Petition — Lipsitz v. Costello

Supreme Court brief1977

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Anited States

No. £6-1716

BARRY LIPSITZ, ROBERT SEIPLE,

C. M. SCHNEIDER, as Trustees of the

GOLD COAST ELECTRICAL JOINT

APPRENTICESHIP and

TRAINING TRUST FUND,

Petitioners,

v8.

MICHAEL COSTELLO, CHARLES PEREZ and

ROBERT HORAN, as Trustees of the

GOLD COAST ELECTRICAL JOINT

APPRENTICESHIP AND TRAINING TRUST

FUND,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

STEADMAN S. STAHL, JR.

2432 Hollywood Boulevard

Hollywood, Florida 33020

Counsel for Petitioners

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TABLE OF CONTENTS

Page

ER cena ee are a ae a eee 2

JURISDICTION iaciloas 2

QUESTIONS PRESENTED . - 3

pp vols: Bi. * ) +: Seca 3

STATEMENT OF THE CASE i aleaiictilanial 4

REASONS FOR GRANTING THE WRIT 8

CONCLUSION _.. OT

CERTIFICATE OF SERVICE 14

APPENDIX

(A) Opinion of United States Court of

Appeals, Fifth Circuit, dated March 7,

1977 siti —— ae

(B) USCA, Section 186 (c), Labor Manage-

ment Act " App. 30

Law of District Court App. 34

(D) Pertinent Portion of

Testimony Transcript ic : App. 40

(E)

(F)

(G)

TABLE OF CONTENTS (cont.)

Pertinent Portion of

Testimony Transcript. ==

Pertinent Portion of

Testimony Transcript PS

Pertinent Portion of

Testimony Transcript ____

III

TABLE OF AUTHORITIES

Case Page

COSTELLO v. LIPSITZ,

547 F.2d 1267 (5 Cir. 1977) VER aaa 2

GARCIA v. AMERICAN MARINE

CORPORATION,

432 F.2d 6 (5 Cir. 1970) ~ Mae 12

INDEPENDENT ASSOCIATION OF MUTUAL

EMPLOYEES OF NEW YORK STATE v.

THE NEW YORK RACING ASSOCIATION, INC.,

398 F.2d 587 (2 Cir. 1968) .. 9

INTERNATIONAL BUSINESS MACHINES

CORPORATION v. EDELSTEIN,

Gee oe oe. eee 12

LITTLE v. GREEN,

438 F.2d 1061 (6 Cir. 1970) __________._____. 12

MOGLIA v. GEOGHEGAN,

ree oe.) —_._._.___..__. 10

YARN PROCESSING PATENT VALIDITY

LITIGATION,

586 F.2d 1025 (5 Cir. 1976) ..................--.. 12

TABLE OF AUTHORITIES (cont.)

STATUTORY AUTHORITIES

|. RT Reena

28 USCA 2201, 2202

29 USCA 186 (¢) (5) (B), (e) (6)

(Labor Management Relations Act) .__

29 USCA 186 (e)

Page

5, 6

in the

Supreme Court

of the

Gnited States

NO.

BARRY LIPSITZ, ROBERT SEIPLE,

C. M. SCHNEIDER, as Trustees of the

GOLD COAST ELECTRICAL JOINT

APPRENTICESHIP and

TRAINING TRUST FUND,

Petitioners,

v8.

MICHAEL COSTELLO, CHARLES PEREZ and

ROBERT HORAN, as Trustees of the

GOLD COAST ELECTRICAL JOINT

APPRENTICESHIP AND TRAINING TRUST

FUND,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

Petitioners, BARRY LIPSITZ, ROBERT SEIPLE,

C. M. SCHNEIDER, as Trustees of the GOLD COAST

ELECTRICAL JOINT APPRENTICESHIP and TRAIN-

ING TRUST FUND, pray that a Writ of Certiorari issue

to review the opinion and decision of the United States

Court of Appeals for the Fifth Circuit entered on March

7, 1977.

OPINION BELOW

The opinion and decision of the Court of Appeals is

reported in 547 F.2d 1267 (5 Cir., 1977). A copy of the

opinion is attached hereto as Appendix “A”.

JURISDICTION

The opinion of the United States Court of Appeals

for the Fifth Circuit which is sought to be reviewed, was

entered on March 7, 1977. This Petition for Writ of

Certiorari is being filed within ninety (90) days of that

order.

Petitioners invoke the jurisdiction of this Court un-

der Title 28, Section 1254(1) and Rule 19(1)(b) of the

Rules of this Court.

QUESTIONS PRESENTED

SHOULD THE DECISION OF THE UNITED

STATES COURT OF APPEALS, FIFTH CIR-

CUIT, INVOLVING AN INTERPRETATION

OF THE LABOR MANAGEMENT RELA-

TIONS ACT OF 1947, RELATING TO A

JOINT APPRENTICESHIP AND TRAINING

TRUST FUND BE REVIEWED, WHERE

SUCH OPINION IS IN DIRECT CONFLICT

WITH OPINIONS OF OTHER UNITED

STATES COURTS OF APPEALS?

SHOULD THE SUPREME COURT EXER-

CISE ITS POWER OF SUPERVISION

WHERE THE FIFTH CIRCUIT COURT OF

APPEALS, IN REVERSING THE TRIAL

COURT, DEPARTED FROM THE ACCEPTED

AND USUAL JUDICIAL PROCEEDINGS BY

ENGAGING IN CONJECTURE AND ASSUM-

ING FACTS NOT IN EVIDENCE?

STATUTES INVOLVED

The Statute involved in this case is Title 29 USCA

141 et seg. The pertinent portion of the statutory text is

set forth in Appendix “B”.

STATEMENT OF THE CASE

Respondents are Union Trustees, and as representa-

tives of Local No. 728, International Brotherhood of Elec-

trical Workers of Fort Lauderdale, Florida, filed a Com-

plaint in the United States District Court below, basing

Federal jurisdiction predicated on Title 28 USCA 2201,

2202, as well as Title 29 USCA 186(e).

On September 1, 1962, a collective bargaining agree-

ment was entered into between Union and Management

whereby a Joint Apprenticeship and Training T:ust Fund

was to be established which Trust Fund was to be fully

financed by Petitioners, who were the Employers’ Trus-

tees (App. “A”).

After the September 1, 1962 Agreement there were

six subsequent collective bargaining agreements providing

for the establishment of a Trust Fund Agreement.

There was only one Trust Fund Agreement in exist-

ence, dated August 27, 1962. Section 10 of that Trust

agreement provided, viz. (App. “A”, p. 1268 of the

Opinion) :

“... [mJatters pertaining to any employees

of this Fund (Trust Fund) shall be the responsi-

bility of Employers Trustees only.”

The District Court found this Trust Agreement to be

hon-éxistent for the years 1964, 1966, 1967, 1972, 1973

and 1974. The District Court further found in its Ultimate

Facts and Conclusions of Law that: (1) there was no

testimony concerning any other written Trust Fund

Agreement which had been ratified and accepted by the

trustees of the Apprenticeship Trust Fund or the Union

membership; (2) witnesses for the plaintiff testified

they were familiar with Article V, Section 7, which pro-

vided: (App. “C’’)

“The parties tc this Agreement (Collective

Bargaining Agreement) shall have a joint ap-

prenticeship and Training Trust Fund Agree-

ment, which agreement shall conform to Sec-

tion 802 of the Labor Management Relations

Act of 1947 as amended,”

and that the written Trust Agreement dated August 27,

1962, had not been accepted by the trustees or the union

membership; (3) prior to August, 1962 there was no

written trust fund agreement, and the existing program

had been founded by both parties - union and manage-

ment. Management then offered in August, 1962 to fund

the entire apprenticeship program in turn for the union

delegating to it the responsibility of employment of the

employers of the apprenticeship program, union repre-

sentatives have never accepted the offer in those years

subsequent to the August 27, 1962 date.

The thrust of Respondents’ (Union Trustees) Com-

plaint was to have Section 10 of the Trust Agreement

eliminated, because matters pertaining to employees of

the Trust Fund were to be the responsibility of the Em-

ployers’ Trustees only. The Union Trustees (Respondents)

claimed the «ch authority violated the constraints im-

plicit in 29 ' © +4, Section 186(c) (5) (B), (c)(6) (App.

“A”, p. 1269 © the Op*vion).

At a non-jury trial, the District Court, in its finding

of facts, concluded the Training Trust Fund (Trust Fund)

being wholly funded by management was not controlled

by Section 302 of the Taft Hartley Act (29 USCA, Sec-

tion 186(c) (5)(B), (c)(6) ‘App. “A”, p. 1270, 1276),

and therefore did not qualify under the Labor-Manage-

ment Relations Act.

Another finding of the District Court was that no

written Trust Fund Agreement had been executed or

existed (App. “A”, p. 1270 of the Opinion), therefore, the

Fund did not come within the purview of the Taft Hartley

Act.

The Fifth Circuit Court of Appeals took the position

that the narrow issue to be decided was whether the Au-

gust 27, 1962 Trust Agreement had been ratified, and if

so, were all the requirements under Section 302 of the

Taft Hartley Act met (App. “A”, p. 1270). In its Opinion

the Court of Appeals succinctly stated its rationale on

page 1274 as follows:

“In other words, under Florida law does the

conduct of the parties constitute a ratification

or adoption of the 27 August 1962 Trust Agree-

ment?”

The Court of Appeals, however, refused to accept the

findings of the lower court, and found that a ratification

had been made of the August 27, 1962 agreement. The

record reflects the contrary.

Briefly, the record will reflect that MICHAEL

COSTELLO, one of the Union Trustees, Respondent, testi-

fied under oath that the August 27, 1962 trust fund had

never been ratified by Union membership (App. “D”) ;

that there were no officially designated Union members

to negotiate the August 27, 1962 Trust Agreement (App.

“<r ).

CHARLES PEREZ, another of the Union Trustees,

Respondent, testified under oath that the April 27, 1962

trust fund had never been ratified by the Union member-

ship (App. “F”’).

