Amicus Curiae Brief — Laborers Health & Welfare Trust Fund v. Advanced Lightweight Concrete Co.

080 No. 85-2079 )

IN THE

Supreme Court of the United States

OCTOBER TERM, 1985

\

LABORERS HEALTH AND WELFARE TRUST FUND

FOR NORTHERN CALIFORNIA, et al.,

. Petitioners,

ADVANCED LIGHTWEIGHT CONCRETE Co., INC.,

Respondent.

Petition for Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

MOTION OF THE

NATIONAL COORDINATING COMMITTEE

FOR MULTIEMPLOYER PLANS FOR LEAVE

TO FILE A BRIEF AND BRIEF AS AMICUS CURIAE

GERALD M. FEDER *

NIK B. EDES

DAVID R. LEVIN

FEDER & EDES

1527 - 18th Street, N.W.

Washington, D.C. 20036

(202) 387-1515

Attorneys for National

Coordinating Committee

for Multiemployer Plans

* (Counsel of Record)

a

WILSON - Erpgs PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

® “EEBe0 00

IN THE

Supreme Court of the United States

OCTOBER TERM, 1985

No. 85-2079

LABORERS HEALTH AND WELFARE TRUST FUND

FOR NORTHERN CALIFORNIA, et al.,

2 Petitioners,

ADVANCED LIGHTWEIGHT CONCRETE Co., INC.,

Respondent.

Petition for Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

MOTION OF THE

NATIONAL COORDINATING COMMITTEE

FOR MULTIEMPLOYER PLANS FOR LEAVE

TO FILE A BRIEF AS AMICUS CURIAE

To the Honorable Chief Justice and Associate Justices

of the Supreme Court of the United States:

Pursuant to Rule 36 of the Rules of this Court, the

National Coordinating Committee for Multiemployer

Plans (“NCCMP”) respectfully moves for leave to file

the accompanying brief as amicus curiae in support of

the petition for Writ of Certiorari. Petitioners have con-

sented to the filing of this brief; respondents have not.

INTEREST OF THE NCCMP

The NCCMP is a nonprofit, tax-exempt organization

formed after the enactment of the Employee Retirement

Income Security Act of 1974 (“ERISA”)* to represent

the interests of multiemployer plans and their partici-

pants in the regulation of benefit plans under ERISA and

other laws. More than 150 multiemployer plans (includ-

ing the petitioners) and related international unions are

members of the NCCMP. These plans are fairly repre-

sentative of all the nation’s multiemployer plans, cover-

ing more than nine million workers and their families.

Because of the broad range of experience of the

NCCMP’s constituent organizations and its close, ongoing

contacts with the hundreds of trustees charged with op-

erating multiemployer plans, the NCCMP believes that

it is uniquely qualified to provide the Court with insight

concerning the vractical, negative implications of the de-

cision below for multiemployer plans and to state the

position of trustees, participants, and beneficiaries of

such plans. In fact, the NCCMP has recently participated

as an amicus curiae in both Central States, Southeast

and Southwest Areas Pension Fund v. Central Transport

Inc., 472 US. , 86 L.Ed.2d 447 (1985) and Connolly

v. PBGC, 475 U.S. ——, 89 L.Ed.2d 166 (1986).

The NCCMP urges this Court to issue a Writ of Cer-

tiorari. Refusal of this Court to review the judgment

below will have broad, adverse consequences upon the

financial soundness of the NCCMP’s member employee

benefit plans and, therefore, upon the plans’ ability to

provide benefits.

ISSUES DEVELOPED BY THE NCCMP

The NCCMP brief focuses on issues which it believes

may not be adequately presented elsewhere, including:

(a) the particularly adverse impact that the court’s

holding below will have on national employee

* ERISA was substantially amended by the Multiemployer Pen-

sion Plan Amendments Act of 1980 (“MPPAA”), P.L. 96-364,

94 Stat. 1208 (1980).

benefit policies generally, and on multiemployer

plans in particular; and

(b) the fundamental conflict in principle between the

decision of the court below and decisions of this

Court, as well as a conflict in principle between

the decision of the court below and decisions in

the other federal circuits.

