Bd. of Trs. Local 392 v. B&B Mech. Servs. ( 2015 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 15a0301p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
BOARD OF TRUSTEES OF THE PLUMBERS, PIPE ┐
FITTERS & MECHANICAL EQUIPMENT SERVICE, │
LOCAL UNION NO. 392 PENSION FUND, et al., │
│ No. 14-4017
Plaintiffs-Appellants,
│
>
│
v.
│
│
B&B MECHANICAL SERVICES, INC., │
Defendant-Appellee. │
┘
Appeal from the United States District Court
for the Southern District of Ohio at Cincinnati.
No. 1:12-cv-00195—Michael R. Barrett, District Judge.
Argued: July 30, 2015
Decided and Filed: December 29, 2015
Before: COLE, Chief Judge; GIBBONS and STRANCH, Circuit Judges.
_________________
COUNSEL
ARGUED: Joseph E. Mallon, JOHNSON & KROL LLC, Chicago, Illinois, for Appellants.
Curtis L. Cornett, CORS & BASSETT, LLC, Cincinnati, Ohio, for Appellee. ON BRIEF:
Joseph E. Mallon, Jeffery A. Krol, JOHNSON & KROL LLC, Chicago, Illinois, for Appellants.
Curtis L. Cornett, CORS & BASSETT, LLC, Cincinnati, Ohio, for Appellee.
STRANCH, J., delivered the opinion of the court in which COLE, C.J., joined.
GIBBONS, J. (pp. 16–18), delivered a separate dissenting opinion.
1
No. 14-4017 Bd. of Trs. Local 392, et al. v. B&B Mech. Servs. Page 2
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OPINION
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STRANCH, Circuit Judge. Five multi-employer fringe benefit funds (the Funds) of the
Plumbers, Pipe Fitters & Mechanical Equipment Service, Local Union 392 (the Union), filed suit
to collect delinquent employee fringe benefit contributions from B&B Mechanical Services, Inc.
(B&B), an Ohio commercial plumbing contractor. The Funds were established for the benefit of
contractors’ employees who perform work under a collective bargaining agreement (CBA)
negotiated between the Union and the Mechanical Contractors Association (MCA) as agent for
its member employers. B&B argued that the Funds had failed to produce proof that B&B’s
principal independently signed the CBA, and that B&B had made ten years of contributions on a
voluntary basis. We conclude as a matter of law that B&B entered a number of written
agreements setting out its obligation to contribute as required by the Labor Management
Relations Act (LMRA) § 302(c)(5)(B) and is bound to pay delinquent contributions that are
owed to the Funds in accordance with the terms of the CBA and the trust agreements.
Accordingly, we REVERSE the district court’s grant of summary judgment in favor of
B&B and we REMAND the case for further proceedings consistent with our opinion.
I. BACKGROUND
B&B operates in the greater Cincinnati, Ohio area. Owners Bryan Kenny and William
Williams, long-time members of the Union, first formed the entity in 2002 as an Ohio limited
liability company, B&B Plumbing & Piping, LLC. In 2006 that company merged with a
corporation, B&B Plumbing & Piping, Inc. Late in 2006, the corporate entity changed its name
to B&B Mechanical Services, Inc. Kenny serves as B&B’s President and Williams serves as
Secretary/Treasurer.
MCA is a mutual organization that serves as the multi-employer bargaining
representative in contract negotiations with the Union. It supports the efforts of contractors
involved in plumbing, pipefitting, and mechanical equipment service who employ Union
No. 14-4017 Bd. of Trs. Local 392, et al. v. B&B Mech. Servs. Page 3
members and it provides services in labor-management relations, industry promotion, and
legislative affairs.
In August 2011, the Funds conducted an audit of B&B’s records for the period January 1,
2009 through December 31, 2010. The auditor determined that B&B did not forward the correct
amount of contributions to the Funds for reported employees and that B&B did not make
contributions on behalf of Kenny and Williams, who performed work covered by the CBA. The
Funds filed suit against B&B to recover $130,145.55 in unpaid contributions, $10,411.65 in
liquidated damages, $1,689.80 in audit fees, and attorney’s fees.
During the course of discovery, the Funds were unable to produce a copy of the CBA that
was signed by B&B through Kenny or Williams. B&B thereafter argued that it was not bound
by the CBA and did not owe the Funds any unpaid contributions for employees.
The record includes a copy of the CBA that was negotiated by MCA and the Union for
the period June 1, 2006, to May 31, 2009, although other CBAs were in effect before and after
those dates. B&B does not dispute that it was a member of MCA in 2009-2010, during part of
the period covered by the Funds’ audit, and B&B has not challenged the terms of any of the three
CBAs that were in effect “through the period of time that B&B Mechanical was a member of
MCA.” R. 20-12, Page ID 401 at 24–25. We refer to the undisputed terms of the CBA effective
June 1, 2006, to May 31, 2009, because that is the only CBA available for our review.
