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CENTRAL STATES v. EKCO PRODUCTS

February 15, 1984

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, LORAN W. ROBBINS; MARION M. WINSTEAD; HAROLD J. YATES; ROBERT J. BAKER; HOWARD MCDOUGALL; ARTHUR H. BUNTE, JR.; EARL L. JENNINGS, JR. AND R.W. PULLIAM, PLAINTIFFS,
v.
EKCO PRODUCTS, INC. AND AMERICAN HOME PRODUCTS, INC., DEFENDANTS.



The opinion of the court was delivered by: Aspen, District Judge:

MEMORANDUM OPINION AND ORDER

Plaintiffs Central States, Southeast and Southwest Areas Pension Fund, Loran W. Robbins, Marion M. Winstead, Harold J. Yates, Robert J. Baker, Howard McDougall, Arthur H. Bunte Jr., Earl L. Jennings, Jr. and R.V. Pulliam ("the Fund") sued Ekco Products, Inc. and American Home Products Corp. ("Ekco")*fn1 for failure to make contributions allegedly due to the Fund from February 5, 1969, to the present.*fn2 Jurisdiction is asserted pursuant to § 301(a) of the Labor Management Relations Act of 1947, 29 U.S.C. § 185(a) and § 502(e)(1) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132. Presently before the Court are the parties' cross-motions for summary judgment. For reasons set forth below, the Fund's motion is denied, and Ekco's motion is granted.

FACTS

The Fund is a common law pension trust established pursuant to 29 U.S.C. § 186(c)(5). From at least November 5, 1966, to the present, Ekco has had a collective bargaining agreement with Teamster Local No. 714 ("Union"). In the 1966-1969 collective bargaining agreement, Ekco agreed with the Union to contribute to the Fund in lieu of the company's pension plan. There was disagreement concerning exactly when Ekco would be required to make contributions on behalf of new employees. The Fund sought contributions after thirty days of employment ("the thirty day rule"), while Ekco sought to contribute after twelve months of service ("the one year rule"). Controversy over which of these two rules is applicable has resurfaced and is the crux of the present matter.

According to the Fund, Ekco was permitted to follow the one year rule for the duration of the 1966-1969 collective bargaining agreement, since upon Ekco's admission into the Fund in April, 1967, the collective bargaining agreement was not subject to reopening. But compliance with the thirty day rule starting in 1969 was, according to the Fund, an express condition of Ekco's admission into the Fund. An "Employer Agreement" proposed by Ekco and executed by the parties stated that Ekco

  accepts the terms and provisions of the Agreement
  and Declaration of Trust as modified by Exhibit
  "A" of the current labor agreement between the
  parties.

Exhibit A required Ekco to pay a monthly sum to the Fund

  for each eligible employee in the bargaining unit
  who has reached his first annual
  anniversary. . . .

Article 9.3 of the 1966-1969 collective bargaining agreement contained a clause which incorporated the Pension Plan between the parties as well as Exhibit A, with the one year rule.

In a letter from the Fund to the Union and Ekco, dated April 21, 1967, Edward J. Murtha declared that

  [t]he Trustees have instructed me to inform you
  that they have accepted the group into the plan
  with the provision, however, that when you
  renegotiate your contract, you must comply with
  our ruling that pension must be paid on all
  employees who have been on the payroll for thirty
  days.

Ekco's representative in these matters, viewed the reference in Murtha's letter to the thirty day rule as a matter that was negotiable at the onset of negotiations for the next collective bargaining agreement.*fn3

The 1969-1972 collective bargaining agreement did not contain the thirty day rule. Rather, the agreement contained a clause which declared that

  [a]ll the terms and conditions of the existing
  contract shall remain in full force and effect
  except as modified by the attached changes ...

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