The NCCMP, therefore, moves for leave to file the

accompanying brief amicus curiae.

Respectfully submitted,

GERALD M. FEDER

NIK B. EDES

DAVID R. LEVIN

FEDER & EDES

1527 - 18th Street, N.W.

Washington, D.C. 20036

(202) 387-1515

Dated: July 1986

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TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ...................... alot aiaattiaiailtnas ii

I. INTEREST OF THE NATIONAL COOR-

DINATING COMMITTEE FOR MULTIEM-

PLOYER PLANS. ..... inisineineatiliel dca 2

II. SUMMARY OF REASONS FOR REVIEW...... 3

III. REASONS FOR REVIEW .................................... 6

A. Multiemployer plan trustees must have an

independent, federal cause of action to col-

lect delinquent contributions for the entire

period that employers have an obligation to

make such contributions ................................... 6

B. The NLRB does not provide trustees with a

forum to satisfy their fiduciary duty of main-

taining the financial stability of multiem-

a a a iaidebiioses 11

I Aaenntanieedtenieicintepestinamciznstinecmeseientavtanntigis 14

ii

TABLE OF AUTHORITIES

Cases: Page

Baker v. International Alliance of Theatrical Stage

Employees, 691 F.2d 1291 (9th Cir. 1982) .......... 12

Board of Trustees, Container Mechanics Welfare/

Pension Fund v. Universal Enterprises, Inc., 751

2 be. fe: f- & 5, 11

Central States Southeast and Southwest Areas

Pension Fund v. Central Transport, Inc., 472

U.S. ——, 86 L.Ed.2d 447 (1985) -........................ passim

Central States Southeast Pension Fund v. Hitch-

ings Trucking, Inc., 472 F.Supp. 1243 (E.D.

