Opposition Brief — Sign, Pictorial & Display Industry Pension Trust Fund v. Formetrics, Inc.

Supreme Court brief1988

Ask Donna

What actually matters in this document.

Text

No. 86-1019 F. SPANIOL, JR

IN THE SUPREME COURT OF THiissmmees

UNITED STATES -

October Term, 1986

SIGN, PICTORIAL AND DISPLAY INDUSTRY

PENSION TRUST FUND; SIGN PICTORIAL

AND DISPLAY INDUSTRY WELFARE

Bocccecs,

vs.

FORMETRICS, INC., a corporation,

Respondent.

RESPONDENT'S BRIEF IN OPPOSITION TO

PETITION FOR A WRIT OF CERTIORARI

MICHAEL H. SALINSKY

Counsel of Record

ANNE E. LIBBIN

KEVIN M. FONG

SUSAN A. BUSH

225 Bush Street

Mailing Address P.O. Box 7880

San Francisco California 94120

Telephone: (415) 983-1462

Counsel for Respondent

sees: | x MADISON & SUTRO

5 Bush

failing Address P.O. Box 7880

San Feiceiene CA 94120

Of Counsel

QUESTION PRESENTED FOR REVIEW

Does the ruling below--which

correctly holds that an employer's failure

to make pension contributions after the

expiration of the collective bargaining

agreement would be an unfair labor prac-

tice within the exclusive, primary juris-

diction of the NLRB, and which is consis-

tent with the decisions of every Court of

Appeals to address the issue--require

review by this Court?!

1 The parties are set forth in the

title; respondent Formetrics, Inc. has no

parent company, and no ownership interest

in any other company.

wt pee eat Rid he heart hia

TABLE OF CONTENTS

Page

Question Presented For

Review eeeencsees#ses#eseeeetcfse#e#esee#*ee#ee#e#e#e#e# i

Statement Of The Case ........ 1

Argument eeeeeses#seetceees#s#s7#ee#ee#ee#e#eee#e#e#e¢ 6

a The Ninth Circuit's

Decision in Advanced

Lightweight Concrete

Is Consistent With

Every Other Court Of

Decision Addressing

Bee RD Bi dibadsvec 7

Td. Petitioners’ Claims

Derive Solely From The

National Labor Relations

Act And Are Within The

Exclusive Jurisdiction :

GE Dme MED chee ecccs 13

T3z. Petitioners Had An

Adequate Remedy Before

the NLRB e*eeeseeee2ee#ee#8e#8ee# 16

Conclusion eeeeteeeneteenseteeneteeeneeeeees 19

ah ie

TABLE OF AUTHORITIES

ee. |

Page(s)

Cases

Clerks and Checkers Local

No. 1593, 263 BLRB $8 ..... 18

Coppus Engineering Corp.,

195 NLRB 595 e*eeee*ee#eee@es#2ee#e#2#e?e# 15

Kaiser Steel Corp. v. Mullins,

455 U.S. 72 eeeeeeteeeeneeee ll, 14

Lab. Health & Wel. Trust v.

Adv. Lightweight Concrete,

779 F.2d 497 eeeeveeeveeveeveee0 oe 6,

passim

Labor Board v. Katz,

369 U.S. 736 e*eeee#ee#@es8e#es#er#8tetee 14

Laborers Health & Welfare

Trust Fund v. Hess,

S94 To BUMOs 279 citiewcccss 9

Moldovan v. Great Atlantic &

Pacific Tea Co., Inc.,

790 F.2d 894 *e*eoeseeeeeee#eeee#€e?#€e*e# cr 10,

N.L.R.B. v. Alva Allen Indus-

tries, Inc.,

369 F.2d 310 *e*eeeees#ss##*e#ee#es#8e?# 15

Peerless Roofing Co., Ltd.,

AG) we Oe bab eeeenecsen 18

Peerless Roofing Co., Ltd. v.

ee ee oe ae Pe 14

-iii-

Cases Page (s)

; San Diego Unions v. Garmon,

359 U.S. 236 ceccceeeecees 14

Taft Broadcasting Co.,

163 NLRB 475 e*enrienrees#srnreee#ee#ses? 15

U.A. 198 Health & Welfare v.