MARSHALL WILLIAMS, a witness for the Em-

ployer Trustees, Petitioners, testified that he was not one

of the Union representatives that negotiated and con-

structed the Trust Agreement (App. “G”).

The United States Circuit Court of Appeais for the

Fifth Circuit reversed the District Court Judgment, and

rendered an Opinion and decision in direct conflict with

previous decisions of the United States Court of Appeals

of other Circuits. This Petition for Writ of Certiorari

ensued.

REASONS FOR GRANTING THE WRIT

SHOULD THE DECISION OF THE UNITED

STATES COURT OF APPEALS, FIFTH CIR-

CUIT, INVOLVING AN INTERPRETATION

OF THE LABOR MANAGEMENT RELA-

TIONS ACT OF 1947, RELATING TO A

JOINT APPRENTICESHIP AND TRAINING

TRUST FUND BE REVIEWED, WHERE

SUCH OPINION IS IN DIRECT CONFLICT

WITH OPINIONS OF OTHER UNITED

STATES COURTS OF APPEALS?

The Joint Apprenticeship and Training Trust Fund

was fully financed by Petitioners who were the Employers’

Trustees. The Union Trustees (Respondents), in their ini-

tial Complaint in the District Court claimed an empasse

was established because of the operation of Section 10 of

the Trust Agreement, which directed that matters pertain-

ing to employees of the Fund shall be the responsibility of

Management only (App. “A”, p. 1268 of the opinion).

Respondents claimed that unless Section 10 of the Trust

Fund Agreement was abolished there was io equality as

countenanced by Section 302 of the Labor Management

Relations Act of 1947.

The decision of the Fifth Circuit Court of Appeals

sought to be reviewed, held that even though a fund is

wholly financed by Management, to preclude the Union

from exercising dominion over the selection of employees

of that fund, the Union did not have an equal voice in the

operation thereof. It was this rationale that led the Fifth

Circuit Court of Appeals to conclude that Section 10 of the

Trust Agreement was in violation of Section 302 of the

Taft Hartley Act.

Another view was taken by the United States Court

of Appeals for the Second Circuit in INDEPENDENT

ASSOCIATION OF MUTUAL EMPLOYEES OF NEW

YORK STATE, et al. v. THE NEW YORK RACING

ASSOCIATION, INC., et al., 398 F.2d 587 (2 Cir. 1968).

The Second Circuit Court of Appeals held that when a

welfare fund or trust fund is established by the employer

and the plan specifies the conditions under which funds

may be disbursed, the dangers which Section 302 of the

Labor Management Relations Act was designed to combat

are not present.

The Second Circuit Court of Appeals further ex-

pressed the legislative intent of Section 302 which was to

prevent unions and union officials from participating in

the expenditure of such funds as they saw fit, and further

held that there was nothing in the history of the legisla-

tion to indicate that an employer was required to give the

union an equal voice in welfare funds wholly financed by

the employer.

This is in direct conflict with the decision of the

Fifth Circuit Court of Appeals sought to be reviewed. Con-

flict Certiorari became manifestly evident when the Fifth

Circuit Court of Appeals stated at page 1277 of its Opin-

ion (App. “A”):

“We find it impossible to approve INDE-

PENDENT ASSOCIATION OF MUTUAL EM-

PLOYEES the effect of which would be to en-

courage open, flagrant violation of the Act by

the simple expediency of having all of the con-

tributions from the employer.”

In MOGLIA v. GEOGHEGAN, 403 F.2d 110 (2 Cir.

1968), Management had financed a pension trust fund.

There had never been a written collective bargaining

agreement or any other written agreement between Man-

agement and Labor and the Court held that absent such

written agreement there was no valid Section 302 trust

concerning the employer contributions.

As in the case at Bar, the Union contended ratifica-

tion and adoption of a written agreement even though it

had not been executed by Management. This contention

was rejected by the Moglia Court on the rationale that

ratification and adoption are only forms of acceptance of

a contract, and must conform to the general principles

governing the formation of contracts.

It, therefore, appears that the Fifth Circuit Court

of Appeals’ decision in the instant case is in direct con-

flict with INDEPENDENT ASSOCIATION OF MU-

TUAL EMPLOYEES, supra, which determined that trust

funds fully funded by management is not controlled by

Section 302 of the Taft Hartley Act. It also conflicts with

the teachings of MOGLIA, supra, which dispels the Union

contention of ratification and adoption of an agreement

that never existed merely because Management continued

to finance the training program.

SHOULD THE SUPREME COURT EXER-

CISE ITS POWER OF SUPERVISION

WHERE THE FIFTH CIRCUIT COURT OF

APPEALS, IN REVERSING THE TRIAL

COURT, DEPARTED FROM THE ACCEPTED

AND USUAL JUDICIAL PROCEEDINGS BY

ENGAGING IN CONJECTURE AND ASSUM-

FACTS NOT IN EVIDENCE?

The District Court made comprehensive findings, viz. :

“Ultimate Facts and Conclusions of Law”

( App. “O?)

The Fifth Circuit Court of Appeals refused to ac-

cept pertinent findings of the lower court. For example,

it found that a ratification had been made of the August

27, 1962 agreement even though the record reflects the

contrary.

The record will reflect that MICHAEL COSTELLO,

one of the Union Trustees, Respondent, testified under

oath that the August 27, 1962 trust fund had never been

ratified by Union Membership (App. D) ; that there were

no officially designated union members to negotiate the

August 27, 1962 Trust Agreement (App. E).

CHARLES PEREZ, another of the Union Trustees,

Respondent, testified under oath that the August 27, 1962

trust fund had never been ratified by the union member-

ship (App. F).

MARSHALL WILLIAMS, a witness for the employer

trustees, petitioners, testified that he was not one of the

union representatives that negotiated and authored the

trust agreement (App. G).

Petitioners contend that the reviewing court has not

only failed to stay within the record, but has made find-

ings in complete contravention to evidence established in

the District Court. It is a fundamental precept of law that

facts not presented at the trial may not be asserted on ap-

peal. See GARCIA v. AMERICAN MARINE CORPO-

RATION, et al., 432 F.2d 6 (5 Cir. 1970). A court of re-

view will not consider the matters not within the trial

record. LITTLE v. GREEN, 428 F.2d 1061 (5 Cir. 1970).

To the same effect se YARN PROCESSING PATENT

VALIDITY LITIGATION, 536 F.2d 1025 (5 Cir. 1976).

The Second Circuit Court of Appeals has made a

pronouncement that an appellate court will rely only upon

the record actually made. INTERNATIONAL BUSI-

NESS MACHINES CORPORATION v. EDELSTEIN,

526 F.2d 37 (2Cir. 1975).

CONCLUSION

For these reasons, a Writ of Certiorari should be is-

sued to review the Judgment and Opinion of the Fifth

Circuit Court of Appeals.

| Respectfully submitted,

FO ay

STEADMAN S. STAHL, JR.

2482 Hollywood Boulevard

Hollywood, Florida 33020

Counsel for Petitioners

Phone: 923-1548

CERTIFICATE OF SERVICE

I hereby certify that three copies of the foregoing

Petition for Writ of Certiorari were mailed to the firm

of Kaplan, Dorsey, Sicking & Hessen, P.A., Attorneys for

Respondent, on the 2_ day phe for1 by depositing

the same in a United States Post Office with mail postage

prepaid and addressed as follows:

Kaplan, Dorsey, Sicking & Hessen, P.A.

Attorneys at Law

P.O. Drawer 520337

Miami, Florida 33152

Mota Abts

" STEADMAN 8. STAHL, JR.

APPENDIX

APPENDIX “A”

United States Court of Appeals,

Fifth Circuit.

No. 75-2207.

Michael COSTELLO et al.,

Plaintiffs-Appellants,

Barry LIPSITZ et al.,

Defendants- Appellees.

March 7, 1977.

Union trustees sought judicial determination under

Declaratory Judgment Act that section of Joint appren-

ticeship and training trust fund agreement providing that

matters pertaining to any employees of the fund shall be

the responsibility of the employer’s trustees only failed to

meet constraints of the Labor Management Relations Act.

The United States District Court for the Southern Dis-

trict of Florida at Ft. Lauderdale, Norman C. Roettger,

Jr., J., held that trust fund was not controlled by the

LMRA and union trustees appealed. The Court of Appeals,

Brown, Chief Judge, held that by ratification, trust agree-

ment signed by union representative and employer associa-

tion agent was the trust fund agreement contemplated by

provision in collective bargaining agreement signed five

days later providing for joint apprenticeship and training

trust fund agreement conforming to section 302 of the

LMRA, and that section of trust fund agreement provid-

App. 2

ing that matters pertaining to employees of fund shall be

the responsibility of employer’s trustees only violated sec-

tion of LMRA requiring equal representation.

Reserved.

1. Labor Relations—131

If trust fund comes within scope of section of LMRA

pertaining to restrictions on payments and loans to em-

ployee representatives, labor organizations, officers and

employees of labor organizations, strict enforcement of

requirement that employees and employers be equally rep-

resented in administration of the fund must be followed.

Labor Management Relations Act of 1947, §§ 302, 302(c)

(5)(B) as amended 29 U.S.C.A. §§ 186, 186(c) (5) (B).

2. Courts—359.1(9)

State law governs the creation of trust funds for

benefit of union members.

3. Labor Relations—131

Under Florida law, there was a ratification of joint ap-

prenticeship and training trust fund by union where ap-

prentices had entered the program and become dues pay-

ing union members and contributions had been made into

the fund benefiting union trustees and those they repre-

sented, and it was no defense to ratification that union

members had not voted approval of the trust agreement

where there was no indication that the agreement had to

ever be directly voted on by the union membership.

