Waggoner v. C & D Pipeline Co., 77-3949

• Citation: 601 F.2d 456
• Decision Date: 24 July 1979
• Docket Number: No. 77-3949,77-3949
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)
• Parties: 102 L.R.R.M. (BNA) 2064, 86 Lab.Cas. P 11,447 William C. WAGGONER et al., etc., Plaintiffs-Appellants, v. C & D PIPELINE COMPANY, Defendant-Appellee.

Page 456

601 F.2d 456

102 L.R.R.M. (BNA) 2064, 86 Lab.Cas. P 11,447

William C. WAGGONER et al., etc., Plaintiffs-Appellants, v. C & D PIPELINE COMPANY, Defendant-Appellee.

No. 77-3949.

United States Court of Appeals,

Ninth Circuit.

July 24, 1979.

Wayne Jett, Los Angeles, Cal., argued for plaintiffs-appellants.

Jackson, Lewis, Schnitzler & Krupman, New York City, Eugene, Button, Los Angeles, Cal. (argued), for defendant-appellee.

Appeal from the United States District Court for the Central District of California.

Before HUFSTEDLER and SNEED, Circuit Judges, and SPENCER WILLIAMS, ^* District Judge.

HUFSTEDLER, Circuit Judge:

The trustees of four employee benefit trusts appeal a summary judgment award in an action against C & D Pipeline Co. ("C & D") for failure to make fringe benefit contributions allegedly required by a collective bargaining agreement. The question on appeal is whether the agreement requires contributions for all hours worked by employees who perform any covered work or only for the hours actually worked in covered employment. We hold that the agreement requires contributions for all hours worked by or paid employees who perform any work covered by the agreement.

I

The employee benefit trusts are established pursuant to the Master Labor Agreement between the International Union of Operating Engineers, Local Union No. 12 ("Local 12") and the Southern California General Contractors Associations, a group of multi-employer associations. Since June 21, 1968, C & D has been a party to a short-form collective bargaining agreement with Local 12 that incorporates by reference the terms of the Master Labor Agreement. The Master Labor Agreement requires C & D to contribute to the trusts at specified rates for "hours worked by (or paid) each employee under this Agreement." (Articles VIII, IX & X.) "(A)ll work falling within the recognized jurisdiction of the Union" is covered by the agreement. (Article I, section B(2).) The agreement applies "to all employees except . . . executives, superintendents, assistant superintendents, master mechanics, office engineers, timekeepers, messenger boys, office workers, or any other employee of the Contractors above the rank of craft foreman, except as herein provided." (Article I, section B(4).)

On July 23, 1969, Local 12 dispatched Donald J. Stark to C & D for work as a universal equipment operator. Stark worked for C & D as an operating engineer, employment covered by the Master Labor Agreement. Eventually, Stark rose to the position of president and managing officer of C & D. He continued to perform some work as an operating engineer, in addition to his new managerial duties. Beginning in June, 1971, Stark was placed on a salary. C & D continued to contribute to the trusts for Stark, but C & D reported and paid fringe benefit contributions only for the hours Stark actually worked as an operating engineer.

During an audit of C & D's payroll records on October 26, 1976, the trustees discovered that C & D was not paying fringe benefit contributions for all hours worked by Stark. After C & D refused to make up the alleged deficiency, the trustees filed this action pursuant to Section 301(a) of the Labor Management Relations Act, 29 U.S.C. § 185(a), to collect contributions allegedly due the trusts as well as liquidated damages and audit expenses.

The district court granted summary judgment to C & D. The court held that the terms of the Master Labor Agreement "unambiguously provide that C & D is obligated to pay fringe benefit contributions to the Trusts only with respect to those hours worked by (or paid) its employees when they are performing work described in the respective agreement or are otherwise covered by the terms of the agreement." The court held that under the Master Labor Agreement C & D "was not obligated to remit fringe benefit contributions for hours worked by (or paid) a member-employee in an executive-managerial capacity as opposed to hours worked by (or paid) said employee when working as an operating engineer."

II

To ascertain the meaning of a collective bargaining agreement the terms of the agreement should be examined first. The Master Labor Agreement requires employer fringe benefit contributions for "hours worked by (or paid) each employee under this Agreement." (Articles VIII, IX & X.) This provision is ambiguous with respect to the contributions required for employees who perform both covered and non-covered employment. If the words "under this Agreement" are read as modifying "hours worked by (or paid)," the agreement may require contributions only for hours worked in covered employment. The words "under this Agreement" may also be read as modifying the word "employee." If an "employee under this Agreement" is anyone who performs some hours of covered employment, then the agreement may require contributions for all hours worked by employees who perform any covered employment.

This ambiguity is not resolved by reference to other provisions of the agreement. Article I, section B(4) excludes certain categories of workers (including "executives") from coverage except as otherwise provided in the agreement. While this provision means that contributions are not required for persons who work solely as executives, it apparently does not apply to employees who perform both executive duties and the operating engineer tasks. C & D itself...