The opinion of the court was delivered by: Ellen Segal Huvelle, District Judge
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.
Plaintiffs are the fiduciaries of the Bricklayers & Trowel Trades
International Pension Fund ("IPF"). (Compl. ¶ 1.) The JPF 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.)
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
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,
universally observed and universally known custom is that members are
bound by such agreements." New York Flame, 828 F.2d at 83. See also
Glueckert Funeral Home, 155 F.3d at 867.
But contrary to defendant's argument (see Def.'s Mem. at 6; Defendant's
Memorandum of Points and Authorities in Opposition to Plaintiffs Motion
for Summary Judgment ["Def.'s Opp." at 2), an unequivocal intent to be
bound can also be inferred even where there is no express delegation of
bargaining authority or direct participation ...