Central States Areas v. Kroger Company

In the
United States Court of Appeals
For the Seventh Circuit
Nos. 99-2257, 99-3014
CENTRAL STATES, SOUTHEAST AND
SOUTHWEST AREAS PENSION FUND,
and HOWARD MCDOUGALL,
Plaintiffs-Appellees,
v.
KROGER COMPANY,
Defendant-Appellant.
Appeals from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 93 C 3669--John F. Grady, Judge.
Argued February 17, 2000--Decided September 15, 2000
Before HARLINGTON WOOD, JR., COFFEY and RIPPLE, Circuit
Judges.
RIPPLE, Circuit Judge. Central States, Southeast
and Southwest Areas Pension Fund (the "Fund")
brought this action under sec. 515 of ERISA, 29
U.S.C. sec. 1145, against the Kroger Co.
("Kroger") to recover delinquent pension
contributions for certain employees at Kroger’s
warehouse center in Atlanta, Georgia. Kroger’s
obligation to make these contributions is defined
by a Collective Bargaining Agreement ("CBA")
negotiated by Kroger and the union representing
the Atlanta employees.
This is a successive appeal; familiarity with
our first opinion is assumed. See Central States,
Southeast & Southwest Areas Pension Fund v.
Kroger Co., 73 F.3d 727 (7th Cir. 1996) ("Kroger
I"). In that opinion, we held that the meaning of
"part-time," as used in the CBA, was ambiguous.
We explained that "part-time" could refer either
to regular employees who worked a shorter week or
to "casual" employees. See id. at 732. Because of
this ambiguity we remanded the case to the
district court for a determination of the meaning
of part-time. See id. at 733.
After additional discovery and a bench trial,
the district court resolved the ambiguous meaning
of "part-time" in favor of the Fund by holding
that "part-time" employees were "regular
employees," not casual employees, and that the
Fund, therefore, was entitled to the disputed
contributions. The district court entered a
judgment in favor of the Fund on liability and
later supplemented its judgment with an award of
attorneys’ fees and costs to the Fund. For the
reasons set forth in the following opinion, we
affirm the judgment of the district court.
I
BACKGROUND
A.
Kroger is a national grocery store chain with
operations in several states, including Georgia.
The warehouse employees and truck drivers at
Kroger’s warehouse center in Atlanta are
represented by the Local 528 chapter of the
International Brotherhood of Teamsters (the
"Union"). Since 1967, the employment relationship
between Kroger and its employees at this facility
has been governed by a CBA negotiated by Kroger
and the Union. Kroger’s participation in the Fund
began in 1971, and the CBA has defined Kroger’s
obligation to make pension contributions to the
Fund on behalf of the Atlanta employees. The CBA
between Kroger and the Union, although one
document, consists of two parts. The first part,
the Master Agreement, was negotiated by Kroger
and the Union and covers the Atlanta facility as
well as several other Kroger facilities
nationwide. The second part of the CBA, the Local
Supplement, applies only to the Atlanta facility.
As we explained in our previous opinion, both the
Master Agreement and the Local Supplement form "a
single, unitary contract" and, consequently, must
be read together. Kroger I, 73 F.3d at 731.
The Master Agreement defines who is a regular
employee and also differentiates between two
other types of employees--"probationary" and
"casual." Probationary employees are defined as
"new" employees who work on a trial basis for 30
to 60 days and who may be discharged at Kroger’s
discretion. CBA sec. 2.2. They become regular
employees at the end of their trial period and,
according to the Master Agreement, "shall be
placed on the regular seniority list." CBA sec.
2.2. On the other hand, "casual" employees are
defined as employees "hired on a short term
basis." CBA sec. 2.3. The Master Agreement states
that casual employees "may be employed from time
to time" for those facilities with a past
practice of hiring casuals. It contains no
specific limit on the duration of a casual
employee’s service. The number of casual
employees is limited to 10 percent of the work
force. See CBA sec. 2.3. The CBA provides that
casual employees "shall not receive fringe
benefits or accrue seniority." CBA sec. 2.3.