App. 3

4. Labor Relations—131

By ratification, trust agreement signed by union

representative and employer association agent was the

trust fund agreement contemplated by provisions in collec-

tive bargaining agreement signed five days later provid-

ing for joint apprenticeship and training trust fund agree-

ment conforming to section 302 of the LMRA, and section

of trust fund agreement providing that matters pertaining

to employees of fund shall be the responsibility of em-

employer’s trustees only violated section of LMRA re-

quiring equal representation. Labor Management Rela-

tions Act of 1947, §§ 302, 302(c)(5)(B) as amended 29

U.S.C.A. §§ 186, 186(c) (5) (B).

5. Courts—406.3(9)

A standard of deference to trial court findings below

the clearly erroneous rule applied where district court used

an improper legal standard. Fed.Rules Civ.Proc. rule

52(a), 28 U.S.C.A.

6. Labor Relations—1052

Purpose of section of LMRA placing restrictions on

payments and loans to employee representatives and labor

organizations is, at the least partially, to prevent abuses,

not requiring that one actually occur. Labor Management

Relations Act of 1947, § 302 as amended 29 U.S.C.A.

$ 186.

7. Labor Relations—131 _

Section of joint apprenticeship and training trust

fund agreement providing that matters pertaining to any

App. 4

employees of the fund shall be the responsibility of the

employer’s trustees only, although in violation of equal

representation requirement of LMRA, was severable and

did not affect remaining portions of the agreement. Labor

Management Relations Act of 1947, §§ 302, 302(c) (5) as

amended 29 U.S.C.A. $§186, 186(c) (5).

Joseph H. Kaplain, Joseph C. Segor, Richard A. Sick-

ing, Miami, Fla., for plaintiffs-appellants.

Steadman S, Stahl, Jr., Hollywood, Fla., for defend-

ants-appellees.

Appeal from the United States District Court for the

Southern District of Florida.

Before BROWN, Chief Judge, and TUTTLE and

GEE, Circuit Judges.

JOHN R. BROWN, Chief Judge:

After more than a decade of operating under eight’

collective bargaining agreements, each of which included

a provision with almost identical wording requiring a

Joint Apprenticeship and Training Trust Fund Agree-

ment (Trust Fund Agreement)? conforming with §302 of

'The eight are for September 1, 1962 to August 31, 1964, October

22, 1964 to August 31, 1966, September 1, 1966, to August 31, 1967,

September 1, 1967 to August 31, 1969, September 1, 1969 to August 31,

1972, September 1, 1972 to September 30, 1973, and October 1, 1973 to

September 30, 1974, October 1, 1974 to September 30, 1975.

Article V, § 7 in the 1962 collective bargaining agreement states

“The parties to this Agreement shall have a joint apprenticeship and

training Trust Fund Agreement, which Agreement shall conform to

Section 302 of the Labor-Management Relations Act of 1947 as

amended.” This provision has been put in all subsequent collective

bargaining agreements including the one dated October 1, 1974.

App. 5

the Labor Management Relations Act of 1947, 29 U.S.C.

§ 186 (LMRA), a smoldering dispute between Union

Trustees’ and Employer Trustees* over one provision, Sec-

tion 10,° of the 27 August 1962 Trust Agreement (Trust

Agreement) reached a non-judicial impasse.

The whole thing turns on § 10 which provides that

“CmJatters pertaining to any employees of this Fund

[Trust Fund] shall be the responsibility of Employers’

3Michael Costello, Charles Perez, and Robert Horan.

*Barry Lipsitz, Robert Seiple, C. M. Schneider.

‘Section 10 and other sections relevant to § 10 of the 27 August

1962 Trust Agreement between Local 728 of IBEW and the Gold

Coast Chapter of the National Electrical Contractors Association

(NECA) follow.

The Employer and the Union do hereby agree as follows:

1. To establish an Apprenticeship and Training Trust Fund

(hereinafter called “Trust Fund”), to be known as and adminis-

tered in the name of the Gold Coast Electrical Joint Apprentice-

ship and Training Trust Fund.

7 - *

4. The Trust Fund shall be controlled and administered b

a Board of Trustees (hereinafter called the “Trustees”), whi

shall consist of six (6) members, three appointed by the Em-

ployer and three appointed by the Union. Each Trustee shall be

elected from the members of the Joint Apprenticeship and Train-

ing Committee, and shall continue to serve as a Trustee only as

long as he remains a member of said committee. The Trustees

appointed by the Employer shall at all times have three (3) votes,

and the Trustees appointed by the Union shall at all times have

three (3) votes, except as per item # 10, said three votes to be

allocated equally among the respective Trustees in attendance.

A quorum at meetings shall be two Trustees appointed by the

Union and two Trustees appointed by the Employer. Votes may

be submitted in writing by absentee Trustees, but such votes

shall not increase the total vote of either the Union or Employer

Trustees, nor be counted for the establishing of a quorum at

any meeting.

10. Matters pertaining to any employees of this Fund shall

be the responsibility of the Employers Trustees only.

App. 6

Trustees only”. Although the contents of § 10 may be

admirably succinct, it has nonetheless created a protracted

conflict. As a result of repeated failures’ spanning almost

a decade to have this section of the Trust Agreement de-

leted, Union Trustees’ sought a judicial determination

under the Declaratory Judgment Act* that § 10 of the

Trust Agreement’ fails to meet the constraints of §§ 302

(c)(5)(B) and 302(c)(6) of the LMRA.” In response,

‘In 1967 Union Trustees’ attempts to have § 10 eliminated began.

Included among these efforts was a complaint to the Department of

Justice in 1969 and a series of motions. At the March 1974 meeting

of Trustees, a motion to rescind § 10 was made.

7Union Trustees were and are representatives of Local No. 728,

International Brotherhood of Electrical! Workers of Fort Lauderdale,

Florida. Employer Trustees were chosen by Florida Gold Coast Chapter

of N.E.C.A., Inc. (Employer Association) and represent contractors

who belong to that chapter of NECA.

*28 U.S.C.A. §§ 2201, 2202. Jurisdiction is also predicated on

29 US.C.A. § 186(e), Section 302(e) of the Labor Management

Relations Act of 1947.

“Trust Fund Agreement” refers to the one called for in the

collective bargaining agreements and “Trust Agreement” indicates the

27 August 1962 Trust Agreement.

1029 U.S.C. $§ 186(c) (5) (B), (c) (6).

§ 186. Restrictions on payments and loans to employee repre-

sentatives, labor organizations, officers and employees of labor

organizations, and to employees or groups or committees of em-

ployees; exceptions; penalties; jurisdiction; effective date; ex-

ception of certain trust funds.

(a) It shall be unlawful for any employer or association of em-

ployers or any person who acts as a labor relations expert, adviser,

or consultant to an employer or who acts in the interest of an em-

ployer to pay, lend, or deliver, or agree to pay, lend, or deliver, any

money or r thing of value—

(1) to any representative of any of his employees who are em-

ployed in an industry affecting commerce; or

(2) to any labor organization, or any officer or employee there-

of, which represents, seeks to represent, or would admit to mem-

bership, any of the employees of such employer who are employed

in an industry affecting commerce; or

App. 7

Employer Trustees argue that a $302 trust does not exist

and therefore equal representation in the administration

of the Trust Fund is not required. Compliance with the §§

(3) to any employee or group or committee of employees of

such employer employed in an industry affecting commerce in

excess of their nurmal compensation for the purpose of causing

such employee or group or committee directly or indirectly to

influence any other employees in the exercise of the right to

organize and bargain collectively through representatives of their

own choosing; or

(4) to any officer or employee of a labor organization engaged

in an irdustry affecting commerce with intent to influence him

in respect to any of his actions, decisions, or duties as a repre-

sentative of employees or as such officer or employee of such

labor organization.

* * o

respect to any money or other thing of value payable by an employer

to any of his employees whose established duties include acting openly

for such employer in matters of labor relations or personnel admin-

istration or to any representative of his employees, or to any officer

or employee of a labor organization, who is also an employee or

former employee of such employer, as compensation for, or by reason

of, his service as an employee of such employer; (2) with respect to

the payment or delivery of any money or other thing of value in

satisfaction of a judgment of any court or a decision or award of an

arbitrator or impartia! chairman or in compromise, adjustment, settle-

ment, or release of any claim, complaint. grievance, or dispute in

the absence of fraud or duress; (3) with respect to the sale or pur-

chase of an article or commodity at the prevailing market price in

the regular course of business; (4) with respect to money deducted

from the wages of employees in payment of membership dues in a

labor organization: Provided, That the employer has received from

each employee, on whose account such deductions are made, a written

assignment which shall not be irrevocable for a period of more than

one year, or beyond the termination date of the applicable collective

agreement, whichever occurs sooner, (5) with respect to money or

other thing of value paid to a trust fund established by such represen-

tative. for the sole and exclusive benefit of the employees of such

employer, and their families and dependents (or of such employees,

families, and dependents jointly with the employees of other employers

making similar payments, a their families and dependents): Pro-

vided, That (A) such payments are held in trust for the purpose of

paying, either from principal or income or both, for the benefit of

(Footnote Continued on Next Page)

App. 8

302(c)(5)(B) and (c) (6) requirements avoids the § 302

prohibition of payments by an employer to his employees,

his employees’ representatives, their labor organizations,

or officers or employees of such a labor organization.

After a full trial without a jury, the District Court

issued its findings of fact and conclusions of law on March

31, 1975. Included among these determinations is the Dis-

trict Court’s decision that no written Trust Fund Agree-

(Footnote Continued From Previous Page)

employees, their families and dependents, for medical or hospital

care, pensions on retirement or death of employees, compensation for

injuries or illness resulting from occupational activity or insurance to

provide any of the foregoing, or unemployment benefits or life in-

surance, disability and sickness insurance, or accident insurance;

(B) the detailed basis on which such payments are to be made is

specified in a written agreement with the employer, and employees

and employers are equally represented in the administration of such

fund, together with such neutral persons as the representatives of the

employers and the representatives of employees may agree upon and

in the event the employer and employee groups deadlock on the admin-

istration of such ae | and there are no neutral persons empowered

to break such deadlock, such agreement provides that the two groups

shall agree on an impartial umpire to decide such dispute, or in

event of their failure to agree within a reasonable length of time, an

impartial umpire to decide such dispute shall, on petition of either

group, be appointed by the district court of the United States for the

district where the trust fund has its principal office, and shall also

contain provisions for an annual audit of the trust fund, a statement

of the results of which shall be available for i ion by interested

persons at the principal office of the trust fund and at such other

places as may be designated in such written agreement; and (C)

such payments as are intended to be used for the purpose of providing

pensions or annuities for employees are made to a rate trust which

provides that the funds therein cannot be used for any purpose

other than paying such pensions or annuities; or (6) with respect

to money or other thing of value paid by ge he to a trust

fund established by such representative for purpose of

vacation, holiday, severance or similar benefits, or “_ costs of

apprenticeship or other training programs: Provided, t the re-

Sales al dienes (B) of the proviso to clause (5) of this subsection

apply to such trust funds. (Emphasis added).