EB A ER Rt se A RC 7

Fibreboard Corporation v. NLRB, 379 U.S. 203

RT sa ao iacoereaaaciastamaaintenthdimetinaniiaaagbinaniiiemenitance 13

Gilbert v. Burlington Industries, Inc., 765 F.2d 320

ne ee eee 11

Jim McNeff, Inc. v. Todd, 461 U.S. 260 (1983) ...... 3,4

Laborers Health & Welfare Trust Fund v. Kauf-

man & Broad, 707 F.2d 412 (9th Cir. 1983) ........ 11

Laborers Health & Welfare Trust Fund for North-

ern California, et al. v. Advanced Lightweight

Concrete Co., Inc., 779 F.2d 497 (9th Cir. 1985) .. 11

Leigh v. Engle, 727 F.2d 113 (7th Cir. 1984) ........... 11

Lewis v. Benedict Coal Corp., 361 U.S. 459 (1960) .. 3

Malone v. White Motor Corp., 435 U.S. 497 (1978) .. 9

Mo-Kan Teamsters Pension Fund v. Botsford

Ready Miz, 605 F.Supp. 1441 (W.D. Mo. 1985) ..5, 11, 13

Moldovan v. Great Atlantic & Pacific Tea Co., Inc.,

790 F.2d 894 (3d Cir. 1986) ............------------....--. 4

Nachman Corporation v. PBGC, 446 U.S. 359

I sociale hi nthidtehiaseiebidaitahiealdasein 7

NLRB v. Amaz Coal, 453 U.S. 322 (1981) .......... 3, 6, 7, 12

NLRB v. Laborers International Union of North

America, AFL-CIO, Local 282, 567 F.2d 833 (8th

ls ID "sciatic hieaheariataiaeiiemnnnnniabeidtibinineaetuess 13

NLRB v. Marsden, 701 F.2d 238 (2d Cir. 1983) ...... 12

NLRB v. Sears, Roebuck & Co., 421 U.S. 132

EY cialis aia iastcacekh aici linenisaicipihnilansaistiniosiiadidteies 5, 12

iii

TABLE OF AUTHORITIES—Continued

Page

NLRB v. Seven-Up Bottling Co., 344 U.S. 344

Cee o> 8S Tir. Ne eee Soe 13

NLRB v. Shipbuilding Local 22, 391 U.S. 418

ER SSE na vom ene) © vt Oe aa 12

Office and Professional Employees Insurance Trust

Fund v. Laborers Fund Administrative Office,

783 F.2d 919 (9th Cir. 1986) _......... 4

Pokratz v. Jones Dairy Farm, 771 F.2d 206 (7th

EROS VA SLE EL CR RA 9

Republic Steel Corp. v. NLRB, 311 U.S. 7 (1940) ..4, 12, 13

Retail Clerks v. Schermerhorn, 375 U.S. 96 (1963) .. 9

Roberts v. Burlington Industries, Inc., 54 U.S.L.W.

3836 (U.S. June 24, 1986) ...00. 11

Rosen v. Hotel and Restaurant Employees, Etc.,

637 F.2d 592 (3d Cir. 1986) 00. 8

Rothensies v. Electric Battery Co., 329 U.S. 296

BR AE Aes TR A ee 5

Saez v. Goslee, 463 F.2d 214 (ist Cir.), cert. de-

nied, 409 U.S. 1024 (1972) 0.0 12

Smith v. CMTA-IAM Pension Trust, 654 F.2d 650

RA ee SEES I SP oe 11

U.A. 198 Health & Welfare, Education & Pension

Funds v. Rester Refrigeration Service, Inc., 790

F.2d 428 (6th Cir. 1966) ......................................... 4

UMWA Health & Retirement Funds v. Robinson, J;

SF EE a 9

United States v. Ruzicka, 329 U.S. 287 (1946)... 5

Van Gunten v. Central States, Etc., 672 F.2d 586 ~

EE a ee ee eee 7

Wisconsin Department of Industry v. Gould, Inc.,

475 U.S. ——, 89 L.Ed. 2d 223 (1986) —...0000. 13

Federal Statutes:

ne casas iedecduanenmaaisctaionaeas 10

I cuseuinomntasutinnnuniens 12

RT» | eee 12

I I cecsecinnsteccsnticsnmmiacsensnenectonescann 6

iv

TABLE OF AUTHORITIES—Continued

29 U.S.C. § LOOLA ............-...-..-----ccerecererenesenesesees 2, 3, 6, 9

Te) 2, 4, 6, 12

i 6,9

Le Te | eee 6,9

I ii tcccctcceccrneescertccrwcsennecmcsnssescsniocs 6

TB BD aces cccesctre nen ccessensnsensncnsccasececterse 6

LE LS) | eee 5, 6, 7,8

JE ee 6,8

29 U.S.C. § 1182(b) (2) ...........--....-ccc.-cceveeneneeeees 5, 8

29 U.S.C. § 1182 (g) (2) -........-.------------------++ 3, 4, 6, 7,13

I OI sictinacitnanincensdinntoncdtncisascanbesnevesans 11

Lf Le | ea 6, 8, 9

Legislative Materials:

Report of the House of Representatives Committee

on Education and Labor on H.R. 3904, H. Rep.

No. 96-869 (Part I), 96th Cong., 2d Sess. (April

J ee ee 9

S. 3017 ERISA-Improvements Act of 1978 .............. 8

Senate Labor Committee Summary and Analysis of

Consideration of S. 1076 (April 1980), 126 ad

Rec. 23039, 23288 (1980) 10

Administrative Materials:

29 C.F.R. § 101.4 (1984) ..............-....---.----cceceeeeceeneeeees 13

29 C.F.R. § 101.9 (1984) -......222..22.-----eeecceeeecceneceneeenees 13

29 C.F.R. § 101.9(c) (1984) -...........-----------2--eneeeneee> 5

Department of Labor Advisory Op. No. 76-89

ESS ee een 6

Internal Revenue Service G.C.M. 39048 .................. 6, 7

Miscellaneous:

