Michels Corporation v. Central States, Southeast and ( 2015 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
Nos. 14-3726, 14-3737
MICHELS CORPORATION,
Plaintiff-Counterclaim Defendant-Appellant,
PIPE LINE CONTRACTORS ASSOCIATION,
Intervening Plaintiff-Appellant,
v.
CENTRAL STATES, SOUTHEAST, AND SOUTHWEST AREAS
PENSION FUND, et al.,
Defendants-Counterclaim Plaintiffs-Appellees.
____________________
Appeals from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 12-cv-4144 — Charles R. Norgle, Judge.
____________________
ARGUED JUNE 5, 2015 — DECIDED SEPTEMBER 2, 2015
____________________
Before WOOD, Chief Judge, and FLAUM and EASTERBROOK,
Circuit Judges.
WOOD, Chief Judge. This case raises a familiar problem for
pension funds: when did an employer’s obligation to con-
tribute to the fund end? That question turns on when the
governing collective bargaining agreement (CBA) between a
2 Nos. 14-3726, 14-3737
multi-employer group and a union terminated and how one
should characterize a series of temporary “extensions” of the
CBA. Several common issues are not before us: we are not
concerned with withdrawal liability on the part of the em-
ployer; we are not concerned about any possible duty to ar-
bitrate contested points; and in the end (despite considerable
attention to the point in the briefs) the standard of review
does not matter.
Cutting through the clutter, we conclude that the parties
to the CBA in question terminated it in accordance with its
terms effective January 31, 2011. Thereafter, the union and
the employer group entered into a series of short-term
agreements that had the effect of extending the CBA’s terms
for the designated periods while the parties negotiated. The
interim agreement that took effect on November 15, 2011,
however, was different: it eliminated the employers’ duty to
contribute to the pension fund and extended all other terms
of the CBA. The district court held that this was not suffi-
cient to end the employers’ duty to contribute and thus
granted summary judgment for the pension fund. We re-
verse. The CBA imposing the duty to contribute had long
since expired by November of 2011, and there was nothing
to prevent the parties from agreeing to the new arrange-
ment.
I
Michels Corporation is a pipeline construction company
based in Brownsville, Wisconsin. It is a member of the Pipe
Line Contractors Association (PLCA), a trade association
that (among other things) negotiates collective bargaining
agreements on behalf of its employer members with the rel-
evant unions—in this case, the International Brotherhood of
Nos. 14-3726, 14-3737 3
Teamsters (the Union). The Central States, Southeast, and
Southwest Areas Pension Fund (the Fund) is a multiemploy-
er pension plan. See 29 U.S.C. § 1000(2), (3), and (37). A
board of trustees, half of whom are appointed by contrib-
uting employers and the other half by the unions represent-
ing the plan participants, runs the Fund.
In February 2006, the PLCA and the Union entered into a
collective bargaining agreement known as the National Pipe-
line Agreement (the 2006 CBA). Article XV(C) of the 2006
CBA addressed the duration of the agreement; it stated that
“[t]he provisions of this Agreement shall continue in full
force and effect until January 31, 2011, and thereafter from
year to year unless terminated at the option of either party
after sixty (60) days’ notice in writing to the other.” Schedule
A of the 2006 CBA laid out the timing and amount of contri-
butions that participating employers needed to make to the
Fund. Schedule B of the 2006 CBA, called the National Pipe-
line Participation Agreement, spelled out the relationship
among the employers, the Union, and the Fund. It included
the following language:
NOW, THEREFORE, IT IS AGREED by and between
the undersigned Employer and the [Union] that such
Employer hereby subscribes to the various agree-
ments and declarations of trust and policies and pro-
cedures of the particular funds into which such Em-
ployer will be required to make contributions pursu-
ant to the National Pipe Line Agreement, and agrees
to be bound thereby and to amendments made or to
be made thereto; and authorizes the parties to such
trust agreements to name the trustees and successor
trusts, and to administer the trusts; and does hereby
4 Nos. 14-3726, 14-3737
ratify and accept such trustees and the terms and
conditions of said trusts as fully and as completely as
if made by the undersigned Employer; provided,
however that no amendments or provisions of said
trust agreements shall bind the Employer for any fi-
nancial obligations or dues delinquency determina-
tions beyond that set forth in the National Pipe Line
Agreement pursuant to which such contributions are
made.