App. 9

ment had been executed or existed for the years 1964,

1966, 1967, 1972, 1973 and 1974."' Coupled with this find-

ing is one that the trust fund in existence—known as the

Gold Coast Electrical Joint Apprenticeship and Training

Trust Fund (Trust Fund)—has been wholly funded by the

employer and consequently the Trust Fund is “. . . not

controlled by Section 302 of the Taft-Hartley Act so that

the employer must give the union an equal voice in the

operation of the Fund.”

When the chaff of the arguments and issues present-

ed is winnowed from the seed of this dispute, only a nar-

row issue remains. Has the executed 27 August 1962 Trust

Agreement been ratified so all § 302 requirements must be

followed?

On the basis of the uncontroverted facts in this record

that a written trust agreement was executed by authorized

representatives of both Union and Employers and that a

Trust Fund has been created and operated in accordance

with the Trust Agreement’s terms from 1962 to today, we

hold that the Trust Agreement has been ratified and that

the Trust Fund is a vali? trust within the perimeters of

§ 302(c) (5) (B)’s and § 302(c) (6)’s application. In view

of this, § 10 of the Trust Agreement is illegal, must be

eliminated from the Trust Agreement, and equal repre-

sentation must exist in the administration of the Gold

Coast Electrical Joint Apprenticeship and Training Trust

Fund.

The District Court’s order reads for the years 1964, 1966, 1967,

1972, 1973 and 1974. However, it is apparent that the District Court

is referring to the times governed by the collective bargaining agree-

ments beginning in the years listed.

App. 10

Actions, Words, Or History

In pre-1962 negotiations between Union and Enm-

ployer Association encompassing a period from the early

1950’s,"* the respective collective bargaining agreements

have provided for a Local Joint Apprenticeship and Train-

ing Committee composed of equal numbers of management

and labor representatives and requiring payments by

each contractor to the Apprenticeship Program of $2.00

per month per indentured apprentice.'® The Union was re-

quired to match the contractors’ payments.

During its negotiations which culminated in the col-

lective bargaining agreement effective on September 1,

1962, Union and Employer Association agreed to create

an Apprenticeship and Training Trust Fund (Trust

Fund) financed wholly by members of Employer Associa-

tion. Included in the 1962 collective bargaining agreement

was the provisicn of Article V, § 7 which states:

“The parties to this agreement shall have a joint

apprenticeship and training trust fund agree-

ment which shall conform to Section 302 of the

Labor Management Relations Act of 1947 as

amended.”

Each successive collective bargaining agreement has

contained the same requirement. On August 27, 1962, five

days prior to the actual signing of the September 1, 1962

collective bargaining agreement, the Trust Agreement was

124 specific date is not indicated in the record, but is referred

to in Union Trustee’s brief only as “as far back as the early 1950’s. . . .”

15R. 130, 144.

App. 11

executed by Marshall Williams'* in his representative

capacity for Union and Karl Behnke as agent for Em-

ployer Association.’

From September 1962 forward the requisite pay-

ments have been made by Employers into the Trust Fund,

succeeding collective bargaining agreements have contained

the identical provision calling for a Trust Fund Agree-

ment, and, most importantly, the conduct of the parties has

demonstrated that each believed the 27 August 1962 Trust

Agreement was the one referred to in each of the collective

bargaining agreements from 1962 through 1974.'* Indeed,

4Before and during the negotiations in 1962, Mr. Williams was

the business agent for Union and signed both the Trust Agreement

and the collective bargaining agreement on behalf of the Union. In

1967, Williams discontinued his employment with Union and accepted

the position as Executive Director of the Apprenticeship Program and

Chapter Manager of NECA.

Article V, § 7 of the 1962 collective bargaining agreement is

quoted above in note 2, supra. Article V, § 8 specifies the amount of

payments to be made into the Trust Fund. This provision in the 1962,

1964, 1°66 and 1969 collective bargaining agreements stated:

—All employers subject to the terms of this Agreement shall con-

tribute 2% of their gross labor payroll for the purpose of main-

taining an apprenticeship and training program. This sum shall

be forwarded weekly to the Trust Fund.

In the 1972 collective bargaining agreement, this provision was altered

and appears as quoted in note 16, infra for the 1972, 1973 and 1974

collective bargaining agreements.

16Other factors are indicative of this belief. At the time of the

trial, the Trust Fund had been operating uncer the terms of the Trust

Agreement, had accumulated approximately 900,000, and had a staff

composed of a director, assistant director, three clerical employees, a

bookkeeper, and 17 instructors. Also, in the 1972 collective bargaining

agreement, a change in the contractors’ contributions aig paver for

and payments were made according to the new terms. The provision

in the 1972 collective bargaining agreenicnt providing for the change

states:

(Footnote Continued on Next Page)

App. 12

were it not for one provision of the 1962 Trust Agreement,

§ 10, this dispute would not be before this Court today.

In 1967, Union’s displeasure with § 10 was piqued

when its business manager, Marshall Williams, resigned

and became both Chapter Manager of NECA and Execu-

tive Director of Trust Fund. In his new dual capacity,

Williams’ salary began at $669.23 per week with a ten

percent increase each January 1 during the life of the

contract. By the fifth and last year of the contract, Wil-

liams’ salary would be approximately $50,000. Among the

other perquisites provided was reimbursement for busi-

ness connected automobile expenses at the rate of twenty

cents per mile. Since 1967, Union Trustees have repeatedly

and unsuccessfully attempted to have § 10 of the Trust

Agreement eliminated. Finally, because of the inability to

dislodge absolute control by Employer Trustees over hiring,

firing, and compensation of Fund employees,'’? Union

Trustees seek our resolution of this provision’s legality."

(Footnote Continued From Previous Page)

Section 8.—All Employers subject to the terms of this Agreement

shall contribute one percent (1%) of their gross labor payroll

for the pu of maintaining an Apprenticeship and Training

Program. This sum shall be forwarded monthly to the Trust

Fund. It is further agreed that, in the event the Fund should fall

below $150,000.00, > on contribution shall revert to two percent

(2%) until such time the Fund is increased to $250,000.00, at

which time the contribution shall revert back to one percent

(1%).

'7Most important are the executive director and assistant director

of the Trust Fund. Also included are clerical employees of the Fund.

*Before trial other issues were disputed, but on the day of the

trial all the following, formerly disputed issues were settled by stipu-

lation. It was a that other matters in the administration of the

Trust Fund must be joint (R.13), Union Trustees may have access

to and copy all Fund records (R. 13, 23, 24), and that the records

App. 13

In resolving this dispute, this Court addresses

whether a written Trust Fund Agreement exists,"

whether the 27 August 1962 Trust Agreement has been

ratified, whether a trust fund agreement in this Union

Trustee-Employer Trustee dispute must conform to the

dictates of § 302(c)(5)(B) and (c) (6) of the LMRA, and

whether § 10 of the Trust Agreement violates these LMRA

provisions.

Misuse, Influence Peddling, Bribery

Based on these actions, on the wording of these

particular writings, and the historical development of the

trust fund references which exist in the collective bargain-

ing agreements, the drama between the two groups has un-

folded. In simplest terms, this case is another of the peren-

nial replays of labor-management disputes. Although the

geographical setting of this disagreement is different from

other, similar ones, it is staged with the back drop of con-

cerns which gave rise to § 302.

Because of the abuses that have occurred in the

cauldron of labor-management interplay which include

misuse of labor organization funds, extortion by labor

personnel, and attempts by business personnel to influ-

ence or exert pressure on union “personnel”—particularly

will be available during trustee meetings. Also, with the exception

of employment and salaries of the Trust Fund staff, it was agreed

that a vote of all the Trustees had to be taken before payments of

Func monies occurred. (R. 17-22).

19More particularly, whether the Trust Fund Agreement referred

to in the 1962 1974 collective bargaining agreements may be

the 27 August 1962 Trust Agreement.

App. 14

in a financial form, restrictions on conduct beween these

two bodies and certain of their representatives have been

imposed by Congress.”” One is the § 302(c) prohibition of

payments by an employer to labor organizations or to their

representatives." However, in certain explicitly, statu-

torily defined instances exceptions to this general prohibi-

tion exist. One permits payments to a trust fund for train-

ing and apprenticeship programs.” For such a trust fund

20[1959] U.S.Code Cong. & Ad.News, pp. 2318, 2321-33. See

Arroyo v. United States, 1959, 359 U.S. 419, 425-26, 79 S.Ct. 864,

868-69, 3 L.Ed.2d 915; see also United States v Ryan, 1956, 350 U.S.

299, 304, 76 S.Ct. 400, 100 L.Ed. 335.

1Other examples of payments by employers to employee represen-

tatives which are precluded by § 302 are illustrated in United States

v. Pecora, 3 Cir., 1973, 484 F.2d 1289 (testimonial dinner and gifts

within § 302); United States v. Overton, 2 Cir., 1972, 470 F.2d 761

(payments made by non-employer corporate entity prohibited by §

302); United States v. Lanni, 3 Cir., 1972, 466 F.2d 1102 (employer

payments to union officer’s girl friend violate § 302). For an example

of a restrictive interpretation of “representative” of an employer's

employees made prior to the 1959 amendment of § 302 by

the Labor-Management Reporting and Disclosure Act of 1959, one

should read Ventimiglia v. United States, 4 Cir., 1957, 242 F.2d 620.