Under the CBA, Kroger is obligated to make
pension contributions for each employee who has
been employed for 30 days or more and who is on
the "regular seniority list." CBA sec. 31.1. As
we explained in our previous opinion, "[t]he
effect of this provision is that Kroger is
required to make contribution to the Fund on
behalf of all probationary employees who had
completed their trial period, but not on behalf
of casual employees." Kroger I, 73 F.3d at 729.
Furthermore, the Master Agreement states that
Kroger must make contributions to the Fund for
"each regular or extra employee, even though such
employee may work only part-time." CBA sec. 31.4
(emphasis added). No contribution is required for
employees "who work either temporarily or in
cases of emergency." CBA sec. 31.4.
Unlike the Master Agreement, the Local
Supplement does not differentiate between
"probationary" and "casual" employees. Instead,
the Local Supplement refers to "part-time" and
"full-time" employees, but it defines neither of
these terms. The Local Supplement also refers to
part-time employees as "part-timers." A few
characteristics of part-time employment
nevertheless emerge from the Local Supplement.
First, the Local Supplement caps the number of
"part-time" employees at 10 percent of the
warehouse employees. See CBA II.A.6. Also, part-
time employees are permitted a limited form of
seniority: They may accrue seniority "only among
other part time employees." CBA II.D.2. Finally,
part-time employees must follow certain job-
bidding procedures to obtain regular positions.
The job-bidding process for part-time employees
first became part of the Local Supplement in
1985. Under the procedure established in 1985,
when a permanent job became available, the most
senior part-timer was required to bid on the
position. See CBA II.D.1. Failure to bid or to
bid successfully would result in termination from
Kroger. The bidding procedure was modified in
1988 so that part-timers were given an
opportunity to bid for a second regular position
if they failed to obtain a position on their
first bid. See CBA II.D.1 (1988). Starting in
1985 and continuing through the 1988 change, the
bidding procedure set forth in the Local
Supplement specified that a part-timer who had
obtained a bid position was required to work in
that position for a "trial period" of 21 days.
CBA II.D.1. If the employee’s performance proved
to be unsatisfactory during this trial period,
the Local Supplement allowed Kroger to return the
employee to his former part-time position.
Prior to 1977, all newly hired employees at
Kroger’s Atlanta facility were designated as
probationary. In 1977, however, Kroger began
classifying all new employees at the Atlanta
facility as casuals. These employees were not
guaranteed fixed hours or schedules. Kroger would
place the new hires on a separate seniority list,
but those employees on the list did not have any
seniority status over regular employees. Rather,
the list was used to allow these employees, who
commonly were referred to as "part-timers" at the
Atlanta facility, to bid (in order of date of
hire) for regular jobs as those jobs became
available. Many of the employees hired as casuals
remained with Kroger for a lengthy period of time
and eventually became regular employees through
the bidding process. Once a part-timer became a
regular employee and was placed on the regular
seniority list, Kroger made pension contributions
on behalf of that employee to the Fund. As long
as the employee was designated as a casual,
however, no contribution was made.
B.
In 1991, the Fund conducted an audit of the
employment records at Kroger’s Atlanta facility
and concluded that, between December 28, 1986,
and December 30, 1989, Kroger had failed to make
pension contributions required under the CBA for
certain warehouse employees. The Fund therefore
brought this action against Kroger under sec. 515
of ERISA; it alleged that Kroger owed the Fund
over $200,000 in delinquent contributions.
In our previous opinion, we reversed the
district court’s grant of summary judgment in
favor of Kroger. The district court had
determined that the CBA was unambiguous and had
declared its meaning as a matter of law. On
appeal, we examined the CBA as a whole and
concluded that the term "part-time," as it was
used in the CBA, was susceptible to more than one
reasonable meaning. "Part-time," we explained,
could mean "casual" or it could refer to "a
regular employee who works a shorter week."
