Contractor with Overlapping Jurisdictional Clauses Must Pay Benefits Twice
A contractor that is signatory to collective bargaining agreements (CBAs) with both the Glaziers and the Iron Workers must make contributions to both unions’ employee benefit funds for covered work, even though only members of the Iron Workers performed the work, the U.S. Court of Appeals for the Seventh Circuit (IL, IN, WI) held.
The contractor, Glass Masters, knew that its CBAs had overlapping jurisdictional language but believed it had the right to choose which union to use on any particular job. Between January 1, 1999, and July 31, 2002, Glass Masters performed two jobs which were covered by both CBAs. It assigned the glazing work to the Iron Workers and made the required contributions to the Iron Workers’ pension and welfare funds. It assigned none of the work to the Glaziers and made no contributions to the Glaziers’ funds. The trustees of the Glaziers’ funds then sued under the Employee Retirement Income Security Act (ERISA) to recover unpaid contributions, and a district court granted summary judgment for the funds. (See Human Resource & Labor News, Issue No. 5-03.)
The circuit court affirmed. The issue is whether the assignment of glazing work to members of the Iron Workers excuses the contractor from making contributions to the Glazier’s fund for the same work. The court said that the “short answer…is no.” ERISA further obligates an employer to make contributions to a benefit fund that it is obligated to make under contract. Therefore, if work done by a contractor’s employees is work cognizable under the contractor’s CBA, then the contractor must make contributions for that work unless the CBA clearly provides otherwise. Glass Master’s CBA with the Glaziers does not provide otherwise. If the CBA provides that contributions to Glazier funds are to be made for glazing work, then Glass Master cannot avoid its obligations by assigning that work to nonunion workers or, as here, to members of a different union. The clear terms of the Glaziers CBA requires contributions for glazing work.
“It is unfortunate that [Glass Masters’ owner] will now have to contribute to the funds of two unions, but he is in a pickle that he created,” said the court. “The time to avoid paying double here was before the work was done by getting an agreement or a pre-work resolution of the dispute. After the work was done was too late.” In short, the Glaziers CBA requires contributions to the Glaziers funds for all hours of work covered by the CBA without regard to the union affiliation of the workers who performed the work.
Trustees of the Glaziers, Architectural Metal & Glass Workers Local 27 Welfare & Pension Funds v. Glass Masters, Ltd., Case No. 03-2546 (7th Cir., 4/20/04).
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