The holding in that case is no longer good law. See [1959] U.S.Code

Cong. & Ad.News, pp. 2318, 2330.

22L_abor Management Relations Act, 1947, § 302(c) (6), 29 U.S.C.

§ 186(c)(6). Aside from the requirements of § 302, the existence

of a trust fund satisfying state law requirements is a prerequisite to

lawful employer payments to a trust fund under §§ 302(c)(5)(B),

(c)(6). Bricklayers, Masons and Plasterers International Union of

America, Local Union No. 15, et al. v. Stuart Plastering Company,

Inc., 5 Cir., 1975, 512 F.2d 1017, 1026. See text infra following note

28.

App. 15

to come within this exception, the statutory criteria set

forth in § 302(c) (5) and (c) (6) must be met.?!

[1] As any “curative” form of legislation designed

to eliminate past abuses and prevent future ones, § 302’s

prohibition combines an elimination of the then existing

abuses with its future-looking “prophylactic” purpose. See

Local No. 2 of Operative Plasterers and Cement Masons

International Association v. Paramount Plastering, Inc.,

9 Cir., 1962, 310 F.2d 179, 186; Employing Plasterers’

Association of Chicago v. Journeyman Plasterers’ Protec-

tive & Benevolent Society of Chicago, 7 Cir., 1960, 279

F.2d 92, 97. To retain this preventive effect against the

onslaught of creative devices to avoid § 302’s application,

this Court has recognized that strict compliance with the

rigid structure of § 302 is necessary in determining

whether a trust fund satisfied the § 302(c)(5)(B) re-

quirements, we have stated

Judicial adherence to the intention of Congress

in enacting Section 302 requires strict enforce-

ment of the purposefully rigid structure provided

in this section. Stuart Plastering, supra at 1026.

Likewise, if the Trust Fund under examination in this

case comes within § 302’s scope, such a strict enforce-

ment of § 302(c) (5) (B)’s requirements must be followed.

23Qne is “. .. a trust fund established by such [employee]

representative . . . .” Additionally, Employer Trustees do not directly

challenge that the Trust Fund was created by such a representative.

Of the requirements set forth in § 302(c)(5)(B) (a detailed written

agreement, equal representation for employers and employees in the

administration of the fund, a dispute-deadlock resolving mechanism,

an annual audit, and an availability of a statement of results), the

only portion Union Trustees contend is violated by § 10 is the equal

representation requirement.

App. 16

Anticipation Of Ratification

Recognizing that, with the exception of § 302(c) (5)

(B)’s equality of administration provision, the other re-

quisites are present in the existing documents, Employer

Trustees direct their sole attack on appeal at whether the

27 August 1962 Trust Agreement is the agreement con-

templated on or after September 1, 1962. In other words,

they contend that although the 27 August Trust Agree-

ment may meet § 302’s requirements, it is not the Trust

Fund Agreement called for by the September 1, 1962 col-

lective bargaining agreement.

An attempt to bolster this argument is made by in-

voking our prior decision in Bricklayers, Masons and

Plasterers International Union of America, Local Union

No. 15, et al. v. Stuart Plastering, 5 Cir., 1975, 512 F.2d

1017, on which Employer Trustees rely as supporting

**The Employer Trustees contend that Article V, § 7 of the 1962

collective bargaining agreement, and as it has been utilized in sub-

sequent collective bargaining agreements, anticipates the creation of

a trust fund. This “anticipates” argument is partly founded on the

literal language of § 7 stating “The parties to this Agreement shall

have a joint apprenticeship and training Trust Fund A re a

The remaining portion of their argument’s foundation is the September

1, 1962 execution of the initial collective bargaining agreement com-

pared to the August 27, 1962 signing of the Trust Agreement. Con-

struing these items together, Employer Trustees contend that the Sep-

tember 1 collective bargaining agreement has required and envisioned

execution of a post-September 1, 1962 Trust Fund Agreement. Ac-

cording to Employer Trustees, it is not the absence of a writing

complying with § 302 which creates the lack of a writing in this

instance. Rather, it is the absence of the writing contemplated to have

been executed after the September 1, 1962 collective bargaining agree-

ment. However, the 1962 Trust Agreement indicates the contrary.

See note 28, infra.

App. 17

their argument that the collective bargaining agreements

contemplated or anticipated “. . . a trust agreement in

future.” Even assuming this foundation to be based on

bedrock — not shifting sand — we need not and do not

address this issue. For ratification purposes, whether the

Trust Agreement was executed before or after the 1962

collective bargaining agreement is irrelevant.2> A written

Trust Agreement exists which virtually tracks § 302’s

standards. Both Union and Employer representatives who

are not challenged on this record as lacking authority ex-

ecuted the 27 August Trust Agreement which has been

operated under and remains in effect without change.

Thus, a writing within § 302’s meaning exists if the 27

August Trust Agreement has been ratified.

Additionally and despite Employer Trustee’s asser-

tion, whether a written, executed trust agreement may be

ratified by subsequent actions was not before the Stuart

Plastering Court. In briefest form, Stuart Plastering en-

tailed consideration of whether a collective bargaining

agreement containing a schedule of payments, by itself,”

25Section 18 of the Trust Agreement states that “[t]his Trust

er t shall continue in effect for the period provided for in

the current and any subsequent Collective Bargaining Agreement, and

for the period of any renewal or extension . . . .” In light of this

provision, we need not consider whether the Trust Fund may exist

ind t of the collective bargaining agreements. See also Hinson

v. N.L.R.B., 8 Cir., 1970, 428 F.2d 133, 138-39.

26In Stuart Plastering, the collective bargaining agreement pro-

vided “the following amounts [specified . . . under the ‘health and

welfare’ benefits schedule and the ‘pension’ benefits schedule] shall be

paid into health and welfare fund”. 512 F.2d at 1020.

App. 18

satisfies § 302(c) (5). No trust agreement had been ex-

ecuted by the defendant employers” in Stuart Plastering.

512 F.2d at 1018-20.

Another singularly distinguishing factor is apparent

from a close reading of Stuart Plastering. Whether a trust

fund agreement could be ratified or similarly assented to

was explicitly stated not to be before the Court.

“Moreover, the appellants do not now contend, nor did

they offer to prove in the district court, that the defend-

ants ratified or assented to this particular agreement by

making any payments that were consistent with its terms

after the apparent date on its face.” Id. at 1029.

For these reasons, Stuart Plastering cannot be considered

as expressing this Court’s view on the ability of a union

to ratify or adopt the terms of a written, executed trust

agreement.

Ratification, Adoption, Or The Childless Parent

[2] Under the pervasive evidence in the record re-

garding their beliefs** and the consistent conduct of the

7Significant are the disparities between that case and this one.

In Stuart Plastering only a collective bargaining agreement had been

executed. Of the two trust instruments, the one for a health and wel-

fare fund had not been executed by any of the defendant employers.

The other for a pension fund had been drafted but not signed by any

employer who was a pasty to the collective bargaining agreement.

Unlike this Gold Coast Trust case, Stuart Plastering represents an

instance when no written trust agreement had been consummated by

the employer parties.

*8The District Court trial transcript indicates the consensus. Union

Trustees presented two witnesses during trial: Charles Perez and

Michael Costello. On cross-examination by Employer Trustees’ attor-

ney, Costello responded in the affirmative to counsel’s inquiry regard-

App. 19

parties, Union and Employer Trustees have continually

indicated that the 27 August writing is the Trust Fund

Agreement required by the collective bargaining agree-

ments. Consequently, the dispositive question is whether

Florida law would recognize the Trust Agreement drafted,

executed, and operated under by the parties as the agree-

ment contemplated by Union and Employer Trustees. In

other words, under Florida law does the conduct of the

ing whether the provision of § 7 refers to the 27 August 1962 Trust

Agreement. (R. 175-76). During direct questioning by the Court,

Perez was asked:

“Well, let me ask the question and see if I can get an answer

to it. In Section 7 it says the parties to the working agreement

shall have a joint apprenticeship and training trust fund ‘agree-

ment. Now, is there one?

Perez: Why yes, there is.

The Court: And is that the one of August 27, 1962?

Perez: Why yes, it is.” (R. 121).

Also, Union Trustees’ indicated in a colloquy with the Court

that there is no contention Union Trustees that the 27 August

Trust Agreement is not the one that they have been operating under.

(R. 78).

Additionally, the testimony of Marshall Williams who was the

only witness for Employer Trustees indicates that the 27 August 1962

Trust Agreement is the one called for and operated under the suc-

cessive collective bargaining agreements. (R. 130-33).

The testimony of Union Trustees’ counsel, of two Union Trustee

witnesses, and of Employer Trustees’ witness, Marshall Williams who

was the Union’s business manager during the negotiations for the

Trust er r and the 1962 collective bargaining agreement, in-

dicates all parties recognize that and have acted as if the 27

Au Trust Agreement was and is the one required by Article V, § 7

of sy respective collective bargaining agreements.

Further support for this proposition is found in § 2 of the 27

August 1962 Trust Agreement which states “. . . It shall be the duty

of the individual employers and the Union to remit to the Trustees

sums in accordance with the Collective Bargaining Agreement, begin-

ning with the first payroll period following September 1, 1962.”

App. 20

parties constitute a ratification or adoption of the 27

August 1962 Trust Agreement?”

In considering whether ratification is a viable theory

under Florida law, an important factor is that Marshall

Williams signed the 27 August Trust Agreement on behalf

of Union and Karl Behkne signed it on behalf of Em-

ployers’ Association. (R. 37-38). No challenge has been

made of the authority of these individuals to execute the

27 August Trust Agreement for their principals. Also,

this Trust Agreement was drafted by representatives for

Union and Employers Association and, thus, with the

knowledge and consent of both sides to the agreement.

