August 18, 2004 / Issue No. 2-04
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Human Resource & Labor News Returns with New Look!
McCarron Slated to Explain Consolidations
Wage-Hour Administrator to Discuss the Davis-Bacon Survey Process
Generation Expert to Talk About Employing “Millennials”
HR Professionals Mingle and Learn at AGC’s HR Networking Forum
AGC Labor Lawyers Hold 20th Annual Symposium
AGC Supports Tripartite Initiative’s Recommendations for Action
How to Find Labor & HR Information on AGC's New Web Site
New Overtime Regulations Take Effect Aug. 23
Federal Contractors Must Post Beck Notice
AGC Partners with Labor Department on Compliance Assistance
Newly Negotiated Wage-and-Fringe Rates Down Slightly From Last Year
Agreement Not Signed by Authorized Company Official Does Not Obligate Contractor to Make Benefit Fund Contributions
Contractor with Overlapping Jurisdictional Clauses Must Pay Benefits Twice
Segal Company Reports on Multiemployer Pension Funding Levels and Investment Performance
NLRB Reverses Latest Grant of Representation Rights to Nonunion Employees
NLRB’s 10(k) Award Trumps Conflicting Arbitration Award
Diabetic Forklift Driver Denied Claim Under ADA

  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). [ return to top ]