Petition — Overhead Door Co. of Metropolitan Washington v. Washington Area Carpenters' Welfare Fund

, N Office - Supreme Court, U.S.

22 9 89 FILED

0 NOV 29 1982

No.

— . = 5 7 VAS

IN THE WS

Supreme Court of the United States

OCTOBER TERM, 1982

OVERHEAD DooR COMPANY OF

METROPOLITAN WASHINGTON,

Petitioner,

v.

WASHINGTON AREA CARPENTERS’ WELFARE FUND, et al.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

JOHN J. Ross *

WENpy T. KIRBY

PAUL C. SKELLY

HOGAN & HARTSON

(a partnership including

professional corporations)

815 Connecticut Ave., N.W.

Washington, D.C. 20006

(202) 331-4500

Counsel for Petitioner

* Counsel of Record

— — — —

: — 3

WILSON - Eres Printinc Co., Inc. - 789-0096 - WASHINGTON, D.C. 20001

QUESTION PRESENTED

Whether a prehire agreement authorized by Section

8(f) of the National Labor Relations Act is enforceable

in a suit brought by the trustees of union fringe benefit

funds against an employer in the construction industry,

absent a showing that the union represents a majority

of the employer’s employees.

(i)

ä al

ii

PARTIES TO THE PROCEEDINGS

Appellee below and Petitioner in this Court is Over-

head Door Company of Metropolitan Washington. Ap-

pellants below and Respondents in this Court are Wash-

ington Area Carpenters’ Welfare Fund, Washington

Area Carpenters’ Pension and Retirement Trust Fund,

Washington Area Carpenters’ Apprenticeship Plan, and

Washington Area Carpenters’ Trust Funds.

TABLE OF CONTENTS

QUESTION PRESENTED DP

PARTIES TO THE PROCEEDINGS ds on

TABLE OF AUTHORITIES 220.000.0.00.........ncc-cccccccecesses-

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APPENDICES:

APPENDIX A—Court of Appeals Opinion

APPENDIX B—Court of Appeals Order accom-

panying Opinion

APPENDIX C—District Court Judgment

APPENDIX D—District Court Memorandum

.

APPENDIX E— Amendment to District Court

Memorandum Opinion

APPENDIX F—Court of Appeals Judgment

APPENDIX G—Court of Appeals Order denying

Petition for Rehearing and Sug-

gestion for Rehearing En Banc..

APPENDIX H—Affidavit of Richard F. Ayres

gs

APPENDIX I—Affidavit of Richard F. Ayres

I

APPENDIX J—Relevant Statutes

(iii)

31a

iv

TABLE OF AUTHORITIES

Cases Page

Kaiser Steel Corp. v. Mullins, 102 S.Ct. 851

RETR ERE ESS i oS Cr 4

N. L. R. B. v. Local Union No. 108, International

Association of Iron Workers, 434 U.S. 335

ESSE ER AN RPP sea ne ee 4,6

Todd v. Jim McNeff, Inc., 667 F.2d 800 (9th Cir.),

cert. granted, 102 S.Ct. 3508 (1982) (No. 81-

TTT 2, 5, 6

Washington Area Carpenters’ Welfare Fund v.

Overhead Door Co., 681 F.2d 1 (D.C. Cir.

1 2, 3, 4, 5, 6

Washington Area Carpenters’ Welfare Fund v.

Overhead Door Co., 488 F. Supp. 816 (D.D.C.

1981), rev'd, 681 F.2d 1 (D.C. Cir. 1982) .......... 2,4

Statutes

RG yyy — 2

4 — — 1

1 — 4,5

4 — 4

3 L—k——̃ 4

IN THE

Supreme Cuurt of the United States

OCTOBER TERM, 1982

No.

OVERHEAD Door COMPANY OF

METROPOLITAN WASHINGTON,

. Petitioner,

WASHINGTON AREA CARPENTERS’ WELFARE FUND, et al.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Petitioner Overhead Door Company of Metropolitan

Washington prays that a writ of certiorari issue to re-

view the judgment of the United States Court of Appeals

for the District of Columbia Circuit, which held that a

“prehire” agreement between an employer and union in

the construction industry, as authorized by Section 8(f)

of the National Labor Relations Act, 29 U.S.C. § 158 (f),

may be enforced retrospectively, even though the union

has not attained the status of majority representative of

the employer’s employees.

OPINIONS BELOW

The judgment and memorandum opinion of the United

States District Court for the District of Columbia (No.

79-0097), dated April 22, 1980, appear as Appendix C

(App. 21a) and Appendix D (App. 22a) hereto. The

District Court’s memorandum opinion is reported at 488

F. Supp. 816. An amendment to the District Court's mem-

orandum opinion, dated May 5, 1980, is incorporated in

the reported opinion at 488 F. Supp. 816 and appears as

Appendix E (App. 30a) hereto. The opinion of the

United States Court of Appeals for the District of

Columbia Cireuit (No. 80-1501, from which certiorari

is sought, dated June 15, 1982, is reported at 681 F.2d 1

and appears as Appendix A (App. la) hereto. The order

of the Court of Appeals denying a Petition for Rehear-

ing and a Suggestion for Rehearing En Banc, dated

August 30, 1982, is not reported but appears as Appen-

dix G (App. 32a) hereto.

JURISDICTION

The Court of Appeals’ judgment in this case was ren-

dered on June 15, 1982. Appendix F (App. 3la). A

timely Petition for Rehearing and Suggestion for Re-

hearing En Bane was filed on July 12, 1982, and denied

on August 30, 1982. Appendix G (App. 32a). The

jurisdiction of this Court is invoked under 28 U.S.C.

§ 1254(1).

RELEVANT STATUTES

The relevant statutory provisions are set forth as

Appendix J (App. 38a) hereto.

STATEMENT OF THE CASE

The issue presented in this case—whether a prehire

agreement is enforceable absent a showing that the union

which signed the agreement is the majority representa-

tive of the employer's employees—is virtually identical to

the issue which this Court has agreed to review in Jim

McNeff, Inc. v. Todd, cert. granted, 102 S.Ct. 3508

(1982) (No. 81-2150) (“McNeff’). The facts of this

case closely resemble those in McNeff.

Petitioner Overhead Door Company of Metropolitan

Washington (the Employer“ is an employer in the

construction industry. In October, 1969, two of the Em-

ployer’s employees were working on a construction proj-

ect in Laurel, Maryland, for which the Employer was a

subcontractor. A representative of the Carpenters’ Union

(the Union“ came to the job site and told the two em-

ployees that the Employer would have to sign a contract

with the Union in order to finish the job. Appendix H

(App. 34a). In addition, the Employer’s president was

oe that the Union would “kick him off the job” unless

he signed a contract and forced the two employees to

join the Union. Appendix I (App. 36a). The Employer’s

president thereafter executed an “Acceptance Agree-

ment” incorporating the terms of the area-wide collec-

tive bargaining agreement between the Construction Con-

tractors Council, Inc. and the Carpenters’ District Coun-

cil, and the two employees joined the Union. Although

fifteen of the Employer’s employees were engaged in car-

pentry work at that time, only one was a member of

the Union. (App. 34a). The Union did not contend that

it represented a majority of these employees, and no

election was ever held to establish the employees’ desires.

(App. 37a). The Employer’s president signed similar

Agreements presented to him by the Union in

1972 and 1976. (App. 35a).

As noted by the Court of Appeals (App. 3a), the

parties are in agreement that these Acceptance Agree-

ments, which cover all terms and conditions of employ-

ment for carpentry services, were “prehire” agreements,

as that term is commonly defined in the construction in-

dustry. These prehire agreements called for the Em-

ployer to make contributions on behalf of covered em-

to certain union fringe benefit funds (the

Funds“ . The Employer made such contributions to

the Funds for hours worked by the three employees who

were members of the Union. The Employer did not make

contributions, however, for other employees who were

1

not members of the Union, and none of those other em-

ployees ever made a claim for benefits from the Funds.

(App. 37a).

On January 9, 1979, trustees of the Funds brought

this action against the Employer in the United States

District Court for the District of Columbia, pursuant to

Section 301 of the Labor Management Relations Act of

1947 (“LMRA”), 29 U.S.C. § 185, and Section 502(f) of

the Employee Retirement Income Security Act of 1974, 29

U.S.C. § 1132(f). The trustees alleged that the Employer

had violated the terms of the prehire agreements by un-

derpaying contributions for its Union employees and

failing to make any contributions for its non-Union em-

ployees. The trustees sought monetary damages and an

audit of the Employer’s records to determine the amount

of underpayment.

On April 22, 1980, the District Court granted sum-

mary judgment for the Employer, holding that the pre-

hire agreements were not enforceable absent proof of

majority support for the Union among the employees.