2 Scott on Trusts §§ 170, 171 (3d ed. 1967) ............. 4

2A Sutherland Stat. Const., § 46.07 at 110 (4th

1, TE cccsnnitiestnigeniiltincietbtndaitapenniinmpenpianctnstiingsiaitintalptpances 11

IN THE

Supreme Court of the United States

OCTOBER TERM, 1985

No. 85-2079

LABORERS HEALTH AND WELFARE TRUST FUND

FOR NORTHERN CALIFORNIA, et al.,

. Petitioners,

ADVANCED LIGHTWEIGHT CONCRETE CO., INC.,

Respondent.

Petition for Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

BRIEF OF THE

NATIONAL COORDINATING COMMITTEE

FOR MULTIEMPLOYER PLANS AS AMICUS CURIAE

IN SUPPORT OF PETITIONERS

The National Coordinating Committee for Multiem-

ployer Plans (“NCCMP”) submits this brief as amicus

curiae to urge the Court to review the holding below that

multiemployer plan trustees cannot invoke federal juris-

diction under ERISA to exercise their fiduciary responsi-

bility for collecting delinquent contributions for the pe-

riod subsequent to the expiration date set forth in a col-

lective bargaining agreement, but prior to the bargaining

parties reaching impasse or a new agreement. Instead,

the court below held that trustees must seek to invoke

the jurisdiction of the National Labor Relations Board

(the “NLRB”) to secure contributions due and owing

during that interim period.

2

I. INTEREST OF THE NATIONAL COORDINATING

COMMITTEE FOR MULTIEMPLOYER PLANS

The nature and purpose of the NCCMP is set forth in

the accompanying motion for leave to file this brief. As

set forth herein, the NCCMP submits that the decision

below offends national employee benefit policies estab-

lished by Congress and recognized by this Court and,

therefore, will have a significant adverse effect upon the

nation’s multiemployer plans and the benefit security of

more than nine million participants and their families.

The impact of the decision below is to force multi-

employer plans to provide benefits for hours worked,

while denying the self-same plans a judicial forum and,

in some circumstances, any forum in which to collect the

contributions that should have been paid for those hours

worked. That result is totally at odds with the purposes

of ERISA. See, e.g., 29 U.S.C. §§ 1001(b), 1001A.

A financially sound pension plan, and one operating

within the confines of law, requires a proper actuarial

relationship between employer contributions and employee

benefits. The necessary predicate to maintaining the

legally mandated financial integrity of multiemployer pen-

sion plans is the implementation of an ongoing system

to collect employee contributions. The inability to collect

these coutributions can lead to inadequate funding of the

multiemployer plans involved.

After the expiration date of a collective bargaining

agreement, employees commonly continue te work during

the period of negotiations for a new agreement. Such

negotiations may continue for extended periods of time.

The decision below undercuts efforts to ensure proper

funding of employee benefit plans, by encouraging em-

ployers to refuse to contribute during the post-expiration

period when negotiations are ongoing. This incentive not

to contribute, resulting from the decision below, is bol-

stered by employers’ awareness not only that the NLRB

may compromise the amount owed to the plan, but also

that the NLRB may require an employer to pay some

thing less than the Congressionally mandated remedy for

collection actions brought in federal court, i.e., contribu-

tions, interest, liquidated damages, costs, and reasonable

attorney fees. 29 U.S.C. § 1182(g)(2). Thus, the deci-

sion below undermines the fiduciary authority uf trustees

and threatens the financial foundation of multiemployer

plans.

By enacting ERISA, Congress sought to enhance the

financial stability of multiemployer plans and to foster

the maintenance and growth of such plans. The legisia-

tive history of both ERISA and MPPAA confirms the

importance of ready and direct access to the federal

courts to collect contributions. Ensuring full funding of

pension plan benefits through timely payment of employer

contributions is one of the statute’s principal objectives.

The decision below is contrary to these Congressional

goals. It is to elaborate upon these concerns and to place

them before the Court that the NCCMP has sought per-

mission to file this brief.

