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Chicago District Council of Carpenters Pension Fund v. Simpson Construction Co.

December 18, 2006

CHICAGO DISTRICT COUNCIL OF CARPENTERS PENSION FUND, ET AL., PLAINTIFFS,
v.
SIMPSON CONSTRUCTION CO. DEFENDANT.



The opinion of the court was delivered by: Magistrate Judge Geraldine Soat Brown

MEMORANDUM OPINION AND ORDER

Plaintiffs Chicago District Council of Carpenters Pension Fund, Chicago District Council of Carpenters Welfare Fund, and Chicago and Northeast Illinois District Council of Carpenters Apprentice and Trainee Program ("the Funds") brought this action against defendant Simpson Construction Company ("Simpson") under Section 502 of the Employment Retirement Income Security Act, 29 U.S.C. § 1132 et seq. ("ERISA"), and Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185 et seq. ("LMRA"). The Funds seek to collect delinquent employee benefits contributions that they allege Simpson owes under a collective bargaining agreement for carpenters' work performed on a construction project for the City of Chicago. (SF ¶ 1.) Before the court are the Funds' Motion for Summary Judgment as to Liability [dkt 57] and Simpson's Motion for Summary Judgment as to Liability [dkt 52]. For the reasons stated below, the Funds' motion is granted and Simpson's motion is denied.

JURISDICTION

Federal jurisdiction exists in this case under 29 U.S.C. §§ 1132 and 185. (SF ¶ 1.) The parties consented to the jurisdiction of a magistrate judge [dkt 5, 6], and this case was assigned to this court [dkt 7] pursuant to 28 U.S.C. § 636(c)).

BACKGROUND*fn1

I. The Parties

The Funds are multi-employer trust funds that provide fringe benefits to participant employees. (See SF ¶¶ 2, 6; see also 29 U.S.C. § 1002(7).) The Funds receive contributions from employers pursuant to the terms of collective bargaining agreements negotiated between the employers and the Chicago and Northeast Illinois District Council of Carpenters (the "Union"). (SF ¶ 2.) Simpson is an employer that is obligated by various collective bargaining agreements to pay monthly fringe benefits contributions to the Funds for each hour of carpenters' work performed by Simpson's employees. (SF ¶¶ 3-6.)

II. The Collective Bargaining Agreement

The collective bargaining agreement relevant to this action (the "CBA") was in effect from 2001 through 2005. [Dkt 87.] Simpson does not dispute that it was signatory to and bound by that CBA, and Simpson admits that, under the CBA, it must pay contributions for jurisdictional work performed by its own employees. (SF ¶¶ 3-6.) The issue is whether Simpson is liable for contributions for jurisdictional work that was not performed by Simpson's employees, but was instead subcontracted to another company that was not signatory to the CBA.

Certain terms of the CBA are relevant to this dispute. Those terms provide, in relevant part:

3.2 EMPLOYER shall not contract or subcontract any work coming within the jurisdictional claims of the UNION to any person, firm or corporation not covered by a Collective Bargaining Agreement with the UNION, provided, however, that the provisions of this paragraph shall apply only to the contracting and subcontracting of work to be done at the site of construction, alteration, painting or repair of a building, structure or other work.

3.3 EMPLOYER, in recognition of the territorial and occupational jurisdiction of the UNION, shall not subcontract or contract out jobsite work coming within the jurisdiction of the Carpenters Union nor utilize on the jobsite the services of any other person, company or concern to perform such work that does not observe the same wages, fringe benefits, hours and conditions of employment as enjoyed by the Employees covered by this Agreement.

3.4 Any EMPLOYER who sublets any of the work coming within the jurisdiction of Carpenters shall assume the obligations of any subcontractor to the extent of Carpenter labor employed on work under contract with the EMPLOYER for prompt payment of [contributions to the Funds] . . . , provided the subcontractor is not bonded as provided for in Article XV hereof. . . .

3.5 If an EMPLOYER, bound by this Agreement, contracts or sub-contracts any work covered by this Agreement to be done at the jobsite of the construction, alteration, painting or repair of a building, structure or other work to any person or proprietor who is not signatory to this Agreement, the EMPLOYER shall require such sub-contractor to be bound by all the provisions of this Agreement, or the EMPLOYER shall maintain daily records of the sub-contractor or the subcontractor's Employees' jobsite hours and be liable for payments to [the Funds], as provided in Articles XII, XIII, and XIV of this Agreement. (SF ¶ 7; CBA at 3-4.)*fn2

III. The Natatorium Project

On June 12, 2001, Simpson entered into a contract with the Public Building Commission of Chicago (the "City") to build an addition to an existing Chicago Park District fieldhouse. (SF ¶ 8.) The "Natatorium Project" included construction of an indoor swimming pool, offices, an exercise room, locker rooms, and shower rooms. (SF ¶ 8.)

Simpson hired a subcontractor, Gem Construction, Inc. ("Gem"), to perform certain work on the Natatorium Project.*fn3 (SF ¶ 12.) Gem was not signatory to the CBA during the relevant time period. (SF ¶ 16.) The subcontract between Simpson and Gem ("Gem subcontract") stated that Gem was to provide labor, material, equipment and supervision for the "building concrete and site concrete work" for the Natatorium Project. (SF ¶ 15; Pls.' LR Resp. ¶ 3; Pls.' LR Resp. Ex. D, Gem Subcontract.)*fn4 It is undisputed that "building concrete and site concrete work" includes carpenters' jurisdictional work (Def.'s LR Resp. ¶ 3), although the record does not reveal how much of the building concrete and site concrete work was jurisdictional work and how much was not.*fn5

Simpson asserts that, as a condition of awarding the subcontract to Gem, Simpson's president Robert Hansen required Gem to use the carpenters of a third company, CRC International ("CRC") to perform any carpenters' work required for the Natatorium Project. (Def.'s LR Stmt. ¶ 15.) CRC was signatory to the CBA during the relevant time period. (SF ¶ 17.) Although Simpson and Gem had a written subcontract relating to the Natatorium Project, the condition to use CRC's carpenters was not included in that document. According to Simpson, it was an oral condition.*fn6 However, Simpson does not state when or where that alleged oral condition was agreed to, nor does Simpson identify the individuals who allegedly agreed to it. The only evidence in the record about the alleged condition to use CRC's union carpenters is the declaration of Mr. Hansen, which states, in relevant part, that "[a]s a condition of awarding the subcontract to Gem, I required Gem to use ...


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