(App. 27a). In reaching its decision, the District Court

relied heavily on this Court’s decision in N.L.R.B. v.

Local 103, International Association of Iron Workers,

434 U.S. 335 (1978) (“Iron Workers“)

On June 15, 1982, the United States Court of Appeals

for the District of Columbia Circuit reversed the District

Court’s entry of summary judgment. The Court of Ap-

peals concluded that the Iron Workers decision was not

controlling, and ruled that a prehire agreement is en-

forceable by breach of contract actions until such time as

either party manifests its intent to void the agreement.

(App. 14a

The Court of Appeals expressly declined to base its holding on

the trustees’ argument that the combined effect of Section 306 of

the Multiemployer Pension Plan Act of 1980, 29 U.S.C. § 1145, and

this Court’s recent opinion in Kaiser Steel Corp. v. Mullins, 102

S.Ct. 851 (1982) precludes an employer from raising an unenforce-

ability defense based on the absence of majority support. (App. 8a).

ARGUMENT

A brief review of the Court of Appeals’ decision in

McNeff demonstrates how closely it resembles the pres-

ent case. See Todd v. Jim McNeff, Inc., 667 F.2d

800 (9th Cir.), cert. granted, 102 S.Ct. 3508 (1982)

(No. 81-2150). In that case, the president of a construc-

tion company signed a prehire agreement under pressure

from a union representative. When the company failed

to comply with the terms and conditions of the prehire

agreement, it was sued by the trustees of a number of

union fringe benefit trust funds under Section 301 of

the LMRA. The company raised a defense that the

agreements were unenforceable absent a showing that

the union had gained majority support among the em-

ployees. This defense was ultimately rejected by the

Ninth Circuit, which ruled that prehire agreements are

enforceable until repudiated by the employer. 667 F.2d

at 804.

In the decision below in the present case, the Court of

Appeals expressly stated that “(t]he reasoning [of the

Court of Appeals decision in McNeff) is the same as we

announce today.” (App. 17a at n.41). Thus, the issue

presented in this case is virtually identical to that which

this Court has already agreed to review in McNeff2

The issue of the enforceability of prehire agreements

is one of great concern in the building and construction

industry. It affects the interests of employees, employ-

ers, unions and union benefit funds across the nation. The

Employer believes that the approach adopted by the Court

of Appeals below, as well as by the Ninth Circuit in Me-

2 McNeff also presents for the Court's consideration a second,

closely related question—whether a prehire agreement may be en-

forced if it was entered into by an employer because of coercion by

a union. Because the District Court's summary judgment was not

grounded upon any finding of coercion, this precise issue was not

argued to the Court of Appeals in the present case, although the

facts underlying this case do reflect an element of union coercion.

Thus, it is not raised as a separate question herein.

Neff, is plainly incorrect. This point is explained fully

by the arguments set forth in the Brief of Petitioner on

the Merits filed in McNeff. Thus, in the interests of avoid-

ing redundancy and an unnecessary expenditure of the

Court’s time, the Employer will not repeat those argu-

ments herein, but rather will briefly set forth the factors

justifying the issuance of a writ of certiorari.

First, the decision below calls into question and under-

mines this Court’s decision in N.L.R.B. v. Local 103, In-

ternational Association of Iron Workers, 434 U.S. 335

(1978) (“Iron Workers”). The District Court’s entry of

summary judgment in favor of the Employer was based

on its conclusion that under Iron Workers, prehire agree-

ments are unenforceable absent a showing that the union

has attained majority support. (App. 27a). The Court

of Appeals concluded, however, that Iron Workers was

tion were enforceable retrospectively. (App. 14a). Thus,

of Appeals’ decision below is plainly contrary

tion established by this Court in Iron Workers.

the

Court of Appeals’ decision in this case

to the considerable conflict among the United

of Appeals on the issue presented by this

by the Ninth Circuit in McNeff, three

approaches have been adopted to date. 667 F.2d

passage of time has resulted in further

than clarification of the law. This wide-

spread division of opinion on an important issue of fed-

eral law warrants prompt resolution by this Court.

8 F

=

12

Tih

: ‘te

7

CONCLUSION

For the reasons set forth above, the Employer respect-

fully requests that this Court issue a Writ of Certiorari

review the decision below of the United States Court

to

of Appeals for the

* Counsel of Record

et of Columbia Circuit.

Respectfully submitted,

JOHN J. Ross *

WENDY T. KIRBY

PAUL C. SKELLY

HOGAN & HARTSON

(a partnership including

professional corporations)

815 Connecticut Ave., N.W.

Washington, D.C. 20006

(202) 331-4500

Counsel for Petitioner

INDEX TO APPENDIX

APPENDIX A—Court of Appeals Opinion

APPENDIX B—Court of Appeals Order accompany-

fe

APPENDIX C—District Court Judgment

APPENDIX D—District Court Memorandum Opin-

Cree en

APPENDIX E—Amendment to District Court Memo-

randum Opinion =

APPENDIX F—Court of Appeals Judgment

APPENDIX G—Court of Appeals Order denying Peti-

tion for Rehearing and Suggestion

for Rehearing En Banne

APPENDIX H—Affidavit of Richard F. Ayres (May

1—

APPENDIX I—Affidavit of Richard F. Ayres (June

4. — —-— ——

APPENDIX J—Relevant Statutes

2la

31a

la

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 80-1501

WASHINGTON AREA CARPENTERS’ WELFARE FUND, ET AL.,

Appellants

V.

OVERHEAD Door Co. OF METROPOLITAN WASHINGTON

Appeal from the United States District Court

for the District of Columbia

Argued 14 May 1981

Decided 15 June 1982

Joseph Semo, with whom Ira M. Lechner was on the

brief, for appellants.

William T. Torgerson, with whom John J. Ross and

Wendy T. Kirby were on the brief, for appellee.

Gerald M. Feder, Robert J. Connerton and Theodore

T. Green were on the brief for amicus curiae, National

Coordinating Committee for Multiemployer Plans, urging

reversal.

Laurence J. Cohen and Terry R. Yellig were on the

brief for amicus curiae, Building and Construction Trades

Department, AFL-CIO, urging reversal.

2a

Gerard C. Smetana and William H. DuRoss, III were

on the brief for amicus curiae, Associated Builders and

Contractors, Inc., urging affirmance.

Before: ROBINSON, Chief Judge, HOMER THORNBERRY,*

Senior Circuit Judge, and WILKEY, Circuit Judge.

Opinion for the Court filed by Circuit Judge WILKEY.

WILKEY, Circuit Judge: This is an appeal of the dis-

trict court’s grant of summary judgment in favor of ap-

pellee Overhead Door Company of Metropolitan Wash-

ington. Appellants, union fringe benefit funds (“the

Funds”), brought suit in January 1979 to recover con-

tributions Overhead Door allegedly owed the Funds un-

der successive agreements with the Carpenters’ District

Council Washington, D.C. and Vicinity (“the Union“).

Overhead Door argued that these prehire“ agreements,

made pursuant to section 8(f) of the National Labor

Relations Act (NLRA),' were not enforceable because

the Union never gained majority support of the bar-

gaining unit. The district court agreed, and entered

summary judgment against the Funds. We reverse.

I. BACKGROUND

Section 8(f) of the NLRA provides that it shall not

be an unfair labor practice for construction industry

unicus and employers to make agreements (called “pre-

hire” agreements), even though the union has not at-

tained majority status among the workers.“ This ex-

empts construction industry employers from the normal

rule that bargaining with anyone other than the ma-

jority representative is an unfair labor practice.“ Once

* Of the United States Court of Appeals for the Fifth Circuit,

sitting by designation pursuant to 28 U.S.C. § 294(d) (1976).

129 U.S.C. § 158(f) (1976).

2 Id.

3 See International Ladies’ Garment Workers Union v. NLRB, 366

U.S. 731, 737-38 (1961).

3a

the union gains majority support, the prehire agreement

matures into a fully effective collective bargaining agree-

ment.* The status of a prehire agreement prior to that

time is the issue in this case.

In 1969 an area-wide collective bargaining agreement

existed between the Union and the Construction Con-

tractors Council, Inc. of Washington, D.C., an employers

association. Overhead Door was not a member of the

Contractors Council and thus not a party to the agree-

ment. According to the president of Overhead Door, in

October 1969 the company was told by the Union’s rep-

resentative that to complete a job it was working on as

a subcontractor it would have to sign an agreement with

the Union, and its two employees working on the job

would have to join the Union.“ These workers complied,

leaving Overhead Door with three Union members out

of fifteen employees. Overhead Door also complied, en-

tering into an “Acceptance Agreement” which incor-

porated the terms of the area-wide collective bargaining

agreement. Similar Acceptance Agreements were signed

by Overhead Door in July 1972 and December 1976, in-

corporating the provisions of subsequent area-wide agree-

ments. The 1976 agreement expired in 1978, meaning

that the agreements between Overhead Door and the

Union were in effect for a ten-year period.

