Trustees of the Twin City Bricklayers Fringe Benefit Funds v. Superior Waterproofing, Inc.

450 F.3d 324
CourtCourt of Appeals for the Eighth Circuit
DecidedJune 7, 2006
Docket05-3112
StatusPublished
Cited by35 cases

This text of 450 F.3d 324 (Trustees of the Twin City Bricklayers Fringe Benefit Funds v. Superior Waterproofing, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Trustees of the Twin City Bricklayers Fringe Benefit Funds v. Superior Waterproofing, Inc., 450 F.3d 324 (8th Cir. 2006).

Opinion

MURPHY, Circuit Judge.

The Trustees of the Twin City Bricklayers Fringe Benefit Funds brought this action against Superior Waterproofing, Inc. and its sole owner Raymond Paschke (collectively Superior) for violation of a statewide collective bargaining agreement (and a related interim independent agreement) with the Bricklayers and Allied Craft Workers Union Local No. 1 of Minnesota (the Union). Subsequently Superior filed a third party complaint against the Union for fraudulent inducement. The Union moved to dismiss Superior’s complaint, and the district court 1 granted the motion after concluding that the third party claims were preempted under § 301 of the Labor Management Relations Act. Superior appeals, and we affirm.

I.

Superior is a Minnesota corporation formed in 1980 by Paschke, its president *327 and sole shareholder. It specializes in caulking and waterproofing, and a number of its craft employees are members of the Union. Since 1981 Superior has been a party to a statewide collective bargaining agreement (CBA) with the Union, along with many other independent employers and several large trade organizations. Paschke also signed a separate interim independent agreement in 2001 which made him personally liable for Superior’s obligations under the CBA.

Under Article 23 of the CBA, Superior is required to contribute to a multiemployer fringe benefit plan, defined under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1002(37). The plan to which Superior agreed to contribute under the CBA provides pension, health, welfare, and other benefits to covered employees, and it is administered by the Trustees. Article 23 of the CBA requires employers to make monthly fringe benefit contributions “for each hour worked by all Employees covered by this Agreement,” to submit monthly fringe benefit contribution Reporting Forms, and to “furnish ... on demand, all necessary employment and payroll records relating to its Employees and persons performing work covered by this Agreement ... that may be required in connection with the administration of the Trust Funds.” It also contains the parties’ acknowledgment that provisions “establishing rates of pay, wages ... and other terms and conditions of employment, including fringe benefits, apply to Employees employed in job classifications within the jurisdiction of the Union, regardless of whether or not such Employees are members of the Union.” In addition, Article 27 of the CBA provides that “(t)his Agreement covers the entire understanding between the parties hereto.”

In April 2004, the Trustees informed Superior that they intended to conduct a fringe benefit compliance audit and they demanded relevant employment, payroll, and fringe benefit contribution records pursuant to Article 23 of the CBA. In their first party complaint, the Trustees allege that them demand for records was prompted by Superior’s breach of the CBA and interim independent agreement by its failure to submit the required monthly contribution Reporting Forms and the required contributions for many of its covered employees. The complaint also alleges that Superior has failed to cooperate with the compliance audit. Because of this failure the Trustees subsequently demanded payment of over $50,000 in delinquent fringe benefit contributions. When Superior refused, the Trustees brought this action to recover the delinquent contributions together with liquidated damages, reasonable attorney fees, and audit costs.

Superior asserts in its answer to the Trustees’ complaint that it had an understanding that it did not have to make contributions and submit Reporting Forms for all of its eligible employees and that any such obligations were procured through fraud. In an affidavit Paschke claims that shortly after he formed Superi- or, he told the Union business manager George Heppelmann that he wanted to sign on to the statewide CBA to be eligible for union only jobs, but that he could not afford to make union fringe benefit contributions for all of his craft employees. Heppelmann allegedly told him that it would be sufficient to place “two or three” employees in the Union and make contributions only on their behalf. Paschke claims that this was consistent with his own past experience working as a tuck-pointer and caulker for a signatory to the statewide CBA who had not paid union wages or made fringe benefit contributions for him, allegedly with Heppelmann’s ap *328 proval. Paschke claims it was because of this experience that he agreed to sign on to the statewide CBA.

Superior has repeatedly renewed its participation in the CBA over the last twenty five years, but it contends that the Union has always known that contributions were being made for at most “about half’ of its craft employees and that the Union assisted this arrangement by informing Paschke when particular jobs were union only so that he would know which employees could staff them. It asserts that it has established a separate fringe benefit plan for its non union employees to which it has contributed more than $25,000.

After the Trustees filed their first party complaint against Superior for breach of the CBA and the interim independent agreement, Superior filed a grievance with the Union. The grievance asked that the Union intercede on Superior’s behalf and indemnify it for the delinquent contributions and other costs. The Union declined to process the grievance for the reason that disputes about fringe benefit payments are not covered by the grievance provisions of the CBA.

Superior then submitted an unfair labor practice charge to the National Labor Relations Board (NLRB), alleging that the Union had failed to engage in good faith negotiations in violation of the National Labor Relations Act (NLRA), 29 U.S.C. § 151 et seq., by fraudulently inducing the company to enter into the CBA. Cf NLRB v. Wooster Div. of Borg-Warner Corp., 356 U.S. 342, 359, 78 S.Ct. 718, 2 L.Ed.2d 823 (1958) (Harlan, J., concurring in part) (obligation to bargain collectively includes duty to negotiate in good faith). By letter dated September 21, 2004, the NLRB regional director dismissed Superi- or’s charge because the applicable CBA is a prehire agreement covered by § 8(f) of the NLRA, 29 U.S.C. § 158(f). 2 In contrast to that part of the NLRA governing collective bargaining generally, see 29 U.S.C. § 158(d), section 8(f) contains no good faith negotiation requirement, and the Board has chosen not to imply one. See Sheet Metal Workers Local 9 (Concord Metal), 301 NLRB 140, 145 (1991). The regional director’s dismissal of Superior’s charge was upheld in a November 30, 2004 letter from the NLRB General Counsel whose decision was the Board’s final determination.

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Bluebook (online)
450 F.3d 324, Counsel Stack Legal Research, https://law.counselstack.com/opinion/trustees-of-the-twin-city-bricklayers-fringe-benefit-funds-v-superior-ca8-2006.