Kroger I, 73 F.3d at 732. Because the term "part-
time" had more than one reasonable
interpretation, we held the CBA to be ambiguous.
Consequently, the meaning of the CBA could not be
determined as a matter of law, and we remanded
the case "for a determination of the meaning of
part-time." Id. at 733.
C.
1.
On remand, the district court allowed additional
discovery and then conducted a bench trial. At
the conclusion of the trial, the district court
announced from the bench the four findings of
fact that would form the basis of its final
decision. Those findings of fact were:
First, the employees in question were not "hired
on a short-term basis," nor were they "employed
from time to time," as defined in article 2.3 of
the master portion of the [CBA].
My second finding of fact is based upon the first
one. It is that the phrase "part-time" in the
local portion of the agreement is not the same as
and does not mean "casual" as defined in article
2.3 of the master portion of the agreement.
My third finding of fact is that the local union
representatives and the negotiators acquiesced in
the treatment of all new hires as "part-timers"
not entitled to pension and welfare contributions
from at least 1977 through the end of the audit
period and beyond. These employees were told by
management that they would not be [en]titled to
benefit contributions until they had successfully
bid for regular employment and had been placed on
the regular seniority list. The employees fully
understood that.
My fourth finding of fact is that the term "part-
time" in the local portion of the agreement was
interpreted by the company and the local union
representatives as referring to these employees
who had not been placed on the regular seniority
list and who, by reason of that fact, would not
be eligible for benefit contributions, regardless
of the length of time they had been employed by
the company.
Tr.8-B at 1005-06.
The district court also elaborated on these
findings. The court observed that the employees
could not have been hired on a "short-term basis"
because "the employees in question were hired by
Kroger with the hope and the expectation that
they would become, each of them, full-time
regular employees when an opening occurred." Id.
at 1003-04. Although Kroger may have known that
there was nothing inevitable about its employees
becoming full-time regular employees, the court
explained, Kroger’s "hope was that the training
that would be given to these employees would be
utilized by the employees to complete their
probationary period successfully and to equip
themselves to become full-time employees when the
opportunity arose." Id. at 1004. Moreover, the
court noted, the employees in question could not
have been "employed from time to time," according
to the court, because that phrase referred to
"people who come and go, people whose employment
is interrupted, people who might be absent for
long periods of time," and did not refer to
people "who are on hand continuously to work
part-time as needed." Id. at 1005. In the
district court’s view, the evidence showed that
the employees in question were available, and
were considered to be available by Kroger, "on a
continuous basis to work part-time as needed
during the peaks and valleys" of Kroger’s Atlanta
operation. Id. "These employees," continued the
court, "were just as continuous as the peaks and
valleys were." Id. The district court further
explained that the content of the employee
handbooks Kroger had provided to its new hires,
as well as the manner in which the employees had
been trained and nurtured, demonstrated that the
employees in question "were by no means regarded
as people who were likely to be on hand for only
a short period of time." Id. at 1004. To the
contrary, the court explained, "it was expected
that in the normal course, [these employees]
would work for a long period of time, both as
what was referred to as part-timers, and then
eventually as people who achieved regular
employment and got on the regular seniority
list." Id.
2.
The district court later issued a written
decision memorializing its findings of fact and
addressing the issue of liability. The district
court explained that the starting point for its
analysis was to consider "whether the evidence
show[ed] the Atlanta warehouse employees in
question were treated as ’casual’ by the company
and the union as that term is used in the [CBA]."
R.197 at 2. According to the district court, the
efforts of the parties to prove that the term
"part-time" in the Local Supplement either was or
was not synonymous with "casual" had proved to be
"largely unpersuasive." Id. In the district
court’s view, "[t]he union and company witnesses
[had] attempted reenactments that are contrary to
the way they acted at the time." Id. at 3./1
Moreover, the district court concluded, "[t]he
fact is that the local union and company
representatives acted according to their own
lights, with little or no regard to whether their
mutual understanding of whom would be paid fringe
benefits comported with the terms of the master
agreement." Id. at 2. Indeed, the court found
that "[i]f the matter had been left to the local
union representatives, no question of
contributions for these employees would ever have
arisen." Id. at 2-3.
