Trustees of Colorado Pipe Industry Pension Trust v. Howard Elec. & Mechanical Inc.

• Citation: 909 F.2d 1379
• Decision Date: 18 May 1990
• Docket Number: No. 3,No. 208,No. 88-2938,U,3,208,88-2938
• Parties: 135 L.R.R.M. (BNA) 3251, 116 Lab.Cas. P 10,305, 12 Employee Benefits Ca 1545 TRUSTEES OF the COLORADO PIPE INDUSTRY PENSION TRUST, an express trust, Plaintiff-Appellant, and Trustees of Colorado Pipe Industry Insurance Trust, an express trust; Plumbers Local Unionnited Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada; and Pipefitters Localnited Association of Journeymen and Apprentices of the Plumbing and Pipefittings Industry of the United States and Canada, Plaintiffs, v. HOWARD ELECTRICAL & MECHANICAL INC., a Colorado Corporation; and Howard Systems, Inc., a Colorado Corporation, Defendants-Appellees, and Jacore, Inc., a Colorado Corporation, Defendant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1379

909 F.2d 1379

135 L.R.R.M. (BNA) 3251, 116 Lab.Cas. P 10,305,

12 Employee Benefits Ca 1545

TRUSTEES OF the COLORADO PIPE INDUSTRY PENSION TRUST, an

express trust, Plaintiff-Appellant,

and

Trustees of Colorado Pipe Industry Insurance Trust, an

express trust; Plumbers Local Union No. 3, United

Association of Journeymen and Apprentices of the Plumbing

and Pipefitting Industry of the United States and Canada;

and Pipefitters Local No. 208, United Association of

Journeymen and Apprentices of the Plumbing and Pipefittings

Industry of the United States and Canada, Plaintiffs, v. HOWARD ELECTRICAL & MECHANICAL INC., a Colorado Corporation; and Howard Systems, Inc., a Colorado Corporation,

Defendants-Appellees,

and

Jacore, Inc., a Colorado Corporation, Defendant.

No. 88-2938.

United States Court of Appeals, Tenth Circuit.

May 18, 1990.

Rehearing Denied Aug. 27, 1990.

James C. Fattor of Hornbein, MacDonald, Fattor & Hobbs, Denver, Colo., for plaintiff-appellant.

Earl K. Madsen of Bradley, Campbell & Carney, Golden, Colo., for defendants-appellees.

Before SEYMOUR and BALDOCK, Circuit Judges, and SEAY, District Judge. ^*

BALDOCK, Circuit Judge.

Plaintiff-appellant trustees sought to collect withdrawal liability from defendant-appellee employer for the unions' multiemployer pension fund. The district court dismissed the action for lack of jurisdiction. We hold that the district court had jurisdiction to adjudicate the plaintiff's claim for withdrawal liability, and that the defendants waived their defenses to withdrawal liability by failing to arbitrate. Our jurisdiction over this appeal arises under 28 U.S.C. Sec. 1291. We reverse with instructions to enter summary judgment for the plaintiff.

I.

The Colorado Pipe Industry Pension Fund (the fund) is an express trust established to provide retirement benefits for employees in the plumbing and pipefitting industry in the State of Colorado. The fund operates a multiemployer pension plan ¹ as defined under the Employment Retirement Income Security Act, 29 U.S.C. Secs. 1001-1461 (ERISA). Defendant-appellee Howard Systems, Inc. is the parent of wholly-owned subsidiary and defendant-appellee Howard Electrical & Mechanical, Inc. (Howard), a Colorado corporation engaged in the construction business. This action between Howard and the trustees arises out of a labor dispute between Howard and Plumbers Local Union No. 3 and Pipefitters Local Union No. 208 (the unions). In our disposition of the instant case, we consider both the dispute between Howard and the unions and the dispute between Howard and the trustees.

Unions' Unfair Labor Practices Action

In May 1981, Howard executed collective bargaining agreements with the unions. Under this agreement, Howard was obligated to contribute to the fund at a specified rate for each hour worked by the unions' members. When the collective bargaining agreement expired in May 1983, Howard and the unions were unable to agree upon a new contract. Paramount among the parties' disagreements was Howard's insistence on hiring "pre-apprentice," non-union employees to perform unit work. In December 1983, Howard presented its "final" offer to the unions, asserted that an impasse existed, and informed the unions that it intended to implement its final offer at the beginning of the new year. Howard hired its first pre-apprentice pipefitter in April 1984 and its first pre-apprentice plumber the following May.

Based upon Howard's unilateral action, the unions brought an unfair labor practice action before the National Labor Relations Board (NLRB). An ALJ concluded that, at the time Howard instituted the unilateral act of hiring pre-apprentice employees, the parties had bargained to a valid impasse; ² thus under applicable labor law, Howard was entitled to institute unilateral changes in the work place. Howard Elec. & Mechanical, Nos. 27-CA-8889, 8889-2, 8924, unpub. order at 37 (NLRB Apr. 8, 1987). However, the NLRB reversed, declining to consider whether Howard and the unions had reached impasse. See Howard Elec. & Mechanical, 293 NLRB No. 51, slip op. at 9-11, NLRB Dec. (CCH) p 15,455 (March 29, 1989). Rather, the NLRB found that Howard's hiring of the pre-apprentice employees constituted an unfair labor practice because the unions had not agreed to exclude the pre-apprentice employees from the bargaining unit and NLRB proceedings were never instituted to change the scope of the unit. Id. The unions "were not required to bargain about" the scope of the bargaining unit, id. at 12; thus, Howard's implementation of its pre-apprentice proposal constituted an unfair labor practice, id. at 12-13. The NLRB ordered Howard to: 1) restore the status quo existing at the time the collective bargaining agreement expired and 2) resume bargaining with the unions until a new contract was agreed upon or a valid impasse reached. ³ Id. at 13.

