On Appeal from the United States District Court for the Eastern District of Pennsylvania; D.C. Civil Action No. 89-02554.
Becker, Mansmann and Anthony J. Scirica, Circuit Judges.
Plaintiffs Sheet Metal Workers Local 19 ("the Union") and the Sheet Metal Workers Welfare, Pension, Annuity, Industry, Apprentice and Vacation Funds of Local 19 ("the Funds") instituted this action against 2300 Group, Inc., doing business as TM&M Storage Specialists ("TM&M"). The plaintiffs claimed that they were entitled to employee benefit fund contributions owed to the Funds and "work assessment fees" (i.e., dues) owed to the Union for the employment of two union members, David Gurney and James C. Powell, for the period January, 1983 to March, 1985, pursuant to the Employment Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq., and section 301 of the Labor Management Relations Act (LMRA), 29 U.S.C. § 185.*fn1
After a bench trial, the district court issued extensive findings of fact and conclusions of law. The court reaffirmed its earlier holding that the action was not barred by the statute of limitations. Moreover, it found that Powell had in fact performed no sheet metal work prior to April, 1983, and that no contributions were due for that period of time. Finally, the district court held that the plaintiffs were, as a matter of law, not entitled to contributions for all hours worked after Gurney and Powell began performing sheet metal work. Sheet Metal Workers Local 19 v. 2300 Group, Inc., No. 89-2554 (E.D. Pa. Oct. 12, 1990) [hereinafter " Sheet Metal III "]. We will affirm the district court's judgment with respect to the statute of limitations and Powell's hours. However, we will reverse the court's determination that the plaintiffs are not entitled to contributions for sheet metal work performed by A1-B1 employees, and will remand for calculation of the amounts due.
TM&M is a small closely held company that was involved in several different types of businesses, including interior moving services for large offices and the sale and installation of closet fixtures, shelving, and lockers. The Union's jurisdiction under the collective bargaining agreement included installation of shelving and lockers. In January, 1982, Barbara Boldt (the president of TM&M), her husband Fred Boldt (TM&M's vice president), and Eugene Fiocchi formed a corporation known as A1-B1 Installers. They intended this corporation to perform sheet metal work, including installation of metal lockers and shelving, as a subcontractor for TM&M and other contractors. David Gurney and James Powell worked for both A1-B1 and TM&M, performing sheet metal work for A1-B1 and non-sheet metal work for TM&M.
The core of this litigation concerns the interpretation and application of separate labor agreements that the Union reached with TM&M and A1-B1, the "Employer Agreement" and the "Specialty Agreement." The latter incorporates by reference the terms of the Employer Agreement, and also includes similar terms. At issue is the extent to which the Employer Agreement's union dues and Fund contribution provisions apply to A1-B1 employees.
The similarities and differences between the Employer Agreement and the Specialty Agreement are crucial to an understanding of the legal issues raised. The Employer Agreement expressly covered "all of the Employer's employees engaged in but not limited to [all types of described sheet metal work] and (e) all other work included in the jurisdictional claims of Sheet Metal Workers' International Association." Employer Agreement [hereinafter "EA"] Art. I (1). The Specialty Agreement is narrower in this regard, covering "employees of the employer engaged in but not limited to the handling, assembly, erection and installation of . . . Lockers and Shelving." Specialty Agreement [hereinafter "SA"] Art. I (1)(2).
The two agreements made identical provision for filing reports and payment to the Funds. Under the Employer Agreement, TM&M was required to file monthly reports and to make specific payments to the Funds on behalf of all covered employees. EA Art. XII (2). To ensure that TM&M contributed for all hours worked by a covered employee, the Employer Agreement required payments to be calculated on the basis of "hours of wages paid," which was defined as "the number of hours resulting from dividing gross wages by the employee's regular time hourly wage rate." EA Art. XII (1). The Specialty Agreement, in lieu of duplicating Article XII of the Employer Agreement, incorporated by reference the rules and regulations in the Employer Agreement concerning the payment of the various funds. SA Art. XIV.*fn2
The monthly reports filed by TM&M under these agreements included a certification that the contributions covered under the report conformed with the applicable collective bargaining agreements and trust agreements.*fn3 This certification was filed with each TM&M "Benefit Funds Work Assessment." As we will discuss more fully, A1-B1 employees were paid through TM&M's payroll, so the certification also appeared on their payroll forms.
