Amicus Curiae Brief — Central States, Southeast & Southwest Areas Pension Fund v. Central Transport, Inc.

LY94

No. 82-2157

IN THE

Supreme Court of the United States

OCTOBER TERM, 1982

rr

CENTRAL STATES, SOUTHEAST AND SOUTHWEST

AREAS PENSION FUND and CENTRAL STATES,

SOUTHEAST AND SOUTHWEST AREAS HEALTH

AND WELFARE FUND,

Petitioners,

va.

CENTRAL TRANSPORT, INC., et al.,

Respondents.

ee

MOTION OF BRICKLAYERS FRINGE BENEFIT

FUNDS — METROPOLITAN AREA, ET AL., FOR

LEAVE TO FILE BRIEF AMICI CURIAE

BRIEF OF BRICKLAYERS FRINGE BENEFIT

FUNDS — METROPOLITAN AREA, ET AL.,

AMICI CURIAE

ee

SHELDON M. MEIZLISH*

1166 First National Building

Detroit, Michigan 48226

Phone: (313) 964-3430

MARSTON, SACHS, NUNN, KATES,

KADUSHIN AND O'HARE, P.C.

(BY: ROLLAND R. O'HARE)

1000 Farmer Street

Detroit, Michigan 48226

Phone: (313) 965-3464

Counsel for Amici

"Counsel of Record

THE INLAND PRESS, DETRUIT, MICHIGAN

He o>

//

BEST AVAILABLE COPY

TABLE OF AUTHORITIES

Cases Page

Ambromovage v Thomas, 2(US '. M.D. Pa

Civ. #8796. 19R2 |

Central States, Southeast and Southwest Areas Pension

Fund v CRST, Inc., 641 F.2d 616 (C.A. 8, 1981

Hughes v Baker Cement Contractors. Inc.. C.A. 6. No. 81

3307 (July 6, 1982) (unreported)*

Jim McNeff, Inc. v Todd, US 103 S.Ct. 1753, 75

L.Ed.2d 830 (1983

Laborers’ Fringe Benefit Funds Detroit and Vicinity \

Northwest Concrete & Construction. Inc. US.D.C.. E.D

Mich., Civ. #78-71765 (June 25, 1979) (unreported); rev'd

640 F.2d 1350 (CA. 6. 198]

Laborers’ Pension Trust Fund Detroit and Vicinity, et

al. v Frank Bizzocchi Cement Construction Company,

Inc., U.S.D.C., E.D. Mich., Civ. #74-72450 (Oct. 29, 1975

unreported

Lathers Local 42 and Lathinag Contractors Association of

Southern California, 223 NLRB 37 (1976)

Local 164, Brotherhood of Painters v National Labor Rela

tions Board, 293 F 2d 133 (C.A.D.C., 1961)

National Labor Relations Board v Amar Coal Company,

$53 U.S. 322. 101 S.Ct. 2789, 69 L.Ed.2d 672 (1981

Robbins v Prosser’s Moving and Storage Company, 700

F.2d 433 (C.A. 8, 1983 ; 2-3, 7

Statutes

Employee Retirement Income Security Act of 1974, as

amended, 29 U.S.C. 41001. ef seq 1, passim

Labor-Management Relations Act of 1947, as amended

$302. 29 U S.C. $186 1, passim

Regulations

Department of Labor Prohibited Transaction Exemptior

76-1 (March 23, 1976), 41 FR 12740

*Reprir ted in the appendix to this bref

]

No. 82-2157

IN THE

Supreme Court of the United States

OCTOBER TERM, 1982

CENTRAL STATES, SOUTHEAST AND SOUTHWEST

AREAS PENSION FUND and CENTRAL STATES,

SOUTHEAST AND SOUTHWEST AREAS HEALTH

AND WELFARE FUND,

Petitioners,

vs

CENTRAL TRANSPORT, INC., et al.,

Respondents.

