Suburban Teamsters of Northern Illinois Health, Welfare & Pension Funds v. Callaghan Paving, Inc.

583 F. Supp. 105, 1984 U.S. Dist. LEXIS 20350
CourtDistrict Court, N.D. Illinois
DecidedJanuary 17, 1984
DocketNo. 83 C 0828
StatusPublished
Cited by3 cases

This text of 583 F. Supp. 105 (Suburban Teamsters of Northern Illinois Health, Welfare & Pension Funds v. Callaghan Paving, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Suburban Teamsters of Northern Illinois Health, Welfare & Pension Funds v. Callaghan Paving, Inc., 583 F. Supp. 105, 1984 U.S. Dist. LEXIS 20350 (N.D. Ill. 1984).

Opinion

MEMORANDUM OPINION AND ORDER

WILLIAM T. HART, District Judge.

Plaintiffs, the Suburban Teamsters of Northern Illinois Health, Welfare and Pension Funds (the “Funds”) bring this action against defendants Callaghan Paving, Inc. (“Callaghan Paving”) and Daniel Callaghan to collect fringe benefit contributions allegedly owed the Funds by Callaghan Paving. The Funds also seek an audit of Callaghan Paving’s records and costs and liquidated damages pursuant to an alleged collective bargaining agreement and to section 502(g)(2) of the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1132(g)(2). Count I seeks recovery from Callaghan Paving and Count II is pendent and seeks recovery from the company’s President and principal owner, Daniel Callaghan, as the “alter ego” of Callaghan Paving. Jurisdiction over Count I is asserted pursuant to section 301 of the Labor Management Relations Act, 29 U.S.C. § 185(a) and section 502 of ERISA.

Presently before the Court is the defendants’ motion for summary judgment or, in the alternative, for partial summary judgment limiting the period of liability to two days. For the reasons stated below, partial summary judgment is granted in favor of the defendants and against the Funds.

[107]*107Facts

Callaghan Paving is an Illinois roadway paving corporation, which at the relevant time performed work mainly in Cook County, Illinois. None of its employees — driver or other — has belonged to Teamsters Local 673, a union based in DuPage County, Illinois.

On October 22, 1975 Daniel Callaghan was visited at a job site in Oak Park, Illinois by Robert Venard (“Venard”), Secretary-Treasurer for Local 673. It is undisputed that two hours later Daniel Callaghan signed a preprinted agreement presented to him by Venard. The form which Daniel Callaghan signed provided, inter alia, for monthly payments to the Funds and union dues for Callaghan Paving employees. The form also referenced various trust agreements which were not attached and unquestionably never were signed by Daniel Callaghan nor submitted for signature to him by Venard or officials of the Funds. The reason for and validity of the signing is contested. The defendants assert that Venard threatened to close down the job unless an agreement was signed and, therefore, the agreement is invalid as it was coerced. The Funds argue that an enforceable collective bargaining agreement was made.

After signing, Daniel Callaghan gave Venard one or two checks, for initiation fees and union dues for the one driver working that day. Two days later Daniel Callaghan stopped payment on the checks. Venard then called to inquire about the dishonored checks and allegedly was told that the “company did little work in DuPage County and that if [the] drivers were to join any Teamsters Local they would join Local 731.” Local 731 serves Cook County drivers.

By affidavit, Daniel Callaghan avers that whenever he later met Venard, Venard would indicate his continued desire to sign up Callaghan Paving employees as members of Local 673. To the contrary, Venard has no recollection of meeting or speaking with Daniel Callaghan after calling about the dishonored checks.

Callaghan Paving allegedly did not rely on the purported collective bargaining agreement: it never paid the wage rate set forth therein. Other than the initial payment on October 22, 1975, it did not pay any union dues to Local 673 on behalf of its employees despite an express dues checkoff provision in the purported agreement. It is undisputed that Venard never transmitted to Local 673 or the Funds any subsequent payments on behalf of Callaghan Paving or any relevant reports. Also no driver employed by Callaghan Paving joined Local 673 and no shop steward was appointed by Local 673. No complaints were received by Callaghan Paving from either its employees, Local 673 or the Funds on matters germane to this case. No grievance proceedings were held in accordance with the disputed collective bargaining agreement.

Beginning in August 1982, driver-employees of Callaghan Paving joined Local 731, the Cook County local. On January 3, 1983, the Funds requested an audit of Callaghan Paving’s record as provided by the trust documents referred to in the agreement. On January 6, 1983, Callaghan Paving replied that it was not then and never had been contractually obligated to Local 673, and that its employees were not members of Local 673. On February 8, 1983, the Funds initiated this action.

The pending motions contend that no enforceable collective bargaining agreement was formed due to duress. In the alternative, they argue that if a contract was formed, it is a voidable “prehire” agreement which was repudiated two days after execution. Thus, the defendants argue that their liability, if any, is limited to contributions to the Funds for two days.

Discussion

Generally, an employer who deals with a union which has not attained the support of a majority of his workers commits an unfair labor practice. See International Ladies Garment Workers Union v. NLRB, 366 U.S. 731, 737-38, 81 S.Ct. 1603, 1607, 6 L.Ed.2d 762 (1961). An exception is [108]*108made for employers in the construction industry who are permitted by the National Labor Relations Act (“NLRA”) to make “prehire” agreements with a union regardless of its majority status representation. 29 U.S.C. § 158(f). The rationale underlying the construction industry exception was explained by the Ninth Circuit:

As jobs begin and end, construction workers frequently change employers. Due to this, Congress has seen fit to allow so-called “pre-hire” agreements in that industry. These agreements may be signed before the union represents a majority of the employer’s employees, and may continue in duration through more than one of the employer’s jobs, even if the employer goes through a high employee turnover. These agreements allow the employees some of the wage and benefit advantages of union representation, as well as relative wage stability. The employer is assured a qualified pool of workers to choose from when it needs them, protection against labor unrest during the period of the contract, and predictable labor costs, an invaluable tool in the bidding process.

Todd v. Jim McNeff, Inc., 667 F.2d 800, 802 (9th Cir.1982), aff҆d — U.S.-, 103 S.Ct. 1753, 75 L.Ed.2d 830 (1983).

A prehire agreement, however, is not synonymous with a collective bargaining agreement: the former is only the first step toward achieving the latter relationship which cannot mature unless the union actually achieves majority status. NLRB v. Local Union No. 103 (“Hidgon Construction Co. ”), 434 U.S. 335, 345, 98 S.Ct. 651, 657, 54 L.Ed.2d 586 (1978). Until a majority of employees indicate a willingness to be represented by a union, the prehire agreement is voidable. Id. 434 U.S. at 341, 98 S.Ct. at 655. In

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583 F. Supp. 105, 1984 U.S. Dist. LEXIS 20350, Counsel Stack Legal Research, https://law.counselstack.com/opinion/suburban-teamsters-of-northern-illinois-health-welfare-pension-funds-v-ilnd-1984.