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CHICAGO DIST. COUNCIL OF CARPENTERS, ETC. v. SKREDE

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,
v.
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 union 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 (1979).

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.


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