These parties have consistently recognized and acted in a

manner which demonstrates ratification. They have con-

tinually operated the Trust Fund from its inception to the

present day in conformity with the 27 August Trust

Agreement as authorized by Article V, § 7 of each col-

lective bargaining agreement subsequent to 1962.

In G & M Restaurants Corporation v. Tropical Music

Service, Inc., 2d Dist.Fla.App., 1964, 161 So.2d 556, 557-

*This Circuit has recognised that there is an exception to the

preemption doctrine for “matters of peripheral concern to federal

labor law.” One of the areas not removed from governing state law

is the creation of trust funds for the benefit of union members. Such

funds are established under the laws of the relevant state. See Craig v.

Bemis Company, Inc., 5 Cir., 1975, 517 F.2d 677, 678; Connell v.

United States Steel Corporation, 5 Cir., 1975, 516 F.2d 401, 405;

Bricklayers, Masons and Plasterers International Union v. Stuart Plas-

tering Company, Inc., 5 Cir., 1975, 512 F.2d 1017, 1025; Snider v.

All State Administrators, Inc., 5 Cir., 1973, 481 F.2d 387, 390. For

this reason, this Court defers to Florida law to determine whether the

conduct of the parties constitutes a ratification of the 27 August Agree-

ment or another form of acceptance of that agreement.

App. 21

58, the Florida District Court quotes from generally rec-

ognized agency authorities that

“* |. . Ratification as it relates to the law of

agency is the express or implied adoption and

confirmation by one person of an act or contract

performed or entered into in his behalf by an-

other without authority . . . However, .. . it is

ordinarily required that for a ratification of an

unauthorized act or transaction of an agent to be

valid and binding, the principal shall have full

knowledge, at the time of the ratification, of all

material facts and circumstances relating to the

unauthorized act or transaction, ....’ In speaking

of ratification, it is universally held that ‘[i]t is

always necessary, in order to have an effective

ratification, that there shall be an intention on

the part of the purported principal to ratify the

act in question.’ Moreover, the required intention

must be manifested in some way.” (Citations

omitted).

(3] For Union, no question exists about its full

knowledge and intent to ratify. Union manifested this rati-

fication and has accepted the benefits of the Trust Fund.

Apprentices have entered this program, been trained, and

become full-fledged, card carrying dues paying members

of Loca] 728. For each of these Local 728 members, con-

tributions have been made into the Trust Fund benefiting

Union Trustees and those they represent. In such circum-

stances, a Florida Court would hold that Union has rati-

fied the written, executed Trust Agreement. See Branford

State Bank v. Howell Company, 1924, 88 Fla. 493, 102

So. 649, 650; Oxford Lake Line v. First National Bank of

App. 22

Pensacola, 1898, 40 Fla. 349, 24 So. 480, 482-84; see also,

Smith v. Loftis Plumbing and Heating Co., 1933, 112 Fla.

382, 150 So. 645; Bellaire Securities Corp. v. Brown, 1936,

124 Fla. 47, 168 So. 625; Proodian v. Plymouth Citrus

Growers Association, 1943, 152 Fla. 684, 13 So.2d 15.

The only possible valid defense Employer Trustees

offer against ratification is that the union members must

vote their approval of the Trust Agreement. Nothing in

the record indicates that the Trust Agreement had to ever

be directly voted on by the union membership. Absent an

explicit requirement for this “voting requirement”, we

find this assertion to be without merit.

Probably the ultimate manifestation of ratification,

and accordingly most telling blow to Employer Trustees’

no ratification argument, is Union Trustees continued at-

tempts to have the disputed provision of the Trust Agree-

ment altered or deleted. How can one contend that a pro-

vision of an agreement is illegal or must be changed if

one has not ratified, adopted or otherwise accepted that

agreement? From their converse position, how can Em-

ployer Trustees contend that § 10 is proper if the 27

August Trust Agreement has not been ratified?

[4] Following this Florida authority, the actions

and conduct discussed above indicate that all parties in-

tended, still intend, believed and still believe, the written

executed 27 August 1962 Trust Agreement to be the agree-

ment required by each of the collective bargaining agree-

ments. By ratification, the 27 August Trust Agreement is

the Trust Fund Agreement contemplated by Article V,

§ 7. We do not accept Employer Trustees’ contention that

under the respective collective bargaining agreements —

App. 23

the Trust Fund’s parent documents — ratification is pre-

cluded. Consequently, the Trust Fund does not have a gap

in its lineage for want of the necessary Trust Fund Agree-

ment.

The District Court’s erroneous finding was caused by

misplaced reliance on Moglia v. Geoghegan, 2 Cir., 1968,

403 F.2d 110, cert. denied, 394 U.S. 919, 89 S.Ct. 1193,

22 L.Ed.2d 453; and Local Union No. 529, United Brother-

hood of Carpenters and Joiners of America v. Bracy De-

velopment Co., Inc., W.D.Ark., 1971, 321 F.Supp. 869.”

Scrutiny of these cases reveals their inapplicability to this

Union Trustee-Employer Trustee dispute.

Moglia addresses whether payments could legally be

made into a trust fund by an employer who was not a

party to the signed trust agreement and had repeatedly

refused to be a signatory of the collective bargaining agree-

ments which required a trust agreement.

Why the Moglia Court found lack of mutuality of

agreement and mutuality of obligation necessary for rati-

fication is evident. The employer in Moglia had declined™

to become a party to both the collective bargaining agree-

ment and the trust agreement.

In a similar fashion, Bracy Development Co., Inc.,

supra, is not applicable. In this Western District of Ar-

3°Jt also cited Hinson v. NLRB, 8 Cir., 1970, 428 F.2d 133. How-

ever, Hinson considers a different issue. It is, under the NLRB Act,

the extent to which an employer is bound by commitments made in

a collective bargaining contract and incidental trust agreement after

termination of the collective bargaining agreement.

31The non-execution was stipulated in Moglia, supra at 110, n. 5.

App. 24

kansas case, Bracy was not a member of the Contractors

Association which had negotiated the collective bargaining

and trust agreements. Bracy never executed these agree-

ments, nor did Local 529 present evidence showing that

an agent of Bracy’s with sufficient express, implied, or

inherent authority executed these documents for Bracy.

Unlike Moglia and Bracy, this case is an instance

where Employer and Union representatives negotiated,

drafted, and executed both a Trust Agreement and col-

lective bargaining agreements, and subsequently conducted

their affairs in accordance with the terms of each for over

twelve years. Because of these differences, Moglia and

Bracy do not sustain their usage by the District Court for

the proposition that Union and Employer Association have

never executed a written Trust Fund Agreement for the

years in question. One was executed on 27 August 1962

and subsequently ratified.

As a second basis for its conclusion that Union

Trustees are not entitled to a voice in the selection and

direction of the employees of the Trust Fund, the District

Court also predicated its opinion on the following, rather

unilluminating recitation.

“In addition, the Apprenticeship Trust Fund

which has been in operation is wholly funded by

the employer. In such event it is not controlled by

Section 302 of the Taft-Hartley Act so that the

employer must give the union an equal voice in

the operation of the Fund. Independent Associa-

tion of Mutual Employees of New York State

v. New York [Racing Ass’n], 398 F.2d 587 (2d

Cir., 1968) .”

App. 25

In Independent Association of Mutual Employees, pay-

ments were made by an employer to a trust fund benefit-

ing his employees, an employee representative. See Local

No. 2 of Operative Plasterers and Cement Masons Inter-

national Association v. Paramount Plastering, Inc., 9 Cir.,

1962, 310 F.2d 179, 182-83, 185-86, cert. denied, 372 U.S.

944, 83 S.Ct. 935, 9 L.Ed.2d 969; Mechanical Contractors

Association of Philadelphia, Inc. v. Local Union 420, 3 Cir.,

1959, 265 F.2d 607, 610-11; Sheet Metal Workers Associa-

tion of San Francisco v. Sheet Metal Workers Interna-

tional Association, 9 Cir., 1957, 248 F.2d 307, 315. Any

such payments are illegal unless all the prerequisites of

§ 302 are met. The one absent in Independent Association

of Mutual Employees and this case is equality of adminis-

tration under § 302(c) (5)(B). We find it impossible to

approve Independent Association of Mutual Employees

the affect of which would be to encourage open, flagrant

violation of the Act by the simple expediency of having all

of the contributions from the employer.** Thus, it does not

sustain the District Court’s determination that this Trust

Fund is not governed by § 302 of the LMRA.

[5] On the basis of our determination from the

overwhelming evidence that a written Trust Agreement

was executed and ratified and an improper legal standard

32Without intimating that any evil motive exists in this instance—

for none does—an additional consideration regarding human pre-

dispositions supports our disapproval of Independent Association of

Mutual Employees. It is a matter of human experience that successful

organizational activity generally hinges on the quality of its executive

direction. In a situation such as the one here, the motives of a trust’s

executive director whose pay is controlled by Employer Trustees and

who is also an employee of Employers—Chapter Manager of NECA—

acting in significant labor matters on Employers’ be may easily be

in significant Trust Fund decisions and operations rm Mong

but not limited to, the selection and employment of the Trust’s

personnel.

App. 26

was utilized, the trial court’s conclusion that as a matter

of law a written trust agreement “... has not been exe-

cuted by union and management” and its finding that no

written trust agreement exists may not stand.”

Equality Versus Inequality

The plain terms of § 302(a) indicate in subdivision

(1) that before a § 302 trust exists requiring compliance

with the provisions of § 302(c) (5) (B), a payment must be

made from an employer to “... any representative of any

of his employees who are employed in an industry affecting

commerce’’,

The payments by the contractor members of Em-

ployer Association represent payments by an employer

to an employee “representative” within the meaning of and

the prohibitions of § 302(a) (1).** See Operative Plasterers

and Cement Masons, supra at 182-86; Mechanical Contrac-

tors Association of Philadelphia, supra at 610-11; Sheet

Metal Workers Association of San Francisco, supra at 315.

Thus, this Trust Fund must comply with § 302.

