United States District Court, Northern District of Illinois
May 17, 1973
RICHARD P. OWEN ET AL., PLAINTIFFS,
ONE STOP FOOD & LIQUOR STORE, INC., AND NDK CORPORATION, DEFENDANTS.
The opinion of the court was delivered by: Bauer, District Judge.
MEMORANDUM OPINION AND ORDER
This cause comes on the defendants' motion to dismiss the
complaint. This action is brought under 29 U.S.C. § 185 for an
alleged violation of a contract between an employer and a labor
The plaintiffs are the Board of Trustees of Chicago Area
Retail Food Clerks Pension Fund ("Pension Fund") which trust
allegedly was created and exists in accordance with the
provisions of 29 U.S.C. § 186(c) and pursuant to a certain
Agreement and Declaration of Trust, dated November 25, 1963 as
amended from time to time.
The defendants, One Stop Food & Liquor Store, Inc., and NDK,
are employers in an industry affecting commerce as defined by
the Labor Management Act of 1947 and have their principal
places of business in Chicago, Illinois.
The plaintiffs in their complaint allege the following
facts, inter alia:
1. The Pension Fund was established for the
purpose of providing retirement benefits for
employees (and their beneficiaries) whose
employers have entered into a collective
bargaining agreement with a labor
organization which is a party to the Pension
Fund's Agreement and Declaration of Trust.
This Pension Fund arrangement is commonly
referred to as a jointly administered
multi-employer Pension Fund.
2. The Retail Food and Drug Clerks Union, Local
1550, a party to the Pension Fund's Agreement
and Declaration of Trust, entered into a
collective bargaining agreement governing the
wages, hours, conditions of work and terms of
employment for employees of the defendants.
This agreement became effective November 25,
1964 and provides in Article 18 that
defendants would contribute to the Pension
Fund a certain sum on all straight-time hours
worked by employees covered by the agreement.
The agreement also provides that any employer
who is sixty days delinquent in the payment
of any or all of the contributions required
by Article 18 shall pay as liquidated damages
a sum of twenty dollars or ten percent of the
amount delinquent, whichever is greater.
3. The defendants have failed and refused to
contribute to the Pension Fund in accordance
with the provisions of the collective
4. There is due to the Pension Fund the sum of
$10,000 which constitutes unpaid
contributions and liquidated damages for the
period from January 1, 1969 through December
The plaintiff Trustees seek to recover from the defendants
an accounting of contributions due, unpaid contributions,
liquidated damages and the cost of maintaining this suit.
The defendants, in support of their motion to dismiss,
1. The plaintiffs' reliance on 29 U.S.C. § 185
to confer jurisdiction on this court is
misplaced since plaintiff is not a labor
organization and/or party to the collective
2. Rule 12(b)(7) of the Federal Rules of Civil
Procedure requires the dismissal of the
action because of the failure of the
plaintiff to join the labor union which is a
3. This Court lacks jurisdiction over the
subject matter because the union has not
exhausted its contractual remedies under the
collective bargaining agreement as said
agreement is described in plaintiffs'
The plaintiffs in opposition to the instant motion contend
that this Court does have jurisdiction under 29 U.S.C. § 185,
that the labor union is not an indispensable party, and that
there is no requirement to arbitrate the instant cause of
It is the opinion of this Court that it has jursidiction
over the instant action.
I. THE TRUSTEES OF THE PENSION FUND CAN MAINTAIN THEIR ACTION
IN THIS COURT PURSUANT TO 29 U.S.C. § 185.
This Court's jurisdiction over the instant action is
predicated on Section 301 of the Labor Management Relations
Act (29 U.S.C. § 185) which provides:
"(a) Suits for violation of contracts between an
employer and a labor organization representing
employees in an industry affecting commerce as
defined in this chapter, or between any such
labor organizations, may be brought in any
district court of the United States having
jurisdiction of the parties without respect to
the amount in controversy or without regard to
the citizenship of the parties."