In the end, the court concluded, its third and
fourth findings of fact manifested "’local’
understandings" that "cannot prevail against the
definition of ’probationary’ employees" contained
in the Master Agreement. Id. at 5. Because the
employees were not casual, the district court
held that they necessarily were probationary. The
employees in question, the district court
concluded, were "regular employees who worked a
shorter week," or, in any event, were not
"casual" employees as defined by the Master
Agreement. Id. at 5-6. Thus, because the
employees were probationary, the court held that
Kroger was required to make contributions to the
Fund for the employees in question.
Based on its holding that Kroger should have
made pension contributions for the employees in
question, the district court awarded damages to
the Fund totaling $446,946.07. The district court
also awarded attorneys’ fees, costs, and double
interest to the Fund as provided by 29 U.S.C.
sec. 1132(g)(2). According to the district court,
Kroger did not contest the amount of attorneys’
fees and costs, so the court awarded the amount
requested by the Fund.
II
DISCUSSION
A.
We review de novo a district court’s
interpretation of a contract. See Moriarty v.
Svec, 164 F.3d 323, 330 (7th Cir. 1998). When a
contract is unambiguous, the court may declare
its meaning as a matter of law. See Kroger I, 73
F.3d at 732. But when a contract is ambiguous,
questions of interpretation are to be resolved by
the trier of fact. See id.; Jos. Schlitz Brewing
Co. v. Milwaukee Brewery Workers’ Pension Plan, 3
F.3d 994, 999 (7th Cir. 1993). We review de novo
a district court’s determination of the meaning
of an ambiguous contract term, see WH Smith Hotel
Servs., Inc. v. Wendy’s Int’l, Inc., 25 F.3d 422,
428 (7th Cir. 1994); LaSalle Nat’l Bank v.
Service Merchandise Co., 827 F.2d 74, 78 (7th
Cir. 1987), as well as the court’s factual
findings following a bench trial, see Fed. R.
Civ. P. 52(a); Brunswick Leasing Corp. v.
Wisconsin Central, Ltd., 136 F.3d 521, 525 (7th
Cir. 1998).
Thus, in this case Kroger has the "difficult,
though not insurmountable" burden of showing that
the district court’s factual findings are clearly
erroneous. Brunswick, 136 F.3d at 526. "A finding
is ’clearly erroneous’ when although there is
evidence to support it, the reviewing court on
the entire evidence is left with a definite and
firm conviction that a mistake has been
committed." United States v. United States Gypsum
Co., 333 U.S. 364, 395 (1948). "Where there are
two permissible views of the evidence, the
factfinder’s choice between them cannot be
clearly erroneous." Anderson v. Bessemer City,
470 U.S. 564, 574 (1985). If the district court’s
account of the facts is plausible in light of the
record viewed in its entirety, we may not reverse
that decision even if we may have decided the
case differently. See id. at 573-74 (noting that
if there are two possible understandings of the
evidence, the factfinder’s conclusion cannot be
clearly erroneous); Salus v. GTE Directories
Serv. Corp., 104 F.3d 131, 135-36 (7th Cir. 1997)
(applying these principles in an ERISA case).
Furthermore, any reasonable doubts we may harbor
should be resolved in favor of the district
court’s ruling "in light of its greater immersion
in the case." Cook v. City of Chicago, 192 F.3d
693, 697 (7th Cir. 1999).
B.
1.
The statutory basis for the Fund’s claim against
Kroger is sec. 515 of ERISA, which provides:
Every employer who is obligated to make
contributions to a multiemployer plan under the
terms of the plan or under the terms of a
collectively bargained agreement shall, to the
extent not inconsistent with law, make such
contributions in accordance with the terms and
conditions of such plan or such agreement.