Rester Refrigeration,

790 F.2d 423 eeeeeeeeoeeeene Te 12

Statutes

Employee Retirement Income

Security Act of 1974,

Section 502, 29 U.S.C.

GB TESS cccseccccccccceseoce 3

Section 515, 29 U.S.C.

ee | BerrrrrrrrerrrereT 3, 8

passim

Section 4201, 29 U.S.C.

GB TFG coscccccccsecececes 10

Section 4203(a) (1),

29 U.S.C. § 1383(a) (1) ... 10

Section 4212(a), 29 U.S.C.

G LI9ZIA) ccccccccccccecece a

Labor Management Relations Act,

Section 301, 29 U.S.C.

§ 185 ee eeeeeneeneeneeeeeeee#e 4

National Labor Relations Act,

Section 8(a) (5),

29 U.S.C. § 158(a) (5) .... 8, 16

Section 10(b),

2D BGebeGes GB BOSC) cecsecs 16, 17

Page(s)

| Other Authorities

Code of Federal Regulations,

29 Co othe § 102.9 eeeeeevee 16-17

Senate Committee on Labor and

Human Resources, 96th Cong.,

2d Sess. :

S 1076--The Multiemployer

~- Pension Plan Amendments

Act of 1980: Summary

and Analysis of Consi-

deration, (Comm.Print,

Ape. 1980) cccccccccccere . ll

-V=

No. 86-1019

IN THE SUPREME COURT OF THE

UNITED STATES

October Term, 1986

SIGN, PICTORIAL AND DISPLAY INDUSTRY

PENSION TRUST FUND; SIGN, PICTORIAL

AND DISPLAY INDUSTRY WELFARE FUND,

Petitioners,

vs.

FORMETRICS, INC., a corporation,

Respondent.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

RESPONDENT'S BRIEF IN OPPOSITION TO

PETITION FOR A WRIT OF CERTIORARI

STATEMENT OF THE CASE

Until January 1984, respondent

Formetrics, Inc. was a party to multi-

employer collective bargaining agreements

with Local 510 of the Sign, Display and

ole

Allied Crafts Union (the "Union"). Pur-

suant to those agreements, Formetrics made

monthly contributions on behalf of its

employees to the Sign, Pictorial and Dis-

play Industry Pension Trust Fund and the

Sign, Pictorial and Display Industry Wel-

fare Fund (the "Trust Funds") (Excerpt of

Record ("ER") 17).

In January 1984, Formetrics

timely withdrew from the multi-employer

association that had negotiated the origi-

nal agreements on behalf of Formetrics and

other employers. On January 27, 1984, the

Union notified Formetrics of the Union's

intent to modify the then-current collec-

tive bargaining agreement, thereby termi-

nating the agreement as of March 31, 1984

(ER 17).

In April 1984, Formetrics was

advised that the Union had agreed upon a

new contract with the multi-employer asso-

ciation. The Union did not ask Formetrics =

a Qa

to negotiate individually with the Union

(ER 17).

Formetrics did not sign any new

collective bargaining agreement with the

Union. Thus, as of March 31, 1984, there

existed no contract obliging Formetrics to

continue making contributions to the Trust

Funds (ER 17).

On September 21, 1984, less than

six months after the expiration of the

collective bargaining agreement, the Trust

Funds filed an action against Formetrics

for contributions allegedly due prior to

the March 31, 1984 contract expiration, as

well as for contributions allegedly due

after the expiration of the contract. The

Trust Funds claimed that Formetrics' fail-

ure to pay contributions violated sec-

tion 515 of the Employee Retirement Income

Security Act ("ERISA"), 29 U.S.C. § 1145.

Jurisdiction was asserted under sec-

tion 502 of ERISA, 29 U.S.C. § 1132, and

section 301 of the Labor Management Re-

lations Act, as amended ("LMRA"),

29 0.8.C. § 185 (ER 1).

Cross-motions for partial sum-

mary judgment were filed. Formetrics

admitted that it owed contributions for

the period through March 31, 1984, but

denied that it was obligated to make con-

tributions after the contract expired.

Formetrics asserted that the district

court lacked subject matter jurisdiction

over an action for contributions allegedly

accrued after the expiration of the con-

tract (ER 13, 17).

