The U.S. Court of Appeals for the Seventh Circuit (Ill., Ind., Wis.) has held that a contractor was required to make contributions to Taft-Hartley pension and health-and-welfare plans for all hours worked by a bargaining-unit employee, including non-bargaining unit work.
The contractor, DLF Construction, entered into a Memorandum of Joint Working Agreement (“MOA”) with Local 692 of the Cement Masons union in 2006. Under the MOA, DLF agreed to be bound to all area-wide CBAs between the union and employer associations. The CBAs required employers to make contributions to the pension and health-and-welfare plans.
Between 2006 and 2008, Panifilio Mata, a member of Local 692, performed cement-related work for DLF as well as other kinds of work, such as painting and installing hardwood floors. DLF made contributions on Mata’s behalf to the benefit funds designated in Local 692’s CBAs for hours Mata spent performing the cement-related (bargaining unit) work but not for hours he spent performing other (nonbargaining unit) work. After conducting an audit, the funds sued DLF to collect about $12,000 in contributions for the hours Mata worked on nonbargaining unit work.
DLF argued that it owed contributions only for bargaining unit work. It rested its claim on a paragraph in the MOA stating that the contractor agrees to be bound to the CBAs “for all aforesaid Cement Masons, Plasterer and Shop Hand employees doing bargaining work as described in the agreement” (emphasis added).
The court rejected DLF’s interpretation of that language. In addition to binding DLF to the CBAs, which the parties did not dispute, that language “establishes the type of employee covered under the CBA — i.e., an employee that does bargaining unit work,” said the court. “All this paragraph does is establish that, for an employee to be covered under the CBA, he or she must be an employee who does bargaining unit work; it does not limit the CBA’s coverage to employees doing only bargaining unit work.”
The court found that the language in the CBAs requiring DLF to make contributions to the funds for “each hour worked by employees covered by [the CBAs]” was straightforward and plain. “And employees covered by the CBAs are employees who are bargaining unit members — i.e., employees who perform work within the trade jurisdiction of the Cement Masons Union,” which is set forth in another section of the CBA. According to the court, the section setting forth the union’s trade jurisdiction merely describes the union’s trade activities for purposes of jurisdictional disputes. It was not intended to, and does not, define bargaining unit work for purposes of fringe benefit contributions.
Finding no language in either the MOA or the CBAs that limits DLF’s obligations to make benefit fund contributions, and finding that the CBAs are clear that DLF must make contributions for each hour worked by a covered employee, the court granted judgment in favor of the funds.
In light of this holding and as always, union contractors are advised to assign nonbargaining work to bargaining unit employees with caution, taking note of applicable language in labor agreements. AGC collective bargaining chapters are likewise advised to review their agreements for language similar to that in the present case and to consider the prudence of seeking modification of such language in future collective bargaining negotiations.
McCleskey v. DLF Construction, Inc., Case No. 11-1826 (7th Cir., 7/23/12).