29 U.S.C. sec. 1145. This section entitles
pension funds to enforce the terms of agreements
when those terms are unambiguous. See Central
States, Southeast & Southwest Areas Pension Fund
v. Hartlage Truck Serv., Inc., 991 F.2d 1357,
1361 (7th Cir. 1993); see also Central States,
Southeast & Southwest Areas Pension Fund v.
Gerber Truck Serv., Inc., 870 F.2d 1148, 1149
(7th Cir. 1989) (en banc) (stating that sec. 515
allows pension funds to "enforce the writings
according to their terms"). Because pension funds
are entitled to rely on the terms of a CBA, a
fund’s reliance upon those terms "may not be
thwarted by oral understandings between the
employer and the union," Kroger I, 73 F.3d at 731
(citing Central States, Southeast & Southwest
Areas Pension Fund v. Joe McClelland, Inc., 23
F.3d 1256, 1257-58 (7th Cir. 1994)), or by
written side agreements between the employer and
the union that have not been disclosed to the
fund, see Central States, Southeast & Southwest
Areas Pension Fund v. Transport, Inc., 183 F.3d
623, 628 (7th Cir. 1999), or "by defenses that
may defeat enforcement of the CBA between the
employer and the union," Kroger I, 73 F.3d at 731
(citing Gerber Truck, 870 F.2d at 1153).
Federal common law rules of contract
interpretation apply when we consider a contract
in the context of an ERISA claim. See Kroger I,
73 F.3d at 731. The written word will prevail
over the subjective understandings of the
contracting parties unless the written agreement
is truly ambiguous. See Pabst Brewing Co. v.
Corrao, 161 F.3d 434, 442 (7th Cir. 1998); Gerber
Truck, 870 F.2d at 1151-53. In our case, we have
determined that the term part-time is ambiguous.
When a court is interpreting an ambiguous term,
the task of the court is to determine what "the
contracting parties . . . intended the clause to
mean." In re Teamsters Indus. Employees Welfare
Fund, 989 F.2d 132, 136 (3d Cir. 1993). To
determine what the contracting parties intended,
the court may look at extrinsic evidence to
determine the meaning the contracting parties
attached to the ambiguous term. See Moriarty, 164
F.3d at 331 (citing FDIC v. W.R. Grace & Co., 877
F.2d 614, 620-21 (7th Cir. 1989)); see also
Rosetto v. Pabst Brewing Co., 217 F.3d 539, 543
(7th Cir. 2000) (stating that, when an ambiguity
"is apparent just from reading the contract,"
"evidence is admissible to cure" that ambiguity).
2.
During the bench trial, Kroger and the Fund
presented the district court with the testimony
of over 20 witnesses and with over 300 exhibits
in their efforts to demonstrate that the parties
to the CBA intended "part-time" to be either
synonymous or not synonymous with "casual." Much
of the evidence presented was conflicting. On
appeal, Kroger and the Fund have devoted the
majority of their arguments to the question of
whether the district court correctly resolved the
ambiguous meaning of "part-time" as that term was
used in the CBA. We shall begin our analysis,
however, by examining one of the unambiguous
terms of the CBA--the term "casual employee."
Section 2.3 of the Master Agreement states that
casual employees, who are hired on a "short term
basis," may be "employed from time to time" at
Kroger facilities with a history of hiring such
employees. CBA sec. 2.3. The parties do not claim
that the meaning of "casual," as it is used here,
is ambiguous; nor have they questioned the
meanings of "short-term basis" or "from time to
time." Relying on the definition of a casual
employee in sec. 2.3 of the CBA, the district
court explained that it understood that term to
refer to those employees that Kroger intended,
when it hired them, to work for a short period of
time. Casual employees, the court reasoned, would
not be employees Kroger expected "in the normal
course" to work "for a long period of time."
