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WASHINGTON AREA CARPENTERS' WELFARE FUND v. OVERHE

April 22, 1980

WASHINGTON AREA CARPENTERS' WELFARE FUND et al., Plaintiffs,
v.
OVERHEAD DOOR CO., OF METROPOLITAN WASHINGTON, Defendant.



The opinion of the court was delivered by: GREEN

MEMORANDUM OPINION

This case comes before the Court on cross-motions for summary judgment. Plaintiffs (Funds) are various pension, welfare, and trust funds for a local carpenters' union. They bring this action under § 502(f) of the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1132, and § 301 of the Labor Management Relations Act of 1947, 29 U.S.C. § 185, to compel defendant, Overhead Door Co. of Metropolitan Washington (Overhead) to allow Funds to audit its records relating to employee contributions and to recover unpaid contributions that Overhead allegedly was required to make pursuant to an agreement with the carpenters' union. Funds also seek auditor's fees, attorney fees, costs and liquidated damages provided for in the agreement. The union itself is not a party to this action.

 Funds have commissioned an audit of the payroll records of the three employees for whom contributions were made; this audit concludes that Overhead owes contributions approximating $ 14,000. Overhead disputes the accuracy of the audit in that it included hours worked by the employees but not as carpenters. It has refused to allow Funds to audit its records relating to other employees.

 The parties have treated this contract as a "pre-hire" agreement, a type of agreement peculiar to the construction industry that may be entered into before all employees to be subject to it are hired, and before the union's membership encompasses a majority of the employees. Labor-Management Relations Act § 8(f), 29 U.S.C. § 158(f). This exception to the typical requirement that a union demonstrate majority support before it may bargain with management is an accommodation to the "transitory nature of the employer-employee relationship in (the construction) industry." N.L.R.B. v. Irvin, 475 F.2d 1265 (3rd Cir. 1973). In time the union must gain majority support if it expects to represent the employees, because only representatives of the majority may bargain with the employer. Act § 9(a), 29 U.S.C. § 159(a). Here, neither the union nor Overhead have petitioned for a representation election under 29 U.S.C. § 159(c), or taken any other steps to determine whether the union has achieved majority support.

 Overhead contends that since Funds have not demonstrated majority support, the pre-hire agreement and the agreement within it to make contributions are not enforceable. Funds argue that the pre-hire agreement is enforceable as long as majority support has not been disproven, and that even if the pre-hire agreement is found to be unenforceable, Overhead still must make contributions for all employees to the trust funds, under the rule that an employer may not assert any defenses it has to a union contract against a trust fund.

 I. Enforceability of the Pre-Hire Agreement

 The parties agree that resolution of this issue turns on the proper application and interpretation of N.L.R.B. v. Iron Workers Local 103, 434 U.S. 335, 98 S. Ct. 651, 54 L. Ed. 2d 586 (1978). In that case, the Supreme Court held that where a union which admittedly lacked majority support attempted to enforce its pre-hire agreement by picketing, it was guilty of the unfair labor practice of picketing for recognitional purposes, a violation of 29 U.S.C. § 158(b)(7). In arriving at this result, the Court affirmed the decision of the National Labor Relations Board, noting that

 
* * * Under the Board's view of § 8(f), a pre-hire agreement does not entitle a minority union to be treated as the majority representative until and unless it attains majority support in the relevant unit. Until that time the pre-hire agreement is voidable and does not have the same stature as a collective bargaining contract entered into with a union actually representing a majority of the employees and recognized as such by the employer.

 Iron Workers, 434 U.S. at 341, 98 S. Ct. at 655.

 The Court "concluded that the Board's construction of the Act, although perhaps not the only tenable one, is an acceptable reading of the statutory language . . . ." Id.

 The Blake decision, however, was disapproved of in a recent well-reasoned decision of the United States District Court for the District of Nebraska, which relied extensively on Iron Workers to resolve a dispute very similar to the one at bar. The case of Contractors, Laborers, Teamsters & Engineers Health & Welfare Plan v. Associated Wrecking Co., 484 F. Supp. 582 (D.Neb.1980), like the instant action, involved a suit to recover sums the defendant allegedly owed to the plaintiff trust funds pursuant to a pre-hire agreement. In that case, as here, the defendant contended that the union never obtained majority support and that the agreement, therefore, was unenforceable. The plaintiffs apparently offered no evidence to the contrary.

 The court in Associated Wrecking interpreted the Board's holding in Iron Workers as "that a § 8(f) agreement is "noneffective,' and thus unenforceable if the union never thereafter obtains majority status, and that, therefore, the employer may freely decide to ignore it until such time as majority status is obtained." Associated Wrecking, Daily Labor Report (BNA, Mar. 12, 1980), at D-2. It read the Supreme Court's holding in that case ...


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