Contractor Does Not Have to Make Double Benefit Fund Payments Despite Competing Union’s Claim of Territory
A contractor that allegedly assigned work to the workers of the wrong Bricklayers local was not required to pay contributions into both locals’ benefit funds, the U.S. Court of Appeals for the Sixth Circuit (KY, MI, OH, TN) has held.
The contractor, OCP Contractors, Inc., is a party to a collective bargaining agreement (CBA) with the Bricklayers’ Toledo Union Local 886 as well as to a CBA with the Bricklayers’ Michigan Local 9. The two locals share the territory of southern Michigan. OCP was hired for two jobs in southern Michigan and assigned the work to Local 886. The company made contributions to Local 886’s health care fund in accordance with the Local 886 CBA. It did not make contributions to Local 9’s health care fund for the work performed on the projects. During a routine audit, the trustees of Local 9’s fund discovered that OCP had performed work in Local 9’s territory and demanded contributions. When OCP refused to make double payments, the trustees sued, arguing that the Local 9 CBA created an obligation for OCP to contribute to the fund for all work done in Local 9’s territory, regardless of who actually performed the work.
The court disagreed. “In situations where an employer is exposed to conflicting CBAs that purport to impose a duty to ‘double pay’ for the same job,” the court stated, “the collecting trustee must show that the CBA created a contractual obligation for the employer to make contributions to both plans, even though only one union did the work.” The issue turns on the particular terms of the contract.
In this case, the Local 9 CBA provides:
The amount of contributions shall be at the rate specified in the appropriate Article of this Agreement on actual hours worked without regard to whether the Employee was working on straight or overtime and shall be paid on all Employees working under this Agreement whether they are probationary, non-union Employees, temporary, seasonal, or casual Employees.
The CBA defines term “Employee” as “Bricklayers & Allied Craftworkers Local Union #9 Michigan of the International Union of Bricklayers and Allied Craftworkers.”
The court concluded that this language creates no duty on the part of OCP to contribute to the Local 9 fund for work performed by Local 886 workers. First, the workers who performed the work were not “Employees” under the terms of the CBA. Second, the work was not performed “under this Agreement” as required in the CBA. Finally, the CBA is silent on the issue of double paying. Thus, the trustees failed to show that OCP had any contractual obligation to pay for work done under a competing CBA.
Trustees for Mich. BAC Health Care Fund v. OCP Contractors, Inc., Case Nos. 04-1148, 04-1463 (6th Cir., 6/17/05).
Union contractors are cautioned to note that the case turned on the relevant language in the CBA. In some cases involving competing claims for work, courts have forced contractors to make double payments to benefit funds. See, e.g., Trustees of the Glaziers, Architectural Metal & Glass Workers Local 27 Welfare & Pension Funds v. Glass Masters, Ltd., reported in Human Resource & Labor News, Issue #2-04.
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