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Central States, Southeast and Southwest Areas Pension Fund v. Northern Illinois Transit, Inc.

United States District Court, Seventh Circuit

May 6, 2013

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS HEALTH AND WELFARE FUND and ARTHUR H. BUNTE, as Trustee, Plaintiffs,
v.
NORTHERN ILLINOIS TRANSIT, INC., Defendant.

MEMORANDUM OPINION AND ORDER

RONALD A. GUZM§N, District Judge.

Plaintiffs Central States, Southeast and Southwest Area Pension Fund ("Pension Fund"), Central States, Southeast and Southwest Area Health and Welfare Fund ("Health and Welfare Fund) (collectively, the "Plaintiffs" or the "Funds"), and Arthur H. Bunte, Jr. as Trustee sued Northern Illinois Transit, Inc. ("NIT") under § 502 of the Employee Retirement Income Security Act of 1974 ("ERISA"). 29 U.S.C. § 1132. Plaintiffs have filed a motion for summary judgment. For the reasons stated herein, the motion is granted.

FACTS

I. The Parties

NIT is an Illinois corporation. (Pls.' LR 56.1 Stmt. § 6.) The Funds are employee benefit plans and trusts funded by contributions from multiple employers according to: (1) collective bargaining agreements; (2) trust agreements that govern the Funds; and (3) participation agreements with local unions. ( Id. §§ 1-4.)

II. The Agreements

A. Collective Bargaining Agreement

In 2006, NIT signed a pre-existing, statewide collective bargaining agreement (the "2006 CBA"). ( Id. §§ 10-12.) The 2006 CBA was negotiated by the Associated General Contractors of Illinois and the Illinois Conference of Teamsters on behalf of certain Illinois-based unions, including Local Union 722 of the International Brotherhood of Teamsters ("Local 722"). ( Id. §§ 10-11.) Under the 2006 CBA, NIT agreed to make contributions to the Funds on behalf of its eligible employees. ( Id. §§ 12-13.) The 2006 CBA contains an "evergreen clause" that extends the duration of the agreement if notice of termination or modification is not provided to the parties prior to its expiration. ( Id. § 14.) This evergreen clause provides that the CBA:

[S]hall become effective as of the 1st day of May, 2006 and shall remain in full force and effect until the 30th day of April 2010 and each year thereafter unless written notice of the termination or desired modifications is given at least sixty (60) days up to ninety (90) days prior to the expiration date of the contract by either of the parties hereto.

( Id. ) Neither NIT nor Local 722 has sent a written notice of termination or modification of the 2006 CBA to the other party. ( Id. § 27.)

B. Trust Agreements

The Funds' governing Trust Agreements require employers to "remit continuing and prompt contributions to the Trust Fund as required by the applicable collective bargaining agreement to which the [e]mployer is a party, applicable law and all rules and requirements for participation by [e]mployers in the Fund." ( Id. § 38.) Furthermore, Article III, Section 1 of the Funds' Trust Agreements states:

[T]he obligation to make such contributions shall continue (and cannot be retroactively reduced or eliminated) after termination of the collective bargaining agreement until the date the Fund receives a) a signed contract that eliminates or reduces the duty to contribute to the Fund or b) written notification that the Employer has lawfully implemented a proposal to withdraw from the Fund or reduce its contributions at the above-specified address. The obligation to make such contributions shall continue during periods when the collective bargaining agreement is being negotiated, but such contributions shall not be required in case of strike after contract termination, unless the parties mutually agree otherwise.

( Id. § 39.) To date, NIT has neither provided the Funds with a contract that eliminated or reduced the obligation to pay contributions nor sent written notice to the Funds that NIT has lawfully implemented a proposal to withdraw or reduce contributions to the Funds. ( Id. § 40.)

C. Participation Agreement

On February 27, 2009, NIT entered into a Participation Agreement with Local 722 in which it agreed to: (1) submit monthly reports of hours worked by covered employees, which the Funds use to prepare monthly bills and determine employee benefit eligibility; and (2) pay contributions to the Funds for each hour worked by eligible employees in accordance with the 2006 CBA's negotiated rates. ( Id. §§ 30-33, 61-62.) The Participation Agreement's duration clause provides in relevant part:

This Agreement and the Employer's obligation to pay contributions shall not terminate until... the Employer is no longer obligated by a contract or statute to contribute to the Fund(s) and the Fund(s) have received written notice directed to the Fund(s) Contracts Department at the address specified above sent by certified mail with return receipt requested which describes the reason why the Employer is no longer obligated to contribute....

( Id. § 32.) Moreover, Paragraph 1 of the Participation Agreement provides that the "Union and the Employer agree to be bound by, and hereby assent to, all of the terms of the Trust ...


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