On August 9, 2010, in compliance with Article XV(C), the
PLCA informed the Union that it intended to terminate the
2006 CBA on January 31, 2011, and begin negotiations for a
new agreement. Just before the end of January, however, the
parties signed a letter agreement extending the terms of the
2006 CBA for one month, to February 28, 2011. This proved
to be the first of eight such extensions; the last one extended
the 2006 CBA’s terms from September 1, 2011, to November
15, 2011. Consistently with the obligations in the 2006 CBA
and the commitments in the letter agreements to continue
operating under the 2006 CBA’s provisions, Michels contin-
ued to contribute to the Fund throughout those extensions.
The day before the eighth extension expired, the parties
shifted course. They agreed that the employers would cease
making contributions to the Fund as of November 15, 2011;
that they would make comparable payments to an escrow
fund until a fund “mutually acceptable to the Parties” was
designated; and that they would otherwise extend the terms
of the 2006 CBA until December 31, 2011. The pertinent lan-
guage of the November 15, 2011, agreement, which figures
prominently in this appeal, is as follows:
Nos. 14-3726, 14-3737 5
AMENDMENT TO AND EXTENSION OF
COLLECTIVE BARGAINING AGREEMENT
BETWEEN PIPE LINE CONTRACTORS
ASSOCIATION AND THE INTERNATIONAL
BROTHERHOOD OF TEAMSTERS
WHEREAS, the current National Pipe Line
Agreement (“CBA”) between the Pipe Line Contrac-
tors Association and … the [Union], as previously ex-
tended, expires at midnight, November 15, 2011;
WHEREAS, the Parties have reached agreement
that the PLCA may cease all contributions to the
[Fund];
WHEREAS, agreement on certain other issues has
not been reached;
WHEREAS, the Parties wish to give formal notice
of this decision to [the Fund] in order to preclude any
contention by [the Fund] that one or more members
of PLCA has an obligation to contribute to [the Fund]
under the Agreement for any period after November
15, 2011;
...
NOW, THEREFORE, BE IT:
...
RESOLVED THAT, Section 1(a) of Article V of the
CBA shall be amended to read as follows:
(a) … [A]s of November 16, 2011, no Employer
shall have an obligation to contribute to [the
Fund]. The amount of those pension contribu-
tions, as well as the amount of all pension con-
6 Nos. 14-3726, 14-3737
tributions on behalf of Travelers, shall be made
to a plan or plans mutually acceptable to the
Parties. Until the Parties agree upon a mutually
acceptable plan or plans, all funds that would
otherwise be remitted to [the Fund] shall be
held in escrow.
On November 15, 2011, PLCA sent a copy of the Novem-
ber 15 agreement to the Union, which signed it. The next
day, Michels sent a letter to the Fund notifying it that Mi-
chels was, pursuant to the November 15 agreement, termi-
nating its contributions to the Fund effective immediately.
The PLCA sent a similar letter the same day. Its letter added:
“For obvious reasons, it is imperative that the termination
date of each member’s contribution obligations be effective
prior to December 31, 2011. This date means the members
have less than 45 days to address any objection with the no-
tice of termination you may choose to raise.” (PLCA be-
lieved that its withdrawal liability would be significantly
higher if the withdrawal was not effective until after the end
of calendar year 2011; that issue fell by the wayside and is
not relevant to this appeal.)
The PLCA followed up with several letters to the Fund
sent between November 28, 2011, and the end of the calen-
dar year. These letters each asked if PLCA’s members (in-
cluding Michels) needed to take any further action to ensure
that the divorce from the Fund was effective. The Fund did
not respond until January 30, 2012, when it informed the Un-
ion that the Fund had determined that none of the PLCA
members effectively withdrew during 2011 because none of
the letters from the PLCA and Michels “was effective to ter-
minate any of the PLCA members’ obligations to contribute
Nos. 14-3726, 14-3737 7
to the Fund.” The PLCA and the Union concluded a new col-
lective bargaining agreement at the end of May 2012. The
Fund received written notice of this agreement on October 9,
2012. No one disputes that no later than that date, Michels
and the other PLCA employers had withdrawn from the
Fund.