The district court dismissed the

post-contract claim, agreeing that the

National Labor Relations Board ("NLRB")

had exclusive jurisdiction over claims for

contributions allegedly due after’ the

March 31, 1984 expiration of the collec-

tive bargaining agreement (Pet.Appx. B).

The Trust Funds appealed the

ruling. During the .pendency of that

appeal, the Ninth Circuit held in Lab.

Health & Wel. Trust v. Adv. Lightweight

Concrete (9 Cir. 1985) 779 F.2d 497 that

the primary jurisdiction of the NLRB pre-

empts a trust fund's action in district

onan to recover contributions for the

period after expiration of a collective

bargaining agreement. In light of its

decision in Advanced Lightweight Concrete,

the Ninth Circuit summarily affirmed the

district court's ruling in favor of For-

metrics (Pet.Appx. A).

A petition for a writ of certio-

rari has been filed in Advanced Light-

weight Concrete (No. 85-2079), and the

Trust Funds have requested that this case

be joined with Advanced Lightweight Con-

crete (Pet., p. 4).

ARGUMENT

The Ninth Circuit correctly held

in Advanced Lightweight Concrete that an

employer's failure to make contributions

to a trust fund after the expiration of

the collective bargaining agreement would

be actionable only as an unfair labor

practice within the exclusive, primary

jurisdiction of the NLRB. Consistent with

the decisions of every Court of Appeals to

address the issue, the Ninth Circuit cor-

rectly held that the NLRB's jurisdiction

preempts a district court action under

ERISA to enforce an alleged obligation to

make contributions following the expira-

tion of the agreement. Any such obliga-

tion could arise only from the National

Labor Relations Act; any violation of such

an obligation is an unfair labor practice.

Nothing in ERISA confers district court

jurisdiction over such claims.

I. THE NINTH CIRCUIT'S DECISION’ IN

‘ADVANCED LIGHTWEIGHT CONCRETE IS

CONSISTENT WITH EVERY OTHER COURT OF

APPEALS DECISION ADDRESSING THE ISSUE.

The Ninth Circuit's decisions in

Advanced Lightweight Concrete and the

instant case are consistent with every

other Court of Appeals decision to address

the issue presented (Moldovan v. Great

Atlantic & Pacific Tea Co., Inc. (3 Cir.

1986) 790 F.2d 894, pet. certiorari pend-

ing, nos. 86-203, 86-208; U.A. 198

Health & Welfare v. Rester Refrigeration

(5 Cir. 1986) 790 F.2d 423, pet. certio-

rari pending, no. 86-262).

As explained in Advanced Light-

weight Concrete and as discussed below

(infra, pp. 13-16), an employer's failure

to pay trust fund contributions after a

collective bargaining agreement has ex-

pired is actionable only as an unfair

labor practice. Any duty to make such

Bet

; :

aed

ns |

GPRS

Pali) es

aN IES ER ES welts one

contributions derives from section 8(a) (5)

of the National Labor Relations Act and,

accordingly, the exclusive, primary juris-

diction of the NLRB preempts any district

court action.

Contrary to petitioner's asser-

tion (Fet., pp. 7-11), neither the lan-

guage of section 515 of ERISA nor its

legislative history suggests that Congress

intended to create an exception to the

NLRB's exclusive jurisdiction. Sec-

tion 515 requires contributions to be made

by an "employer who is obligated to make

contributions to a walti-euplerer plan

* * * under the terms of a collectively

bargained agreement" (29 U.S.C. § 1145;

emphasis added) . Section 515 does not

require contributions to be made where

otherwise required by labor ‘ton but

applies only where the "collectively bar-

gained agreement" itself obligates the

employer to make contributions.

wtie

il inlA li cc Sa Aa i i

}

ame

eee ee od

Pa at

fies

Section 515 is deliberately

different from the separate withdrawal

liability provision of ERISA; that pro-

vision defines an "obligation to contrib-

ute," for purposes of determining an

employer's withdrawal from a plan, as

including an obligation arising under a

collective bargaining agreement, or "as a

result of a duty under applicable

labor-management relations law" (29 U.S.C.