The Employer Agreement also stated that only journeymen sheet metal workers and registered apprentices should be employed on any work covered in the Agreement, EA Art. II (1), that TM&M "shall exert every possible effort to secure all work" covered in the Agreement, EA Art. II (2), and that the subcontracting or assigning of any work would comply with the Agreement's conditions of employment, "including, without limitations, those relating to . . . benefits." EA Art. II (4); see also SA Arts. III (1), VIII (7) (8). The Specialty Agreement contained comparable provisions, but its language relating to subcontracting excluded the word "benefits." SA Art. II (1). Otherwise, the Specialty Agreement indicated that A1-B1 would comply with the subcontracting requirements of the Employer Agreement, SA Art. XV, and would follow "agreements national in scope." SA Art. X (1).
Identical provisions in the two agreements required Union membership for employment. EA Art. III; SA Art. V. If a particular employee was not a union member at the beginning of employment, the employee had eight days to join. Id. In addition, both agreements provided that all employees would be hired through the Union. EA Art. IV; SA Art. IV.*fn4
The Employer Agreement contained some unique provisions that are particularly relevant here. For example, the Employer Agreement, but not the Specialty Agreement, expressly contemplated the creation of new businesses or subcontracting arrangements. These provisions indicated that the terms and requirements of the Employer Agreement would be maintained even if another business were to be created. EA Art. II (10) (11). The Employer Agreement also recognized specialty agreements and enabled the Union's Business Manager "to take whatever steps were necessary" to add flexibility on the conditions to be followed "in recognition of the serious non-union competition." EA Article XVI.*fn5
According to Barbara Boldt, when A1-B1 was formed as a union installer of sheet metal lockers and shelving, a Union official informed her that it was acceptable for A1-B1 to report its employees' salaries through TM&M. Thus, A1-B1 never had a separate payroll. Its employees were paid from TM&M's account, and a single payroll record was kept for all the employees of both companies under TM&M's name.
Moreover, during the time period at issue, A1-B1 never submitted any reports or contributions to the Funds. Instead, TM&M reported the hours of all its employees, including those who worked for A1-B1, under TM&M's name. TM&M then paid the employees of A1-B1 out of its payroll account, billing A1-B1 for the wages and benefit fund contributions.
TM&M reported hours of wages and paid contributions into the Fund for three individuals, Eugene Fiocchi, David Gurney and James Powell. Only the contributions for Gurney and Powell are at issue in this case.
Gurney, who is Barbara Boldt's son, began work for TM&M in June, 1979 and later joined the Union. He performed sheet metal work during all of 1983 and 1984, and through the first three months of 1985. Powell, Gurney's friend, began to work for TM&M in the summer of 1982, installing closet fixtures. According to Barbara Boldt, Powell began to perform sheet metal work and to work for both TM&M and A1-B1 in April, 1983, and then joined the Union in May, 1983.
Gurney and Powell, then, began doing sheet metal work for A1-B1, but also continued to do non-sheet metal work such as closet fixture installation for TM&M. TM&M filed contribution reports on behalf of A1-B1 covering the amount of time spent by the employees on sheet metal work and billed A1-B1 for the amount of the contributions.
In June, 1984, Fiocchi left A1-B1 and formed a sheet metal installation company, Eastern Installers. Powell left A1-B1 for Eastern on July 19, 1984. Gurney followed suit on March 26, 1985. TM&M reported the hours of both Gurney and Powell to the Funds, as TM&M's employees, through their respective termination dates. Because it had no more employees covered by the collective bargaining agreement, TM&M submitted its last report to the Funds in April, 1985.
In early 1989, a Union agent reported to the Funds that TM&M was doing a sheet metal job at Rutgers University, but without union workers. Because TM&M had not informed the Funds that it had started using sheet metal employees again, and because it was still bound to an agreement with the Union, the Funds decided to audit TM&M. Barbara Boldt provided the auditor with the payroll register showing how much Gurney made in 1985, but would not provide all the records needed for the audit. As a result, the plaintiffs filed their complaint on April 7, 1989. They sought an accounting of sums due the Funds, injunctive ...