Meanwhile, on March 15, 2012, Michels initiated a law-
suit seeking a declaratory judgment that its duty to contrib-
ute to the Fund ended on November 15, 2011. The Fund filed
its amended counterclaim on August 2, 2012. The district
court had jurisdiction over both Michels’s complaint and the
complaint filed by PLCA (which intervened in the district
court) under 28 U.S.C. § 1331 and Section 301 of the Labor
Management Relations Act (LMRA), 29 U.S.C. § 185. It had
jurisdiction over the Fund’s counterclaim under 28 U.S.C.
§ 1331 and Section 502(e)(1) of the Employee Retirement In-
come Security Act (ERISA), 29 U.S.C. § 1132(e)(1).
On cross-motions for summary judgment, the district
court ruled in favor of the Fund and against Michels and
PLCA. Using numbers to which the parties had stipulated, it
held that Michels had to pay the Fund $895,565.48 for the
principal contributions it owed from November 2011 until
October 2012 and $336,670.96 for interest, statutory damag-
es, and fees. The court entered its final judgment on Decem-
ber 2, 2014; it re-entered the judgment two days later to
make a technical correction to the caption of the case. Mi-
chels and PLCA both appealed.
II
Before we move to the main event, we offer a word about
standard of review, to explain why we do not consider it
8 Nos. 14-3726, 14-3737
dispositive here. We then address the question whether the
2006 CBA remained in full effect by virtue of the numerous
extension agreements that were concluded, or if it terminat-
ed and each extension agreement functioned as an interim
CBA between PLCA and the Union. If the former is the case,
as the district court thought, then the parties had no right to
eliminate the contribution obligation in the November 15,
2011, agreement. If the latter is the better characterization,
then the obligation to contribute died no later than Novem-
ber 15, 2011, when the parties eliminated it in a written
agreement and communicated that agreement to the Fund.
A
Michels and PLCA argue that this court should approach
the dispute unencumbered by any deference to the Fund’s
position; they stress that we are reviewing a grant of sum-
mary judgment, and de novo review typically applies in that
situation. Orr v. Assurant Employee Benefits, 786 F.3d 596, 600
(7th Cir. 2015). The Supreme Court held in Firestone Tire and
Rubber Co. v. Bruch, 489 U.S. 101 (1989), that in actions chal-
lenging denials of benefits based on plan interpretations the
proper standard of review is de novo “unless the benefit plan
gives the administrator or fiduciary discretionary authority
to determine eligibility for benefits or to construe the terms
of the plan.” Id. at 115. Phrasing this more generally, review
is deferential over decisions that have been committed to the
discretion of the plan administrator. See, e.g., Operating
Eng'rs Local 139 Health Benefit Fund v. Gustafson Constr. Corp.,
258 F.3d 645, 653 (7th Cir. 2001) (arbitrary and capricious
standard applied to trustees’ determination regarding inter-
est and penalties owed on delinquent contributions where
the plan provided the trustees the power to construe provi-
Nos. 14-3726, 14-3737 9
sions of the collective bargaining agreement). If the particu-
lar type of decision has been delegated to the administrator,
then deference is owed both to the decision and to the plan
interpretation that led to it. At the threshold, however, the
court must decide which matters were entrusted to the ad-
ministrator and which were not. (This is something like
what happens when parties debate whether a particular
matter lies within the scope of an arbitration agreement:
courts usually decide that question, although it is possible
for the parties to agree to submit it to the arbitrator. See First
Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995).)
In order to determine whether an issue has been assigned
to the administrator, it is necessary to consult the plan doc-
uments to see what the parties have said. This involves the
familiar process of contract interpretation, for which de novo
review is proper. We also address questions of law inde-
pendently. See Trustees of Chicago Truck Drivers, Helpers &
Warehouse Workers Union Pension Fund v. Leaseway Transpor-
tation Corp., 76 F.3d 824, 829 (7th Cir. 1996). To the extent
that the CBA is pertinent, we note that the Supreme Court
recently has reminded us that “[w]e interpret collective-
bargaining agreements, including those establishing ERISA
plans, according to ordinary principles of contract law … .”