MCA membership required B&B to employ Union members to perform work covered by
the CBA, and B&B paid dues to MCA so that the association would represent B&B’s interests.
Jack Bertoli, Executive Director of MCA, did not know of any contractor in the geographic area
who employed union labor but did not comply with the entire CBA negotiated by MCA and the
Union, whether the contractor was an MCA member or not.
The evidence, taken in a light most favorable to the Funds, establishes that, during the ten
years between 2002 and 2012, B&B conducted itself as if it were bound by the CBAs negotiated
between MCA and the Union. In 2002, the year Kenny and Williams formed B&B Plumbing,
LLC, Kenny and B&B’s surety, West American Insurance Company, executed a bond in favor
of the Funds. The bond provided that B&B Plumbing, LLC had entered into a written contract
No. 14-4017 Bd. of Trs. Local 392, et al. v. B&B Mech. Servs. Page 4
or had signed a letter of assent to be bound by the terms of a CBA negotiated between MCA and
the Union, and in doing so B&B had agreed to pay its employees the current union wage scale
and “to pay current contractual agreed amounts to various fringe benefit funds established under”
the CBA. R. 20-17, Page ID 447. In mid-December 2006, the surety amended the bond to
reflect the company’s name change to B&B Mechanical Services, Inc., and shortly thereafter,
B&B notified the Union of its name change by sending a copy of the bond amendment to the
Union. It is undisputed that “signatory contractors” to the CBA are required to maintain such a
bond to secure payment of the contributions to the Funds required by the CBA.
For ten years after executing the surety bond, B&B submitted monthly fringe benefit
contributions for its union employees and the associated contribution reports to the local Funds
as required by the CBA. B&B’s contribution amounts matched the rates required by the CBAs
that were in effect for various time periods. Each monthly contribution report submitted to the
Funds included B&B’s certification “that this report includes only employees covered under the
terms of a collective bargaining agreement with the” Union. R. 20-8, Page ID 278; R. 21-3, Page
ID 612 at 17. B&B also submitted monthly contributions and associated contribution reports to
the Union’s National Pension Fund. In each contribution report, B&B certified “that it is a party
to a written agreement requiring contributions” to the National Pension Fund; that it “agree[d] to
be bound by the terms of the Fund’s Revised Standard Form of Participant Agreement and by the
Fund’s Agreement and Declaration of Trust”; and that the report included only employees who
were covered under the terms of the CBA with the Union. R. 20-11, Page ID 391.
In March 2009, after the Union expressed interest in negotiating a new CBA, MCA sent a
letter to all signatory contractors inviting them to designate MCA as the bargaining agent for
contract negotiations. The letter asked the member to sign and return an attached “Appointment
of Agent” form to give MCA express permission to negotiate a new CBA on behalf of the
member. B&B did not return the form, but it also did not withdraw its MCA membership.
On four occasions, B&B received wage subsidies from the Union pursuant to the Union’s
Equality and Stabilization Program (E&S Program). The purpose of the subsidies provided by
the Union was to help B&B compete against non-union contractors. In April 2008, Kenny
signed a Participation Agreement on behalf of B&B acknowledging that the E&S Program is
No. 14-4017 Bd. of Trs. Local 392, et al. v. B&B Mech. Servs. Page 5
available to “parties to the Collective Bargaining Agreement between the MCA and the Union
and does not seek to impose its terms on non-signatory Contractors.” R. 20-13, Page ID 415–16.
The Agreement provided:
Wages are a mandatory subject of collective bargaining between the MCA and the
Union. The Program helps signatory Contractors to compete effectively against
non-signatory Contractors and creates job opportunities for Journeymen by
establishing wage subsidies with signatory Contractors on certain projects. The
purpose of this Participation Agreement (“Agreement”) is to set forth the terms
and conditions that must be followed by all eligible signatory Contractors that
seek to participate in the Program. . . .
. . . As a condition to being eligible to participate in the Program, the undersigned
signatory Contractor agrees to comply with the terms and conditions of this
Agreement[.]
Id. (emphasis added).
On each occasion in 2008, 2010, and 2011 that B&B applied for a wage subsidy from the
Union through the E&S Program, Kenny and representatives of the Union and MCA signed a
Memorandum of Understanding (MOU) between the Union and MCA. Each MOU provided:
With the exception of the foregoing changes, applicable only to the Job Name and
Location stated in this Memorandum of Understanding, the Agreement of June 1,
2006, shall remain in full force and effect in accordance with its terms, and this
Memorandum shall be concurrent with that Agreement, or until completion of this
job.