The parties agree that these Acceptance Agreements,

which cover all terms and conditions of employment for

carpentry services, were prehire agreements. One pro-

vision of each agreement required Overhead Door to

make contributions to the Funds on behalf of all covered

employees. For example, by the end of the ten-year

* See NLRB v. Local 103, Int'l Ass of Bridge, Structural &

Ornamental Iron Workers, 434 U.S. 335, 341 (1978).

5 The alleged use of threats to force Overhead Door to sign the

agreement is not at issue in this case, as the company never filed

an unfair labor practice charge.

4a

period Overhead Door was required to pay, for each hour

worked by each employee, $.80 per hour to the Health

and Welfare Fund, $.60 per hour to the Pension Fund,

and $.07 per hour to the Apprenticeship Training Fund.

In 1976 the Funds conducted a partial audit of the com-

pany’s records, and concluded that it had failed to make

contributions for most employees and had undercounted

the hours worked by the few employees for whom con-

tributions were made.

In January 1979 the Funds brought this suit under

section 301 of the Labor Management Relations Act and

section 502 of the Employee Retirement Income Security

Act,“ seeking to collect the unpaid contributions. In re-

sponse Overhead Door conceded that it contributed to

the Funds on behalf of its three union employees, who

have received some benefits from the Funds. It argued,

however, that the agreements did not cover most hours

worked by two of these three employees because one had

not worked as a carpenter since 1969 and the other had

been a supervisor since 1969. More important, the com-

pany denied responsibility for contributions based on

hours worked by its nonunion employees. It claimed that

it had never applied the agreements to these employees,

and asserted that the agreements could not be enforced

because the Union had not achieved majority status.

In April 1980 the district court granted summary

judgment for Overhead Door. It determined that agree-

ments under section 8(f) are permissible but not en-

forceable until the union gains majority support among

the employees. The court also rejected the Funds’ argu-

ment that the company was not permitted to assert the

defense of unenforceability in a suit brought by the

Funds, third party beneficiaries of the agreements. Since

the Funds failed to establish the majority status of the

Union, the agreements could not be enforced. Overhead

29 U.S.C. § 185 (1976); id. § 1132.

5a

Door was not liable for contributions on behalf of any

employees, whether union or nonunion.“

The Funds then appealed. On 12 June 1981 this court

stayed the appeal pending the Supreme Court’s decision

in Kaiser Steel Corp. v. Mullins. In Mullins this court

had held that in a suit brought by union funds to re-

cover unpaid contributions, the employer could not raise

the defense that the contract was illegal. The Supreme

Court reversed, holding that the defense of illegality was

legitimate.

Turning again to this appeal, we reverse and remand

to the district court for a decision on the merits of the

Funds’ claims.

II. LEGITIMATE EMPLOYER DEFENSES TO A TRUST FUND

SUIT TO RECOVER UNPAID CONTRIBUTIONS

The Funds contend that Overhead Door is not en-

titled to defend this suit on the basis of the alleged

unenforceability of the prehire agreement. The dis-

trict court rejected this argument, but the legal bases

of its decision have been largely superceded by a recent

Supreme Court decision and a new statutory provision

dealing with this issue. We therefore must consider

these new developments.

In Kaiser Steel Corporation v. Mullins the Supreme

Court held that a company which had promised to con-

tribute to union welfare funds was “entitled to plead

and have adjudicated a defense that the promise is il-

legal under the antitrust and labor laws.“ The collec-

tive bargalning agreement between Kaiser Steel and the

United Mine Workers included a clause requiring Kaiser

Steel to make contributions to union funds based on each

7488 F. Supp. 816 (D. D.C. 1980).

102 S. Ct. 851 (1982), rev’g 642 F.2d 1302 (D.C. Cir. 1980).

Id. at 854.

6a

ton of coal produced and each hour worked by employees,

as well as on each ton of coal purchased from another

operator who did not make contributions on his produc-

tion. In a suit brought by the union funds to recover

the latter form of contributions, Kaiser Steel sought to

raise the defense that the purchased coal clause was

void and unenforceable because it violated sections 1

and 2 of the Sherman Act and section 8(e) of the Labor

Management Relations Act (which prohibits “hot cargo”

clauses whereby an employer agrees not to do business

with another employer). The district court rejected

the defense and granted summary judgment for the fund

trustees; a divided court of appeals affirmed. The Su-

preme Court reversed, holding that its cases left “no

doubt that illegal promises will not be enforced in cases

controlled by the federal law.“

The Court then turned to a statutory issue not pre-

viously addressed. On 6 September 1980, nine days after

the court of appeals decision in Mullins, Congress en-

acted the Multiemployer Pension Plan Amendments Act

of 1980.“ Section 306 of the Act provides:

Every employer who is obligated to make contribu-

tions to a multiemployer plan under the terms of the

plan or under the terms of a collectively bargained

agreement shall, to the extent not inconsistent with

law, make such contributions in accordance with the

terms and conditions of such plan or such agree-

ment.“

Assuming arguendo that this new provision applied to

Mullins, the Court determined that it did not change the

result. The Act did not abolish illegality defenses, the

15 U.S.C. §§ 1, 2 (1976) ; 29 U.S.C. § 158(e) (1976).

11 102 S. Ct. at 856.

12 Pub. L. No. 96-364, 94 Stat. 1208.

8 29 U.S. C. A. § 1145 (West Supp. 1981).

— Wiis ee

7a

Court found, but rather only unrelated or extraneous

defenses. Also, finding an abolition of illegality defenses

would create a partial repeal of the labor, antitrust, and

other laws which might be cited as a defense to an action

for collection of unpaid contributions. Since repeals by

implication are disfavored, the Court found that the

1980 Act did not prevent Kaiser Steel from raising the

defense of illegality."

There are substantial reasons for believing that the

combined effect of Mullins and the 1980 Act is to pro-

hibit an employer from defending a trust fund suit on

the basis of the alleged unenforceability of prehire agree-

ments. The Mullins decision rested on the alleged illegal-

ity of the contract. Since payment by Overhead Door

to the Funds pursuant to the prehire agreements would

not be illegal, as allegedly would payment by a coal pro-

ducer pursuant to the purchased coal clause, Mullins may

be distinguished.“ More important, the Court specifically

cited legislative history indicating that the 1980 Act was

intended to reverse the result in this very case: “Both

[the House and Senate floor managers of the bill] also

stated that they . . . disapproved cases such as Washing-

ton Area Carpenters’ Welfare Fund v. Overhead Door Co.,

4 102 S. Ct. at 860-62. Three Justices dissented from the Court’s

interpretation of the 1980 Act. Id. at 862 (Brennan, J., dissenting).

Overhead Door argues that the principle underlying Mullins

and §306(a) is that defenses are permissible when they relate

directly to the enforceability of the contract itself. It notes that

§ 306(a) provides a cause of action for employers who are “obli-

gated to make contributions” pursuant to “a collectively bargained

agreement,” 29 U.S.C.A. § 1145 (West Supp. 1981), and asserts

that the “obligation” is what is in dispute here. A contrary reading,

however, is at least as compelling. The terms of the prehire agree-

ments clearly do obligate the company to contribute to the Funds,

and in at least one other context prehire agreements have been

found to constitute collectively bargained agreements. See Donald

Schriver, Inc. v. NLRB, 635 F.2d 859, 875 (D.C. Cir. 1980), cert.

denied, 451 U.S. 976 (1981).

8a

488 F. Supp. 816 (DC 1980), appeal pending

This specific reference in the legislative history, com-

bined with the Act’s purpose of making it easier for

union funds to recover unpaid contributions, provides

support for a holding that Overhead Door may not de-

fend this suit on the basis uf the alleged unenforceability

of section 8(f) agreements.

Nonetheless, we have determined not to resolve this

case on the basis of the 1980 Act. In the first place,

there is a question whether the Act applies at all here,

since the Court in Mullins refused to hold that the Act

applied to cases pending on appeal.“ And appellants

themselves have stated that the Act is not at issue in this

case, instead relying on it only as evidence of a national

policy in favor of enforcing contribution obligations.“

More important, the unavoidable effect of preventing em-

ployers from raising the unenforceability defense in cases

such as this one will be to make prehire agreements

enforceable, at least retrospectively. There are no other

means by which an employer may assert its position

that section 8(f) agreements are never enforceable prior

to recognition of the union as majority representative.“

102 S. Ct. at 861 (citing 126 Conc. Rec. H7899 (daily ed.

26 Aug. 1980) (remarks of Rep. Thompson); id. at 811673 (daily

ed. 26 Aug. 1980) (remarks of Sen. Williams

* The majority assumed arguendo the applicability of the Act.