The defendants contend that this Court does not have
jurisdiction over this action because the plaintiffs are not
a "labor organization" within the coverage of Section 301, and
that consequently the complaint must be dismissed. However,
the defendants concede that if the union itself had brought
the suit, this Court would have jurisdiction.
It is the opinion of this Court that the defendant's
distinction is without merit. This is, in the language of the
statute, a suit for violation of a contract "between an
employer and a labor organization" (here the Retail Food and
Drug Clerks Union, Local 1550) for the contributions to a
Trust Fund for employees. Looking at the substance of the
relationship between the parties, there is nothing to be
gained by requiring a suit by the union rather than by the
Trustees of the Pension Fund.*fn* The United States Supreme
Court has directed that Section 301 is not to be given a
narrow meaning; Section 301 is designed to vindicate
individual employees rights arising from a collective
bargaining contract. Smith v. Evening News Association,
371 U.S. 195 (1962). Vindication of such rights is the purpose of
this suit, and thus the jurisdiction of this Court over the
instant matter would be proper and appropriate.
This finding follows similar rulings by Federal Courts in
other districts. See Trustees v. Woehsberger Roofing Works,
Civ. No. 67-300, 66 LRRM 2047 (E.D.N.Y. 1967); Hann v. Korum,
Civ. No. 65-114, 64 LRRM 2862 (D.C.Oreg. 1967); Hann v. Ben
Harlow, Civ. No. 64-523, 65 LRRM 2012 (D.C.Oreg. 1967);
Schlecht v. Hiatt, Civ. No. 65-377, 65 LRRM 2009 (D.C.Oreg.
1967). See also Cahoun v. Bernard, 333 F.2d 739 (9th Cir.
1964) (involving an action by Trustees of a Pension Fund
originally brought in Municipal Court of Los Angeles which was
removed to Federal District Court based on assertions of
original jurisdiction pursuant to Section 301. Thus, it is
clear that the labor union is not an indispensable party to
this litigation and that this Court has jurisdiction over the
II. THE UNION'S FAILURE TO EXHAUST ITS CONTRACTUAL REMEDIES
SUCH AS ARBITRATION IS NOT A BAR TO THIS ACTION BROUGHT BY
THE TRUSTEES OF THE PENSION FUND.
The Trustees of a Welfare and/or Pension Trust Fund
established under a collective bargaining agreement are not
typical third-party beneficiaries of such agreements. The
Trustees of such funds are not parties to such agreements and
are not subject to each and every duty and obligation arising
under the agreement.
Further, Congress, in enacting Section 302 of the Labor
Management Relations Act (29 U.S.C. § 186) intended that
Welfare and Pension Funds established in accordance with that
section would be independent of exclusive control by the union.
Consequently, the failure of an employer to make contributions
as required by an agreement is not an arbitrable dispute in the
absence of a specific provision in the agreement requiring the
Trustees to submit their claims to the arbitration procedure.
See Lewis v. Harcliff Coal Co., Inc., et al., 3 N.B.P.C. 146
Since the Pension Fund in the instant action was established
in accordance with 29 U.S.C. § 186, it is the opinion of this
Court that dismissal of the instant action in order to permit
the union and the employers to arbitrate the right of the
Trustees would be contrary to the intent of Congress in
establishing independent Pension Funds. If the parties to the
collective bargaining agreement (the employers and union)
intended that claims for unpaid contributions to the Welfare
Fund should be subject to the
arbitration provision of the agreement, they should have so
stated in unequivocal language. Lewis v. Benedict Coal
Corporation, 361 U.S. 459, 80 S.Ct. 489, 4 L.Ed.2d 442 (1960).
Since the parties have not so stated in the agreement, it is
the opinion of this Court that the defendants' contention that
the union should first exhaust its contractual remedy of
arbitration before this action can be maintained is without
Accordingly, it is hereby ordered that the defendants'
motion to dismiss is denied.