*’Because an improper legal standard was used, the District Court’s

findings do not come to this Court with the usual “Buckler and Shield”

of F.R.Civ.P. 52(a). In other terms, a standard of deference to trial

court findings below the clearly erroneous one applies to this instance.

Battelstein Investment Co. v. United States, 5 Cir., 1971, 442 F.2d

87, 92; McGowan v. United States, 5 Cir., 1961, 296 F.2d 252, 254.

See Perkins v. Mississippi, 5 Cir., 1972, 455 F.2d 7, 44 (Brown, C.

J., dissenting) .

Aside from the fact that the payments in this case are pro-

hibited under § 302 unless its requirements are met, it Pee” be

remembered that Article V, § 7 of the collective bargaining agreements

calls for a written trust fund agreement meeting the § 302 standards.

App. 27

[6] One of the mandates of § 302(c) (5) (B) is that

there be equal representation by employers and employees

in the administration of the trust fund. 29 U.S.C.

§ 186(c) (5) (B). Knowing that §302 requires equal rep-

resentation, remembering that the purpose of § 302 is, at

the least partially, to prevent abuses— not requiring that

one actually occur,’* and being aware of the infinite cre-

ativity of mankind to circumvent such statutory schemes,

we conclude that § 10 of the 27 August Trust Agreement

violates the provisions of § 302(c) (6) and (c) (5)(B) re-

quiring equal representation. Although we wish to empha-

size that none of the flagrant, impermissible abuses which

gave birth to § 302 have occurred in this case,** our deci-

sion is based upon the recognition that § 302 would be

eviscerated should the phrase “employees and employers

are equally represented in the administration of such

fund” connotate only the requirement that employees and

employers have equal numbers of trustees, three each in

this case, or representatives.

If one wishes to circumvent the purposes for which

§ 302 was adopted, it requires little ingenuity to foresee

that control over the hiring, firing, and salary determina-

tions of Trust Fund employees solely by Employer

Trustees would enable the unscrupulous union representa-

tive to seek indirect payments of the form § 302 was de-

signed to prevent by demanding employment of friends or

relatives. At the opposite extreme, an employer bent on

the disaffection of an employee representative may offer

employment to such a person’s spouse, relative, or friend.

3$See Paramount Plastering, supra at 186; Journeyman Plasterers’

Protective & Benevolent Society of Chicago, supra at 97.

*6Indeed, the record shows that all parties have acted with the

utmost propriety.

App. 28

Of more immediate bearing to this case is the exist-

ence of a trust fund created for the benefit of employees

which has an administration exclusively chosen and con-

trolled by Employer Trustees. In 1967, the Director of the

Trust Fund shifted from Union’s to Employers’ employ-

ment and signed a contract which provides for a salary of

approximately $50,000 per year by 1972 plus reimburse-

ment for business expenses including twenty cents per

mile for automobile expenses. As an additional complica-

tion, the Executive Director also acts as NECA Chapter

Manager, the Employer Association’s. It does not strain

one’s imagination to think that any trust fund adminis-

trator — especially one for the benefit of employees —

will listen closely to the words of his major master, Em-

ployer Trustees.*’

These are the subtle forces that have often tempted

the most honorable among us. It is the preventive aspect

of § 302 which recognizes the frailty inherent in mankind

and seeks to avert these temptations by specifying a rigid

structure before the Gold Coast Electrical Joint Appren-

ticeship and Training Trust Fund, or any trust fund, is

exempted from its prohibitions. For these reasons, strict

application of the mandates of § 302 is required by this

Court to this Trust Agreement.

(7] In summary, we find that (i) a written Trust

Fund Agreement containing within its four corners all of

the requirements of § 302 of the LMRA has existed, been

7Because of our disposition of this case, we do not consider

whether any conflicts with § 302’s requirements or with the fiduciary

aspects present in all trust situations arise from holding the dual posi-

—. > Executive Director of the Trust Fund and Chapter Manager of

App. 29

ratified, and continues to be operated under, (ii) the Gold

Coast Electrical Joint Apprenticeship and Training Trust

Fund must comply with the provisions of § 302 of the

Labor Management Relations Act of 1947, and (iii) § 10 of

the Trust Agreement violates § 302(c)(5)(B) requiring

equal representation.** For these reasons, the ruling of the

District Court is reversed.

REVERSED. ©

38Jn making this decision, one additional factor must be addressed.

Simply because we find that § 10 of the Trust Agreement violates

§ 302(c)(5)(B), this does not and is not to be construed as a deter-

mination that the entire Trust Agreement and Trust Fund structure

violate § 302. Section 17 of the Trust Agreement contains a severabil-

ity provision. “. . . In the event that any of the ae of this Trust

Fund Agreement is held to be illegal or invalid . . . such illegality or

invalidity shall not affect the remaining provisions of the agreement

unless such po or invalidity prevents the accomplishment of the

urposes and objectives of this Trust Fund Agreement.” This severa-

lity clause § 10’s limited impact—its correction cures the de-

fect—allows the Trust Agreement and Trust Fund to remain.

App. 30

APPENDIX “B”

§ 186. Restrictions on payments and loans to em-

ployee representatives, labor organizations, officers and

employees of labor organizations, and to employees or

groups or committees of employees; exceptions; penalties;

jurisdiction ; effective date ; exception of certain trust funds

plicable (1) in respect to any money or other thing of

value payable by an employer to any of his employees

whose established duties include acting openly for such

employer in matters of labor relations or personnel admin-

istration or to any representative of his employees, or to

any officer or employee of a labor organization, who is

also an employee or former employee of such employer, as

compensation for, or by reason of, his service as an em-

ployee of such employer; (2) with respect to the payment

or delivery of any money or other thing of value in satis-

faction of a judgment of any court or a decision or award

of an arbitrator or impartial chairman or in compromise,

adjustment, settlement, or release of any claim, complaint,

grievance, or dispute in the absence of fraud or duress;

(3) with respect to the sale or purchase of an article or

commodity at the prevailing market price in the regular

course of business; (4) with respect to money deducted

from the wages of employees in payment of membership

dues in a labor organization: Provided, That the employer

has received from each employee, on whose account such

deductions are made, a written assignment which shall not

be irrevocable for a period of more than one year, or be-

yond the termination date of the applicable collective agree-

ment, whichever occurs sooner; (5) with respect to money

or other thing of value paid to a trust fund established by

App. 31

such representative, for the sole and exclusive benefit of

the employees of such employer, and their families and

dependents (or of such employees, families, and dependents

jointly with the employees of other employers making simi-

lar payments, and their families and dependents): Pro-

vided, That (A) such payments are held in trust for the

purpose of paying, either from principal or income or

both, for the benefit of employees, their families and de-

pendents, for medical or hospital care, pensions on retire-

ment or death of employees, compensation for injuries or

illness resulting from occupational activity or insurance to

provide any of the foregoing, or unemployment benefits or

life insurance, disability and sickness insurance, or acci-

dent insurance; (B) the detailed basis on which such pay-

ments are to be made is specified in a written agreement

with the employer, and employees and employers are

equally represented in the administration of such fund,

together with such neutral persons as the representatives

of the employers and the representatives of employees may

agree upon and in the event the employer and employee

groups deadlock on the administration of such fund and

there are no neutral persons empowered to break such

deadlock, such agreement provides that the two groups

shall agree on an impartial umpire to decide such dispute,

or in event of their failure to agree within a reasonable

length of time, an impartial umpire to decide such dispute

shall, on petition of either group, be appointed by the dis-

trict court of the United States for the district where the

trust fund has its principal office, and shall also contain

provisions for an annual audit of the trust fund, a state-

ment of the results of which shall be available for inspec-

tion by interested persons at the principal office of the

trust fund and at such other places as may be designated in

such written agreement; and (C) such payments as are

App. 32

intended to be used for the purpose of providing pensions

or annuities for employees are made to a separate trust

which provides that the funds held therein cannot be used

separate trust which provides that the funds held therein

cannot be used for any purpose other than paying such

pensions or annuities; (6) with respect to money or other

thing of value paid by any employer to a trust fund estab-

lished by such representative for the purpose of pooled

vacation, holiday, severance or similar benefits, or defray-

ing costs of apprenticeship or other training programs:

Provided, That the requirements of clause (B) of the prv-

viso to clause (5) of this subsection shall apply to such

trust funds; (7) with respect to money or other thing of

value paid by any employer to a pooled or individual trust

fund established by such representative for the purpose of

(A) scholarships for the benefit of employees, their fami-

lies, and dependents for study at educational institutions,

or (B) child care centers for preschool and school age de-

pendents of employees: Provided, That no labor organiza-

tion or employer shall be required to bargain on the estab-

lishment of any such trust fund, and refusal to do so shall

not constitute an unfair labor practice: Provided further,

That the requirements of clause a (B) of the proviso to

clause (5) of this subsection shall apply to such trust

funds; or (8) with respect to money or any other thing of

value paid by any employer to a trust fund established by

such representative for the purpose of defraying the costs

of legal services for employees, their families, and depend-

ents for counsel or plan of their choice: Provided, That the

requirements of clause (B) of the proviso to clause (5) of

this subsection shall apply to such trust funds: Provided

further, That no legal service shall be furnished: (A) to

initiate any proceeding directed (i) against any such em-

ployer or its officers or agents except in workman’s com-

App. 33

pensation cases, or (ii) against such labor organization, or

its parent or subordinate bodies, or their officers or

agents, or (iii) against any other employer or labor or-

ganization, or their officers or agents, in any matter aris-

ing under subchapter II of this chapter or this chapter;

and (B) in any proceeding where a labor organization

would be prohibited from defraying the costs of legal serv-

ices by the provisions of the Labor-Management Reporting

and Disclosure Act of 1959.

App. 34

APPENDIX “C”

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

No. FL 74-172-Civ-NCR

MICHAEL COSTELLO, CHARLES PEREZ

and ROBERT HORAN, et al

Plaintiffs

vs.

BARRY LIPSITZ, ROBERT SEIPLE,

D. M. SCHNEIDER, et al

Defendants

FINDINGS OF FACT

and

CONCLUSIONS OF LAW

(Filed March 31, 1975)

After trial of this case, without a jury, the court

makes the following findings of fact and conclusions of

law.