Id. at 860. The dissenters argued that there was no doubt that the

1980 Act did apply to pending cases. Id. at 863 n.1 (Brennan, J.

dissenting).

18 See Reply Brief for Appellants at 6 n.12; Supplemental Brief

for Appellants at 4.

1% This is analogous to the Mullins majority's concern that pre-

venting the defense of illegality would effectively create a partial

repeal of the antitrust and labor laws. See 102 S. Ct. at 862. The

dissenters disputed this, at least with respect to the antitrust laws,

arguing that the employer could still sue for damages and injunc-

tive relief under the Sherman Act. /d. at 866 (Brennan, J., dissent-

9a

We prefer to resolve this issue on the basis of the his-

purpose of section 8(f), rather than on the

the 1980 Act, which did not refer specifically

to ire agreements at all. Accordingly, we turn to

the merits of Overhead Door’s claim that its obligations

under the prehire agreements are not enforceable.

III. ENFORCEABILITY OF PREHIRE AGREEMENTS

A. Legisiative History of Section 8(f)

The general rule under the NLRA is that an employer

commits an unfair labor practice by dealing with a union

that does not have the support of a majority of work-

ers.” The underlying policy is to protect employee free-

dom of choice. “There could be no clearer abridgment

of § 7 of the Act, assuring employees the right ‘to bar-

gain collectively through representatives of their own

choosing’ or ‘to refrain from’ such activity” than to

grant “exclusive bargaining status to an agency selected

by a minority of its employees, thereby impressing that

agent upon the nonconsenting majority.“

Section 8(f) provides an exception to this rule for

employers in the construction industry. This court re-

cently described the congressional motivation for enact-

ing this exception:

Section 8(f) was enacted as part of the 1959 amend-

ments to the National Labor Relations Act. The

ing). In the case of prehire agreements, however, it is clear that

preventing an employer from asserting their unenforceability in

defense of a trust fund suit effectively makes them enforceable in

that context.

We also note that none of the circuit courts to address the

8(f) issue in the past two years have relied on the 1980 Act. See

p. 17 infra.

2° See International Ladies Garment Workers Union v. NLRB.

366 U.S. 731, 737-38 (1961).

Id. at 737.

10a

provision was added due to the peculiar nature of

employment in the building and construction indus-

try. As described in the Senate Report concerning

§ 8(f):

The occasional nature of the employment rela-

tionship makes this industry markedly different

from manufacturing and other types of enter-

prise. An individual employee typically works

for many employers and for none of them con-

tinuously. Jobs are frequently of short dura-

tion, depending on various stages of construc-

tion.

S. Rep. No. 187, 86th Cong., Ist Sess. 27 (1959),

reprinted in I LEGISLATIVE HISTORY OF THE LABOR-

MANAGEMENT REPORTING AND DISCLOSURE ACT OF

1959 (LeGISLATIvE History), at 423 (1959). As

a result of these peculiarities, special arrangements

became common in the construction industry. As

described by the Senate Report:

In the building and construction industry it is

customary for employers to enter into collective

bargaining agreements for periods of time run-

ning into the future, perhaps 1 year or in many

instances as much as 3 years. Since the vast

majority of building projects are of relatively

short duration, such labor agreements neces-

sarily apply to jobs which have not been started

and may not even be contemplated.

Id. at 28; I LecisLaTive History at 424. The Re-

port noted that these agreements have special ad-

vantages for employers as well as workers:

— ~~ =

lla

ployer must be able to have available a supply

of skilled craftsmen ready for quick referral.

Id.

For these reasons and since the practice of sign-

ing such agreements was “not entirely consistent

with Wagner Act rulings of the NLRB that exclu-

sive bargaining contracts can lawfully be concluded

only if the union makes its agreement after a repre-

sentative number of employees have been hired,” id.,

Congress added § 8(f) to the Act. That provision

authorizes employers in the construction industry to

enter into comprehensive agreements with labor

organizations that have not established majority

status in the manner provided by §9 of the Act.

As the Senate Report bluntly concluded, “[r]epre-

sentation elections in a large segment of the indus-

try are not feasible to demonstrate such majority

status due to the short periods of actual employ-

ment by specific employers.” Id. at 55; I LEGISLA-

TivE History at 451 (emphasis supplied).

Congress thus expressly recognized that § 9(a)

collective bargaining relationships are often not

feasible in the construction industry. Due to the

occasional nature of employment in that industry,

unions and employers may enter prehire“ agree-

ments that stabilize employment conditions in a

particular geographic area over an extended period

of time.”

By enacting this section, however, Congress did not

eliminate its concern for both employer and employee

freedom of choice. As the Supreme Court has held,“Con-

gress was careful to make its intention clear that prehire

agreements were to be arrived at voluntarily, and no

element of coercion was to be admitted into the narrow

22 Donald Schriver, Inc. v. NLRB, 635 F.2d 859, 874 (D.C. Cir.

1980), cert. denied, 451 U.S. 976 (1981).

12a

exception being established to the majority principle.” ™

Moreover, until the union gains full recognition, either

the employees or the employer may petition the Board for

a representation election.“

B. The Supreme Court's Iron Workers Decision

In NLRB v. Local 103, International Association of

Bridge, Structural & Ornamental Iron Workers (Iron

Workers), the Supreme Court upheld a National Labor

Relations Board (NLRB) determination that a union

committed an unfair labor practice under section 8(b)

(7)(C) by picketing to enforce a prehire agreement.

An employer who had signed a prehire agreement estab-

lished a separate company for the purpose of doing

business with nonunion employees. The union considered

this a violation of the agreement’s multiemployer under-

standing, and it picketed at one jobsite for more than

thirty days, the time period triggering applicability of

section 8(b)(7)(C)’s prohibition of recognitional pick-

eting.“ The Board found that the picketing was unlaw-

ful because it was intended not merely to enforce the

terms of the agreement but also to force the employer

to recognize and bargain with the union.

The Supreme Court affirmed, emphasizing the substan-

tial deference it gave to the Board’s decision: “We have

concluded that the Board’s construction of the Act, al-

though perhaps not the only tenable one, is an accepta-

ble reading of the statutory language and a reasonable

implementation of the purposes of the relevant statutory

sections.“ Although section 8(f) provides an excep-

28 NLRB v. Local 1038, Int'l Ass'n of Bridge, Structural & Orna-

mental Iron Workers, 434 U.S. 335, 348 n.10 (1978).

29 U.S.C. § 158(f) (1976).

% 434 U.S. 335 (1978).

26 29 U.S.C. § 158(b)(7)(C) (1976).

* 434 U.S. at 341. See also id. at 350.

13a

tion to the rule regarding majority representation, the

exception is narrow. “The employer’s duty to bargain

and honor the contract is contingent on the union’s at-

taining majority support at the various construction

sites.“ Section 8(f) does not expand the employer’s

duty to bargain with a majority union into a duty “to

bargain with a union with which he has executed a pre-

hire agreement but which has failed to win majority

support in the covered unit.” To hold otherwise would

contravene the clearly expressed congressional policy of

maintaining the employees’ freedom to choose their own

representative. Accordingly, until majority support is

gained, “the prehire agreement is voidable and does not

have the same stature as a collective-bargaining contract

entered into with a union actually representing a ma-

jority of the employees and recognized as such by the

employer.” *°

C. Retrospective Enforcement of Prehire Agreements

The three Acceptance Agreements called for Overhead

Door to make specified contributions to the Funds on

behalf of covered employees. The parties agree that these

were prehire agreements. The sole issue before us, there-

fore, is whether Overhead Door is liable for the unpaid

contributions even though the union never attained ma-

jority status during the ten-year span of the agreements.

Overhead Door bases its argument for unenforceability

on language in Iron Workers stating that a prehire

agreement is merely a “ ‘preliminary step’” and that

“(t]he empioyer’s duty to bargain and honor the contract

is contingent on the union’s attaining majority sup-

28 Jd. at 345.

29 Jd. at 346.

Id. at 341.

:

|

|

l4a

port.“ “ The Funds, on the other hand, rely on the

Court’s statement that the agreements are “voidable,” *

interpreting this to mean that the contract is enforceable

until it is voided by either party.

We hold that section 8(f) agreements are enforceable

in a breach of contract action for the period from the

date the agreement was made until the date when either

party manifests its intent to void the agreement. We

emphasize the limitations on this holding. Unti!' e

minority union obtains support of a majority of em-

ployees, the prehire agreement is not prospectively bind-

ing. Either party to the agreement may void it. While

the agreement remains in effect, however, it must be ob-

served by the parties.

