Mora v. Construction Laborer ( 2006 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
MANUEL MORA, on his own behalf 
and on behalf of all persons
similarly situated, No. 04-55594
Plaintiff-Appellant,
v.  D.C. No.
CV-03-00471-JVS
CONSTRUCTION LABORERS PENSION OPINION
TRUST FOR SOUTHERN CALIFORNIA,
Defendant-Appellee.

Appeal from the United States District Court
for the Central District of California
James V. Selna, District Judge, Presiding
Argued and Submitted
December 5, 2005—Pasadena, California
Filed January 25, 2006
Before: Harry Pregerson, John T. Noonan, and
Sidney R. Thomas, Circuit Judges.
Opinion by Judge Noonan;
Dissent by Judge Pregerson
1073
MORA v. CONSTRUCTION LABORERS PENSION TRUST 1075
COUNSEL
Richard A. Weinstock and Andrew T. Koenig, Ventura, Cali-
fornia, for the plaintiff-appellant.
John S. Miller, Herbert J. Klein, and Dwayne P. McKenzie,
Los Angeles, California, for the defendant-appellee.
Donald J. Capuano, Washington, DC, for amicus curiae
National Coordinating Committee for Multiemployer Plans.
OPINION
NOONAN, Circuit Judge:
Manuel Mora and the class represented by him (collectively
Mora) appeal the judgment of the district court denying cred-
its for hours of service giving rise to additional pension bene-
fits from the defendant, Construction Laborers Pension Trust
for Southern California (the Pension Trust). Mora contends
that contributions made to the Construction Laborers’ Trust
for Southern California (the Vacation Trust) should generate
the service credits. The district court ruled that ERISA did not
1076 MORA v. CONSTRUCTION LABORERS PENSION TRUST
require the contributions to count toward service credits and
granted summary judgment to the Pension Trust. We affirm.
Doing so, we dispel a confusion largely caused by a name.
FACTS
The Pension Trust is the product of collective bargaining
between the Southern California District Council of Laborers
together with affiliated local unions and the Southern Califor-
nia Chapter of the Associated General Contractors of America
together with other associations of contractors. The Pension
Trust was established on October 16, 1962. Its terms are set
out in over 90 typed pages. Article IX provides for its amend-
ment by the trustees. It has been amended 55 times, normally
as the result of collective bargaining. Half of the trustees are
elected by the union and half by the associations of employ-
ers. There is a procedure for appealing the denial of pension
claims and there is a Pension Appeals Committee, whose
elected chairman is John L. Smith, the Business Manager of
Local No. 1184, Laborers’ International Union of North
America, AFL-CIO.
Employers are required to contribute to the Pension Trust
for all hours worked by a construction laborer and for all
hours for which the laborer is paid although no work is per-
formed. If a laborer receives a paid vacation, the employer is
required to contribute to the Pension Trust for each hour of
such vacation.
The collective bargaining agreements between the union
and the employer association have not required paid vaca-
tions. Some employers give them, some don’t. In 1965, the
union and the employer associations negotiated the establish-
ment of the Vacation Trust, to be governed by trustees half
appointed by the union and half by the employers. The Vaca-
tion Trust had in Article XIII a provision for amendment by
the trustees and in Article VIII, an appeals process. Amended
article 12.07 provides:
MORA v. CONSTRUCTION LABORERS PENSION TRUST 1077
Contributions to the Fund and any liquidated dam-
ages payable in connection therewith, shall be
deemed to be, and shall be, a part of the wages due
to the employees with respect to whose work such
payments are made. No individual employer shall
have any right, title or interest in such contributions,
or any part thereof, and no part thereof shall ever
revert to any such individual employer. Insofar as
consistent with the other provisions of this Agree-
ment, contributions shall be treated and reported as
a part of the compensation earned by the employee
at the time the work to which the contributions per-
tain is performed, subject to the terms of this Agree-
ment, and shall be deemed to be, and shall be treated
as, subject to withholding tax and social security and
unemployment taxes as a part of the total compensa-
tion payable at the end of the individual employer’s
payroll period during which such work is performed
or paid for, but the full per hour contribution shall be
transmitted to the Fund. Such contributions shall not
be a part of the hourly wage rates for the purpose of
computing overtime, or reporting time or for any
other purpose of the Collective Bargaining Agree-
ment, or part of the “regular rate” or “basic hourly
rate” for the purpose of the Federal Fair Labor Stan-
dards Act or the Walsh-Healy Act or any other law,
ordinance or regulation, except that if, consistent
with the foregoing, such contributions can be consid-
ered and treated as a part of the wages prevailing in
the area for the purpose of the Federal Davis-Bacon
Act and similar federal, state or local laws, ordi-
nances or regulations, they shall be so considered
and treated.