Tr.8-B at 1004. The court also explained that
casual employees would be people "who come and
go, people whose employment is interrupted,
people who might be absent for long periods of
time," rather than people "who are on hand
continuously to work part-time as needed." Id. at
1005. We agree with the district court’s
assessment of the meaning of "casual
employee."/2
The CBA’s definition of "casual employees" is
binding on Kroger. See Joe McClelland, 23 F.3d at
1257-58; Gerber Truck, 870 F.2d at 1149. Thus, in
our previous decision in this case, we observed
that "it is only if the employees at issue are
truly casual, and not probationary, as those
terms were understood by the parties to the CBA,
that Kroger’s reclassification of the Atlanta
employees (and thus its failure to make
contributions on their behalf) is permissible."
Kroger I, 73 F.3d at 733. In applying the CBA’s
definition of "casual employee" to the facts of
this case, the district court found in its first
finding of fact that the employees in question
were not casuals. Specifically, the district
court found that these employees were not hired
on a short-term basis because they were hired
"with the hope and the expectation that they
would become, each of them, full-time regular
employees when an opening occurred." Tr.8-B at
1003-04. Indeed, the court found, Kroger expected
these employees, regardless of whether they
stayed with Kroger, to "work for a long period of
time, both as what was referred to as part-
timers, and then eventually as people who
achieved regular employment and got on the
regular seniority list." Id. at 1004.
Furthermore, the district court found that the
employees in question were not employed "from
time to time" because they were, in fact, "as
continuous as the peaks and valleys" of Kroger’s
operation. Id. at 1005.
Kroger submits that the district court ignored
the evidence of record and the parties’ intent by
concluding that the new hires were not "casuals."
Instead, Kroger asserts, the new hires were hired
on a "short-term basis" and were employed "from
time to time," thus meeting the definition of
"casuals" given in the Master Agreement. Kroger
further submits that the employees in question
must have been casuals because their employment
was marked by characteristics of "casual"
employment. They were not given set schedules;
they had no weekly salary guarantees; and they
served as fill-ins for Kroger’s regular
employees. After the new employees worked their
first 30 days at Kroger, their status did not
change, and most of the new hires never became
regular employees. In fact, Kroger submits, 85
percent of them worked less than 12 weeks.
Additionally, Kroger explains, until the
employees obtained a bid position, they were not
entitled to job benefits like progressive
discipline, jury duty, and holidays--all benefits
regular employees enjoyed. Therefore, Kroger
submits, the new hires were "effectively" casual
employees. Appellant’s Br. at 25. Finally, Kroger
takes issue with the district court’s conclusion
that Kroger expected every new hire to become a
regular employee. This could not possibly be the
case, Kroger submits, because it knew that only a
small fraction would stay with the company more
than a few weeks.
There is sufficient evidence in the record,
however, to support the district court’s
conclusion that these employees were not "hired
on a short term basis" or "employed from time to
time." Thus, we cannot say that the district
court’s first finding of fact is clear error. The
district court stated, in particular, that the
employee handbooks and Kroger’s "training and
nurture" of its new hires persuaded the court
that the employees in question were not casuals.
Tr.8-B at 1004. As an example, one of the
employee handbooks used by Kroger welcomed them
to the "Kroger team" and instructed them to use
the handbook "as a training tool and guide during
your first several weeks at Kroger." R.209, Ex.92
at 971. The district court also found that,
regardless of whether the employees stayed with
Kroger for a long time, Kroger hired these
employees with the intention that they would
remain with the company and eventually become
"regular" employees. Even though Kroger had a
high turnover rate at the Atlanta facility, there
was also evidence that eventually a new hire that
stayed with the company either had to bid for a
permanent position or, failing that, was fired.
Here, we agree with the Fund that "[t]he ability
to bid on permanent jobs is entirely at odds with
the concept of casual employment which by
contract definition, is short and indefinite,"
Appellee’s Br. at 18, especially because there
was evidence that it took six to nine months to
get to the top of the "part-time" seniority list.
3.