M&G Polymers USA, LLC v. Tackett, 135 S. Ct. 926, 933 (2015).
The Fund argues that the governing language appears in
Article V, section 2 of the Revised and Amended Trust
Agreement for Central States, Southeast and Southwest Are-
as Pension Fund (Trust Agreement), which reads as follows:
All questions or controversies, of whatsoever
character, arising in any manner or between any par-
ties or persons in connection with the Fund or the op-
10 Nos. 14-3726, 14-3737
eration thereof, whether as to any claim for any bene-
fits preferred by any participant, beneficiary, or any
other person, or whether as to the construction of the
language or meaning of the rules and regulations
adopted by the Trustees or of this instrument, or as to
any writing, decision, instrument or accounts in con-
nection with the operation of the Trust Fund or oth-
erwise, shall be submitted to the Trustees, or to a
committee of Trustees, and the decision of the Trus-
tees or of such committee thereof shall be binding up-
on all parties or persons dealing with the Fund or
claiming any benefit thereunder. The Trustees are
vested with discretionary and final authority in mak-
ing all such decisions, including Trustee decisions
upon claims for benefits by participants and benefi-
ciaries of the Pension Fund and other claimants, and
including Trustee decision construing plan docu-
ments of the Pension Fund. To the extent this section
is contrary to or inconsistent with a Named Fiduciary
Agreement, this section shall be inapplicable.
The category “any writing, instrument or accounts in
connection with the operation of the Trust Fund” is very
broad. Nonetheless, there are good reasons to think that the
CBA does not qualify. The CBA itself does not describe or
summarize the terms of the plan. It is, however, a document
that is related to the plan. Even so, there is nothing in the
Trust Agreement that purports to confer on the Trustees the
power to interpret agreements between third parties—even
agreements to determine the date on which an employer and
a union jointly agree to withdraw from the Fund. Moreover,
no employer is required by law to participate in any particu-
lar fund, or indeed in any fund at all. See Central Laborers'
Nos. 14-3726, 14-3737 11
Pension Fund v. Heinz, 541 U.S. 739, 743 (2004) (noting with
regard to pensions that “[n]othing in ERISA requires em-
ployers to establish employee benefits plans” or “mandate[s]
what kind of benefits employers must provide if they choose
to have such a plan”). If we had to decide, we would thus be
inclined to say that the scope of the 2006 CBA and the proper
legal characterization of the extension agreements are both
decisions that lie outside the scope of Article V, section 2.
But in the end it does not matter how we characterize the
2006 CBA. Even under ERISA’s arbitrary and capricious
standard of review, a plan administrator’s “interpretation
may not controvert the plain language of the document.”
Cottillion v. United Ref. Co., 781 F.3d 47, 55 (3d Cir. 2015). As
we previously have noted, “[i]n some cases, the plain lan-
guage or structure of the plan or simple common sense will
require the court to pronounce an administrator's determina-
tion arbitrary and capricious.” Tompkins v. Central Laborers'
Pension Fund, 712 F.3d 995, 1002 (7th Cir. 2013) (quoting Hess
v. Hartford Life & Accident Ins. Co., 274 F.3d 456, 461 (7th Cir.
2001)). This is one of those cases.
B
Under ERISA, plan fiduciaries are obliged to assure the
financial integrity of a plan by, among other things, “holding
employers to the full and prompt fulfillment of their contri-
bution obligations.” See Central States, Southeast & Southwest
Areas Pension Fund v. Cent. Transp., Inc., 472 U.S. 559, 574
(1985). The Multiemployer Pension Plan Amendments Act of
1980 (MPPAA) “arose out of Congress’ fear that any time an
employer withdrew from a multiemployer pension plan
(MPP) under ERISA it could set off a domino effect that,
‘much like a bank run,’ could leave the MPP unable to pay
12 Nos. 14-3726, 14-3737
its vested obligations.” Central States, Southeast & Southwest
Areas Pension Fund v. Hunt Truck Lines, Inc., 204 F.3d 736, 739
(7th Cir. 2000) (citation omitted). ERISA provides that an
employer’s obligation to contribute to a plan arises either
“under one or more collective bargaining (or related) agree-
ments, or … as a result of a duty under applicable labor-
management relations law … .” 29 U.S.C. § 1392(a). The pre-
sent case does not rest on any independent legal duty; we
can thus disregard the second option under the statute.