This holding is based on our understanding of the

congressional purposes underlying the exception for pre-

hire agreements. As the legislative history of section

8(f) indicates, Congress recognized that the normal col-

lective bargaining paradigm did not work in the con-

struction industry. Permitting a minority union to make

an agreement with an employer, often before the em-

ployer has hired any employees for a particular job, has

many benefits for both parties. Employees gain the

benefits of collective bargaining where it might other-

wise be impractical. At the same time, they are free to

Id. at 345. Overhead Door also cites the Court's statement that

a previous decision, Retail Clerks Int'l Ass'n, Locals 128 & 683 v.

Lion Dry Goods, Inc., 369 U.S. 17 (1962), could be reconciled with

a holding “that absent a showing that the union is the majority's

chosen instrument, the contract is unenforceable.” 434 U.S. at 352.

In Lion Dry Goods the Court held that § 301 of the Labor Manage-

ment Relations Act confers jurisdiction on the federal courts to hear

suits based on §8(f) contracts. All Jron Workers added was that

this holding did not compel the conclusion that §8(f) agreements

are enforceable, since the jurisdictional question differs from the

enforceability question. Nothing further can be read into ron

Workers.

82 Jron Workers, 434 U.S. at 341.

15a

call for a representation election if dissatisfied with the

prehire agreement or any other aspect of the minority

union’s involvement. Employers are free to abstain from

entering section 8(f) agreements, but when they do

make them they are able to set labor costs in advance,

to ensure a ready supply of workers, and to gain a meas-

ure of labor peace. In sum, both parties are able to

enjoy the benefits of a stable employment relationship,

while retaining freedom to alter that relationship.”

This analysis demonstrates that a prehire agreement

serves two important purposes. First, it matures into a

fully effective collective bargaining agreement once the

union represents a majority of the workers. Second, it

serves as the terms of employment for the workers hired

by the consenting employer. It is indisputable that Con-

gress intended the second purpose; otherwise, section

8(f) would not permit prehire agreements ever to be

followed prior to the union’s demonstration of its ma-

jority status. And given Congress’ recognition that in

many instances a union may find it difficult to establish

its majority position, section 8(f) must contemplate that

many prehire agreements will govern for a considerable

period of time.“

In our view, recognition of these separate purposes

compels our conclusion that prehire agreements are en-

forceable retrospectively, but not prospectively. Congress

intended that prehire agreements not have the same

status as contracts between an employer and a recog-

nized majority union. To hold that an employer is pros-

pectively bound to follow section 8(f) contracts would

33 See pp. 10-11 supra.

„Due to the occasional nature of employment in [the construc-

tion] industry, unions and employers may enter prehire’ agree-

ments that stabilize employment conditions in a particular geo-

graphic area over an extended period of time.” Donald Schriver,

Inc. v. NLRB, 635 F.2d 859, 874 (D.C. Cir. 1980), cert. denied, 451

U.S. 976 (1981).

l6a

contravene the principle that adherence to them be

voluntary.“ Moreover, it would effectively force the em-

ployer to recognize and bargain with a union before the

union had proved its majority status. This result would

violate the policy of employee free choice which was em-

phasized in the /ron Workers decision.”

Retrospective enforcement is a different matter. The

prehire agreement sets the compensation for services

rendered to the employer while the agreement remains

in effect. We do not believe Congress intended to permit

an employer to accept labor services under a prehire

agreement, refuse to pay wages, and yet be immune from

suit to recover the wages on the ground that the contract

is unenforceable. Contributions to union welfare funds

are as much a part of an employee’s compensation as his

hourly wages, and an employer should not be free to

withhold either one.

This requirement is fully consistent with the Supreme

Court’s emphasis on employer and employee freedom of

choice. We disagree with Overhead Door’s contention

that the “real issue” in this case is whether a minority

union can force an employer to bargain with it.“ There

is no sense in which the Funds’ contract action has a

forbidden recognitional purpose, as did the picketing in

Iron Workers. At any time the employer may avoid all

future dealings with a minority union by simply de-

claring the prehire agreement void. Once this intention

is manifested, the employer’s obligation to follow the

agreement ceases.** It remains liable, however, for obli-

See Iron Workers, 434 U.S. at 347-48 & n.10.

0 See id. at 346-49.

* Brief for Respondent at 12.

38 We need not decide what specific act an employer must take

to demonstrate its repudiation of a prehire agreement. The essen-

tial point is that the union and employees be put on notice that the

contract is voided. It is clear on the record in this case that Over-

17a

gations accrued while the agreement was in effect. Em-

ployees thus receive full compensation for services

rendered, yet their freedom to choose their own bargain-

ing representative is unimpaired. The minority union

gains no added ability to ignore employee wishes, and the

employer is under no greater obligation to deal with the

union.

We note that of four circuit courts to rule on this

issue, the Eighth, Ninth, and Tenth Circuits have held

that union trust funds may recover unpaid contributions

due under a prehire agreement; only the Fifth Circuit

has ruled to the contrary.“ The reasoning of very recent

decisions of the Eighth and Ninth Circuits is the same

as we announce today.*' We note that the Tenth Circuit,

relying on an earlier Eighth Circuit decision, has sug-

gested that prehire agreements are both retrospectively

head Door did not manifest the necessary intent. On the contrary,

it signed new agreements each time it was asked to do so.

0 Contractors, Laborers, Teamsters & Engineers Health & Wel-

fare Plan v. Associated Wrecking Co., 638 F.2d 1128 (8th Cir.

1981); W. C. James, Inc. v. Oil, Chem. & Atomic Workers Int'l

Union, 646 F.2d 1292 (8th Cir. 1981); Todd v. Jim Mere, Inc.,

667 F.2d 800 (9th Cir. 1982); Western Wash. Laborers-Employers

Health & Sec. Trust Fund v. McDowell, No. 80-3024 (9th Cir.

2 Mar. 1982); New Mezico Dist. Council of Carpenters v. Mayhew

Co., 664 F.2d 215 (10th Cir. 1981). See also Trustees of Atlanta

Iron Workers Local 387 Pension Fund v. Southern Stress Wire

Corp., 509 F. Supp. 1097 (N.D. Ga. 1981); Florida Marble Polish-

ers Health & Welfare Trust Fund v. Megahee, 102 L.R.R.M. (BNA)

2740 (M.D. Fla. 1979); Eastern Dist. Council of United Bhd. of

Carpenters v. Blake Constr. Co., 457 F. Supp. 825 (E.D. Va. 1978).

% Baton Rouge Bldg. & Constr. Trades Council v. E.C. Schafer

Constr. Co., 657 F.2d 806 (5th Cir. 1981). See also Lail v. C&R

Constr., Inc., No. 1-80-52 (E.D. Tenn. 26 Jan. 1981); Vermeer v.

Aloha Contractors, Inc., 90 Lab. Cas. (CCH) J 12,466 (D. Or. 1980) ;

Paddack v. Clark, 90 Lab. Cas. (CCH) J 12,494 (D. Or. 1980).

41 See W.C. James, Inc. v. Oil, Chem. & Atomic Workers Int'l

Union, 646 F.2d 1292, 1295 & n.4 (8th Cir. 1981); Todd v. Jim

MeNeff, Inc., 667 F.2d 800, 802-04 (9th Cir. 1982).

18a

and prospectively enforceable in a contract action.** This

reads Iron Workers narrowly as being limited to unfair

labor practice cases, a reading with which we disagree.

The Supreme Court was careful to state that the section

8(f) exception is limited to ensure that adherence be

voluntary on the part of the employer. Essential to this

principle, we believe, is the employer’s ability to repu-

diate a prehire agreement while the union remains in a

minority position.

We note also that a recent decision by the NLRB pro-

vides strong support for our determination that Iron

Workers hinged on the Board’s finding that the picket-

ing there was conducted for a recognitional purpose. In

April 1981 the Board held that a union which picketed

for more than thirty days for the announced purpose of

forcing an employer to make fringe benefit payments

pursuant to a prehire agreement did not violate section

8(b)(7)(C). After reviewing the factual situation as

a whole, the NLRB determined that “the sole purpose of

the picketing” was to compel the employer to make the

payments.“ The Board noted: “Our decision is

consistent with the concept that relationships protected

by Section 8(f) must be voluntary. The Respondent’s

picketing was limited to requiring the Charging Party to

meet the obligations which allegedly had accrued under

an 8(f) contract and was not directed at forcing con-

tinuation of the 8(f) relationship.“ Iron Workers was

42 New Mexico Dist. Council of Carpenters v. Mayhew Co., 664

F.2d 215, 219-20 (10th Cir. 1981) (relying on Contractors, Laborers,

Teamsters & Engineers Health & Welfare Plan v. Associated Wreck-

ing Co., 638 F.2d 1128, 1133-34 (8th Cir. 1981)). The broad holding

in Associated Wrecking was cut back in W.C. James, Inc. v. Oil,

Chem. & Atomic Workers Int'l Union, 646 F.2d 1292, 1295 & n.4

(8th Cir. 1981), which held that a prehire agreement was not

prospectively enforceable.