Trustees' Withdrawal Liability Action

In May 1986, during the pendency of the unions' unfair labor practices action, the trustees informed Howard that it was subject to withdrawal liability under the Multiemployer Pension Plan Amendments Act of 1980, 29 U.S.C. Secs. 1381-1461 (MPPAA). The trustees calculated Howard's withdrawal liability at $555,852 and demanded payment. Howard did not arbitrate the disputed liability, a prerequisite to maintaining a defense to withdrawal liability under Sec. 1401 of the MPPAA. The trustees then brought the present action against Howard seeking: 1) postcontract contributions under Sec. 1132(g)(2) of ERISA for contributions accrued after expiration of the collective bargaining agreement and 2) withdrawal liability of $255,032 under Sec. 1381 of the MPPAA.

The trustees moved for summary judgment on the withdrawal liability claim, contending that Howard had waived all defenses to its withdrawal liability by failing to arbitrate, 29 U.S.C. Sec. 1401(b). Howard also moved for summary judgment arguing that, according to the Supreme Court's recent holding in Laborers Health & Welfare Fund for N. Cal. v. Advanced Lightweight Concrete Co., 484 U.S. 539, 108 S.Ct. 830, 98 L.Ed.2d 936 (1988), the district court lacked jurisdiction over the trustees' action. The trustees conceded that Advanced Lightweight Concrete was dispositive of their Sec. 1132(g)(2) claim for postcontract contributions, but contended that the case did not bar federal jurisdiction over the withdrawal liability claim brought under Sec. 1381. The district court, however, dismissed the entire action for lack of jurisdiction holding that "the unfair labor practice charges brought by the unions and still pending before the NLRB are matters for which the NLRB has exclusive jurisdiction and precludes this court from proceeding in this matter." Trustees of Colo. Pipe Indus. Pension Trust v. Howard Elec. & Mechanical, Inc., No. 86-M-2561, unpub. order at 4 (D.Colo. Nov. 28, 1988).

II.

This case requires us to construe the respective jurisdictional bases of two statutory remedies available to multiemployer pension plans: ERISA and the MPPAA. This circuit has not considered whether a federal court which lacks jurisdiction over an action brought under Sec. 1132(g)(2) of ERISA can nevertheless maintain jurisdiction over an Sec. 1381 action brought under the MPPAA. This jurisdictional issue presents a question of law subject to de novo review. Williams Natural Gas Co. v. Oklahoma City, 890 F.2d 255, 260 n. 7 (10th Cir.1989).

A.

Congress enacted ERISA, "to ensure that employees and their beneficiaries would not be deprived of anticipated retirement benefits by the termination of pension plans before sufficient funds have been accumulated in the plans." Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 720, 104 S.Ct. 2709, 2713, 81 L.Ed.2d 601 (1984). Toward that end, ERISA creates a statutory obligation requiring that employers contribute to multiemployer plans in accordance with their contractual obligations. ⁴ 29 U.S.C. Sec. 1145. ERISA also provides trustees of multiemployer plans with a remedy to collect delinquent contributions, plus interest and attorney's fees, from errant employers. ⁵ 29 U.S.C. Sec. 1132(g)(2).

In 1980, Congress amended ERISA to establish special rules governing multiemployer pension plans. These amendments were necessary because, under ERISA, employers could withdraw from a multiemployer pension plans without paying their share of the unfunded vested benefit liability, thereby threatening the solvency of such plans. Advanced Lightweight Concrete, 484 U.S. at 545, 108 S.Ct. at 834; Joyce v. Clyde Sandoz Masonry, 871 F.2d 1119, 1120 (D.C.Cir.), cert. denied, --- U.S. ----, 110 S.Ct. 280, 107 L.Ed.2d 260 (1989); Woodward Sand Co. v. Western Conference of Teamsters Pension Trust Fund, 789 F.2d 691, 694 (9th Cir.1986).

As enacted, the [MPPAA] requires that an employer withdrawing from a multiemployer pension plan pay a fixed and certain debt to the pension plan. This withdrawal liability is the employer's proportionate share of the plan's 'unfunded vested benefits' calculated as the difference between the present value of vested benefits and the current value of the plan's assets. 29 U.S.C. Sec. 1381, 1391.

Gray, 467 U.S. at 725, 104 S.Ct. at 2715. The MPPAA empowers trustees of multiemployer plans to maintain actions for withdrawal liability and vests federal courts with jurisdiction over such disputes. ⁶ 29 U.S.C. Sec. 1451(a) & (c).

Under the MPPAA, an employer becomes subject to withdrawal liability once it "permanently ceases to have an obligation to contribute" to a multiemployer pension fund. ⁷ 29 U.S.C. Sec. 1383(a)(1). "[T]he term 'obligation to contribute' means an obligation arising--(1) under one or more collective bargaining (or related) agreements, or (2) as a result of a duty under applicable labor-management relations law...." 29 U.S.C. Sec. 1392(a). Under Sec. 1392(a)(1), the employer's obligation to contribute arises from contractual agreements requiring the employer to...