R. 20-14 Page ID 418–21. The phrase “Agreement of June 1, 2006” is a reference to the CBA
dated June 1, 2006 to May 31, 2009. Under the four MOUs, the Union approved a total of
$8,260 in wage subsidies to help B&B compete against non-union employers.
Kenny denies that B&B or its legal predecessors entered into a CBA with the Union. He
further denies that B&B expressly authorized MCA to engage in collective bargaining with the
Union on behalf of B&B. He concedes that B&B traditionally hired union employees and used
the Union’s hiring hall twice in 2007, but he denies that he had any intent to bind B&B to the
CBA when he requested union employees through the hiring hall. Because B&B employed
union workers, Kenny and Williams believed that it was appropriate for B&B to make
contributions to the Funds on behalf of the union employees, even though B&B was not bound
No. 14-4017 Bd. of Trs. Local 392, et al. v. B&B Mech. Servs. Page 6
by the terms of the CBA. His assertion that B&B acted voluntarily in making contributions to
the Funds for ten years, however, conflicts with his statement that Union officials required B&B
to make the contributions and submit the contribution reports to the Funds. According to Kenny,
the Union supplied B&B with forms already filled in with the required contribution rates so that
B&B only had to add its employees’ names and the number of hours each employee worked. By
completing the forms, Kenny explains, B&B did not intend to bind itself to the CBA. B&B
stopped making any contributions after the Funds conducted the audit of B&B’s records in 2011.
On cross-motions for summary judgment, the district court ruled in favor of B&B,
holding the Funds failed to produce evidence to prove that B&B signed the CBA or entered into
any written agreement binding B&B to the CBA. The court subsequently denied the Funds’
motion to alter or amend the judgment under Federal Rule of Civil Procedure 59(e). The Funds
now appeal from the district court’s Opinion & Order denying the Rule 59(e) motion.
II. STANDARD OF REVIEW
The denial of a Rule 59(e) motion is ordinarily “reviewed for an abuse of discretion, but
where a Rule 59(e) motion seeks reconsideration of a grant of summary judgment, as it did here,
we conduct a de novo review.” Nat’l Leadburners Health & Welfare Fund v. O.G. Kelley & Co.,
129 F.3d 372, 374 (6th Cir. 1997). We will affirm a grant of summary judgment if the evidence,
taken in the light most favorable to the non-moving party, demonstrates that there are no genuine
issues of material fact for trial and the moving party is entitled to judgment as a matter of law.
Cent. States, Se. & Sw. Areas Pension Fund v. Gen. Materials, Inc., 535 F.3d 506, 508 (6th Cir.
2008).
III. ANALYSIS
Well-settled principles of law aid us in resolving this appeal. Both the Employee
Retirement Income Security Act (ERISA) and the LMRA require that agreements concerning
employee fringe benefit plans be maintained in writing in order to avoid misunderstandings and
prevent abuse. One of ERISA’s “core functional requirements” is that each “employee benefit
plan shall be established and maintained pursuant to a written instrument.” Curtiss-Wright
Corp. v. Schoonejongen, 514 U.S. 73, 83 (1995) (quoting 29 U.S.C. § 1102(a)(1)). Every
No. 14-4017 Bd. of Trs. Local 392, et al. v. B&B Mech. Servs. Page 7
employee benefit plan must “specify the basis on which payments are made to and from the
plan,” 29 U.S.C. § 1102(b)(4), and “[t]he plan administrator is obliged to act ‘in accordance with
the documents and instruments governing the plan insofar as such documents and instruments
are consistent with’” ERISA provisions. Kennedy v. Plan Adm’r for DuPont Sav. & Inv. Plan,
555 U.S. 285, 300 (2009) (quoting 29 U.S.C. § 1104(a)(1)(D)).
Written plans are necessary because LMRA § 302(a) generally bars employers from
contributing money or a thing of value to representatives of employees. 29 U.S.C. § 186(a).
This statutory prohibition exists to prevent the misappropriation or dissipation of money that is
owed to union employees. Cent. States, Se. & Sw. Areas Pension Fund v. Behnke, Inc., 883 F.2d
454, 459 (6th Cir. 1989). To protect fringe benefits, an exception exists in § 302(c)(5)(B) of the
LMRA authorizing employers to make contributions to trust funds established by employee
representatives “for the sole and exclusive benefit of the employees,” if “the detailed basis on
which such payments are to be made is specified in a written agreement with the employer.”