FINDINGS OF FACT

1. This is an action brought by Employee Trustees

of the Gold Coast Electrical Joint Apprenticeship and

Training Trust Fund against the Employer Trustees of

said Trust, alleging that the Trust Agreement under which

the parties function in the administration of an apprentice

and journeyman training program violates the provisions

App. 35

of Sections 302 (c) (5) (B) and (C) (6) of the Labor-

Management Relations Act of 1947, as amended, (the Taft-

Hartley Act); and, in the implementation of the Trust

Agreement, defendants have denied plaintiffs their exer-

cise of certain richts contained in said statutory law.

2. On August 27, 1962, the Trust Agreement which

is the subject of this suit was signed by Marshall Williams,

as Business Manager of International Brotherhood of

Electrical Workers, Local Union 728, and the Chapter Man-

ager of the Gold Coast Chapter National Electrical Con-

tractors Association, Inc., the labor and management

groups, respectively, which had been and remain the col-

lective bargaining agents for union electricians and con-

tractors in Broward County, Florida. On September 1,

1962, a two year collective bargaining agreement became

effective, which contained a new section dealing with the

establishment of a Trust Agreement which was to “con-.

form to Section 302 of the Labor Management Relations

Act of 1947 as amended.”

3. The witnesses called by the plaintiffs testified

that they were familiar with the provisions of Article V,

Section 7. The court finds that the written Trust Agree-

ment dated August 27, 1962 was not accepted by the

trustees for union members, but it has been followed by

both the union and management.

4. There is no written Trust Agreement in existence

for the years 1964, 1966, 1967, 1972, 1973 and 1974. The

working agreements for these years were introduced into

evidence, and in Article V, Section 7, is set forth the fol-

lowing:

App. 36

“The parties to this Agreement shall have a

joint apprenticeship and training Trust Fund

Agreement, which Agreement shall conform to

Section 302 of the Labor-Management Relations

Act of 1947, as amended.”

5. Prior to August 1962 there was no written Trust

Fund Agreement, and the program at that time was

funded by both parties — union and management. Man-

agement offered to refund the entire apprenticeship pro-

gram in turn for the union agreeing to delegating the re-

sponsibility of employment to the employer representa-

tives. This offer has not been accepted by the union in

those years subsequent to the August 27, 1962 agreement.

6. The Joint Apprenticeship and Training Commit-

tee (JATC) was established and continued to operate un-

der the terms of the 1962 agreement although the union

attempted from 1967 on to delete Section 10 from the

Agreement. Section 10 reads, as follows:

“10. Matters pertaining to any employees of

this F'und shall be the responsibility of the Em-

ployers Trustees only.”

7. The plaintiffs, Employee Trustees, have had an

equal voice along with the Employer Trustees in the se-

lection and the employment conditions, including salaries

and expenses, of some seventeen instructors employed by the

Trust to give the training and instruction to apprentices

and journeymen which is the sine qua non of the program.

They have, in addition, had an equal voice in the selection

of apprentices, the investment of the Trust’s assets, the

purchase of instructional materials and supplies, the send-

App. 37

ing of persons to instructional meetings and conferences,

the payment of rent, and the discharge of a former Assist-

ant Director of the Trust. However, the Employer Trust-

ees have effectively blocked them in exercising any control

over the selection of a Director, an Assistant Director and

several office clerical employees, as well as the amount of

salaries paid to said persons.

8. Marshall Williams, the former Business Manager

of Local 728, current Director of the Trust, also serves in

the dual capacity as Chapter Manager of the Contractors’

Association. His office and the offices of the Trust are

located in a building owned by the Contractors’ Associa-

tion, which also has its office in the same building. By

the terms of his employment contract 2xecuted jointly be-

tween the Employer Trustees of the Trust and the Con-

tractors’ Association, he is to serve in both capacities for

one weekly salary, with dual responsibilities. His Assist-

ant Director, Arnold Bleeker, serves the Trust exclusively,

but his salary is set solely by the Employer Trustees of the

Trust. The office clerical employees, at least some of whom

perform duties for both the Trust and the Contractors’

Association, are directed solely by Mr. Williams and the

Employer Trustees.

9. The Training Fund is an employer-established

Fund and wholly funded by them. Prior to August 1962,

the empleyers and employees funded the program equally.

CONCLUSIONS OF LAW

1. Section 302 of the National Labor Relations Act

provides that the agreements for apprenticeship training

App. 38

programs and other type welfare programs be a “written

agreement.” However, the working agreements are not

complete written agreements for the establishment of an

Apprenticeship Training Fund. Section 7 of the working

agreements requires that there be a written Trust Fund

Agreement but one has not been executed by union and

management. See Moglia v. Geoghehan, 403 F.2d 110 (2d

Cir. 1968) ; cert. denied, 89 S.Ct. 1193 (1969); Hinson v.

National Labor Relations Board, 428 F.2d 133 (8th Cir.

1970); Local Union No. 529, United Brotherhood of Car-

penters and Joiners of America v. Bracy Development Co.,

Inc., 321 F.Supp. 869 (W.D. Ark. 1971).

In addition, the Apprenticeship Trust Fund which has

been in operation is wholly funded by the employer. In

such event it is not controlled by Section 302 of the Taft-

Hartley Act so that the employer must give the union an

equal voice in the operation of the Fund. Independent

Association of Mutuel Employees of New York State v.

New York, 398 F.2d 587 (2d Cir. 1968).

The defendants have stipulated to certain requests

of plaintiffs in this suit, including willingness to provide

the Employee-Trustees full and complete access during

regular business hours and during meetings of the JATC

to all records, including financial records. Defendants fur-

ther stipulated that all expenses of the Fund, except the

salaries of the Director, Assistant Director and the office

clerical employees would be submitted to a voite of the

Trustees — both Employee Trustees and Employer Trust-

ees — before disbursement.

The court further finds that certain services have

been performed by plaintiffs’ attorney which the Appren-

App. 39

ticeship Training Fund should bear, and the court will

consider this matter further at a hearing, or upon affi-

davits if counsel so stipulate.

DONE AND ORDERED this 31 day of March, 1975.

/s/ Norman C. Roettger, Jr.

United States District Judge

ec— Kaplan Dorsey Sicking & Hessen

ec— Varon, Stahl & Kay, P.A.

App. 40

APPENDIX “D”

MR. KAPLAN: I object, Your Honor. It calls

for a legal conclusion.

THE COURT: Sustained.

MR. KAPLAN: May I also submit to Your

Honor the question has gone much further inan direct

ever contemplated and he is going over ground we have

all talked about this morning. I think it is improper at

this point.

THE COURT: I sustained your objection.

BY MR. STAHL:

Q. Mr. Costello, this agreement of August 27, 1962

with Section 10 in it, has it ever been approved by the

union representatives?

A. Not to my knowledge, sir.

MR. STAHL: Thank you.

MR. KAPLAN: I have no further questions.

THE COURT: You may step down, Mr. Cos-

tello.

App. 41

APPENDIX “E”

Q. And also under Section 16, if it is to be amended

it is to be taken to the employees and employers?

A. Also Section 17, if any part of that trust agree-

ment is found to be illegal by a court of law it shall be

removed.

Q. Mr. Costello, then you are telling me that there

was no official union-designated members to negotiate the

August 27, 1962 agreement?

A. Yes, sir. I will state that again.

Q. And has the union ever, or any union repre-

sentatives, ever becn been appointed— You are a member

of that committee, aren’t you, sir?

A. lIamnow, sir.

Q. By virtue of what document?

A. I was appointed by the unit chairman in 1969.

Q. By reason of the working agreement or by rea-

son of the trust fund agreement?

A. The working agreement, collective bargaining

agreement.

App. 42

APPENDIX “F”

Q. You say formally it is not before them right now.

Every time since September the Ist, 1962 there’s been a

collective bargaining agreement, the trust fund agreement

of August 27, 1962 has been ratified and adopted as the

trust fund agreement in existence?

MR. KAPLAN: Object. That is a conclusion on

the part of counsel.

THE COURT: It’s cross examination. I will

permit a yes or no answer.

THE WITNESS: No. The working agreements

have been ratified, yes. The trust agreement has not been

ratified.

BY MR. STAHL:

Q. The trust agreement has not been ratified by

whom?

A. The union side. It was never brought before them.

App. 48

APPENDIX “G”

THE COURT: Who’s “they”?

THE WITNESS: The local union, membership,

told the negotiating committee, their negotiating commit-

tee, to proceed with what really took affect. That hap-

pened.

BY MR. KAPLAN:

Q. So if the trust agreement wasn’t in existence, you

read only the collective bargaining agreement, is that

right?

A. That’s correct. Didn’t even read the collective

bargaining agreement at the time.

Q. I see.

A. We discussed it and we discussed the problems

of the apprenticeship and how to fund it, just like I men-

tioned a moment ago.

Q. If you never read the documents, then, it is your

testimony, is it not, that the finished product which is the

trust agreement, was something that was constructed be-

tween you and Kar! Behnke; is that true?

A. No, sir. Absolutely not. Karl Behnke and I didn’t

personally have anything to do with constructing this

agreement. It was constructed by the two respective

committees of the organizations. We only signed it. We

only signed it on behalf of them.

App. 44

Q. The collective bargaining agreement makes ref-

erence, as we have pointed out on several occasions, to the

creation of a “Joint Apprenticeship and Trust Fund

Agreement which agreement shall conform to Section 302

of the Labor-Management Relations Act of 1947 as

amended.”

Did you agree to put that language in there?

A. The committee did.

Q. Well, did you have any part in the drafting of

that clause?

A. Mr. Kaplan, the business manager or the chapter

mar ger never votes on any action that is taken from

the respective bodies. They only carry out the orders that

are given them, and this is precisely what happened. The

two committees constructed this thing, I didn’t. I signed

on behalf of the local union because I am under the opin-

ion now, as I was then, that is what they agreed to.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.