43 International Union of Operating Engineers, Local 150, 255

N.L.R.B. No. 83, at 16 (6 Apr. 1981).

Id. at 17.

19a

distinguished: “Unlike that situation, the ‘enforcement’

sought by the Respondent’s picketing was payment of an

alleged past obligation under the 8(f) contract and did

not require current application of the contract.“

The NLRB’s reasoning applies as well to the case at

hand. The Funds’ lawsuit is limited to seeking payment

by Overhead Door of unpaid contributions allegedly due

under prehire agreements which were never repudiated.

In no way can the suit force continuation of a section

8(f) relationship, nor can it impair employer or employee

freedom of choice. Since Iron Workers itself rested sub-

stantially on deference to the NLRB’s construction of the

statute, this recent decision is entitled to due considera-

tion. We find that our reasoning accords with that of

the Board.

IV. CONCLUSION

On remand the district court will need to consider two

separate claims. The first is that Overhead Door’s pay-

ments for its three union employees were based on an

insufficient number of hours worked. This dispute turns

on whether two of the union employees were engaged in

carpentry work within the meaning of the agreements.

The second is that contributions are owed for hours

worked by nonunion employees. We hold that Overhead

Door was obliged to make these payments. The district

court should resolve any further disputes about which

employees and hours were covered, and should consider

any remaining defenses Overhead Door might legitimately

raise, such as the relevant statute of limitations.

Reversed and remanded.

#5 Jd. at 19.

20a

APPENDIX B

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

September Term, 1981

No. 80-1501

WASHINGTON AREA CARPENTERS’ WELFARE FUND, et al.,

0 Appellants

OVERHEAD Door Co. OF METROPOLITAN WASHINGTON

Before: Robinson, Chief Judge, Thornberry,* Senior

Cireuit Judge for the Fifth Circuit, and Wilkey, Circuit

Judge.

ORDER

IT IS ORDERED, sua sponte, that the Clerk shall with-

hold issuance of the mandate herein until seven days after

disposition of any timely petition for rehearing. See Local

Rule 14, as amended on November 30, 1981. This instruc-

tion to the Clerk is without prejudice to the right of any

party at any time to move for expedited issuance of the

mandate for good cause shown.

For THE COURT:

GEORGE A. FISHER

Clerk

[Filed June 15, 1982]

„Sitting by designation pursuant to 23 U.S.C. § 294(d).

2la

APPENDIX C

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

Civil Action No. 79-0097

WASHINGTON AREA CARPENTERS’ WELFARE FUND, et al.,

0 Plaintiffs,

OVERHEAD Door Co. OF METROPOLITAN WASHINGTON,

Defendant.

JUDGMENT

Upon consideration of plaintiffs’ and defendant’s mo-

tions for summary judgment, and for the reasons given

in the memorandum opinion filed this date, it is this 22nd

day of April, 1980,

ORDERED, that defendant’s motion for summary

judgment be and hereby is granted; and it is

FURTHER ORDERED, that judgment be and hereby

is entered in favor of defendant Overhead Door Co., of

Metropolitan Washington and against plaintiffs Washing-

ton Area Carpenters’ Welfare Fund, Washington Area

Carpenters’ Pension and Retirement Trust Fund, Wash-

ington Area Carpenters’ Apprenticeship Plan, and Wash-

ington Area Carpenters’ Trust Funds; and it is

FURTHER ORDERED, that the above-entitled action

be and hereby is dismissed with prejudice.

/s/ Joyce Hens Green

JOYCE HENS GREEN

United States District Judge

[Filed April 22, 1980]

goa "<>

22a

APPENDIX D

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

Civil Action No. 79-0097

WASHINGTON AREA CARPENTERS’ WELFARE FUND, et al.,

Plaintiffs,

V.

OVERHEAD Door Co. OF METROPOLITAN WASHINGTON,

Defendant.

MEMORANDUM OPINION

This case comes before the Court on cross-motions for

summary judgment. Plaintiffs [Funds] are various pen-

sion, welfare, and trust funds for a local carpenters’

union. They bring this action under § 502(f) of the Em-

ployee Retirement Income Security Act of 1974, 29 U.S.C.

§ 1132, and § 301 of the Labor Management Relations

of 1947, 29 U.S.C. § 185, to compel defendant, Over-

head Door Co. of Metropolitan Washington [Overhead]

to allow Funds to audit its records relating to employee

contributions and to recover unpaid contributions that

Overhead allegedly was required to make pursuant to an

agreement with the carpenters’ union. Funds also seek

auditor’s fees, attorney fees, costs and liquidated damages

provided for in the agreement. The union itself is not a

party to this action.

The original collective bargaining agreement between

Overhead and the Carpenters’ District Council of Wash-

ington, D.C. in October 1979 was executed at a job site

where two of Overhead’s employees were working. Ac-

cording to Overhead, the union’s representative told

Overhead’s president that he had to sign the agreement if

the employees were to finish the job. Overhead acknowl-

edges that these employees soon after joined the union, and

that one of its thirteen other employees at the time was al-

ready a member of the union. Pursuant to that agree-

ment, since October 1979 Overhead has deducted union

dues from the wages of these three employees and has

paid contributions on their hours. Overhead’s president

states that he currently has 21 employees doing carpen-

try work, and that of the three employees referred to

above, two have not worked as carpenters in over 10

years. He does, however, admit to re-signing the agree-

ment in 1972 and 1976.

Funds have commissioned an audit of the payroll rec-

ords of the three employees for whom contributions were

made; this audit concludes that Overhead owes contribu-

tions approximating $14,000. Overhead disputes the ac-

curacy of the audit in that it included hours worked by

the employees but not as carpenters. It has refused to

allow Funds to audit its records relating to other em-

ployees.

The parties have treated this contract as a “pre-hire”

agreement, a type of agreement peculiar to the construc-

tion industry that may be entered into before all employ-

ees to be subject to it are hired, and before the union’s

membership encompasses a majority of the employees.

Labor-Management Relations Act §8(f), 29 U.S.C.

§ 158(f). This exception to the typical requirement that

a union demonstrate majority support before it may bar-

gain with management is an accommodation to the “tran-

sitory nature of the employer-employee relationship in

the construction] industry.” N. L. R. B. v. Irvin, 475 F.2d

1265 (3rd Cir. 1973). In time the union must gain ma-

jority support if it expects to represent the employees,

because only representatives of the majority may bargain

with the employer. Act §9(a), 29 U.S.C. § 159(a).

Here, neither the union nor Overhead have petitioned for

a representation election under 29 U.S.C. § 159(c), or

taken any other steps to determine whether the union has

achieved majority support.

242

Overhead contends that since Funds have not demon-

strated majority support, the pre-hire agreement and the

agreement within it to make contributions are not en-

forceable. Funds argue that the pre-hire agreement is

enforceable as long as majority support has not been

disproven, and that even if the pre-hire agreement is

found to be unenforceable, Overhead stil] must make con-

tributions for all employees to the trust funds, under the

rule that an employer may not assert any defenses it has

to a union contract against a trust fund.

I. Enforceability of the Pre-Hire Agreement

The parties agree that resolution of this issue turns on

the proper application and interpretation of N.L.R.B. v.

Iron Workers Local 103, 434 U.S. 335 (1978). In that

case, the Supreme Court held that where a union which

admittedly lacked majority support attempted to enfurce

its pre-hire agreement by picketing, it was guilty of the

unfair labor practice of picketing for recognitional pur-

poses, a violation of 29 U.S.C. 158 (b) (7). In arriving

at this result, the Court affirmed the decision of the Na-

tional Labor Relations Board, noting that

Under the Board’s view of 8 (f), a pre-hire

agreement does not entitle a minority union to be

treated as the majority representative until and un-

less it attains majority support in the relevant unit.

Until that time the prehire agreement is voidable

and does not have the same stature as a collective

bargaining contract entered into with a union actu-

ally representing a majority of the employees and

recognized as such by the employer.

Iron Workers, 434 U.S. at 341.

The Court “concluded that the Board's construction of

the Act, although perhaps not the only tenable one, is an

acceptable reading of the statutory language... Id.

Overhead relies on Iron Workers for the proposition

that the pre-hire agreement is unenforceable unless ma-

— —AUAUQ—j——

jority support is proven by Funds or the union. Funds

asserts that the Iron Workers case is limited to the situ-

ation of attempts to enforce pre-hire agreements by

picketing. This interpretation was espoused in Eastern

District Council v. Blake Construction Co., 457 F. Supp.

