United States District Court, Northern District of Illinois, E.D
June 14, 1982
CHICAGO DISTRICT COUNCIL OF CARPENTERS PENSION FUND, CHICAGO DISTRICT COUNCIL OF CARPENTERS WELFARE FUND, CHICAGO DISTRICT COUNCIL OF CARPENTERS APPRENTICE & TRAINEE PROGRAM AND THE CHICAGO DISTRICT COUNCIL OF CARPENTERS, GEORGE VEST, JR., WESLEY ISAACSON, MILTON HOLZMAN, THOMAS E. RYAN, RICHARD S. PEPPER, ALBERT KAUFMAN, DOMINIC J. VELO AND HERBERT S. CHURCH, JR., AS TRUSTEES OF THE CHICAGO DISTRICT COUNCIL OF CARPENTERS PENSION AND WELFARE FUNDS, RICHARD S. PEPPER, WESLEY ISAACSON, GEORGE VEST, JR., THOMAS D. COLEMAN, JACK BORNHOEFT, DOMINIC J. VELO, EDWARD ELLIS AND KENNETH BORG, AS TRUSTEES OF THE CHICAGO DISTRICT COUNCIL OF CARPENTERS APPRENTICE & TRAINEE PROGRAM, PLAINTIFFS,
ALLYN H. SKREDE, INDIVIDUALLY AND D/B/A ABILITY CABINET COMPANY, DEFENDANTS.
The opinion of the court was delivered by: Aspen, District Judge:
MEMORANDUM OPINION AND ORDER
Plaintiff, Chicago District Council of Carpenters Pension Fund
(the "Fund"), brought this action against defendants Allyn H.
Skrede and Ability Cabinet Company to collect $14,697.83 in
fringe benefit contributions allegedly due to the Fund from
defendants pursuant to the terms of a collective bargaining
agreement and certain trust agreements.*fn1 Jurisdiction is premised
upon § 502 of the Employee Retirement Income Security Act,
29 U.S.C. § 1132 (1976). Presently before the Court are the parties'
cross-motions for summary judgment*fn2 on the sole legal issue
whether the Fund can enforce a "pre-hire" agreement which
requires defendants to make fringe benefit contributions to the
Carpenters' Pension and Welfare Funds and the Carpenters'
Apprentice and Trainee Program on behalf of all employees, union
and non-union, doing work within the occupational scope of the
collective bargaining agreement. For the following reasons, the
Fund's motion is granted and the defendants' motion is denied.
The circumstances underlying this lawsuit are not in dispute.
On October 2, 1975, the parties executed a contract which
purported to bind the defendants to the terms and conditions of
the collective bargaining and trust agreements negotiated between
the Chicago District Council of Carpenters and the Mid-America
Regional Bargaining Association. Those agreements required that
employers contribute a specific sum to the Fund for each hour
union and non-union employees performed work within the
occupational scope of the collective bargaining agreement.
Between October 1, 1978, and March 31, 1980, however, defendants
made contributions on behalf of only one of five employees
performing work within the occupational scope of the collective
bargaining agreement. The four employees on whose behalf
defendants refused to make fringe benefit contributions were not
members. Upon discovery of defendants' apparent delinquency, the
Fund brought this action to collect the fringe benefit
contributions allegedly due.
Defendants contend that the "pre-hire" agreement which required
them to make contributions to the Fund on behalf of non-union
employees is not enforceable.*fn3 Defendants argue that compliance
with the terms of a pre-hire agreement is voluntary until the
union achieves majority status among the employer's workers
within the bargaining unit. Cf. N.L.R.B. v. Iron Workers Local
103, 434 U.S. 335, 98 S.Ct. 651, 54 L.Ed.2d 586 (1978)
("Higdon"). The Fund argues, on the other hand, that defendants
are liable for their failure to make fringe benefit contributions
whether the union achieved majority status or not. Federal courts
which have considered the enforceability of pre-hire agreements
in this context have split.*fn4
In Higdon, the Supreme Court upheld the NLRB's conclusion that
it was an unfair labor practice for an uncertified majority union
to engage in extended picketing as a device to enforce a pre-hire
agreement.*fn5 434 U.S. at 341, 98 S.Ct. at 655. The Court reasoned
that although the National Labor Relations Act permitted labor
and management to enter into pre-hire agreements, the use of
picketing to enforce those agreements would hinder employees'
freedom to make an uncoerced choice of bargaining agent.*fn6 Id. at
346, 98 S.Ct. at 658. Defendants' effort to apply the same
reasoning to the Fund's attempt to collect fringe benefit
contributions in this case is not persuasive. As the Eighth
Circuit noted in Associated Wrecking Co., supra:
[Higdon] held that an employer does not commit an
unfair labor practice for breach of its duty to
bargain by unilaterally abrogating a pre-hire
agreement with a labor union that never obtains
majority support from the employees in the bargaining
unit. It does not necessarily follow, however, that
absence of majority status leaves the union without a
remedy for breach of contract on any provision of the
section 8(f) agreement.