Section 515 of ERISA provides that an employer “who is
obligated to make contributions to a multiemployer plan
under the terms of the plan or under the terms of a collec-
tively bargained agreement shall, to the extent not incon-
sistent with law, make such contributions in accordance with
the terms and conditions of such plan or such agreement.”
29 U.S.C. § 1145. The statute also dictates when the obliga-
tion to contribute ceases: “a complete withdrawal from a
multiemployer plan occurs when an employer—(1) perma-
nently ceases to have an obligation to contribute under the
plan, or (2) permanently ceases all covered operations under
the plan.” 29 U.S.C. § 1383(a). The date of complete with-
drawal is defined as “the date of the cessation of the obliga-
tion to contribute or the cessation of covered operations.” Id.
§ 1383(e).
In our case, Michels’s obligation to contribute is tied ex-
clusively to the 2006 CBA. See Parmac, Inc. v. I.A.M. Nat’l
Pension Fund Benefits Plan A, 872 F.2d 1069, 1072 (D.C. Cir.
1989); see also Trustees of Local 138 Pension Trust Fund v. F.W.
Honerkamp Co., 692 F.3d 127, 135 (2d Cir. 2012). The Fund
recognizes this, but it argues that the 2006 CBA did not ex-
pire until the end of May 2012. Before that, it says, the par-
Nos. 14-3726, 14-3737 13
ties extended the 2006 CBA numerous times, and therefore
Michels never acquired the right to withdraw. It concedes
that the November 15, 2011, extension purported to elimi-
nate the obligation to contribute to the Fund, but it says that
this language was inconsistent with Article III, section 7(a) of
the Trust Agreement, which provides that “[a]n employer is
obliged to contribute to the Fund for the entire term of any col-
lective bargaining agreement accepted by the Fund on the terms
stated in that collective bargaining agreement … .” (Empha-
sis added.) This language, it concludes, makes the attempted
repudiation of the obligation to contribute ineffective.
None of the cases upon which the Fund relies support its
position. In Central States, Southeast & Southwest Areas Pen-
sion Fund v. Auffenberg Ford, Inc., 637 F.3d 718, 721 (7th Cir.
2011), we considered the validity of an oral agreement gov-
erning an employer’s duty to contribute to a fund. This, we
found, was insufficient to override the written requirement
for contributions found in the governing CBA. See also 29
U.S.C. § 1102(a)(1). The decision in Central States, Southeast &
Southwest Areas Pension Fund v. Waste Management of Michi-
gan, Inc., 674 F.3d 630 (7th Cir. 2012), is also inapposite.
There we rejected an employer’s effort to terminate its con-
tribution obligations before the stated expiration date of a
CBA. No question about the effectiveness of post-expiration
extension agreements was before the court. Central States,
Southeast & Southwest Areas Pension Fund v. Fingerle Lumber
Co., No. 08 C 1886, 2009 WL 1137793 (N.D. Ill. April 22,
2009), came to a similar result. There the bargaining parties
had initially agreed to make contributions up to a particular
date, and later they agreed on an earlier time. The court held
that they could not advance their withdrawal date, because
the Fund had relied on the initial duration of the agreement.
14 Nos. 14-3726, 14-3737
The present case differs from each of these. First, we are
not evaluating any oral agreements. Second, no one tried to
withdraw on a date earlier than the one specified in the 2006
CBA (January 31, 2011) or even earlier than the date in the
ninth extension agreement, November 15, 2011. To the con-
trary, Michels complied with its contribution obligations
through the November date. The Fund had no reason to
think that the parties would extend the 2006 CBA even a mi-
nute beyond November 15, 2011. It learned the two critical
points here at the same moment: there would be another ex-
tension, but the 2006 CBA was going to be modified to ex-
clude a contribution obligation.