MOTION OF DU RICKLAYERS FRINGE BENEFIT

FUNDS — METROPOLITAN AREA, ET AL., FOR

LEAVE TO FILE BRIEF AMICI CURIAE

The Bricklayers Fringe Benefit Funds — Metropolitan

Area, the Carpenters Fringe Benefit Funds — Detroit and

Vicinity, the Cement Masons Fringe Benefit Funds —

Detroit and Vicinity, the Electrical Workers Fringe Benefit

Funds of Local Union #58, IBEW, and the Laborers Fringe

Benefit Funds — Detroit and Vicinity move to intervene in

this case as amici curiae for purposes of submitting the

attached brief. The consent of the attorney for the petitioners

has been obtained. The consent of the attorneys for the

respondents was requested but refused.

The amici are composite names for trust funds! established

under, and administered pursuant to, Section 302 of the Labor-

Management Relations Act of 1947, as amended, 29 U.S.C.

$186, and the Employee Retirement Income Security Act of

1974, as amended, 29 U.S.C. §§1001, et seq. In this respect, they

have the same legal status as petitioners. Amici operate to

provide pension, medical, hospitalization, dental, holiday and

vacation pay, optical and other benefits to workers in the con-

struction industry in southeastern Michigan. Each is a multi

employer, jointly administered employee benefit plan created

by collective bargaining.

Amici believe that the Sixth Circuit’s opinion of January 20,

1983, was, at the very least, overly broad and, by its sweep,

will, unless corrected, do serious damage to the public policy

favoring protection of employee benefit plans and to the statu

'The “Bricklayers Fringe Benefit Funds — Metropolitan Area” include the

Bricklayers Pension Trust Fund Metropolitan Area, the Bricklayers

and Trowel Trades International Pension Fund, the Bricklayers Holiday

Trust Fund Metropolitan Area, the Detroit and Vicinity Trowel Trades

Health and Welfare Fund, and the Bricklayers Joint Apprenticeship

Committee

The “Carpenters Fringe Benefit Funds — Detroit and Vicinity” inelude

the Carpenters Pension Trust Fund — Detroit and Vicinity, the Carpen

ters Vacation and Holiday Trust Fund — Detroit and Vicinity, and the

Carpenters Health and Welfare Fund — Detroit and Vicinity

The “Cement’ Masons Fringe Benefit Funds Detroit and Vicinity”

include the Cement Masons Pension Trust Fund — Detroit and Vicinity,

the Bricklayers and Trowels Trades International Pension Fund, the

Cement Masons Vacation and Holiday Trust Fund — Detroit and Vicinity,

and the Detroit and Vicinity Trowel Trades Health and Welfare Fund

The “Electrical Workers Fringe Benefit Funds of Local Union #58,

IBEW” include the Electrical Workers Pension Trust Fund of Local

Union #58, IBEW, the Electrical Workers Joint Board of Trustees Vaca

tion Fund, the Electrical Workers Insurance Fund, the Supplemental

Unemployment Benefit Fund of the Electrical Industry, Detroit, Michi

gan, the National Electrical Benefit Fund, and the Joint Apprenticeship

Training Trust Fund

The “Laborers Fringe Benefit Funds — Detroit and Vicinity” include

the Laborers Pension Trust Fund Detroit and Vicinity, the Laborers

Vacation and Holiday Trust Fund — Detroit and Vicinity, and the Labor

ers Metropolitan Detroit Health and Welfare Fund

LLL LT LL TT TS EA eT TS SE ET NS

3

tory requirement, in furtherance of that policy, that such plans

be properly funded. There are critical policy and practical con

siderations which amici believe the Court of Appeals either

failed to consider or misapprehended. In the interests of the

participants for whose sole and exclusive benefit amici exist

and the thousands of workers and beneficiaries similarly situ

ated, amici request leave to file the attached brief.

Respectfully submitted,

SHELDON M. MEIZLISH*

1166 First National Building

Detroit, Michigan 48226

Phone: (313) 964-3430

MARSTON, SACHS, NUNN, KATES,

KADUSHIN AND O'HARE, PC.

(BY: ROLLAND R. O'HARE)

1000 Farmer Street

Detroit, Michigan 48226

Phone: (313) 965-3464

Counsel for Amici

*Counsel of Record

Dated: July ® 19R3

No. 82-2157

IN THE

Supreme Court of the United States

OCTOBER TERM, 1982

ee

CENTRAL STATES, SOUTHEAST AND SOUTHWEST

AREAS PENSION FUND and CENTRAL STATES,

SOUTHEAST AND SOUTHWEST AREAS HEALTH

AND WELFARE FUND,

Petitioners,

V8.

