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Trustees of Operating Engineers Local 965 Health Benefit Plan, et al v. Brian J. Shirley D/B/A Jayco Construction

September 28, 2011

TRUSTEES OF OPERATING ENGINEERS LOCAL 965 HEALTH BENEFIT PLAN, ET AL., PLAINTIFFS,
v.
BRIAN J. SHIRLEY D/B/A JAYCO CONSTRUCTION, BRIAN J. SHIRLEY D/B/A JAYCO AND JAYCO, INC., AN ILLINOIS CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Richard Mills, U.S. District Judge:

E-FILED

Thursday, 29 September, 2011 09:10:51 AM

Clerk, U.S. District Court, ILCD

OPINION

Pending is the Plaintiffs' motion for partial summary judgment. The Plaintiffs allege that Defendant Brian J. Shirley failed to terminate his agreement with the Operating Engineers Local Union 965. Because his notice of termination did not comply with the contract's notice provisions, the Plaintiffs contend Shirley is bound by the contract. The Plaintiffs further assert that Jayco, Inc. is the successor to Shirley (a sole proprietor) and had notice of his labor agreement or, in the alternative, that Shirley remains a sole proprietorship in that he has not operated as a corporation.

The Defendants claim that Brian Shirley was essentially the sole individual performing work falling within the Operating Engineers' jurisdiction, and that he understood he was exempt from contributing to the Plaintiff Funds. To the extent that relief is sought after December 18, 2008, the Defendants assert that Shirley timely terminated the Collective Bargaining Agreements at issue on December 18, 2008. Shirley further alleges there is a genuine issue of material fact as to whether Jayco, Inc. is his legal successor.

I. BACKGROUND

(A)

This action arises under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1145, and the Labor Management Act of 1947, 29 U.S.C. § 185. Plaintiffs Operating Engineers Local 965 Health Benefit Fund, Operating Engineers Local 965 Apprenticeship and Training Fund and the Central Pension Fund of the International Union of Operating Engineers are employee benefits plan administered pursuant to the terms and provisions of the Declaration of Trust creating the Funds.

Brian J. Shirley is an Employer engaged in an industry within the meaning of ERISA. On December 4, 2003, Shirley signed the Agreement between the International Union of Operating Engineers Local Union 965 AFL-CIO and the Central Illinois Builders of the AGC Memorandum of Agreement, May 1, 2003 through April 30, 2006 ("the CIB Agreement"). The period of the CIB Agreement was from May 1, 2003, through April 30, 2006. The CIB Agreement was to remain in effect unless one of the "interested parties" provided written notice at least 60 days prior to the expiration date. The CIB Agreement covers and applies to all persons engaged in performing the duties or classifications of work described in Article I of the CIB Agreement. The Standard Form Contract for Adoption of Agreement provides in part, "The parties hereto do hereby adopt all of the provisions and terms of the attached Agreement as the Agreement between the parties."

Brian Shirley did not assign his bargaining rights to the Central Illinois Builders of the A.G.C. in 2003 or any other employers' association when he signed the CIB Agreement. Accordingly, to adopt the CIB Agreement as their own agreement, Shirley and Operating Engineers Local 965 executed the STANDARD FORM CONTRACT FOR ADOPTION OF AGREEMENT addendum shown on pages 61 through 64 of the CIB Agreement. The STANDARD FORM CONTRACT FOR ADOPTION OF AGREEMENT on page 61 of the CIB Agreement states that:

The Employer further agrees to be bound by all terms and conditions of any subsequent collective bargaining agreement between the Association and Union unless not less than 90 days and more than 120 days prior to the expiration of this or any subsequent Agreement, the Employer notifies the Union in writing that it revokes its assent to any collective bargaining agreement. In that event, the Employer agrees that any notice served by the Union upon the Association or appropriate mediation service for reopening, termination, or modification of this or any subsequent Agreement shall serve as notice to the Employer.

The Standard Form Area Agreement provides, in Article 37, page 26, that "This Agreement shall be in force and effect from May 1, 2004, through April 30, 2008, and shall remain in effect from year to year thereafter, unless objections are made by a Certified Mail by one or more of the interested parties at least sixty (60) days prior to the expiration date as set forth above, or the yearly expiration date thereafter." Paragraph 3 of the Standard Form Contract for Adoption of Agreement, on pages 27-28 of the Standard Form Area Agreement, states:

The individual Employer signatory hereto agrees that it will be bound by all modifications, amendments, extensions, and renewals of this Agreement, as well as any subsequent collective bargaining agreements, unless the signatory Employer gives notice in writing by a Certified Mail upon the Union between one hundred twenty (120) and one hundred fifty (150) days prior to the expiration of this or any subsequent Agreement ...


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