825 (E.D. Va. 1978). The court in that case held that a

pre-hire agreement, although terminable by either party

at will, was enforceable, and was not in fact terminated

until the employer gave reasonable notice of his intent to

terminate. The employer’s failure to comply with the

agreement was held to constitute conduct manifesting

such intent. Id. at 830. The court distinguished Iron

Workers: “. . . that case dealt with the question of

whether certain picketing was an unlawful labor practice

and is not determinative on the facts of this case.” Id.

at 829. Relying on Blake, Funds argue that since Over-

head has not manifested its intent to withdraw from the

contract or shown that the union lacks majority support,

but has signed subsequent agreements renewing the origi-

nal one, it remains obligated to make contributions.

The Blake decision, however, was disapproved of in a

recent well-reasoned decision of the United States District

Court for the District of Nebraska, which relied exten-

sively on Iron Workers to resolve a dispute very similar

to the one at bar. The case of Contractors, Laborers,

Teamsters & Engineers Health & Welfare Plan v. Asso-

ciated Wrecking Co., Civ. No. 77-0-248 (D. Neb. Feb. 15,

1980), like the instant action, involved a suit to recover

sums the defendant allegedly owed to the plaintiff trust

funds pursuant to a pre-hire agreement. In that case, as

here, the defendant contended that the union never ob-

tained majority support and that the agreement, there-

fore, was unenforceable. The plaintiffs apparently offered

no evidence to the contrary.

The court in Associated Wrecking interpreted the

Board’s holding in Iron Workers as “that a § 8(f) agree-

ment is ‘noneffective,’ and thus unenforceable if the

j * Ct

union never thereafter obtains majority status, and that,

therefore, the employer may freely decide to ignore it

until such time as majority status is obtained.” Asso-

ciated Wrecking, Daily Labor Report (BNA, Mar. 12,

1980), at D-2. It read the Supreme Court’s holding in

that case to mean “that a § 8(f) agreement was unen-

forceable until such time as the union achieves majority

status.” Id.

It is clear that all 8 (f) does is to allow employers

of construction workers willing to enter into agreements

with uncertified unions to do so without being guilty of

unfair labor practices. Legislative history bears this out:

It was not the intention of the committee to re-

quire by Section [8 (f)] the making of prehire agree-

ments, but, rather, to permit them, nor was it the

intention of the committee to authorize a labor or-

ganization to strike, picket, or otherwise coerce an

employer to sign a prehire agreement where the

majority status of the union had not been established.

The purpose of this section is to permit voluntary

prehire agreements.

104 Cong. Rec. 11308 (July 16, 1958) (remarks of Sen.

John F. Kennedy).

A pre-hire agreement “is merely a preliminary step

that contemplates further action for the development of

a full bargaining relationship.” Ruttman Construction

Co., 191 N.L.R.B. 701, 702 (1971). It “cannot be en-

forced, and can be unilaterally ignored or abrogated by

the employer,’ until such time as the union achieves

majority status in the relevant unit.” Associated Wreck-

ing, at P. D-2. “The employer’s duty to bargain and

honor the contract is contingent on the union’s attaining

majority support at the various construction sites.” Iron

Workers, at 345.

1 Presumably, no matter how many times it is re-executed.

27a

While the union here could at any time petition the

Board for a representation election, it has not chosen to

do so. With no evidence of support except the acknowl-

edgment that three of Overhead’s employees (including

two no longer doing carpentry) at one time joined the

union, Funds in effect are asking the Court to presume

that the union has achieved majority support and, con-

sequently, that the agreement is valid. The Court cannot

traverse that bramble path without falling into a bottom-

less mire of speculation. It is abundantly clear that sup-

port of a majority of workers at each construction site is

a crucial element of enforceability, to be affirmatively

demonstrated by the party bring suit. Funds have not

satisfied their burden.

II. Defenses to the Union Contract Applied to the Trust

Fund Agreement

Funds ask the Court to hold as a matter of law that

when the trustees of a Taft-Hartley fund such as those

involved here sue an employer for unpaid contributions,

the employer may not assert any defenses it has against

the collective bargaining agreement. They emphasize that

the union is not a party to the suit and note in support

of their argument various cases in which the courts have

refused to allow employers to assert such defenses in

suits brought by trust funds. Yet none of the cases cited

by Funds involved a pre-hire agreement or the issue of

majority support. See Lewis v. Benedict Coal Corp., 361

U.S. 459 (1960) (union breached contract by striking) ;

2 The fact that the union is not a party to this suit does not

relieve Funds of the burden to prove majority support. It is proof

of majority support, not a representation election per se, that is

required. While Funds may not be able to petition for a § 9(a)

election, they are not precluded from presenting other forms of

proof.

28a

Huge v. Long’s Hauling Co., 590 F.2d 457 (3d Cir.

1978) (union allegedly violated Sherman Anti-Trust

Act) ; Lewis v. Seanor Coal Co., 382 F.2d 437 (3d Cir.

1967), cert. denied 390 U.S. 947 (1968) (antitrust viola-

tions and illegal “hot cargo” provisions in agreement

alleged). These cases involved collateral defenses to en-

forcement of the agreements. The defense in the instant

case, on the other hand, concerns the validity of the very

agreement that sought to establish a contractual relation-

ship between Funds and Overhead.

The laudable policy considerations behind the decisions

disallowing contractual defenses in trust fund cases in-

clude guaranteeing “hard working people the unemploy-

ment, health and retirement protections that they and

their families expect to receive as part of the terms of

their employment” and foreclosing the “possibility that

an employer will surprise its employees at a late date

that it was not legally bound to provide for contingen-

cies that may afflict them or their families in the future.”

Huge v. Long’s Hauling Co., at 465. These very im-

portant concerns, however, are absent in a case such as

the instant one involving, as it does, a voidable agree-

ment upon which no reasonable expectations of future

benefits may be based. Certainly those employees who

have never received benefits from the agreement can

expect no more than the status quo.

The Iron Workers case teaches that majority support

is a crucial element of an enforceable pre-hire agree-

ment. Such support must be established affirmatively by

the party suing to enforce the agreement. Cf. Associated

Wrecking, supra. As majority support has not been

shown, the agreement is unenforceable against Overhead.

Consequently, Funds have no claim for insufficient con-

tributions with respect to the three employees on whose

behalf some contributions were made, nor any right to

examine Overhead’s payroll records for other employees.

29a”

In light of the foregoing, there being [as the parties

agree] no genuine issues of material fact, Overhead is

entitled to summary judgment as a matter of law pursu-

ant to Fed. R. Civ. P. 56.

Judgment is entered for the defendant, Overhead Door

Co. of Metropolitan Washington, in accordance with the

accompanying Order.

/s/ Joyce Hens Green

Joyce HENS GREEN

United States District Judge

Date: April 22, 1980

80a

APPENDIX E

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

Civil Action No. 79-0097

WASHINGTON AREA CARPENTERS’ WELFARE FUND, et al.,

Plaintiffs,

v.

OVERHEAD Door Co. OF METROPOLITAN WASHINGTON

Defendant.

AMENDMENT TO OPINION

Pursuant to Rule 60(a) of the Federal Rules of Civil

Procedure, it is by the Court this 5th day of May, 1980,

ORDERED, that the Memorandum Opinion in this case

entered on April 22, 1980 be corrected as follows: in the

second paragraph of the first page of the Opinion, the

two references to “October 1979” shall be changed to read

“October 1969“.

Otherwise the text of the Opinion in this case contains

no clerical errors, and is not affected by this Order.

/s/ Joyce Hens Green

JOYCE HENS GREEN

United States District Judge

Filed May 5, 1980]

31a

APPENDIX F

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

September Term, 1981

CA 79-0097

No. 80-1501

WASHINGTON AREA CARPENTERS’ WELFARE FUND, et ai.,

v. Appellants

OVERHEAD Door Co. OF METROPOLITAN WASHINGTON

Appeal from the United States District Court

for the District of Columbia

Before: Robinson, Chief Judge, Homer Thornberry,*

Senior Circuit Judge for the Fifth Circuit,

and Wilkey, Circuit Judge

JUDGMENT

THIS CAUSE came on to be heard on the record on

appeal from the United States District Court for the Dis-

trict of Columbia, and was argued by counsel.

ON CONSIDERATION THEREOF It is ordered and

adjudged by this Court that the judgment of the District

Court appealed from in this cause is hereby reversed and

the case is remanded for further proceedings consistent

with the opinion of this Court filed herein this date.

Per Curiam

FoR THE COURT

/s/ George A. Fisher

GEORGE A. FISHER

Clerk

Date: June 15, 1982

Opinion for the Court filed by Circuit Judge Wilkey.