Article 12.08 then provides:
It is the intent and purpose of the Plan, and of this
Agreement, and a material part of the consideration
1078 MORA v. CONSTRUCTION LABORERS PENSION TRUST
for the making of contributions to the Fund by indi-
vidual employers, that the money in each vacation
account shall be received by the employee entitled
thereto personally.
According to the sworn and undisputed declaration of John L.
Smith:
The Vacation Trust is and always has been set up
as a savings type vehicle for an employee rather than
as a payment to an employee for vacation time off
that the employee takes. The monies contributed to
the Vacation Trust have always been subject to pay-
roll withholding in the same manner as wages paid
and received for that particular week of employment.
Over the years on behalf of its members, the
Union has moved money back and forth between
wages and contributions to the Vacation Trust to
reflect the balance between the amount of wages that
the Union believes can be set aside and accumulated
as Vacation Trust contributions and the amount of
wages that the Union believes should be paid
directly to employees as immediate wages received.
It has never been the intent of the Pension Trust
Trustees nor of the Union nor of the employer asso-
ciations that the money paid by employers as contri-
butions to the Vacation Trust constitute hours of
service to be credited to an employee. The contribu-
tion to the Vacation Trust is simply payment for
wages in the same manner as a wage payment is for
the hour worked. Contributions to the Vacation Trust
allow an employee to accumulate savings throughout
the year. Contributions to the Vacation Trust do not
pay for vacation time off and were never intended to
do so.
MORA v. CONSTRUCTION LABORERS PENSION TRUST 1079
Mora is a retired construction laborer and union member,
who receives an early retirement pension from the Pension
Trust. In 1970 and again in 1972, Mora worked less than
1,000 hours and so did not receive service credits for those
years. But there were payments made to the Vacation Trust
for the hours he did work in those years. If those payments
were treated as counting for hours of service he would have
over 1,000 hours of service for 1970 and 1972 and increase
his pension by $26.00 per month.
On December 28, 1999, Mora appealed the computation of
credits for 1970 and 1972. On January 26, 2000, the Pension
Appeals Committee denied his appeal.
PROCEEDINGS
On January 14, 2002, Mora began this suit in the district
court. On November 20, 2002, the district court found that the
requirements for certification of a class had been met, that the
estimated class was between 500 and 600 persons whose
claims were typical and shared commonality, and that fair and
efficient adjudication called for certification of a class of par-
ticipants or their surviving spouses who had been granted a
pension by the Pension Trust after January 1, 1975, the date
on which ERISA applied. The class was essentially limited to
those who had not received service hours credit for payments
from the Vacation Trust.
On October 10, 2003, the district court denied Mora’s
motion for summary judgment. On March 12, 2004, after sub-
mission of additional documents and declarations by both
sides, the district court, sua sponte, gave summary judgment
to the Pension Trust.
Mora appeals.
ANALYSIS
[1] Mora pitches his appeal not on the terms of either the
Pension Trust or the Vacation Trust, but on regulations issued
1080 MORA v. CONSTRUCTION LABORERS PENSION TRUST
by the Department of Labor interpreting ERISA, 29 U.S.C.
§ 1052. They read:
(1) An hour of service is each hour for which an
employee is paid, or entitled to payment, for the per-
formance of duties for the employer during the appli-
cable computation period.
(2) An hour of service is each hour for which an
employee is paid, or entitled to payment, by the
employer on account of a period of time during
which no duties are performed (irrespective of
whether the employment relationship has termi-
nated) due to vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, military duty
or leave of absence. 29 C.F.R. § 2530.200b-2(a).
Mora argues that the payments made to the Vacation Trust are
payments “due to vacation.” As the Pension Trust is undis-
putedly an ERISA plan, Mora concludes that the regulation
controls.