CENTRAL TRANSPORT, INC., et al.,

Respondents.

———

BRIEF OF BRICKLAYERS FRINGE BENEFIT

FUNDS — METROPOLITAN AREA, ET AL.,

AMICI CURIAE

em

Amici, Bricklayers Fringe Benefit Funds — Metropolitan

Area, Carpenters Fringe Benefit Funds — Detroit and Vicin

itv, Cement Masons Fringe Benefit Funds — Detroit and Vic

inity, Electrical Workers Fringe Benefit Funds of Local Union

#58, IBEW, and Laborers Fringe Benefit Funds — Detroit

and Vicinity, are composite names! for various emplovee pen

sion and welfare benefit plans covering workers in the con

struction industry in southeastern Michigan and, in many

respects, their families. All were established under and are

administered pursuant to the Labor-Management Relations

Act of 1947, as amended (“LMRA”), 29 U.S.C. $186, and the

Emplovee Retirement Income Security Act of 1974, as amended

(“ERISA”), 29 U.S.C. §$1001, et seq.

See note 1 in the (attached) Motion of Bricklayers Fringe Benefit Funds

Metropolitan Area, et al., for Leave to File Brief Amici Curiae. The

interest of the amici is stated in the motion

LEE TE LS A sc

~

Amici have not made a detailed review of the trial court

record in this case. Insofar as the decision of the Court of

Appeals for the Sixth Circuit rested on the details of the doe

uments submitted or the particular agreed-upon relationships

among the parties, we have no comment to make. It is the

breadth of the opinion which concerns us.2 We are fearful that

application of the principles set out there will, at least in the

construction industry, frustrate our efforts to conform to the

standards of diligence in collecting contributions imposed by

statute and regulation.

This brief will be limited to a brief discussion of the matters

which we urge need to be given greater consideration, particu

larly in respect to industries like the construction industry,

than they were in the Sixth Circuit’s opinion

1. As a prefatory comment to our discussion, it should be

noted that, in reaching its conclusion, the panel drew heavily

upon the Eighth Circuit’s decision in Central States, Southeast

and Southwest Areas Pension Fund v CRST, Inc., 641 F.2d 616

(1981). After the Sixth Cireuit’s decision in the instant case,

the Eighth Circuit, en banc, overruled the CRST holding, Rob

bins v Prosser’s Moving and Storage Company, 700 F.2d 433

(Feb. 16, 1983).

