contends that any contributions prior to August 28, 1974 are
barred by the Illinois statute of limitations applicable to oral
agreements. Ill.Rev.Stat. (1977), ch. 83, § 16. Section 17
applies to "written contracts."
The complaint is based on § 301 of the Labor Management
Relations Act (29 U.S.C. § 185(a)) and on § 502 of the Employee
Retirement Income Security Act (29 U.S.C. § 1132). It is
well-established that, inasmuch as § 301 contains no time
limitations, the law of the state where the cause of action
arises governs the statute of limitations issue. United Auto
Workers v. Hoosier Cardinal Corp., 383 U.S. 696, 86 S.Ct. 1107,
16 L.Ed.2d 192 (1966). Since the agreement in this case was made
and to be performed in Illinois, the law of this state applies.
A collective bargaining agreement dated August 1, 1978 is
attached as Exhibit A to defendant's supporting memorandum. The
welfare fund is described in Article VIII; the vacation trust
fund is described in Article IX and the pension fund is described
in Article XI. All of them require the employer to make monthly
contributions to the specific funds in a certain percentage of
the "gross payroll for all employees defined in this agreement."
The defendant employer contends that the identity of the
employees benefitted by the three trust funds can only be
determined by parol evidence. If the agreement is partly written
and partly oral, the five year Illinois statute of limitations
should apply. Pratl v. Hawthorn-Mellody Farms Dairy, Inc.,
53 Ill. App.3d 344, 11 Ill.Dec. 216, 368 N.E.2d 767 (1st Dist.
1977); see also Kordewick v. Indiana Harbor Belt R. Co.,
157 F.2d 753 (7th Cir. 1946), cert. denied, 329 U.S. 806, 67 S.Ct. 502, 91
L.Ed. 688 (1946).
We believe the defendant's argument is specious and not
required by the above cases. The contract sued upon is in
writing, and the plaintiffs are identified therein. Only the
measure of damages needs to be arrived at by evidence outside of
its four corners and this can be computed from payroll records.
Although there is no specific definition of the term "employees,"
§ 2.06 requires membership in the union as a condition of
employment after 31 days from the date of hiring. At least two
decisions in this district have held that suits of this kind are
subject to a ten year statute of limitations. Paul et al. v.
Lindgren, 375 F. Supp. 843 (N.D.Ill. 1974) and Paul et al. v.
Allen, 74 C 2357 (N.D.Ill. June 30, 1976).
In the United Auto Workers decision, supra, p. 2, the Supreme
Court held that state law governed not only the applicable
statute of limitations but also the "characterization" of the
agreement under state law. 383 U.S. at 706, 86 S.Ct. at 1113. The
Federal court in Indiana had ruled that the union's suit for
unpaid vacation benefits was based partly upon the oral
employment contracts of each employee and that therefore the
shorter Indiana statute governing hybrid contracts was
applicable. The Supreme Court also said at p. 706, 86 S.Ct. at p.
1113 that ". . . the characterization of this action for the
purpose of selecting the appropriate state limitations provision
is ultimately a question of federal law." It found no reason to
reject the trial court's characterization of the action as one to
enforce individual verbal contracts of employment.
It will be noted, however, that the United Auto Workers'
contractual clause provided: "Employees who qualify for a
vacation in the previous year and whose employment is terminated
for any reason before the vacation is taken will be paid that
vacation at time of termination." This clause ran in favor of the
individual employees and not in favor of the contracting union,
giving rise to the need for parol identification. In the case at
bar, however, the employer agreed in Articles VIII, IX and XI to
contribute directly to the three trust funds which are in effect
third party beneficiaries. The parties to this agreement are thus
We must confess that the statute of limitations question is not
entirely free from doubt. In Pratl v. Hawthorn-Mellody Farms
Dairy, Inc., supra, the court held that individual union members
by the five year statute of limitations when suing to enforce a
collective bargaining agreement, because they could not be
identified individually from the face of the contract. The court
said at 53 Ill. App.3d 347, 11 Ill.Dec. 219, 368 N.E.2d 770: "A
contract cannot be said to be in writing unless the parties
thereto, as well as the terms and provisions thereof, can be
ascertained from the instrument itself." Cf. Matzer v. Florsheim
Shoe Co., 132 Ill. App.2d 470, 270 N.E.2d 75 (1st Dist. 1971).