§ 1392(a)).* Withdrawal liability for a

2 Section . 4212 of ERISA (29 U.S.C.

§ 1392) defines “obligation to contribute"

only "[flor purposes of this part"--that

is, Subchapter III, Subtitle E, Part I of

ERISA, entitled "Employer Withdrawals."

Section 515 is located in Subchapter I,

Subtitle B, Part 5 of the statute, and is

therefore unaffected by section 4212. The

Ninth Circuit in Advanced Lightweight

Concrete expressly rejected the district

court's reasoning to the contrary in

Laborers Health and Welfare Trust Fund v.

Hess (N.D.Cal. 1984) 594 F.Supp. 273.

_ Congress chose to provide special damages

for recovery of contributions only where

contributions were delinquent under an

(Footnote Continued)

wSeo

. ’

§ a)

¥ 4

‘

¥ t

3 t

- P

? '

‘

Mer ee les ied :

plan's unfunded vested benefits is imposed

when an employer withdraws | from a

multi-employer pension plan (29 U.S.C.

§ 1381); a complete withdrawal occurs when

the employer "permanently ceases to have

an obligation to contribute under the

plan" (29 U.S.C. § 1383(a)(1)). The broad.

definition of the cessation of the

“obligation to contribute” under’ the

withdrawal liability provisions is neces-

sary to prevent withdrawal liability from

being imposed every time a collective

bargaining agreement expires. Since there

may be a short hiatus between cupisecien

of one contract and agreement on a

new contract which also requires

contributions, imposing withdrawal

(Footnote Continued)

agreement (Advanced Lightweight Concrete,

supra, 779 F.2d 502; Moldovan v. Great

Atlantic & Pacific Tea Co., Inc. (3 Cir.

0 F.2d 894, 901).

«gu

liability immediately upon cessation of a

contractual obligation to contribute would

interfere with collective bargaining by

putting pressure on employers to accede to

union demands before the prior agreement

expired.

Congress enacted section 515 to

prevent an employer from asserting claims

and defenses unrelated to its promise to

contribute in an action to recover delin-

quent contributions.” Congress intended

to simplify collections of delinquent

contributions (Pet., pp. 10-11), but only

where the contributions are delinquent

under the terms of a collective bargaining

3 Senate Committee on Labor and Human

Resources, S 1076--The Multiemployer Pen-

sion Plan Amendments Act of 1980: Summary

and Analysis of Consideration, 96th Cong.,

2d.Sess., 44 (Comm.Print, Apr. 1980) (1980

Senate Labor Comm.Print). See also Kaiser

allie

Steel Corp. v. Mullins (1982) 455 U.S. 72,

agreement. There is no basis for suggest-

ing that Congxese intended to alter the

Claims and defenses related to unilateral

changes in benefits and the duty to bar-

gain under the National Labor Relations

Act (see infra, p. 15, n. 5). Nothing

suggests that Congress intended sec-

tion 515 to create a new and independent

obligation under ERISA to continue contri-

butions after contract expiration.

Every Court of Appeals to ad-

dress the issue has held that an employ-

er's failure to make contributions after

the termination of a collective bargaining

agreement does not violate section 515 or

any other provision of ERISA (Moldovan v.

Great Atlantic & Pacific Tea Co., Inc.

(3 Cir. 1986) 790 F.2d 894; U.A. 198

Health & Welfare v. Rester Refrigeration

(5 Cir. 1986) 790 F.2d 423). The Ninth

Circuit's summary affirmance in the

instant case, based on Advanced

-12-

Lightweight Concrete and similar

decisions, presents no issue worthy of

consideration by this Court and should be

left undisturbed.

II. PETITIONERS' CLAIMS DERIVE SOLELY

FROM THE NATIONAL LABOR RELATIONS ACT

AND ARE WITHIN THE EXCLUSIVE JURIS-

DICTION OF THE NLRB.