Although the narrow issue of the Robbins case was whether

the trustees of benefit funds were required to exhaust arbitra

tion provisions of a collective bargaining agreement before

instituting a collection suit, many of the policy considerations

involved in this case were discussed at some length in the

Eighth Circuit’s en bane opinion. In deciding Robbins, the

Court took cognizance of the Sixth Circuit’s opinion in the

?The Sixth Circuit's panel decision in the instant matter appears to be dia

metneally in conflict with another panel's (unreported) decision. See Hughes

v Baker Cement Contractors, Inc. C.A. 6, No. 81-3307 (July 6, 1982),

reprinted in the appendix to this bref

‘The Eighth Circuit stated, “On reflection, however, we believe that [the

cited cases including CRST) were not correctly decided.” 700 F.2d. at 438

See also the entire discussion at p. 438 of the opinion

= tO a

instant case. Robbins, 700 F.2d, at 445, n. 7 (dissenting opinion

2. ERISA imposes a fiduciary duty upon trustees of employee

benefit plans to collect contributions. One of the earliest inter

pretative statements concerning ERISA by the Department of

Labor or the Internal Revenue Service, the two agencies

charged by the statute with enforcement in respect to continu

ing plans, dealt with this subject. While setting out the condi

tions under which trustees could agree to installment payment

plans of overdue contributions from delinquent emplovers, the

Department of Labor made it plain that such agreements wer

extensions of credit prohibited by ERISA and that trustees

were required to make “systematic, reasonable and diligent

efforts to collect delinquent contributions.” Prohibited Trans

action Exemption 76-1 (March 23, 1976), 41 FR 12740. One of

the necessary elements of any systematic effort by multi

employer fringe benefit programs to eollect amounts owing

which must, after all, be determined before they can be col

lected is the audit

Typically, multi-employer plans such as petitioners and

amc! depend upon a s\ stem of emplover self-disclosure Weekly

or monthly, each emplover fills out report forms setting out

the names of the emplovees performing bargaining unit work,

hours worked and/or wages earned and such other informa

tion as is required for the calculation of contributions due and

for the administration of the fringe benefit program. The

employer then calculates the contribution due (ordinarily, ar

amount equal to a percentage of wages or an amount multip

hed by the number of hours, days or weeks worked or paid,

depending upon the agreed-upon formula) and mails the com

pleted form and a check for the amount shown to be due to the

fund office or a depository bank

The fund ordinarily has no method of independently verif\

ing or challenging the amounts said by the emplover to be due

All of the information is in the emplever’s possession. None is

in the fund's

SSN eS eee 6 ee EE EE a

LL EE TT A |

means for workers in those industmes and

to ar hiv ve a measure of the healt} and retire

ech workers involved it arge single emplover

relevant characteristics of the eo struction

t aril operate | i vidual carpenters or

rT abore rs nay work Ta? rie (>? dozens ft

vear. If there is a hiatus in available work at

ise of supply or seheduling problems (not

worker mav find a short job on another job

» different emplover ra different econ

emi e)

nefit funds w rainal Nave f Way )

' igiver participant w rkey? s emi loved Or

oy s em ved int ths empl ey eontmbu

4 ea The ty msient nature i ern piovmen? ?

7 ther factor wt Paves t he funds il t he

er probitv and accura and requires broad

niar reditors and that the debt “has a

| tnat the Dart \ VA t} nar respons ry ?\ Tov

tort Tay , - 4 ave apparel ; 1 ty ? A +}

»w We , TA

, | ’ " , re

Lab my Ts. Fringe Benefit Funds Detroit and

Vorthwest Concrete & Construction. Ini I'S 1)¢

(1 #78.71765 Glune 25. 1979 rev d on other

40 F2d 13850 (C.A. 6. 1981). The trustees have

mw th the estab nment of t he hasi ceontractua

rwhp h obligate - t he empiovet! They cannot reTuss

al CTP t wi I nas gyned t he ree site eoOller

‘

ing agreement evel | they helheve that emplover to

¥rresDo ryle To the extent that credit extended

ome mn the ter | tne exte? on and rile

e bargaining agreement or the applicable trust

pect i bp? ae, tM innot make a demand

; empiovel Tove rey, rift ? ) ir’ navment ft ting

egardlk t } ‘ mpecul is the emplover n git

ry tre 1? i”: i nave me power ft i cet tiv

cy ? Dower ’ tive ’ fruction ncust? Tle?

exagverated, tne dbenewtit Tund ive none.

f the ¢ rt of Apnea iggest that ther

‘ rie t thy ‘ TT witty oY infered f eat

th respect. we helieve that the itor re

? | vrart the in? Tated. The i? } mda the Hers

, neers 1 nave " wen | nrers | { Drove

pal pur ‘ f the Taft-Hartl requirement

management admit tration of ch Tunds was !t

e level of fund-union identity and ERISA ha

tT ¢ eT earer That Tmistes must act Tor t he ner

art nants ; , Ting mw? r ting Compan Ne a |

| Labor Relations Board vy Amar Coal Company

. irga yg age ' i

ie - ts

i # } } }? \ .

hy } ("A Tye " | j j j '

; . j f ’ NITLRE

**

LL a

153 U.S. 322, 101 S.Ct. 2789, 69 L.Ed.2d 672 (1981), Hughes \

Baker Cement Contractors, Inc., supra’, Robbins, 700 F 2d, at

139-442. and Ambromovage v Thomas, 3 EBC 1872, 1878, 1883

1886 (TU S.D.C.. M.D... Pa.. Civil #8796, July 9, 1982)