Insofar as the identity of the union is concerned, these cases
are not applicable, but the plaintiff trustees are suing and are
named, if at all, only in the trust agreements referred to in the
specific Articles of the contract. This does not satisfy Pratl,
although defendant has not raised this issue.
There exists another unresolved question, whether the trustees
of these funds have standing to sue under § 301 of the Labor
Management Relations Act. That section technically is applicable
to "suits by and against labor organizations," but union trust
funds have often been allowed to invoke the section. Todd v.
Casemakers, Inc., 425 F. Supp. 1375 (N.D.Ill. 1977); Wishnick v.
One Stop Food & Liquor Store, Inc., 359 F. Supp. 239 (N.D.Ill.
1973). The employer has not contended otherwise, although it does
deny the "jurisdictional allegations" of pars. 1(a) and (b) of
the Amended Complaint.
Plaintiffs alternatively sue under § 502 of E.R.I.S.A., but
that statute likewise contains no statute of limitations on
actions of this kind. In fact, the Congressional committee which
reported on the statute stated that suits to enforce benefit
rights under trust plans "are to be regarded as arising under the
laws of the United States in similar fashion to those brought
under § 301 of the Labor-Management Relations Act of 1947." See
Reiherzer v. Shannon, 581 F.2d 1266, 1271 (7th Cir. 1978).
Assuming that the trustees have standing to sue under § 502 of
E.R.I.S.A., Illinois law would govern the statute of limitations
question here also.
Defendant contends that § 413 of E.R.I.S.A. (29 U.S.C. § 1113)
provides for a three-year period of limitations, but § 413 only
applies to suits brought "with respect to a fiduciary's breach"
and to other suits for violation of Part 4 of the Act. Section
502 (29 U.S.C. § 1132) pursuant to which this suit is brought
falls under Part 5. This section did not become effective until
September 2, 1974.
Thus only the few days between August 28 and September 2, 1974
would be added by application of a period of limitation longer
than five years.
However, § 502 (29 U.S.C. § 1132) provides for civil action by
fiduciaries in limited situations only. One, (subsection(a)(3))
is to obtain "equitable relief" for violations of Subchapter I.
In our opinion, this suit for contributions of money allegedly
due and owing qualifies only for the future equitable relief
prayed for in par. D of the complaint, not for a money award for
A fiduciary also has standing to sue for relief provided by §
409 of the Act, pursuant to the provisions of § 1132(a)(2).
Section 1109 merely subjects fiduciaries to personal liability
for breaches of trust. This section might give the beneficiaries
or perhaps even the union a cause of action against fiduciaries
who allow the statute of limitations to run against their claims,
but it does not give the fiduciary the cause of action against an
allegedly defaulting employer. In fact, we have been shown no
provision in E.R.I.S.A. which supports the filing of this action.
Since E.R.I.S.A. at most would afford a basis for recovery back
only to September 2, 1974, and since we do not find any authority
for applying the three-statute of limitations of § 413 (29 U.S.C. § 1113),
we will also deny defendant's motion for summary
judgment on the E.R.I.S.A. portion of the complaint.
In view of the fact that the statute of limitations issue under
§ 301 of the Labor Management Relations Act is somewhat
unsettled, we believe that the most efficient
way to proceed is to allow plaintiffs to attempt first to prove
their claim for liability. We assume that computation of damages
for the ten year period preceding the filing of the complaint
will be primarily an accounting problem, if defendants' records
of employment extend back for that entire period. If a
controlling decision should be handed down by a higher court
before the case at bar is concluded, then it should be a simple
matter to adjust the computation to conform to that decision. The
same procedure would be applicable in the event of a successful
appeal on the statute of limitations issue. If we are ultimately
proved to be wrong in this decision, the parties should have a
complete record which will avoid a new trial for the period prior
to August 28, 1974.
Other problems lurk in this case, such as (1) whether the union
should be a plaintiff; (2) whether the trustees should sue on the
basis of the trust agreements specified in Articles VIII, IX and
XI of the Collective Bargaining Agreement; (3) whether the matter
can be settled without expensive litigation; (4) whether the
ultimate determination will depend upon contractual
interpretation and, if so, what provisions might be involved; and
(5) whether the matter can be determined by voluntary arbitration
at some stage.
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