Il. SUMMARY OF REASONS FOR REVIEW

A. Consistent with established Congressional policy

recognizing the importance of employee benefits to the

financial well-being of millions of Americans, 29 U.S.C.

§§ 1001, 1001A, this Court has declared that employee

benefit plan trustees have an absolute duty of loyalty to

plan beneficiaries and the exclusive authority to control

plan administration. See Central States Southeast and

Southwest Areas Pension Fund v. Central Transport,

Inc., 472 U.S. ——, 86 L.Ed.2d 447 (1985); NLRB v.

Amaz Coal Co., 453 U.S. 322 (1981). To fulfill these

responsibilities, this Court has consistently recognized the

right and duty of multiemployer plan trustees to calculate

and collect eiployer contributions due and owing to em-

ployee benefit funds. See Central Transport; Jim McNeff,

Inc. v. Todd, 461 U.S. 260 (1983) ; Amazx Coal Co.; Lewis

v. Benedict Coal Corp., 361 U.S. 459 (1960).

4

The independent right of trustees to collect employer

contributions is a fundamental prerequisite to the dis-

charge of all fiduciary duties. Accord, Central Transport;

Jim McNeff, Inc. v. Todd; 2 Scott on Trusts §§ 170, 171

(3d ed. 1967). Moreover, ERISA expressly directs the

federal courts to award not only the delinquent contribu-

tions, but also interest, liquidated damages, and the cost

of collection, including reasonable attorney fees. 29

U.S.C. § 1182(g) (2). Congress stated its intent that the

purpose of this mandatory judicial remedy is to dis-

courage delinquencies and to foster the financial integrity

of multiemployer plans. Yet, contrary to these fundamen-

tal principles and the express intent of Congress, the

court below limited trustees’ authority to collect delin-

quent contributions that are due after the expiration date

of a collective bargaining agreement, but prior to im-

passe or the successful negotiation of a new bargaining

agreement. The decision below forces trustees to seek

to invoke the jurisdiction of the NLRB, albeit that agency

cannot provide the remedies mandated by Congress under

ERISA. Accord, Republic Steel Corp. v. NLRB, 311 U.S.

7, 10-12 (1940). Yet, Congress directed that plan trus-

tees be given “ready access” to the federal courts, 29

U.S.C. § 1001(b).

The decision of the court below, which failed to recog-

nize federal district court jurisdiction under ERISA suf-

ficiently broad to enable plan trustees themselves to en-

force employer funding obligations, threatens the finan-

cial integrity of the multiemployer plans that trustees—

1The Third and Fifth Circuits and another panel of the Ninth

Circuit have all recently reached the same result in similar cases.

Moldovan v. Great Atlantic & Pacific Tea Company, Inc., 790 F.2d

894 (3d Cir. 1986); U.A. 198 Health & Welfare, Education & Pen-

sion Funds v. Rester Refrigeration Service, Inc., 790 F.2d 423 (5th

Cir. 1986); Office and Professional Employees Insurance Trust

Fund v. Laborers Fund Administrative Office, 788 F.2d 919 (9th

Cir. 1986). The Fifth and Ninth Circuits cited the decision below.

5

not the NLRB—are obligated to protect. See, e.g., 29

U.S.C. § 1104.