Kroger nevertheless argues that the district
court clearly erred because the court failed to
resolve--or worse, incorrectly resolved--the
ambiguity in the meaning of the term "part-time"
as used in the CBA. According to Kroger, had the
district court resolved the ambiguity correctly,
it would have concluded, based on the record,
that "the parties intended [’part-time’] to have
a temporal meaning only in the Master Agreement,
but to denote a status of employee, ’part-
timers,’ the employees at issue, in the Local
Supplement." Appellant’s Br. at 16. Furthermore,
Kroger submits, the district court’s third and
fourth findings of fact warranted judgment for
Kroger because those findings of fact evidenced
the understanding of the parties to the CBA that
"part-time," as used in the Local Supplement,
referred to casual employees, who were not
entitled to pension contributions. The district
court’s ruling, Kroger maintains, runs contrary
to the meaning of "part-time" that Kroger and the
Union, the parties to the CBA, intended when they
contracted and have accepted since at least 1977.
Kroger correctly points out that, in general,
the practical interpretation the parties to a
contract have given that contract is strong
evidence of their intended meaning for an
ambiguous term./3 Nonetheless, regardless of the
terminology employed with respect to the "part-
time" employees in Atlanta, Kroger and the Union
simply could not have redefined "casual" in
derogation of the clear meaning of that term
provided in the CBA. Just as employers may not
rely on oral or written side agreements when
those agreements contravene the terms of the
governing agreement, see Transport, 183 F.3d at
628; Joe McClelland, 23 F.3d at 1257-58, Kroger
may not rely on a practice--even one accepted by
the Union--that contravenes the express and
unambiguous terms of the CBA. Whatever meaning
Kroger and the Union may have ascribed to "part-
time" in the Local Supplement, Kroger’s practice
of treating the employees in question as
"casuals" for pension contribution purposes when,
in fact, those employees were not hired on a
short-term basis or employed from time to time
cannot thwart the unambiguous definition of
casual employees contained in the CBA.
The district court acknowledged that its task on
remand was a difficult one given the fact that
the CBA, "as interpreted by the local
representatives of the union and by the company,
is marked by an inconsistent view of casual and
part-time as between the two portions of the
agreement." Tr.8-B at 1007. Nevertheless, because
the employees were not truly casuals, they had to
have been probationary employees, the only other
type of new employee countenanced by the CBA. And
because they were probationary employees, and not
casuals, Kroger should have made the disputed
pension contributions for them.
C.
Kroger also submits that the Fund should be
estopped from claiming that pension contributions
are owed for the Atlanta workers. According to
Kroger, it can establish the elements of estoppel
because it reasonably relied, to its detriment,
on a knowing misrepresentation because the Fund
did not object to Kroger’s practice of deeming
all new hires as casuals.
Kroger argues that the Fund made knowing
misrepresentations to it in two ways. First,
Kroger claims, the Fund knowingly misrepresented
to it that the Fund did not object to the
company’s practice. According to Kroger, each
month it sent the Fund a report that showed the
gap between the employees’ original hire dates
and the dates Kroger began making contributions
for them. The Fund then sent Kroger a monthly
bill for fund contributions based on the
information provided by Kroger the previous
month. By "misrepresenting to Kroger that
Kroger’s payment and reporting was acceptable,"
Kroger argues, it was misled into thinking that
no pension contributions were required.
Appellant’s Br. at 42. Secondly, Kroger argues
that, by accepting Kroger’s monthly
contributions, the Fund knowingly misrepresented
to Kroger that the Fund had read and had approved
the CBA. Had the Fund read the CBA, according to
Kroger, the Fund would have known that the CBA
was ambiguous (as it did when it finally
conducted its audit) and would have asked Kroger
about the ambiguity.
Moreover, Kroger submits that it reasonably
relied on the Fund’s misrepresentations.
Essentially, Kroger explains, the Fund’s inaction
"lulled Kroger into a false sense of security
regarding its use of part-timers and its
contribution obligations." Appellant’s Br. at 44.
Finally, Kroger maintains that it relied to its
detriment on the Fund’s misrepresentations.
According to Kroger, had it not relied on the
misrepresentations, Kroger would not have
incurred the expense and exposure caused by the
present litigation.