B. The “estoppel argument” for subsequently denying bene

fits to a worker whose emplover has cheated, with or without

the employee's connivance, can hardly justify the panel's con

clusion. First, it is far from certain that this “defense” is avail

able to the funds when an employee sues for benefits. See, e.g

Robbins. 700 F.2d. at 441. Thus. to use the Eighth Circuit's

expression, the funds are “in danger of being whipsawed”

Ibid. Second, it fails to take into consideration the inequality of

the distribution of power between emplover and emplovee

particularly during hard times). The employer, in clear viola

tion of the agreement, can force an employee as a condition of

keeping his job not to complain about the emplover’'s failure to

make necessary contributions, a danger of great magnitude

when the economy is in a state of recession or depression

Finalls t Ta to take into consideration the fact that some

emplovees are too uneducated either generally or in the mech

anisms Dv whieh ther henefit funds operate, or too unsopnis

ticated to know that they are being cheated

(. For practical purposes, the recoupment remedy suggested

hy the Sixth Cireuit pane! simply does not exist Ry the time

e cause will have accrued, there is a distinct possibility that

the emplover will no longer be in business or have sufficient

assets to satisfy anv judgment. The construction industry |

un industry of transient emplovers as well as transient emplovees

i? ndustryv in addition to which multiple corporate or other

forn for a single emplovet! with a the llega problen oT

cle ryt it ve at 7 Al . ection rT? at nr ys Aare COMMo};r piace If

™w *¢

™

also an industry in which undercapitalization of a singl

empiover, known or unknown to its emplovees. is masked bh

the endemic division of capital (lender. develoner. builder) ar

the emploving unit (contractor. subeontractor). If the emplover

s still around and collectible when the fur ds come look ng for

nin the pring Ipal deren se the empiover wil 1Se s. OF COUTSE

‘estoppel”

7. The audit is the most efficacious means of assuring con

phance wit! the fri pe henetit provisions of t hve eontract Ty

the extent the auditor is deprived of the necessary tools. cheat

ng more kelv to vo indetected Ty the extent it does. the

actuaria tour dat OT of the particular fur a e ft} reatened. a

heneficiarr face a possible oss or diminutior if henefit

and/or those empiovers who are fully meet ng their fringe

benefit funding obligations are placed at a competitive disad

antage in the short run and at msk of having to make wi

funding shortfa caused bv the cheater nthe iong rut

8. Granting the auditor more or less unrestricted acce t

in emplover Nook ind records ma we recognize, give rise

to the possibilit if abuse or to a potential invas Tr privas

fr ner ered emplover Where thes ire real no ryilit vy

ind not ruses f stil lenial of access to revelatory record

the District ¢ rt has ample power to fashion an appropriat:

nrotert roer

4

CONCLUSION

Amici respectfully submit that the Sixth Circuit, focusing

00 exclusively on the possibilities of abuse and invasions of

privacy, failed to give appropriate consideration to the pract

eal and policy difficulties which would be caused by the apy

eation of the restrictive principles it enunciated. The focus, we

irge, more proper!\ belongs on protecting the participants of

emplovee benefit plans and safeguarding the fiscal integrit !

those plans. That court’s decision, if allowed to stand, would

TY aftrate t? aT | ity { Tw ( eT lt ated ’ ERISA

The petition for a writ of certiorari should be granted

Resper tfullv supmitted

SHELDON M. MEIZLISH"*

1166 First National! Building

Detroit. Michigan 4822¢

Phone: (331) 964-3438

MARSTON, SACHS, NUNN, KATES

KADUSHIN AND O'HARE, P<

BY: ROLLAND R. OHAREI

1OO0 Farmer Street

Detroit. Michigan 48226

Phone: (313) 965-3464

APPENDIX

lf FUSS. ¢ rt of Apnea

for t} “Siwthy € ‘ve

H uahe Baker Cement ¢ nrractors ly

\ ~] ii | ‘ i™

la

NO. 81-3307

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

THURMAN HUGHES, ANTHONY D. LIBERATORE,

MARTIN MASON, CHARLES PEARL, RICHARD

STANDER, JR. PAUL SWEITZER, DREXEL J.

