APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA Civil Action No. 75-1256.
Staley,*fn* Hunter and Garth, Circuit Judges.
Doubarn Sheet Metal, Inc., (Doubarn) appeals from a final order of the District Court for the Eastern District of Pennsylvania directing that certain agreements and checks deposited with the court pending the outcome of trial be turned over to Local 19 of the Sheet Metal Workers' International Association (Local 19). The issue on appeal is the district court's interpretation of a labor agreement between Doubarn and Local 75 of the same union. For reasons that follow, we reverse.
Labor relations within the sheet metal contracting industry are elaborately structured, with employer and labor organizations at both the local and national levels. Contractors in given geographical areas form trade associations. These local associations have combined to form the Sheet Metal and Air-Conditioning Contractors National Association (SMACNA). Employees generally belong to locals of the Sheet Metal Workers' International Association (SMWIA). An SMWIA local engages in multi-employer collective bargaining with the local SMACNA chapter.
Employers, however, often perform work outside the geographical jurisdiction of the local unions with which they have entered collective bargaining agreements. In order to avoid any resulting conflicts, SMACNA and SMWIA formed the Joint Labor Relations Adjustment Committee. It comprises members of both organizations and meets periodically to negotiate uniform language for the basic provisions to be inserted in the collective bargaining agreement between each local union and its corresponding SMACNA chapter. These negotiations result in a Standard Form of Union Agreement, which is intended to permit contractors to bid on jobs anywhere in the nation with assurance of uniform labor conditions. The Agreement also guarantees local unions that locally negotiated wages and working conditions will not be undercut by outside employers who import workers from areas where the wages are lower.
To this latter end, the Standard Form of Union Agreement provides that when an employer performs work outside of the local union's geographical jurisdiction, he may send no more than two employees to the job, and those employees must be paid the higher of their local wage scale and the scale at the job location. In all other respects, the employer is to be governed by the working conditions established by the collective bargaining agreement negotiated by the local union that has geographical jurisdiction over the work.
Doubarn is a California sheet metal contractor. Through its local SMACNA chapter, it is signatory to a collective bargaining agreement with Local 75 of the SMWIA. That agreement contains, virtually verbatim, the provisions of the Standard Form of Union Agreement that deal with work outside the geographical jurisdiction of the Local union. Article VIII, Sections 5 and 6 of the agreement read as follows:
" SECTION 5. When the Employer has any work specified in Article I of this Agreement to be performed outside of the area covered by this Agreement and within the area covered by another Agreement with another union affiliated with the Sheet Metal Workers' International Association, and qualified sheet metal workers are available in such area, he may send no more than two (2) sheet metal workers per job into such area to perform any work which the Employer deems necessary, both of whom shall be from the employer's home jurisdiction. All additional sheet metal workers shall come from the area in which the work is to be performed. Journeymen sheet metal workers covered by this Agreement who are sent outside of the area covered by this Agreement shall be paid at least the established minimum wage scale specified in Section I of this Article but in no case less than the established wage scale of the local agreement covering the territory in which such work is performed or supervised, plus all necessary transportation, travel time, board and expenses while employed in that area, and the Employer shall be otherwise governed by the established working conditions of that local Agreement. If employees are sent into an area where there is no local Agreement of the Sheet Metal Workers' International Association covering the area then the minimum conditions of the home local union shall apply.
SECTION 6. In applying the provisions of Sections 2, 4 and 5 of this Article VIII, the term 'wage scale' shall include the value of all applicable hourly contractual benefits in addition to the hourly wage rate provided in said Section."
Local 19 of the SMWIA has geographical jurisdiction over sheet metal work in Philadelphia and its vicinity. Local 19 signed a collective bargaining agreement with the Roofing and Sheet Metal Contractors' Association of Philadelphia and Vicinity ("Philadelphia"), the Philadelphia chapter of SMACNA. That agreement contains the provisions of the Standard Form of Union Agreement governing wage scale and working conditions for work performed outside the geographical jurisdiction. But, in addition, it contains one major provision not found in the Standard Form or in the Doubarn-Local 75 agreement. This provision requires employers who are parties to make payments to the Stabilization Agreement of the Sheet Metal Industry Trust Fund (SASMI). These payments are made on behalf of each employee and amount to three percent of the employee's hourly gross pay. The SASMI fund is then used to pay benefits to qualifying sheet metal workers who are unemployed because of periodic unemployment in the industry. Workers qualify by working 1200 hours over a twelve month period or 2000 hours over a twenty-four month period in locations where employers are required to make the SASMI contributions.
In April, 1975, Doubarn entered into a contract to perform sheet metal work in the Centre Square Building in Philadelphia. On April 28, two Doubarn employees, members of Local 75, arrived in Philadelphia to perform that work. Before they could begin, representatives of Local 19 demanded that Doubarn make payments to SASMI on behalf of the employees working in Philadelphia. ...