* Sitting by designation pursuant to 28 U.S.C. § 294(d).

— TT. 2

82a

APPENDIX G

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

September Term, 1981

Civil Action No. 79-0097

No. 80-1501

WASHINGTON AREA CARPENTERS’ WELFARE FUND, et al.,

4 Appellants

OVERHEAD Door Co. OF METROPOLITAN WASHINGTON

Before: Robinson, Chief Judge; Wilkey, Circuit Judge;

and Thornberry *, Senior Circuit Judge, United

States Court of Appeals for the Fifth Circuit

ORDER

On consideration of appellee’s petition for rehearing,

filed July 12, 1982, it is

ORDERED by the Court that the aforesaid petition is

denied.

Per Curiam

FoR THE Court:

GEORGE A. FISHER

Clerk

By: /s/ Robert A. Bonner

ROBERT A. BONNER

Chief Deputy Clerk

Filed Aug. 30, 1982

* Sitting by designation pursuant to Title 28 U.S.C. 4 294(d).

= ee ge ee ie

83a

APPENDIX H

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

Civil Action No. 79-0097

WASHINGTON AREA CARPENTERS’ WELFARE FUND, et al.,

Plaintiffs,

V.

OVERHEAD Door Co. OF METROPOLITAN WASHINGTON,

Defendant.

AFFIDAVIT OF RICHARD F. AYRES

Commonwealth of Virginia, . one

County of Fairfax ) :

To Wit:

Richard F. Ayres, being duly sworn, deposes and

states:

(1) My name is Richard F. Ayres. Since 1962 I have

been the President of the Overhead Door Company of

Metropolitan Washington.

(2) The Overhead Door Company of Metropolitan

Washington was chartered under the laws of the Dis-

trict of Columbia in 1927 and originally had its princi-

pal office in Washington, D.C. However, during the

time that I have been President, the company’s principal

office was located in Alexandria, Virginia until 1974 and

thereafter has been located in Newington, Virginia.

Throughout this period, our only other office has been

located in Harrisonburg, Virginia.

i eee

84a

(3) The exclusive business of my company is to in-

stall and service the products manufactured by the Over-

head Door Company of Pennsylvania and the Overhead

Door Corporation (an Indiana corporation) under two

franchise agreements. Under the first franchise agree-

ment, attached as Exhibit A to this affidavit, my com-

pany’s franchise territory includes the counties of Arling-

ton, Fairfax, Prince William, and Loudon in Virginia;

the counties of Montgomery, Prince Georges, Charles,

and St. Mary’s in Maryland; and the District of Colum-

bia. Under the second franchise agreement, attached as

Exhibit B to this affidavit, my company’s franchise terri-

tory includes 16 additional counties in Virginia and 4

counties in West Virginia. Our projects under these

franchise agreements include commercial and residential

installations, and most of our work has been in Virginia.

(4) Many years ago, the Overhead Door Company of

Metropolitan Washington had a contract with the Car-

penters’ Union, but the contract expired and was not

renewed. From the time I became President of the com-

pany in 1962 until October, 1969, I had never signed a

collective bargaining agreement covering any of my em-

ployees. However, in October, 1969, two of my employees

were working on a job in Laurel, Maryland in which I

was a subcontractor to the Charles Tompkins Company.

A representative of the Carpenters’ Union, whose name

I think was James S. Merkle, came to the job site and

told my men that I would have to sign a contract with

the Carpenters’ Union in order to finish the job. I signed

the contract, and my two employees on that job joined

the Union. The names of those employees are Daniel O0.

Jacobs and Jimmie Lantz. At that time I had 15 em-

ployees doing carpentry work, one of whom, Robert Tay-

lor, belonged to the Carpenters’ Union. The Union did

not contend that it represented a majority of these em-

ployees.

(5) Since October, 1969, I have deducted union dues

from the wages of Taylor, Jacobs, and Lantz and I have

FP eee eel

35a

paid contributions on their hours to the Carpenters. I

have continued to do so despite the fact that Taylor has

not worked as a carpenter for the last 10 years and the

fact that Jacobs has been my installation superintendent

for the last 10 years. However, I have never applied the

Carpenters’ contract to any of the other employees or to

any job subsequent to the Charles Tompkins’ job in 1969.

I now have 21 employees doing carpentry work.

(6) Whenever the Carpenters’ Union has sent me a

new contract to sign, I have signed it. I recognize the con-

tract documents attached as Exhibit F .o ine plaintiffs’

motion for summary judgment and I acknowledge that

I signed the pages at the end of Exhibit F in 1969, 1972,

and 1976. I have never seen the Welfare Fund, Ap-

prenticeship Plan, or Pension Fund documents attached

as Exhibits C, D and E to the plaintiffs’ motion for

summary judgment and I cannot say that they are au-

thentic.

(7) I acknowledge that I am behind in my payments

for contributions for hours worked by Taylor, Jacobs, and

Lantz in the amount of $13,956.89, if the standard of

measurement is all hours worked, rather than all non-

supervisory hours worked at the carpentry trade.

/s/ Richard F. Ayres

RICHARD F. AYRES

Subscribed and sworn to before me this 16 day of May,

1979.

/s/ IIllegible]

Notary Public

My Commission Expires:

36a

APPENDIX I

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

Civil Action No. 79-0097

WASHINGTON AREA CARPENTERS’ WELFARD FUND., et al.,

Plaintiffs,

V.

OVERHEAD Door Co. OF METROPOLITAN WASHINGTON,

Defendant.

AFFIDAVIT OF RICHARD F. AYRES

Commonwealth of Virginia

County of Fairfax -”

To Wit:

Richard F. Ayres, being duly sworn, deposes and

states:

(1) This affidavit supplements my affidavit of May 16,

1979.

(2) Since I have been President of the Overhead Door

Company of Metropolitan Washington, the Carpenters’

Union has never represented any of my employees other

than Taylor, Jacobs, and Lantz. Moreover, the Union has

represented Jacobs and Lantz only because it told me in

October, 1969, that it would kick me off the job unless

I signed a contract and made Jacobs and Lantz join

the Union, which I did.

37a

(3) Since I have been President of the Overhead Door

Company of Metropolitan Washington, no election has

ever been held among my employees.

(4) Since I have been President of the Overhead Door

Company of Metropolitan Washington, I have never paid

contributions to the Carpenters for any employees other

than Taylor, Jacobs, and Lantz, and none of my other

employees has ever made a claim for benefits from the

Carpenters.

/s/ Richard F. Ayres

RICHARD F. AYRES

Subscribed and sworn to before me this 4 day of June,

1979.

% (Megible]

Notary Public

My Commission Expires: 8-26-80.

O_O — —h ll

38a

APPENDIX J

29 U.S.C. § 158 (f). National Labor Relations Act.

(f) It shall not be an unfair labor practice under

subsections (a) and (b) of this section for an em-

ployer engaged primarily in the building and con-

struction industry to make an agreement covering

employees engaged (or who, upon their employment,

will be engaged) in the building and construction

industry with a labor organization of which building

and construction employees are members (not estab-

lished, maintained, or assisted by any action defined

in subsection (a) of this section as an unfair labor

practice) because (1) the majority status of such

labor organization has not been established under

the provisions of section 159 of this title prior to

the making of such agreement, or (2) such agree-

ment requires as a condition of employment, mem-

bership in such labor organization after the seventh

day following the beginning of such employment or

the effective date of the agreement, whichever is later

or (3) such agreement requires the employer to no-

tify such labor organization of opportunities for em-

ployment with such employer, or gives such labor

organizations an opportunity to refer qualified ap-

plicants for such employment, or (4) such agreement

specifies minimum training or experience qualifica-

tion for employment or provides for priority in op-

portunities for employment based upon length of

service with such employer, in the industry or in the

particular geographical area: Provided, That nothing

in this subsection shall set aside the final proviso to

Section (a) (3) of this Act: Provided further, That

any agreement which would be invalid, but for clause

(1) of this subsection, shall not be a bar to a pe-

tition filed pursuant to Section 159(c) or 159 (e of

this title.

29 U.S.C. § 185 (a) Labor Management Relations Act.

(a) Suits for violation of contracts between an em-

ployer and a labor organization representing em-

ployees in an industry affecting commerce as defined

in this Chapter, or between any such labor organiza-

tions, may be brought in any district court of the

United States having jurisdiction of the parties,

without respect to the amount in controversy or with-

out regard to the citizenship of the parties.

29 U.S.C. § 1132(f). Employee Retirement Income Se-

curity Act.

(f) The district courts of the United States shall

have jurisdiction, without respect to the amount in

controversy or the citizenship of the parties, to grant |

the relief provided for in subsection (a) of this sec-

tion in any action.