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Flynn v. Fischer Tile & Marble

February 26, 2003

JOHN FLYNN, ET AL., PLAINTIFFS,
v.
FISCHER TILE & MARBLE, INC., DEFENDANT.



The opinion of the court was delivered by: Ellen Segal Huvelle, United States District Judge

MEMORANDUM OPINION

Plaintiffs seek contributions that defendant allegedly failed to pay to an employee benefit plan, in violation of section 515 of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1145. Defendant's liability to the plan hinges on whether it was bound by a 1997 collective bargaining agreement between the Tile Contractors' Association of America ("TCAA") and the Bricklayers and Allied Craftspersons International Union ("BAC International"), or in the alternative, whether it had negotiated valid independent agreements for work it performed outside the jurisdiction of its local union agreements. Since there are material facts in dispute, these issues cannot be decided as a matter of law, and thus, both plaintiffs' and defendant's motions for summary judgment will be denied.

BACKGROUND

Plaintiffs are the fiduciaries of the Bricklayers & Trowel Trades International Pension Fund ("IPF"). (Compl. ¶ 1.) The IPF is a multi-employer employee benefit plan within the meaning of sections 3(3) and 3(37) of ERISA, 29 U.S.C. § 1002(3), (37), authorized to effect collections on behalf of the BAC International and the International Masonry Institute ("IMI"). (Id. ¶ 4.) It is also authorized to file suit on behalf of affiliated local union pension funds. *fn1 (Id.)

Defendant Fischer Tile & Marble, Inc. ("Fischer Tile") is a licensed California tile contractor in Sacramento, California. (Memorandum of Points and Authorities in Support of Defendant's Motion for Summary Judgment ["Def.'s Mem."] at 1.) The TCAA is a nationwide association of tile contractors that provides a number of services to its members, including the negotiation of "such national labor agreements as the Board of Directors, in the exercise of its discretion, shall determine to be in the best interests of a majority of its contractor members." *fn2 (TCAA Bylaws at 2.) Defendant has been a member of TCAA for more than fifty years. (Statement of Undisputed Material Facts in Support of Fischer Tile's Motion for Summary Judgment ["SSUMF"] ¶ 8.

Fischer Tile was also a member of the Associated Tile Contractors of Northern California ("ATCONC"), another multi-employer group, at all relevant time periods. (Def.'s Mot. Ex. 1, Fischer Dep. at 23-24.) ATCONC negotiated collective bargaining agreements exclusively with the BAC Local 29, the union representative of all tile setters and finishers employed by Fischer Tile and other ATCONC employers. (SSUMF ¶ 27.) The jurisdiction of BAC Local 29 spanned fifteen Northern California counties around Sacramento ("Sacramento Area Counties"). The remaining thirty-one Northern California counties, the "Bay Area Counties," were in the jurisdiction of BAC Local 19 (later Local 3) [hereinafter "BAC Local 19(3)"]. Fischer Tile was not affiliated with the multi-employer group that negotiated with BAC Local 19(3). (Def.'s Mem. at 2.) However, Fischer Tile did perform work outside the Sacramento Area Counties and it is Fischer Tile's liability to the IPF for this work that is at issue here.

In 1997, the TCAA adopted a collective bargaining agreement [hereinafter the "Agreement"] negotiated with the BAC International. The Agreement purported to bind all TCAA members by stating that TCAA had adopted it "for and on behalf of" its members and defining the employers that would be bound by the Agreement as:

[i]ndividuals or firms belonging to the 'Tile Contractors Association of America, Inc.' who have not notified the International Union of Bricklayers and Allied Craftworkers of their intent to enter into the collective bargaining process for their own International Agreement at least sixty (60) but no more than (90) days prior to the expiration date of this Agreement or within thirty (30) days of the effective date of this Agreement. (Pls.' Mot. for Summary Judgment ["Pls.' Mot."] Ex. B, Lippert Dep. Ex. 21, 1997 TCAA Agreement at 2.

Thus, members could opt out of the Agreement by notifying the BAC International that they did not want to participate in the Agreement and would instead negotiate their own collective bargaining agreements. *fn3

On January 19, 2001, plaintiffs filed suit under section 502(a)(3) of ERISA, 29 U.S.C. § 1132(A)(3), to collect delinquent pension fund contributions allegedly owed by defendant for the period beginning with the TCAA Agreement's January 1, 1997 effective date and running through December 31, 1999, after which time defendant had formally opted out by notice dated October 20, 1999. By Order issued February 5, 2002, the Court denied defendant's motion to dismiss or transfer the action for improper venue. Having completed discovery, the parties have now filed cross-motions for summary judgment pursuant to Fed. R. Civ. P. 56. Plaintiffs argue that the undisputed evidence establishes that defendant was bound by the TCAA Agreement by virtue of its membership in TCAA, and its course of conduct, including its failure to opt out of the Agreement. In response, defendant moves for summary judgment on the grounds that the undisputed evidence fails to support a finding of an unequivocal intention to be bound by the Agreement, or alternatively, that it was exempt from the Agreement because it made all required contributions pursuant to collective bargaining agreements with BAC local unions.

LEGAL ANALYSIS

I. 1997 TCAA Agreement

The test for determining whether an employer is bound by a collective bargaining agreement negotiated by a multi-employer association is well-established and was adopted in this Circuit in Teamsters 174 v. N.L.R.B., 723 F.2d 966 (D.C. Cir. 1983). In order to bind an employer, it must be determined that the "'members of the group have indicated from the outset an unequivocal intention to be bound in collective bargaining by group rather than individual action.'" Id. at 972 (quoting Western States Reg'l Council No. 3, Int'l Woodworkers of America v. N.L.R.B., 398 F.2d 770, 773 (D.C. Cir. 1968)). See also Charles D. Bonanno Linen Serv., Inc. v. N.L.R.B., 454 U.S. 404, 419-20 (1982) (Stevens, J., concurring); Trustees of the UIU Health and Welfare Fund v. New York Flame Proofing Co., 828 F.2d 79, 83 (2d Cir. 1987); Moriarty v. Glueckert Funeral Home, 155 F.3d 859, 865 (7th Cir. 1998); Komatz Construction v. N.L.R.B., 458 F.2d 317, 321 (8th Cir. 1972); Joseph McDaniel, 226 N.L.R.B. 851, 853, enforced sub nom. N.L.R.B. v. Beckham, Inc., 564 F.2d 190 (5th Cir. 1977). But, as cautioned by this Circuit, this test is a stringent one, and the "intention to be bound must be unequivocal - it cannot be ambiguous or susceptible to numerous interpretations by the party who consents to engage in group bargaining." Teamsters 174, 723 F.2d at 972.

The application of this test is easy where the party has actually signed the collective bargaining agreement or has explicitly delegated bargaining authority to the multi-employer group. See, e.g., Shearon Envtl. Design Co. v. Laborers' District Council, 1993 WL 476232 (E.D. Pa. Nov. 18, 1993); Ruan Transport Corp., 234 N.L.R.B. 241 (1978). Similarly, even though it is agreed that "mere membership" in an employers' association is not sufficient to bind the employer to an agreement, an intent to be bound will be found "if the 'principal, if not virtually sole activity' of the association is to negotiate collective bargaining agreements on behalf of its members and if the long-standing, ...


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