It is undisputed that the col-

lective bargaining agreement in this case

expired on March 31, 1984. Any claim that

contributions were due after that date

could arise, if at all, only under the

National Labor Relations Act, which re-

quires an employer to bargain in good

faith after the expiration of a collective

bargaining agreement and to maintain the

status quo until an impasse or union waiv-

er. Failure to maintain the status quo

=i 3<

under such circumstances is an unfair

labor practice. 4

This Court has long held that

such unfair labor practices fall within

the special competence and exclusive

jurisdiction of the NLRB (see San Diego

Unions v. Garmon (1959) 359 U.S. 236,

244-245; Kaiser Steel Corp. v. Mullins

(1982) 455 U.S. 72, 86). The NLRB is

charged by Congress to balance the con-

flicting interests of labor and manage-

ment, and the instant case poses the very

type of factual and legal issues that are

within the NLRB‘s exclusive jurisdiction

to determine. Whether Formetrics' cessa-

tion of contributions ae its duty to

bargain in good faith is an issue reserved

4 See e.g. Peerless Roofin Co.

Ltd. v. N.L.R-B. (3 Cir. 1981) 641 F.2d

734, 736. See also Labor Board v. Katz

(1962) 369 U.S. 736, 743.

-14-

for the NLRB and its specialized exper-

tise. For example, aétivnstive defenses

of impasse and waiver sits properly be

raised to justify an employer's unilateral

changes in benefits.”

Such. fundamental questions of

federal labor law must be resolved by the

NLRB. The NLRB must first determine

whether there is any obligation of the

employer to make post-contract payments

before the contributions can be considered

5 The NLRB has found that an employer

is free to make unilateral changes where a

union waives its right to bargain or when

an impasse has been reached (see e.g.

Coppus Engineering Corp. (1972) 195 NLRB

595; Taft Broadcasting Co. (1967) 163 NLRB

475, 478, affirmed (D.C, Car. 1968)

395.F.2@ 622). Also, a union cannot

charge an employer with refusal _ to

negotiate if the union has not made an

effort to engage in bargaining with the

employer (N.L.R.B. v. Alva Allen

Industries, Inc. (9 Cir. 1966) 369 F.2d

7; 046

a} S-

delinquent. ° "Without a [NLRA] sec-

tion 8(a)(5) violation, there is no sec-

tion 515 infraction under ERISA" (Advanced

Lightweight Concrete, supra, 779 F.2d

504).

III. PETITIONERS HAD AN ADEQUATE REMEDY

BEFORE THE NLRB.

Petitioners’ assertion that they

have no recourse to the NLRB because the

NLRB has denied the Union's unfair labor

practice charge as untimely (Pet., pp. 11,

47) . 48 without merit. The Trust Funds,

like any other party, have "standing" to

bring an unfair labor practice charge

before the NLRB (29 U.S.C. § 160(b);

6 The fact that such fundamental

questions of federal labor law are central

to the existence of an obligation to

contribute refutes petitioners’ assertion

that this case presents only "collateral"

issues of labor law (Pet., p. 10).

«i=

29 C.F.R. § 102.9). Petitioners have not

been denied a forum before the NLRB; peti-

tioners have simply failed to seek an NLRB

hearing.

Petitioners' assertion that they

would have been restricted in any NLRB

proceeding by a six-month statute of limi-

tations under section 10(b) of the Nation-

al Labor Relations Act (29 U.8.C.

§ 160(b); Pet., DP. 15) is disingenuous.

Petitioners clearly had the opportunity to

file an NLRB charge within the six-month

period: Petitioners filed their district

court action on September 21, 1984, within

six nantes of the expiration of the

collective bargaining agreement. If

petitioners were of the view that

Formetrics was obligated under the

National Labor Relations Act to continue

contributions following the expiration of

the collective bargaining agreement, they

ee rs eee ee ee Oe a eS ee ee

had ample opportunity to bring an unfair

labor practice charge before the NLRB.’

7 Contrary to petitioners' assertion

(Pet., p. 16), the NLRB awards liquidated

damages to trust funds in unfair labor

practice proceedings where the amount may

be determined from the documents governing

the trust fund (Peerless Roofing Co. Ltd.

(1980) 247 NLRB 500, 505, af firme irmed (9 Cir.

1981) 641 F.2d 734; see also Clerks and

Checkers Local No. 1593 (1979) 243 NLRB 8,

9, n. 4, affirmed (5 Cir. 1981) 644 F.2d

408).

safer de tb ta a as “ ap aa ag pe ine cold eA gen OAS Se Sa Bt me as Se ae ete ie eae we ow

CONCLUSION

For the foregoing reasons, the

petition for writ of certiorari should be

denied.

Respectfully submitted,