Michels argues that we should ignore the Trust Agree-
ment and look only to the 2006 CBA. The language of the
statute provides some support for this position. Under 29
U.S.C. § 1381, a withdrawal is effective when the employer
“permanently ceases to have an obligation to contribute un-
der the plan.” The statute clarifies that “an obligation to con-
tribute” is an obligation “arising under one or more collec-
tive bargaining agreements.” 29 U.S.C. § 1382(a)(1). By men-
tioning only CBAs and no other document, the statute indi-
cates that Michels’s obligation to contribute is tied to the
2006 CBA. See Parmac, Inc., 872 F.2d at 1072 (“The law is
clear that an employer’s withdrawal liability under the
MPPAA must be determined by looking at the employer’s
collective bargaining agreement.”).
Even if we conclude that the 2006 CBA controls, our job
is not finished. That is because the parties disagree about
what document or documents qualify as the governing CBA.
Michels argues that the November 15, 2011, extension
agreement is the CBA in question, because the 2006 CBA had
Nos. 14-3726, 14-3737 15
long since expired. We agree with this analysis. Article
XV(C) of the 2006 CBA permitted either party to provide
written notice no less than 60 days before the expiration date
of its intention to terminate the agreement. PLCA gave such
notice to the Union by a letter sent August 9, 2010, well more
than 60 days before January 31, 2011. PLCA never revoked
that notice, and so the CBA was terminated in keeping with
this procedure. At that time, the parties entered a phase dur-
ing which negotiations were continuing, but no new agree-
ment had been concluded. True, they executed a series of
brief extensions that had the effect of carrying forward the
terms of the 2006 CBA, but they were under no obligation to
do so. Each one of these letter agreements stood on its own.
As PLCA and Michels point out, in a somewhat different
context this is the way that the National Labor Relations
Board (the Board) has understood interim agreements—as
binding, stand-alone CBAs. When a union is interested in
challenging the role of an incumbent union as the certified
bargaining representative, it may file a rival election petition
and see how it fares at the workplace. But it cannot do so just
anytime. It must wait until the open period 60 to 90 days be-
fore the governing collective bargaining agreement expires
(or later) before doing so. Before that time, the existing con-
tract bars the rival union’s challenge—hence the name “con-
tract bar” to describe this policy. In Union Carbide Corp., 190
N.L.R.B. 191 (1971), the Board had to decide whether a peti-
tion for an election that had been filed on August 6, 1970,
could go forward or if it was impermissible under the con-
tract bar. As of that date, the Board wrote, the third anniver-
sary of the 1967 agreement had passed and a petition filed
then would have been entertained. But the parties executed
a modification of the existing agreement on September 29,
16 Nos. 14-3726, 14-3737
1969, with a new expiration date of October 15, 1972. The
Board regarded the modification as a new contract; it reject-
ed the argument that it was incorporated into and made a
part of the 1967 agreement. Although the context is different,
the Union Carbide ruling supports the idea that the various
extensions were not merged into the 2006 CBA.
The Fund pushes back with the assertion that its posi-
tion—that the November 15, 2011 agreement was not a new
CBA—squares better with the mechanics of collective bar-
gaining agreements. Labor law requires that for a new col-
lective bargaining agreement to be created, it must be ap-
proved by a vote of the membership of the union. See Booster
Lodge No. 405, Int'l Ass'n of Machinists & Aerospace Workers,
AFL-CIO v. NLRB, 412 U.S. 84, 86 (1973). The Teamsters Con-
stitution is no exception: it states that a new CBA is “ratified
by majority vote of the Local Unions having and exercising
jurisdiction over the work covered by the agreement,” and it
is not binding until after that vote. The Union membership
did not vote on any of the one-month extensions to the 2006
CBA. They voted on nothing until the new CBA was pre-
sented to them in June 2012. This argument, however,
proves too much. It is common in labor relations for one col-
lective bargaining agreement to expire before a new full-
blown agreement can be concluded. The parties must, and
do, continue to bargain during that interim period, and they
often agree to carry forward the terms of the old CBA (per-
haps with some modifications) if the bargaining is still fruit-
ful and impasse has not been reached.