29 U.S.C. § 186(c)(5)(B).
Under such written agreements, the multi-employer fringe benefit trust funds become
third-party beneficiaries and, under § 515 of ERISA, they may rely on the literal terms of the
written agreements. 29 U.S.C. § 1145; Operating Eng’rs Local 324 Health Care Plan v. G & W
Constr. Co., 783 F.3d 1045, 1051 (6th Cir. 2015). Section 515 protects and streamlines a trust
fund’s ability to collect an employer’s delinquent contributions owed to an ERISA employee
benefit plan by limiting the employer’s assertion of “unrelated” or “extraneous” defenses, Kaiser
Steel Corp. v. Mullins, 455 U.S. 72, 88 & n.12 (1982), and by rendering immaterial the actual
intent of the bargaining parties or any understandings those parties may entertain separate and
apart from the written agreements. Bakery & Confectionery Union & Indus. Int’l Health Ben.
& Pension Funds v. New Bakery Co., 133 F.3d 955, 959 (6th Cir. 1998). Thus, § 515 “increases
the reliability” of the income stream of multiemployer funds, “reduces the cost and delay
associated with collection actions, and reduces or eliminates the cost of monitoring the formation
of collective bargaining agreements.” Id. (quoting Bakery & Confectionery Union & Indus. Int’l
Pension Fund v. Ralph’s Grocery Co., 118 F.3d 1018, 1021–22 (6th Cir. 1997)).
No. 14-4017 Bd. of Trs. Local 392, et al. v. B&B Mech. Servs. Page 8
In this circuit, we apply a longstanding rule that the “written agreement” required by
LMRA § 302(c)(5)(B) does not have to be a CBA as long as the written agreement “sets out the
employer’s obligation to contribute” to the employee benefit funds. Behnke, Inc., 883 F.2d at
459 (quoting Cent. States Se. & Sw. Areas Pension Fund v. Kraftco, Inc., 799 F.2d 1098, 1111
n.16 (6th Cir. 1986)). In fact, the employer does not have to sign the written agreement to be
bound by it because § 302(c)(5)(B) “does not specify any signature requirement.” O.G. Kelley &
Co., 129 F.3d at 375. The reduction of the agreement to writing satisfies § 302(c)(5)(B) because
the statute requires “a written agreement to which an employer is bound, not a written agreement
to which an employer is bound which also carries that employer’s signature.” Id. at 376.
The conclusion of O.G. Kelley & Co. that § 302(c)(5)(B) does not require an employer’s
signature on the written agreement “coheres with a well-developed body of law allowing
employer associations to bind employer members to collective bargaining agreements.” Id. at
375. In Trustees of U.I.U. Health & Welfare Fund v. N.Y. Flame Proofing Co., 828 F.2d 79, 83
(2d Cir. 1987), the Second Circuit held that membership in an employers’ association like MCA
bound an employer to a CBA requiring employer contributions to trust funds if the principal
activity of the employers’ association is negotiation of CBAs on behalf of its members “and if
the longstanding, universally observed and universally known custom is that members are bound
by such agreements.” Under those circumstances, acquiring membership in the employers’
association constitutes “an unequivocal statement as to [the association’s] actual authority to
bind the new member.” Id. In this case, B&B does not dispute the testimony of MCA’s
Executive Director, Jack Bertoli, that labor contract negotiation is a principal function of MCA
and that Bertoli did not know of any contractor employing Union labor in the Cincinnati area that
did not comply with the CBA negotiated by MCA and the Union, whether that contractor was an
MCA member or not. The O.G. Kelley & Co. court also cited the Fifth Circuit’s decision in
NLRB v. Beckham, Inc., 564 F.2d 190 (5th Cir. 1977), which concluded that the employers’
association had apparent authority to bind an employer in labor contract negotiations where the
employer participated in the negotiations with knowledge that the association would bind all
members, even though the employer refused to sign the CBA at the conclusion of the
negotiations. O.G. Kelley & Co., 129 F.3d at 375–76.
No. 14-4017 Bd. of Trs. Local 392, et al. v. B&B Mech. Servs. Page 9
We have held that § 302(c)(5)(B) is satisfied if the “written agreement” binding an
employer to make contributions to trust funds is signed by the contractors’ association on behalf
of the employer, even if the employer did not give the association express written authority to act
on its behalf. United Ass’n of Journeymen & Apprentices of the Plumbing & Pipefitting Indus. of
the U.S. & Canada, Local Union 816 v. Herb Phillips Plumbing & Heating of Bay City, Inc., No.