THRASH and RICHARD L. WALLER, TRUSTEES of the

OHIO LABORERS’ DISTRICT COUNCIL-OHIO

CONTRACTORS’ ASSOCIATION INSURANCE FUND;

and

W. W. LATHROP, JR., JAMES BYRD, DONALD W

FITTON, JR.. FORREST W. HUFF, TOM MOORE,

DREXEL J. THRASH, CHARLES McKEE, and JOHN

CALDWELL, TRUSTEES of the LABORERS’ DISTRICT

COUNCIL AND CONTRACTORS’ PENSION FUND OF

OHIO;

and

W. JOE NIEDHARDT, DREXEL J. THRASH,

MARSHALL L. FLYNN, JACK E. KUEBLER, AMOS

JACKSON, ROBERT F. BLIEILE, GERALD JONES and

WILLIAM COPELAND, TRUSTEES of the OHTO

LABORERS’ TRAINING AND UPGRADING FUND,

Plaintiffs-A ppellants,

VS.

BAKER CEMENT CONTRACTORS, INC.

Defendant A ppe llee

ORDER

(Filed July 6, 1982)

Before: ENGEL and BROWN, Circuit Judges; and GUY,

District Judge.*

*Honorable Ralph B. Guy, Jr., District Judge, United States District Court

for the Eastern District of Michigan sitting bv designation

Je

wa

This matter is before this court as a result of plaintiffs’

appeal of a summary judgment granted in favor of the de

fendant in the district court.

Plaintiffs are the Trustees of the Ohio Laborers’ District

Council-Ohio Contractors’ Association Insurance Fund, the

Laborers’ District Council and Contractors’ Pension Fund of

Ohio, and the Ohio Laborers’ Training and Upgrading Trust

Fund. These three funds are collectively bargained, multi

employer, Taft-Hartley fringe benefit funds established by

agreements and declarations of trusts between the Labor

Relations Division of the Ohio Contractors’ Association, the

Associated General Contractors of America, Inc.. and Em

plovers’ Association and the Laborers’ District Council of Ohio

of the Laborers’ International Union of North America, AFL

CTO, an association of a local laborers’ union in Ohio.

The defendant is an Ohio corporation engaged in the building

and construction industry within the State of Ohio.

On June 1, 1975, defendant became signatory to a collective

bargaining agreement that had been negotiated between the

Butler County Area Contractors’ Association of Hamilton.

