Gould ex rel. Central Pension Fund of the International Union of Operating Engineers & Participating Employers v. Lambert Excavating, Inc.

870 F.2d 1214
CourtCourt of Appeals for the Seventh Circuit
DecidedMarch 9, 1989
DocketNo. 88-1674
StatusPublished
Cited by4 cases

This text of 870 F.2d 1214 (Gould ex rel. Central Pension Fund of the International Union of Operating Engineers & Participating Employers v. Lambert Excavating, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gould ex rel. Central Pension Fund of the International Union of Operating Engineers & Participating Employers v. Lambert Excavating, Inc., 870 F.2d 1214 (7th Cir. 1989).

Opinions

WILL, Senior District Judge.

This is an appeal from the district court’s order granting the plaintiffs’ motion for a preliminary injunction and ordering the defendant to make delinquent and future contributions to certain employee benefit funds. We affirm the issuance of the preliminary injunction with one modification.

Background

The plaintiffs brought this action under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001, et seq., seeking, among other things, a preliminary injunction preventing Lambert Excavating, Inc. (“Lambert”), an Indiana corporation, from failing to make contributions to plaintiffs’ employee benefit trust funds for prospective obligations pending a resolution of the underlying disputes. See 29 U.S.C. §§ 1132, 1145. The plaintiffs are fiduciaries of the funds. They also seek damages for delinquent contributions, prejudgment interest, liquidated damages, attorneys’ fees and costs.

Lambert’s alleged obligation is based on a collective bargaining agreement it executed with Local 103 of the International Union of Operating Engineers (the “Union”) on March 15,1985. The agreement is a construction industry “pre-hire” agreement covered by Section 8(f) of the Taft-Hartley Act, 29 U.S.C. § 158(f). Under that provision, construction industry employers and unions may sign collective bargaining agreements even though the union may not represent a majority of the employer’s employees. Such agreements may be repudiated at any time by either party before the union achieves representation of a majority of the employees. Jim McNeff, Inc. v. Todd, 461 U.S. 260, 265-66, 103 S.Ct. 1753, 1756-57, 75 L.Ed.2d 830 (1983); Int’l Ass’n of Bridge, Structural & Ornamental Iron Workers, Local Union 103, AFL-CIO v. Higdon Constr. Co., Inc., 739 F.2d 280, 282 (7th Cir.1984).

However, a union may enforce an employer’s pre-hire agreement obligations despite not representing a majority of the workers, so long as the contract has not been repudiated. McNeff, 461 U.S. at 269-71, 103 S.Ct. at 1758-59. In addition, if the agreement has not been repudiated, it becomes fully binding once the union achieves majority representation. Mesa Verde Constr. Co. v. N. Cal. Disk Council of Laborers, 820 F.2d 1006, 1010 (9th Cir.1987). The contract here provides, among other things, that Lambert will make monthly contributions to the funds based on the number of hours worked by Union members. Plaintiffs’ Exhibit 11, 1116; Exhibit 12, Article 41; Exhibit 13, II56.1 Not all contributions (allegedly owed) were paid, although some were.

Lambert contends that before March of 1985 it had not signed a contract with the Union since 1977 and had operated primarily as a non-Union contractor, although it had employed some members of the Union during that time. Don Lambert, President of the defendant-appellant, claims that when he signed the March 15, 1985 contract on behalf of the defendant he specifi[1216]*1216cally told Leon Goodman and Leon Smith, the two Union representatives negotiating on behalf of the Union, that he intended to comply with the contract only on a single construction project for Eli Lilly and thereafter to resort to his “old ways,” i.e., employing non-Union members. Negotiations for the March 15, 1985 contract occurred just after the Eli Lilly construction project began.

Goodman and Smith testified that they had no recollection of any oral limitation on the March 15, 1985 contract’s scope. It is undisputed that the written contract does not contain any such limitation.2 In addition, Mr. Lambert testified that he did not ask that such a limitation be placed in the contract. Deposition of Don Lambert at 30-31. Lambert’s work on the Eli Lilly project lasted between two and three weeks.

The plaintiffs argue that Lambert has been a party to various collective bargaining agreements with the Union since 1966, including memorandum agreements and renewals thereof. These agreements allegedly affected wages, hours and working conditions. According to the Union, Lambert had been breaching these contracts in one way or another until 1985, when the breaches became more significant. Up until that time, Lambert and the Union were able to resolve their differences (e.g., projects were restaffed with Union members). The alleged breach in question relates to wages paid and contributions owed to the benefit funds. The only contract in issue is the one executed on March 15, 1985.

The plaintiffs also argue that Lambert never indicated that he intended to terminate the March 1985 contract almost immediately after its execution, i.e., after the Eli Lilly project. Moreover, Lambert has in fact made certain contributions to the Union pursuant to the contract in order to maintain several of his employees’ eligibility for health benefits. Such payments have continued even after the hearing before the district court on the plaintiffs’ motion for a preliminary injunction. In addition, Lambert has continued to acquiesce in the Union’s demands to replace some non-Union members with Union members on non-Eli Lilly projects which he would not have to do if the contract had been repudiated.

A hearing on the plaintiffs’ motion for a preliminary injunction was held on October 28, 1986. Lambert argued that the collective bargaining agreement was not enforceable prospectively because it was limited to one (completed) construction project and because the contract had been repudiated by Lambert. According to Lambert, the Union never achieved majority representation and Lambert had repudiated the contract. At the time of the Eli Lilly project, Lambert had approximately twelve to fifteen employees, five of whom were members of the Union. The present majority/minority status of the Union is not in issue on appeal.

After the presentation of evidence, the district court allowed the plaintiffs to take additional discovery and file a supplemental brief with respect to issues raised during the hearing which were not raised before. Subsequently, both parties took depositions (four in total) and filed additional briefs. On February 4, 1988, the district court ruled that the March 15, 1985 contract had not been repudiated and was enforceable [1217]*1217prospectively. The district court issued an injunction requiring Lambert to pay delinquent contributions (since August 1986) and future contributions as they became due.

Standard Of Review

ERISA provides for civil enforcement, including an injunction, of an employer’s obligations to make contributions to pension plans. 29 U.S.C. §§ 1132(a)(3), 1145. There are no specific procedures under ERISA, however, which cover the issuance of injunctions. Accordingly, the right to injunctive relief is determined based on traditional standards. Sheet Metal Workers’ Intern. Ass’n, Local 206 v. West Coast Sheet Metal Co., 660 F.Supp. 1500, 1503-06 (S.D.Cal.1987);

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Bluebook (online)
870 F.2d 1214, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gould-ex-rel-central-pension-fund-of-the-international-union-of-operating-ca7-1989.