91-1216, 1991 WL 225555, at *1–2 (6th Cir. Nov. 4, 1991). Our decision rested on “hornbook
law that an agent can bind a principal to a written contract—even where the contract itself must
be in writing—whether or not the agent’s authorization to do so is itself in writing.” Id. at *3
(citing Restatement (Second) of Agency § 30). O.G. Kelley & Co. and Herb Phillips thus stand
for the principle that an employer may be bound by a CBA negotiated by an MCA and a Union
even though the employer did not sign the CBA or provide express written authority to the MCA
to negotiate on its behalf.
Our decision in Merrimen v. Paul F. Rost Electric, Inc., 861 F.2d 135 (6th Cir. 1988), is
inapposite. That case addressed a narrow situation where an provision of a CBA expressly
required the employer to sign a letter of assent before the employer could be bound by the CBA.
Id. at 136. Although the employer maintained membership in an employer association and
voluntarily made pension contributions for employees for a period of time, the employer did not
sign the mandatory letter of assent despite promises to do so. Id. at 136–37. Because the CBA
expressly required the employer’s signature on a letter of assent, we declined to hold the
employer bound to the CBA by conduct alone. Id. at 139.
We confirmed in O.G. Kelley & Co. that the Merrimen court had no occasion to decide
whether a CBA negotiated by a multi-employer association but not signed by an individual
employer satisfied the “written agreement” requirement of LMRA § 302(c)(5)(B). 129 F.3d at
374. Because § 302(c)(5)(B) permits an employer to make contributions to an employee trust
fund if “the detailed basis on which such payments are to be made is specified in a written
agreement with the employer,” we concluded that interpreting the statute not to require the
employer’s signature on the written agreement comported with the legislative purpose. Id. at
375.
No. 14-4017 Bd. of Trs. Local 392, et al. v. B&B Mech. Servs. Page 10
Similarly, in Herb Phillips Plumbing & Heating, 1991 WL 225555, at *2, we
discouraged a broad reading of Merrimen. In Herb Phillips, the CBA did not require the
members of a contractors’ association to sign letters of assent in order to be bound to the CBA,
and under ordinary agency principles “the association’s president was authorized to execute the
agreement for and on behalf of the individual employers who were members of the association.”
Id. See also NLRB v. I&F Corp., No. 97-6289, 1999 WL 777646, at *3 (6th Cir. Sept. 17, 1999)
(“In multiemployer bargaining, employers pool their resources and bargaining strength by
authorizing a committee, such as the Association, to bargain with a union on their behalf, then to
execute a CBA”). Importantly, we concluded in Herb Phillips that the “written agreement”
requirement of § 302(c)(5)(B) was satisfied by the association’s entry into a written agreement
with the union on behalf of its members:
Section 302(c)(5)(B) does not say that an employer’s agent needs written
authorization to sign contracts for the employer. The purpose of § 302 is simply
“to insure that employer contributions are only for a proper purpose and to insure
that the benefits from the established fund reach only the proper parties.”
Id. (quoting Moglia v. Geoghegan, 403 F.2d 110, 116 (2d Cir. 1968)). “This purpose hardly
suggests that we can or should impose a non-statutory requirement with respect to the form of
the agent’s authority.” Id. The written CBA signed by the association as the employer’s agent
“clearly satisfie[s] the ‘written agreement’ requirement of § 302(c)(5)(B), and the [CBA] was
clearly sufficient to satisfy the anti-fraud purposes of § 302.” Id.
Having examined the tenets of ERISA and the LMRA and the principles of law flowing
from their provisions, we now turn to the question before us—whether B&B is required to make
contributions to the Funds. We examine the various writings of record in this case in light of our
precedent and the longstanding rule that the “written agreement” required by LMRA
§ 302(c)(5)(B) does not have to be a CBA as long as the written agreement “sets out the
employer’s obligation to contribute” to the employee benefit funds. Behnke, Inc., 883 F.2d at
459 (quoting Kraftco, Inc., 799 F.2d at 1111 n.16).
A. The Collective Bargaining Agreement
Applying these legal principles to the undisputed facts before us, we conclude that B&B
is bound by the written CBA negotiated between MCA and the Union to make contributions to
No. 14-4017 Bd. of Trs. Local 392, et al. v. B&B Mech. Servs. Page 11
the Funds on behalf of B&B’s union workers, though neither Kenny nor Williams signed the
CBA. The Union and MCA negotiated the CBA, set down its terms in writing, and
representatives of both the Union and MCA signed the CBA. Under O.G. Kelley & Co.,
§ 302(c)(5)(B) imposes no requirement that B&B independently sign the CBA in order to be
bound by that written agreement to make contributions to the Funds. 129 F.3d at 375–76. MCA
acted as B&B’s agent when it negotiated and signed the CBA. Id.; Herb Phillips Plumbing
& Heating of Bay City, Inc., 1991 WL 22555, at *2–3. It is of no legal consequence that B&B
now argues it did not give MCA express written consent to act as its agent to bind it to the CBA.