[2] The difficulty for Mora is that the payments to the
Vacation Trust were not made “on account of time during
which no duties [were] performed.” The payments were made
precisely for time during which Mora worked. These hours
have already been counted once. To count them again would
be to count them twice. The regulations do not call for that
improbable result. Indeed, they explicitly prohibit it. 29
C.F.R. § 2530.200b-2(b)(3); accord. Hope v. Int’l Brother-
hood of Electrical Workers, 785 F.2d 826, 830-31 (9th Cir.
1986).
[3] This conclusion is consistent with the express provision
of Article XII of the Vacation Trust, already quoted: “Contri-
butions to the [Vacation Trust] . . . shall be deemed to be, and
shall be, a part of the wages due to the employees with respect
to whose work such payments are made.” They “shall not be
MORA v. CONSTRUCTION LABORERS PENSION TRUST 1081
a part of the hourly wage rates for the purpose of computing
overtime, or reporting time . . . .” The conclusion is equally
consistent with the August 22, 1966 ruling of the Internal
Revenue Service and the July 12, 1967 ruling of the Franchise
Tax Board of the state of California. I.R.S. Priv. Ltr. Rul. 67-
351 (Aug. 22, 1966); CA F.T.B. Priv. Ltr. Rul. (July 12,
1967). The trustees and the tax authorities have not been in
the dark for over thirty-eight years.
Mora’s contentions have a superficial attraction because of
the name of the entity into which the 1970 and 1972 contribu-
tions were made. His argument ends with the name. The pay-
ments were in fact into a trust that held savings on his
account. His suit is an attempt to make an end run around the
union-employer trustees of the Pension Trust. It is without a
basis.
The judgment of the district court is AFFIRMED.
PREGERSON, Circuit Judge, dissenting:
Department of Labor regulations allow employees to count
hours of paid vacation as “hours of service,” the currency in
which hours are counted for pension purposes. The majority
holds that construction laborers cannot count their vacation
benefit as “hours of service,” because their vacation benefit
comes from a trust fund as a lump sum of money, not from
an employer as a set amount of vacation time. I cannot sup-
port this outcome.
The crux of my disagreement with the majority comes
down to whether the payments union members receive from
the vacation trust are vacation benefits intended to approxi-
mate “traditional” paid vacations received by employees in
other industries, or whether the vacation trust is an involun-
tary savings plan akin to a “Christmas Club.” I believe the
1082 MORA v. CONSTRUCTION LABORERS PENSION TRUST
vacation trust documents are clear on this point. Article II of
the Trust Agreement states that the trust fund is intended as
“a fund for the payment of paid vacations.” The summary
plan document circulated by the vacation trust fund to union
members touted this program as a “vacation check” that “ma-
terially assists [an employee] in defraying the expenses of a
vacation should [the employee] decide to take one.” Thus, I
cannot agree with the majority that Mora’s argument is much
ado over an unfortunate label. See Maj. Op. At 1076. Defen-
dant’s present assertions to the contrary, see Maj. Op. at 1078,
do not alter the fact that vacation trust payments were consis-
tently marketed as a paid vacation benefit and should carry
the consequences that normally follow paid vacations.
Once it is shown that these vacation trust payments are
intended to approximate vacation benefits provided to
employees in other industries, the Defendant’s remaining
arguments fall away. The lump sum of money received by
union construction laborers can easily be translated into a
quantity of time, and in fact, the regulations provide for this
calculation. See 29 C.F.R. § 2530.200b-2(b)(2). The differ-
ences between the vacation trust payment and a traditional
vacation benefit — i.e., the fact that payments come from a
trust rather than from the employer, the timing of tax with-
holding, and the fact that payments are doled out at regular
intervals rather than at the time vacation is taken — can be
attributed to the nature of the construction industry and the
short-lived relationship between construction employers and
laborers, not to any substantive difference between the con-
struction laborer’s paid vacation and the paid vacation of
other employees. “Double counting” of hours can be avoided
by allowing union members to show that they did take some
period of time away from work; indeed, it should hardly be
a problem for transitory construction laborers to show that
they did not work a full 52 weeks in a year.
Constructions laborers work at many job sites for multiple
employers over the course of a year. Accommodations have
MORA v. CONSTRUCTION LABORERS PENSION TRUST 1083
been negotiated between unions and construction employers
to ensure that these transitory workers are provided with paid
vacation benefits similar to those provided to employees in
other industries. I believe we should give effect to their agree-
ment and treat the paid vacation received by construction
laborers as we would treat paid vacation received by an
employee in any other industry.
Accordingly, I respectfully dissent.