C
Even if we downplay the importance of the 2006 CBA,
we would come to the same result. The plain language of the
Nos. 14-3726, 14-3737 17
Trust Agreement also compels a decision in Michels’s favor.
The Trust Agreement recognizes two scenarios in which the
obligation to contribute may properly be terminated:
The obligation to make such contributions shall con-
tinue (and cannot be retroactively reduced or elimi-
nated) 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.
Trust Agreement, Article III, section 1 (emphasis added).
This provision could not be clearer: the obligation to con-
tribute ends when the fund receives a signed contract that
eliminates or reduces the duty to contribute to the fund. That
is exactly what the Fund received from Michels on Novem-
ber 16, 2011. Nothing the parties did was inconsistent with
this provision. There is nothing noteworthy about the fact
that Michels and the other PLCA parties contributed to the
Fund during the post-termination months; after all, they
were obliged to do so until the Fund received the signed
contract eliminating this obligation to which this language
refers.
The Fund evidently thinks that the “signed contract”
mentioned in Article III, section 1 must be a new CBA, and
that the November 15, 2011, agreement was not a new CBA.
But the Trust Agreement does not require that the “signed
contract” mentioned in Article III, section 2, be a CBA. It
would have been easy enough to use that term, not the term
“signed contract.” As PLCA points out, the relevant section
18 Nos. 14-3726, 14-3737
of the Trust Agreement uses the term “collective bargaining
agreement” nine times, while subpart (a) uses the broader
phrase “signed contract.” The Fund received just such a
“signed contract” when the November 15, 2011 agreement,
amending and extending the CBA, was delivered to it.
Elsewhere the Trust Agreement also recognizes that there
might be something other than a collective bargaining
agreement. Article III lists “each new or successive collective
bargaining agreement, including but not limited to interim
agreements and memoranda of understanding between the
parties” as among the items that must be sent to the Fund.
The term “interim agreement” describes the extensions (and
the November 11, 2015 amendment and extension) perfectly.
The conclusion that these were separate agreements thus fits
with the language of the 2006 CBA and with the language of
the Trust Agreement. In concluding that the November 15,
2011 agreement was insufficient to allow Michels to with-
draw from the Fund, the Fund contravened the plain lan-
guage of the Trust Agreement. Its decision was therefore ar-
bitrary and capricious.
Looking to other agreements only further sinks the
Fund’s arguments. The National Participation Agreement,
which appears as Schedule B of the 2006 CBA, governs the
relationship between individual employers and the Fund.
After stating that the employers agree to make contributions
pursuant to the CBA, the Participation Agreement adds the
following proviso: “no amendments or provisions of said
trust agreements shall bind the Employer for any financial
obligations or dues delinquency determinations beyond that
set forth in the National Pipe Line Agreement pursuant to
which such contributions are made.” That language sup-
Nos. 14-3726, 14-3737 19
ports a duty to contribute during the life of the 2006 CBA,
and during the extensions up until November 15, 2011. It
does not support any such duty thereafter, however, because
the November 15 agreement sets the financial obligation to
the Central States Fund at zero, while at the same time it
provides for escrowing money to be given to a successor
fund. The Fund’s only response to this is to attack the
amendment as unauthorized, along the lines we already
have outlined. Its argument, however, depends entirely on
the idea that the 2006 CBA continued in full force until some
time beyond November 2011—perhaps all the way until the
new collective bargaining agreement was concluded. We are
persuaded, however, that this is incorrect, under the agree-
ments that linked these parties, as we discussed in Part II.B
of this opinion.
III
We therefore conclude that the collective bargaining
agreement between PLCA and the Union expired in accord-
ance with its terms on January 31, 2011. Until November of
that year, it was followed by a series of separate agreements,
each of which carried the terms of the expired CBA forward.
In November, the parties exercised their right to change the
term before us now: the duty to contribute to the Fund. They
properly notified the Fund in writing of this prospective
change. The district court’s judgment in favor of the Fund
therefore must be, and is, REVERSED.