To say that an employer may challenge the majority
status of a union in an unfair labor practice
proceeding is not to say that the employer may assert
the union's lack of majority status as a defense in a
breach of contract action on a type of contract
specifically authorized by the Act.
638 F.2d at 1133.
We do not agree with defendant's argument that the distinction
between the unfair labor practice context of Higdon and the
breach of contract context of this case is without significance.
Despite the broad language of the decision, the Supreme Court's
specific holding in Higdon is directed against those tactics used
to enforce pre-hire agreements which also constitute unfair labor
practices under § 8 of the National Labor Relations Act.
29 U.S.C. § 158 (1976). In the present case, although defendants
argue generally that the entire pre-hire agreement undermines the
policy of the Act, they have not and could not allege that a
breach of contract action to enforce the collection of fringe
benefit contributions on behalf of non-union employees is an
unfair labor practice. Defendants' reading of Higdon would
require us to hold all pre-hire agreements unenforceable until
majority status is established, whether or not the means employed
to achieve such enforcement was otherwise lawful. This result is
not supported by Higdon.*fn7 See Trustees of the Atlanta Iron
Workers Local 387 Pension Fund v. Southern Stress Wire Corp.,
509 F. Supp. 1097, 1103-04 (N.D.Ga. 1981).
Defendants' contention that the entire pre-hire agreement
interferes with their employees' freedom to choose a bargaining
agent, as guaranteed by the National Labor Relations Act,
obscures the fundamental policy issue raised by this case. We are
not concerned with the propriety of the agreement itself;
Congress has expressly declared that a pre-hire agreement is not
an unfair labor practice under the Act.*fn8 29 U.S.C. § 158(f).
Rather, the extent to which a pre-hire agreement interferes with
the policy of guaranteeing employees' freedom to choose a
bargaining agent is measured with reference to the means chosen
to enforce the agreement. Defendants have not, however,
demonstrated how the collection of fringe benefit contributions
on behalf of non-union employees interferes with those employees'
freedom of choice.
The pre-hire agreement has allowed defendants to enjoy the
benefits of knowing their labor costs and being able to project
those costs accurately. N.L.R.B. v. Irvin, supra, 475 F.2d at
1267. The agreement has also helped to guarantee industrial peace
at defendants' worksites during the period involved in this case.
Associated Wrecking, supra, 638 F.2d at 1134. See generally
Sen.Rpt.No. 187, 86th Cong., 1st
Sess. 55-56 (1959); House Rep. No. 741, 86th Cong., 1st Sess.
19-20 (1959), U.S.Code Cong. & Admin.News, p. 2318. After having
enjoyed the benefits of the pre-hire agreement at issue,
defendants cannot now avoid their reciprocal obligation to
contribute to the Fund simply by asserting that the agreement is
wholly unenforceable. In light of the policies underlying the
National Labor Relations Act, the Court will not strain to read
Higdon in a way which permits an employer to accept the benefits
of a pre-hire agreement without having to honor its obligations
under that agreement.
Even if the broad language of Higdon is separated from its
factual context, the Supreme Court's decision does not support
defendants' motion for summary judgment. The Higdon Court
expressly declared that until the union achieves majority status,
"the pre-hire agreement is voidable and does not have the same
stature as a collective bargaining contract. . . ." Higdon,
supra, 434 U.S. at 341, 98 S.Ct. at 655. The Court did not decide
that such an agreement was void. Reading Higdon as broadly as its
language allows, a pre-hire agreement would become unenforceable
only upon the employer's affirmative repudiation of the
agreement. Todd, supra, 667 F.2d at 803; Atlanta Iron Workers,
supra, 509 F. Supp. at 1105. Defendants' simple failure to perform
its contractual obligation to contribute to the Fund without some
affirmative notice to the Fund is not itself sufficient to
constitute such a repudiation. Todd, supra, 667 F.2d at 804. The
Fund was never put on notice by the defendants that it was no
longer responsible for covering the employees for whom
contributions were not received. Cf. Florida Marble Polishers
Health and Welfare Trust Fund v. Megahee, 102 L.R.R.M. 2740
The Fund's motion for partial summary judgment also seeks
recovery of attorneys' fees, costs and interest on the delinquent
contributions pursuant to the collective bargaining agreement and
29 U.S.C. § 1132(g)(2) (1980). In this context, the Fund is
entitled to such an award regardless of defendants' good faith.
Accordingly, the Fund's motion for partial summary judgment is
granted and defendants' motion is denied. The Fund is directed to
submit to this Court for approval a statement detailing the
appropriate amount of interest on this judgment as provided in
the Act and the reasonable attorneys' fees and costs attributable
to this lawsuit. It is so ordered.