Ohio, an association of employers, and Laborers’ Local No. 534,

a local union affiliated with the Ohio Laborers’ District Council

This collective bargaining agreement obligated the defendant

to make contributions to certain trust funds on behalf of its

laborers who work within the geographical jurisdiction of

Local 934, whether or not such laborers were 1n fact union

members Subsequent to entering into this collective bargaining

agreement, the defendant, on October 13, 1975, executed another

agreement entitled “Assent of Participation,” which agreement

bound the defendant insofar as trust fund contributions were

ceoneerned to the Ohio Laborers’ District Council and the local

unions of which it is e mprised Pursuant to these two agree

ments, the defendant made monthly fringe benefit contributions

to the trust funds in question on behalf of those members of

its work force performing laborers’ work. On July 25, 1977,

3a

plaintiff Trustees, pursuant to the relevant contract provisions,

requested permission of defendant to perform an audit of its

payroll records in accordance with the above-referenced agree

ments. On November 30, 1977, the audit was commenced but

was not completed when the defendant advised the auditor

that it would not provide payroll or other related records for

employees other than those identified by the defendant as

laborers on whose behalf a monthly contribution was owed. As

a result of this refusal to make the requested records available,

the plaintiffs instituted this action against the defendant

At the final pretrial conference held in the trial court, the

parties were directed by the district judge to present this

matter on cross-motions for summary judgment rather than

by way of trial. Pursuant to this direction, cross-motions for

summary judgment were filed and, on April 21, 1981, the

district judge entered an order of summary judgment essentially

finding in favor of the defendant

Plaintiffs. defendant. and the trial court were all! in agreement

that the plaintiffs are entitled to review such records as are

necessary to fulfill their obligations under the collective bar

gaining agreement and the trust fund agreements. By impli

cation at least, the parties are also in agreement that sufficient

information was not furnished by the defendant to the plaintiffs

in order for them to make a complete determination as to

whether fringe benefit funds are being contributed by the

defendant as required. The district court held, however, that

the release of all the information requested by the plaintiffs

would necessarily require the disclosure of additional infor

mation which was not needed by the plaintiffs and which the

eourt deemed confidential in nature insofar as the employer

was coneerned. The trial court further concluded that the

information that the Trustees needed was available from

another souree, i.e.. the Union, and that therefore the missing

information that the needed to complete their audit could be

obtained by resorting to the Union and its records

ta

Although this appeal poses interesting questions which are

being raised with increasing frequency as a result of the

passage of the Employees’ Retirement Income Security Act of

1974 (ERISA), this court concludes that it is unnecessary to

reach those questions in order to determine this appeal. The

decision of the trial court that the plaintiffs were entitled to

the type of information that they sought in this lawsuit but

could obtain it from other sources is erroneous and not sup

ported by the record

The trial court recognized that plaintiffs should not be

wholly dependent upon the defendant’s identification of who

was working as a laborer and thus entitled to fringe benefit

fund contributions. The court concluded, however, that because

there was a Union security agreement in the collective bar

gaining agreement requiring all! laborers to be Union members

and, further, because the collective bargaining agreement

provided for union stewards to be at each job site, that the

Union would thus be able to definitively ascertain and identify

those employees performing laborers’ work on whose behalf

contributions had to be made. This conclusion is fatally defective

for two reasons

First, defendant’s collective bargaining agreement with Local

934 contained a “grandfather clause” which required that onl

those laborers hired after the effective date of the agreement,

June 1, 1975, become members of Local 534. Thus, the de

fendant could have non-Union laborers on its payroll without

being in violation of its agreement with Loeal 534.

Second, although the Assent of Participation agreement

signed by the defendant also obligated it to make trust fund

contributions in the geographic areas covered by Locals 423.

410, and 265, the defendant was not in fact signatory to any

collective bargaining agreements with these other three unions

Thus, although the standard collective bargaining agreements

of Locals 423, 410, and 265 contained “union security clauses,”

they were not binding upon the defendant because it had no

Ja

direct contractual relationship with these unions. Thus, the

defendant could perform work in the geographic areas of these

unions and use non-union labor. These two examples clearly

demonstrate that there were at least two groups of employees

of indefinite size for whom the employer was required to make

trust fund contributions but whose eligibility for same could

not be determined from Union records.

In addition, undue emphasis is placed upon the fact that in

the geographic area under the jurisdiction of Local 534 there

was to be a union steward on the job. One of the significant

purposes achieved by the passage of ERISA was to set up

independent trust funds and trustees with fiduciary respon

sibilities. This was for the purpose of protecting the employee

against both management and the union. To suggest that the

union steward is the ultimate safeguard as to who is doing

laborers’ work overlooks the fact that Congress, by the passage

of ERISA, legislatively determined that employee retirement

income and fringe benefits should not be left to the protection

solely of management or union, but required the protection of

an independent board of trustees.

Since the major premises on which the trial court determined

that the plaintiffs could in fact achieve access to the information

they needed are incorrect, it is necessary to reverse the sum

mary judgment by the district court and remand for such

further proceedings as will enable the plaintiffs to secure the

information necessary for them to meet their fiduciary respon

sibilities under ERISA

By way of further guidance to the parties on remand, this

court would further note that it would not appear that a

referral of this matter to arbitration is an appropriate vehicle

for the resolution of this dispute at its current level. It may be

that ultimately the parties will have a disagreement as to

whether a given employee is performing laborers’ work. Such a

determination may or may not be properly referrable to

arbitration based upon the provisions of the particular bar

ha

gaining agreements involved, but arbitration is not an appro

priate vehicle for determining the nature and scope of the

records to which plaintiffs should have access. The court

would further note that the case of Central States. Southeast

and Southwest Areas Pension Fund \ CRST. Ine 641 F2.d

618 (Sth Cir. 1981), appears to be distinguishable from the cas

ENTERED BY ORDER OF THE COURT

s/ JOHN P. HEHMAN

Clerk