance Coverage", provided in its pertinent parts as follows:

The Employer hereby agrees to contribute to the Teamsters Local No. 429 Health and Welfare Fund the following monthly contributions for each eligible employee:

                Effective February 1, 1982  $ 85.00 per month
                Effective February 1, 1983  $ 95.00 per month
                Effective February 1, 1984  $105.00 per month
                

* * * * * *

To be eligible for this plan an employee must work 60 hours of each preceding month and have at least six months employment.

* * * * * *

(See Memoranda in Support of Defendant's Cross-Motion for Summary Judgment, Doc. # 7, Exhibit "A").

During the month of January, 1982, the Company had, under the terms of the preexisting contract and its agreement with the Union to extend this contract, continued to provide Blue Cross/Blue Shield coverage for eligible employees. Thus, based on the terms of the 1982-85 contract, specifically, Article XVI, the commencement of the defendant's obligation to the Fund coincided with the expiration of its contract with Blue Cross/Blue Shield on February 1, 1982.

As the expiration date of the 1982-85 contract approached, i.e., December 31, 1984, the Union and the defendant once again commenced negotiations aimed at reaching a new agreement and, once again, the parties failed to reach an accord before the expiration of the existing contract. The Union, as a result, commenced a lawful strike against the defendant which continued until January 25, 1985. On that date, the Union and the defendant executed a new collective bargaining agreement, backdating, for purposes of "continuity" as before, the commencement date of the contract to January 1. The contract will expire on December 31, 1987. The provisions of this new contract regarding the defendant's obligation to the Fund are, with minor alterations, identical to the provisions of the 1982-85 contract. Article XVI of the 1985-87 agreement provides as follows:

The Employer hereby agrees to contribute to the Teamsters Local No. 429 Health and Welfare Fund the following monthly contributions for each eligible employee:

                Effective February 1, 1985  $115.00 per month
                Effective February 1, 1986  $125.00 per month
                Effective February 1, 1987  $135.00 per month
                

* * * * * *

To be eligible for this plan an employee must work 60 hours of each preceding month.

* * * * * *

(See Memoranda in Support of Plaintiff's Motion for Summary Judgment, Doc. # 5, Attachment 1).

THE PREEMPTION ISSUES

The defendant first argues that this Court lacks jurisdiction under either LMRA or ERISA to adjudicate this dispute since the National Labor Relations Act (NLRA), 29 U.S.C. § 151 et seq., vests jurisdiction to resolve this matter exclusively with the National Labor Relations Board. The defendant's conclusion is premised upon its characterization of the plaintiff's action as a claim under § 8(a)(5) of the NLRA, 29 U.S.C. § 158(a)(5). It is indeed true, as the defendant argues, that courts must defer to the exclusive competence of the National Labor Relations Board where the employer's conduct is arguably subject to §§ 7 or 8 of the NLRA. See Moldovan v. Great Atlantic & Pacific Tea Co., Inc., supra. It is also true that § 8(a)(5) of NLRA requires an employer to continue to abide by the terms of an "expired" collective bargaining agreement until the parties have bargained to an "impasse". Id. We believe the defendant mischaracterizes the nature of the Fund's claims however. While the plaintiff may possess a claim against the defendant pursuant to § 8(a)(5) of the NLRA, the claim which the Fund has asserted before this Court rests solely upon the defendant's obligations, or lack thereof, under the 1982-85 contract. The Fund's sole contention is that the defendant was obligated under the 1982-85 agreement to contribute to the Fund for the month of January, 1985, according to the number of eligible employees working for the defendant during December, 1984; it has asserted no claim, under the NLRA or otherwise, that the defendant possessed some obligation independent of the collective bargaining agreement itself to comply with the terms of that agreement. The defendant's argument, therefore, is unavailing, and we find and conclude that this Court possesses jurisdiction under both LMRA and ERISA to adjudicate this conflict.²

In the same vein as its preemption argument regarding the NLRA, the defendant also argues that the Fund's pendent state law claim under Pennsylvania's WPCL is preempted by federal statutes. As far as the defendant's assertion that the NLRA preempts the Fund's pendent state law claim is concerned, its argument fails for the same reasons we have just stated that the NLRA does not divest this Court of jurisdiction. The defendant again mischaracterizes the gravamen of the Fund's action as alleging a violation of § 8(a)(5), and as a result, it relies upon inapposite authority for its legal conclusion. When the Fund's claim is correctly characterized as only alleging a breach of contract, it is clear that the plaintiff's action under the WPCL is not preempted by the NLRA since the plaintiff has made no allegation that the defendant's conduct in any way constituted an unfair labor practice arguably within the purview of NLRA.³See International Longshoreman's Association, AFL-CIO v. Davis, ___ U.S. ___, 106 S.Ct. 1904, 90 L.Ed.2d 389 (1986).

The defendant next argues that, if not preempted by NLRA, then the plaintiff's claim under the WPCL is preempted by § 301 of LMRA. Here, the defendant relies primarily upon a decision of the Seventh Circuit Court of Appeals in which that court held that § 301 preempted application of the Illinois Wage Payment and Collection Law, Ill.Rev.Stat. ch. 48, ¶ 39m-1 et seq., by the State's administrator of the Act so as to require an employer to pay vacation benefits under the terms of a collective bargaining agreement. The court stated that in enacting Taft-Hartley (LMRA), Congress created an exclusive federal remedy for the breach of a collective bargaining agreement and that no action to enforce such an agreement may be based upon state law. See National Metalcrafters v. McNeil, 784 F.2d 817 (7th Cir.1986); see also, Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 105 S.Ct. 1904, 85 L.Ed.2d 206 (1985); Oglesby v. RCA Corp., 752 F.2d 272 (7th Cir.1985); Gilbert v. Burlington Industries, Inc., 765 F.2d 320 (2nd Cir. 1985), appeal pending, ___ U.S. ___, 106 S.Ct. 378, 88 L.Ed.2d 332; Eitmann v. New Orleans Public Service, Inc., 730 F.2d 359 (5th Cir.1984); Miller v. Lay Trucking Co., Inc., 606 F.Supp. 1326 (N....