See Herb Phillips Plumbing & Heating of Bay City, Inc., 1991 WL 225555, at *3 (“Section
302(c)(5)(B) does not say that an employer’s agent needs written authorization to sign contracts
for the employer.”).
Bound by the CBA, B&B is an “employer” under that agreement and required to make
contributions to the trust funds for union employees. The Preamble to the CBA provides:
This document is a collective bargaining agreement between the Union and
Employer Association entered into for the purpose of establishing the wages,
benefits, terms and conditions of employment of the employees of any employer
represented by the Employer Association and/or any employer who signs this
agreement[.]
R. 20-4, Page ID 226 (emphasis added). The CBA further provides that, “[u]pon the execution
of this agreement by both parties [the Union and MCA], through their committees appointed for
these purposes, this agreement shall be binding upon the Union and the employers and upon all
employees thereof.” Id., CBA Article I, § 2 (emphasis added). The CBA defines an “employer”
as “a Plumbing, Heating, Piping, Air Conditioning or Refrigeration Contractor, which is a . . .
corporation . . . engaged in the plumbing, heating, piping, air conditioning or refrigeration
business; is recognized as such in any one or combination of the above trades; conducts a regular
shop for this express purpose, and employs journeymen and/or apprentices, under this
agreement.” Id. at 226–27, CBA Article II, § 1. B&B thus was an “employer” bound by the
CBA during the time B&B was an MCA member in 2009–2010, the period covered by the
Funds’ audit. Because MCA negotiated the CBA with the Union as the agent of employer
members, B&B is bound by the CBA’s provisions to make contributions to the Funds. See
Behnke, Inc., 883 F.2d at 459; O.G. Kelley & Co., 129 F.3d at 375; Herb Phillips Plumbing
No. 14-4017 Bd. of Trs. Local 392, et al. v. B&B Mech. Servs. Page 12
& Heating of Bay City, Inc., 1991 WL 225555, at *2–3. Merrimen does not control because the
CBA here did not expressly require a signature of Kenny or Williams in order to bind B&B to
the provisions of the CBA. B&B is bound by the CBA because MCA represented B&B as an
agent in the CBA negotiations and because B&B is an “employer” under the express language of
the CBA.
B. The Trust Fund documents
B&B is also bound to make employee contributions to the Funds under the applicable
trust documents. Section 1.2 of the trust document governing the Health and Welfare Fund
provides in part that “[t]he term ‘Collective Bargaining Agreement’ shall mean any written
contract by and between the Employer as defined in Section 1.4 of this Article and the Union as
defined in Section 1.12 of this Article.” R. 21-2, Page ID 546. Section 1.4 defines the term
“Employer” in part to “mean the Mechanical Contractors Association of Cincinnati and the
members thereof.” Id., Page ID 547. Section 1.5 of the trust document further provides in part
that “[t]he term ‘Employer Contributions’ shall mean payments made or to be made to this Trust
Fund by an Employer under the provisions of a collective bargaining agreement as defined
herein.” Id. at 548 (emphasis added).
Likewise, § 6.1 of the trust document governing the Pension Fund provides:
Any Employer who is required to contribute to the Fund by the provisions of a
Collective Bargaining Agreement with the Union shall become a part of this Trust
Fund (and the employees of said Employer shall be eligible to participate therein)
upon the said Employer making the required contribution to the Trust Fund,
unless such participation is clearly contrary to the stated purposes of this Fund.
R. 21-2, Page ID 602. Section 1.3 of the trust document further states in part that “[t]he term
‘Employer’ shall mean the Mechanical Contractors Association of Cincinnati and the members
thereof.” Id., Page ID 586 (emphasis added).
Because B&B is an “employer” under the trust documents governing the Health and
Welfare Fund and the Pension Fund, B&B is bound to make contributions to those Funds on
behalf of union employees.
No. 14-4017 Bd. of Trs. Local 392, et al. v. B&B Mech. Servs. Page 13
C. Other written agreements
Finally, B&B executed other written agreements promising to make contributions to the
Funds on behalf of union employees that satisfy the LMRA’s requirement that a written
agreement “set[] out the employer’s obligation to contribute” to the employee benefit funds.
Behnke, Inc., 883 F.2d at 459 (quoting Kraftco, Inc., 799 F.2d at 1111 n.16).