The district court held that our decision in
Coker v. Trans World Airlines, Inc., 165 F.3d 579
(7th Cir. 1999), precluded relief on an estoppel
theory in this case because, under Coker,
estoppel requires a "knowing misrepresentation."
R.197 at 4 (citing Coker, 165 F.3d at 585-86).
According to the district court, the Fund had not
made a knowing misrepresentation because such a
misrepresentation requires an intent to mislead.
In this case, the district court explained,
"nothing like that occurred." Id.
This circuit has not decided whether estoppel
claims should be available in ERISA actions
involving multi-employer, funded plans. See,
e.g., Shields v. Local 705, Int’l Bhd. of
Teamsters Pension Plan, 188 F.3d 895, 899-900
(7th Cir. 1999) (declining to decide whether
estoppel could ever apply to such a plan). Even
assuming that estoppel could be available in this
context, however, we agree with the district
court that Kroger cannot make out the elements of
estoppel, although we reach this conclusion for
reasons different from the district court.
Kroger’s estoppel argument is foreclosed because
Kroger’s reliance on any misrepresentation made
by the Fund could not have been reasonable.
"Reliance on the misrepresentation is reasonable
only if the party asserting estoppel does not or
should not know the truth." Bakery &
Confectionary Union & Indus. Int’l Pension Fund
v. Ralph’s Grocery Co., 118 F.3d 1018, 1027 (4th
Cir. 1997). Here, Kroger, the party asserting
estoppel, obviously knew of its practice of
designating the employees in question as casuals
and, therefore, it was in a better position than
the Fund to know the truth that its practice did
not comport with the CBA. Thus, we cannot accept
Kroger’s estoppel argument.
D.
Finally, we must address the question of
attorneys’ fees and costs. The district court
correctly awarded the Fund its attorneys’ fees
and costs for its efforts in the district court
to enforce the contribution agreement with
Kroger. See 29 U.S.C. sec. 1132(g)(2). Likewise,
the Fund is entitled under sec. 1132(g)(2) to
recover its reasonable attorneys’ fees and costs
in this appeal. See, e.g., Central States,
Southeast & Southwest Areas Pension Fund v.
Wintz, 155 F.3d 868, 876 (7th Cir. 1998); Joe
McClelland, 23 F.3d at 1259.
Conclusion
For the foregoing reasons, we affirm the
judgment of the district court.
AFFIRMED
/1 As an example, the district court noted that one
of Kroger’s witnesses had testified that the
employees at the Atlanta facility were commonly
referred to as "part-time casual." R.197 at 3.
This testimony, in the district court’s
estimation, was not credible; according to the
court, the employees "would have been described
as ’part-time,’ or ’casual,’ but not both." Id.
/2 We note that the district court’s understanding
of the term "casual employee" is not only
consistent with the terms of the CBA, it also
comports with the dictionary definition of
"casual employment." Black’s Law Dictionary
defines "casual employment" as:
Employment at uncertain or irregular times.
Employment for short time and limited and
temporary purpose. Occasional, irregular or
incidental employment. Such employee does not
normally receive seniority rights nor does he
normally receive fringe benefits.
Black’s Law Dictionary 198 (5th ed. 1979); see
also Central States, Southeast & Southwest Areas
Pension Fund v. Independent Fruit & Produce Co.,
919 F.2d 1343, 1350 (8th Cir. 1990) (citing
Black’s Law Dictionary to define "casual
employment" in a CBA lacking its own definition
of the term).
/3 See Old Colony Trust Co. v. City of Omaha, 230
U.S. 100, 118 (1913) ("Generally speaking, the
practical interpretation of a contract by the
parties to it for any considerable period of time
before it comes to be the subject of controversy
is deemed of great, if not controlling,
influence."); Moriarty, 164 F.3d at 332 (stating
that extrinsic evidence of the parties’
understanding of an ambiguous term is "highly
relevant"); In re Teamsters, 989 F.2d at 137
(stating that evidence of a course of conduct
over a substantial period of time is
"particularly compelling" on the question of the
parties’ intent).