the FDSA Modell was giving the FDSA authority to bargain on its behalf. Although Modell subsequently opened additional funeral establishments (it eventually had three operations, all known to the FDSA) and employed persons who would be covered by FDSA collective bargaining agreements, Modell did not pay contributions on behalf of these employees. Neither did Modell receive any direct communication from anyone until late 1994 that it owed contributions to the Funds.
7. Although Modell was not told when it joined the FDSA that it would be liable for contributions to the Funds and although collective bargaining was not the principal activity of the FDSA, Modell learned, or should have learned, over the years that the FDSA believed it represented Modell in collective bargaining agreements between the FDSA and the Union. At least some of the times when the contracts in question came up for renewal, employer members, including Modell, were sent letters inviting them to meetings to discuss the negotiations. Furthermore, copies of the new contracts were sent to each employer, including Modell. Letters accompanying the contracts as well as statements in newsletters explicitly stated that the agreements were binding on all members and that they covered all employees performing covered work. There were other references in newsletters, primarily to dates, such as Christmas and New Year's, when, according to the newsletter reminders, under the collective bargaining agreements funerals could not be held.
8. Modell relies on evidence that it had its own pension plan and that it provided health insurance to its employees as proof that it did not know that it was required to contribute to the Funds.
This evidence supports Modell's contention that it did not intend to be bound by the FDSA negotiated collective bargaining agreements. In addition, Modell never voted on any union contract nor signed any document authorizing the FDSA to negotiate on its behalf.
Conclusions of Law
1. Modell is an employer within the meaning of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 152(2), and ERISA, 29 U.S.C. § 1002(5). The FDSA is an employer within the meaning of the LMRA, 29 U.S.C. § 152(2). The Funds are employee benefit plans within the meaning of ERISA, 29 U.S.C. § 1002(3). Thomas J. Moriarty, as trustee of the Funds, is authorized to enforce the obligations imposed by ERISA upon employers. 29 U.S.C. § 1132(a)(3). The Union is a labor organization representing employees in an industry affecting commerce within the meaning of the LMRA, 29 U.S.C. §§ 152(5) and 185.
2. The Funds are third-party beneficiaries of collective bargaining agreements between the FDSA and the Union. Central States, Southeast and Southwest Areas Pension Fund v. Gerber Truck Service, Inc., 870 F.2d 1148, 1151 (7th Cir. 1989); Robbins v. Lynch, 836 F.2d 330, 333 (7th Cir. 1988). Under ERISA, every employer obligated pursuant to the terms of an employer "plan" or a collective bargaining agreement to make contributions to a Fund, must, unless inconsistent with law, make such contributions. 29 U.S.C. § 1145.
3. Modell is obligated to make contributions to the Funds only if it agreed to do so. Modell is obligated to make contributions if it gave the FDSA authority to enter into agreements on its behalf. E.g., Moriarty v. Glueckert Funeral Home, Ltd., 925 F. Supp. 1389, 1393 (N.D. Ill. 1996) (J. Shadur). That authority may be actual or apparent. Id.; Trustees of the UIU Health and Welfare Fund v. New York Flame Proofing Co., 828 F.2d 79, 82-84 (2d Cir. 1987).
4. Modell could be found to have given the FDSA actual authority to bind it to collective bargaining agreements, and thus the duty to make contributions to the Funds, either by giving the FDSA express authority or by doing some act indicating an "unequivocal intention to be bound." New York Flame Proofing, 828 F.2d at 82-83; Glueckert Funeral Home, 925 F. Supp. at 1393. In this case, Modell did not give the FDSA express authority to bind it to the collective bargaining agreements.
5. Neither did Modell indicate an "unequivocal intention to be bound" by the FDSA negotiated agreements. New York Flame Proofing held that such an intention could be drawn from membership in an association whose "'principal, if not virtually sole activity' was to negotiate collective bargaining agreements on behalf of its members" where the "longstanding, universally observed and universally known custom is that members are bound by such agreements." 828 F.2d at 83. In this case I have found that the FDSA's principal activity has not been shown to be negotiating collective bargaining agreements. Neither has Mr. Moriarty shown that the FDSA's members have universally observed any custom to be bound by such agreements. I conclude that Modell did not give the FDSA actual authority to bind it to make contributions to the Funds.
6. As Judge Shadur found in Glueckert, however, this does not end the inquiry. Modell can still be found obligated to make contributions if it gave the FDSA apparent authority to bind it. Glueckert, 925 F. Supp. at 1394.
Apparent authority to do an act is created as to a third person by written or spoken words or any other conduct of the principal which, reasonably interpreted, causes the third person to believe that the principal consents to have the act done on his behalf by the person purporting to act for him.
RESTATEMENT (SECOND) OF AGENCY ("RESTATEMENT") § 27 (1958); Glueckert, 925 F. Supp. at 1394. The acts of the principal mean the acts of Modell. Id. If Modell put its agent (the FDSA) in a position "in which according to the ordinary habits of persons in the locality, trade or profession, it is usual for such agent to have a particular kind of authority, anyone dealing with him is justified in inferring that he has such authority. . . ." RESTATEMENT, § 27 cmt. a; Glueckert, 925 F. Supp. at 1394.
7. Although Modell did not know at the time it joined the FDSA that the FDSA expected to act as its agent in negotiating collective bargaining agreements, Modell subsequently was informed on repeated occasions over the years, through letters and newsletter reports, that the FDSA believed it was acting on Modell's behalf -- and purported to bind all FDSA members, including Modell -- each time it negotiated an agreement with the Union. At no time did Modell protest that it had given no authority, or even make an inquiry. I conclude that Modell's inaction reasonably supports the Union's belief that the FDSA was authorized to bind Modell to the collective bargaining agreements negotiated over the years. See RESTATEMENT § 43 cmt. c:
In the absence of other evidence as to the agent's authority, the fact that the principal acquiesces in the conduct of the agent is sufficient evidence to prove authorization or ratification. If such conduct of the agent is known to a third person, as the principal has reason to know, and the principal makes no manifestation of his objection thereto, although he could easily do so, apparent authority is thereby created.