In 2002, B&B purchased and executed a surety bond in favor of the Funds titled “The
United Associates of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of
U.S. and Canada Local Union #392 Fringe Benefit Funds and Employee Authorized Deductions
Bond” and maintained it through the years. The bond provided that B&B Plumbing, LLC had
entered into a written contract or had signed a letter of assent to be bound by the terms of a CBA
negotiated between MCA and the Union. The bond confirmed in writing that B&B is bound by
the written CBA to “pay current contractual agreed amounts to various fringe benefit funds
established under said agreement[.]” R. 20-17, Page ID 447–48. After revising the bond in 2006
to reflect a company name change, B&B sent a copy of the amended bond to the Union, thereby
reaffirming its obligation to make contributions to the Funds pursuant to the CBA. R. 20-5, Page
ID 262.
On a monthly basis for ten years, B&B also submitted contributions and contribution
reports to the Funds as required by the CBA. Each monthly contribution report listed the
employees covered by the CBA for whom contributions were being made and included B&B’s
certification “that this report includes only employees covered under the terms of a collective
bargaining agreement with the” Union. R. 20-8, Page ID 278; R. 21-3, Page ID 612 at 17. B&B
also certified in the contribution reports sent to the National Pension Fund that it was “a party to
a written agreement requiring contributions.” R. 20-11, Page ID 391. See Mich. Bricklayers
& Allied Craftsmen Health Care Fund v. Nw. Constr., Inc., Nos. 95-2379, 96-1346, 1997 WL
351296, at *1 (6th Cir. June 23, 1997) (holding employer bound to the terms of an expired CBA
when it continued to submit contribution report forms and payments, continued to make payroll
deductions for union dues under the terms of the expired CBA, and increased the amount of
payroll deductions in accordance with the terms of the new CBA before it was signed).
No. 14-4017 Bd. of Trs. Local 392, et al. v. B&B Mech. Servs. Page 14
Although our court held in Central States, Southeast & Southwest Areas Pension Fund v.
General Materials, Inc., that certification clauses in contribution reports alone were not
sufficient evidence to bind the employer to an expired CBA under the facts of that case, 535 F.3d
at 509–10, in this case, the certification clauses in the contribution reports are coupled with
written agreements binding B&B to an unexpired CBA requiring contributions to the Funds. See
Bricklayers Local 21 of Ill. Apprenticeship & Training Program v. Banner Restoration, Inc., 385
F.3d 761, 771 n.9 (7th Cir. 2004) (“[C]ertification language is significant, and may be sufficient,
to the extent that it incorporates other written agreements with the employer—such as a
collective bargaining agreement or trust agreements—which . . . set forth the ‘detailed basis’ for
payments as required by section 302(c)(5)(B).”).
Finally, B&B applied to the Union for and received wage subsidies on four occasions
from 2008 through 2011 under the Union’s Equality and Stabilization Program. Kenny signed
participation agreements acknowledging that the program was designed to help union contractors
compete with non-union contractors. R. 20-13, Page ID 415–16. He also signed MOUs
providing that, with the exception of the wage changes permitted by the subsidy program, the
CBA “shall remain in full force and effect in accordance with its terms, and this Memorandum
shall be concurrent with that Agreement, or until completion of this job.” R. 20-14 Page ID 418–
21. Consequently, Kenny acknowledged each time B&B accepted wage subsidies from the
Union that B&B was bound by the terms of the CBA to make contributions to the Funds.
IV. CONCLUSION
B&B argues that it does not owe any contributions to the benefit Funds because it did not
independently sign the CBA and merely made ten years of “voluntary” contributions to the
Funds. Such contributions—absent the requisite “written agreement”—are illegal under LMRA
§ 302. See Merrimen, 861 F.2d at 137. But we need not address whether B&B’s multi-year
contributions to the Funds are void for illegality because the undisputed evidence supports the
conclusion that B&B executed written agreements binding itself to the CBA’s fringe benefit
obligations. Following ample precedent under ERISA and the LMRA, we enforce the written
agreements binding B&B to make contributions to the Funds. Because we conclude under
LMRA § 302(c)(5)(B) that B&B is bound by a “written agreement” requiring it to make
No. 14-4017 Bd. of Trs. Local 392, et al. v. B&B Mech. Servs. Page 15
contributions to the Funds, we also need not decide whether an employer’s course of conduct
alone is sufficient to demonstrate that the employer is bound to a written agreement requiring the
payment of contributions. Cf. Mich. Bricklayers & Allied Craftsmen Health Care Fund, 1997
WL 351296, at *1.
Accordingly, we REVERSE the decision of the district court and REMAND the case for
further proceedings consistent with this opinion.
No. 14-4017 Bd. of Trs. Local 392, et al. v. B&B Mech. Servs. Page 16
_________________
DISSENT
_________________
JULIA SMITH GIBBONS, Circuit Judge, dissenting. Because I believe that there are
genuine issues of material fact as to whether B&B intended to be bound by the CBA, I
respectfully dissent. After properly concluding that the “written agreement” contemplated by
§ 302(c)(5)(B) of the LMRA need not be a CBA nor need it contain an employer’s signature, the
majority lists multiple writings, including the CBA itself, the trust fund documents, the surety
bond, monthly contribution reports, and wage subsidy receipts, which it feels satisfy
§ 302(c)(5)(B) and bind B&B to contribute to the Funds as a matter of law. This conclusion, in
my opinion, ignores factual insufficiencies in the record and overstates the independent legal
effect of some of the writings.
First, the majority presupposes that B&B was a member of the MCA at the time it
negotiated the CBA. Based on this presupposition, it concludes that the MCA had actual
authority to bind B&B to the CBA. Other than the testimony of the MCA’s Executive Director
that MCA had a relationship with B&B’s predecessors, however, there is no evidence suggesting
that, prior to October 2009, B&B was a member of the MCA. Even the Funds note B&B did not
become a formal member of the MCA until October 2009. What is more, the MCA’s executive
director testified that he has never received an agreement appointing MCA as B&B’s agent in
CBA negotiations. When viewing these facts in the light most favorable to B&B, there is a
genuine question of material fact as to whether the MCA was acting as B&B’s agent while it
negotiated the relevant CBAs, and thus, whether B&B was or ever intended to be bound by the
CBA.
The majority next concludes that the Health and Welfare Trust Fund Agreement satisfies
§ 302(c)(5)(B)’s “written agreement” requirement and binds B&B to the CBA. However, this
argument also presupposes that B&B was a member of the MCA when it negotiated the CBA.
As the majority notes, the trust agreement defines “Employer” as “the Mechanical Contractors
Association of Cincinnati and the members thereof,” and the agreement only includes those
employers who “[are] required to contribute to the Fund by the provisions of a Collective
No. 14-4017 Bd. of Trs. Local 392, et al. v. B&B Mech. Servs. Page 17
Bargaining Agreement with the Union.” Because I believe there is a question of fact about
B&B’s membership in the MCA, I do not think that the trust agreement independently
establishes B&B’s obligation to contribute to the Funds as a matter of law. I would also note
that the trust agreement was executed on February 15, 2001, and amended on March 1, 2001, but
that B&B’s initial predecessor was not formed until 2002. It would strain credulity to hold that a
trust agreement last executed before B&B or its predecessors ever existed can somehow serve as
an independent basis to bind B&B to the CBA.
The majority next turns its focus to the monthly contribution reports B&B sent to the
Funds for nearly a decade. The reports reference B&B’s obligations under the CBA, but, as the
majority correctly points out, the certification clauses in the reports, standing alone, are
insufficient to bind B&B to the CBA. See Central States, Southeast & Southwest Areas Pension
Fund v. General Materials, Inc., 535 F.3d 506, 509–10 (6th Cir. 2008); Dugan v. R.J. Corman R.
Co., 344 F.3d 662, 668 (7th Cir. 2003) (noting that contribution report language was “weak
evidence” of the employer’s obligations under the CBA); see also Firesheets v. A.G. Bldg.
Specialists, Inc., 134 F.3d 729, 731–32 (5th Cir. 1998) (noting that “the existence of some
boilerplate language on the record-keeping documents for the contributions does not bind [the
employer]”). For the same reasons, the surety bond B&B purchased in 2002 and revised in 2006
cannot independently bind B&B to the CBA. Like the contribution reports, the bond contains
language referencing B&B’s obligations under the CBA. However, when the record as a whole
shows a genuine issue as to the employer’s intent to be bound by a CBA, writings with
boilerplate references to the CBA should not be independently sufficient to establish, as a matter
of law, that an employer is bound under the CBA. See Dugan 344 F.3d at 668 (noting that
“boilerplate will sometimes be irrelevant to the document in which it has been unthinkingly
inserted”).
Finally, the majority casts B&B’s receipt of wage subsidies under the Union’s Equality
and Stabilization Program as further evidence of B&B’s obligations under the CBA. However,
the terms of the E&S agreement dictate that the program does not serve to bind contractors who
are not already parties to the CBA. The agreement expressly provides: “The Program only
No. 14-4017 Bd. of Trs. Local 392, et al. v. B&B Mech. Servs. Page 18
effects [sic] parties to the Collective Bargaining Agreement between the MCA and the Union
and does not seek to impose its terms on non-signatory Contractors.”
On my reading of the record, it remains an open question whether B&B intended to be
bound or was ever in fact bound by the CBA. Therefore, I respectfully dissent. I would remand
the case to the district court for trial.