The significance of this issue in the administration of

ERISA and the serious hindrance to the effective mainte-

nance and continuation of multiemployer plans warrants

review by this Court. Accord, Rothensies v. Electric Bat-

tery Co., 329 U.S. 296 (1947) ; United States v. Ruzicka,

329 U.S. 287 (1946).

B. The Congress has chosen to exclude government

agencies from the contribution collection process of multi-

employer plans. See 29 U.S.C. § 1182(b) (2). That point

has been underscored by this Court and the Department

of Labor, which, as a practical matter, simply does not

have “the resources for policing the day-to-day opera-

tions of each multiemployer plan in the Nation.” Central

Transport, Inc., 86 L.Ed.2d at 462. Nonetheless, the court

below has forced trustees to resort to the NLRB admin-

istrative mechanism in order to exercise their essential

fiduciary right to collect delinquent contributions, even

though the NLRB may fashion a remedy that compro-

mises the interests of the employee benefit plan. See, e.g.,

Mo-Kan Teamsters Pension Fund v. Botsford Ready Miz,

605 F.Supp. 1441, 1444 (W.D. Mo. 1985); 29 C.F.R.

§ 101.9(c). However, the NLRB may decline to exercise

jurisdiction for various reasons, and its decision to do so

is essentially precluded from review. See, e.g., NLRB v.

Sears, Roebuck & Co., 421 U.S. 182, 188-39 (1975). More-

over, courts in at least two circuits have asserted that

neither employee benefit funds nor their trustees have

standing to invoke the jurisdiction of the NLRB. Board

of Trustees, Container Mechanics Welfare/Pension Fund

v. Universal Enterprises, Inc., 751 F.2d 1177, 1183 (11th

Cir. 1985); Botsford Ready Mix, 605 F.Supp. at 1447.

Applying the ruling below to decisions in these circuits

totally precludes the collection of delinquent contributions

for the period prior to impasse. Thus, on the one hand,

plan trustees would be left without any forum in which

6

to collect contributions due and owing, but on the other,

they would be saddled with the obligation to provide the

benefits for which the contributions should have been

made. See Central Transport, 86 L.Ed.2d at 455 n.7 and

463 n.20.

Absent a uniform rule enunciated by this Court, trus-

tees will be whipsawed between the denigration of their

authority by the court below and the ultimate responsi-

bilities imposed on them by the judiciary, see Central

Transport; by the executive, see Internal Revenue Service

G.C.M. 39048, and Department of Labor Advisory Op.

No. 76-89 (Aug. 31, 1976); and by the Congress, see 29

U.S.C. §§ 1001(b), 1001A, 1053, 1054.

Ill. REASONS FOR REVIEW

A. Multiemployer plan trustees must have an independ-

ent, federal cause of action to collect delinquent con-

tributions for the entire period that employers have

an obligation to make such contributions.

The purpose of multiemployer benefit trusts and the

policy underlying the statute which regulates those trusts

are one and the same: to protect the interests of partici-

pants and to ensure the receipt of promised benefits. See

29 U.S.C. §§ 186(c) (5), 1001(b). The property of multi-

employer benefit trusts consists initially of employer con-

tributions, which participating employers have a statu-

tory obligation to pay and fund trustees have a duty to

try to collect. See 26 U.S.C. § 412 and 29 U.S.C. §§ 1082,

1104, 1106, 11382(g) (2), 1145. Moreover, ERISA “vests

the ‘exclusive authority and discretion to manage and

contr! the assets of the plan’ in the trustees alone...

29 U.S.C. § 1103(a).” Amazx Coal, 453 U.S. at 333.

One of Congress’ principal purposes in adopting amend-

ments to ERISA in 1980 was “to strengthen the funda-

mental requirements and enhance the financial stability

T

of multiemployer pension plans,” Amaz Coal, 453 U.S.

at 338 n.22., by, inter alia, assuring that fund trustees

will have the ability to recover delinquent contributions

quickly and effectively. Accord, 29 U.S.C. §§ 1182(g) (2),

1145. Moreover, as the Court acknowledged in Central

Transport, 86 L.Ed. 2d at 460, trustees have no real

choice in this matter. Any failure on the part of fund

trustees to pursue diligently their obligation to collect

contributions can constitute a breach of their statutory

fiduciary obligation, as well as an unlawful extension of

credit to a delinquent employer. Id.

Furthermore, the fact that an employer has wrong-

fully failed to make contributions on behalf of an em-

ployee has been held not to form the basis for trustees’

refusal to pay the employee a benefit. Thus, the entitle-

ment and amount of a pension benefit are a function of

hours of service, not hours of service for which contribu-

tions were paid. See Van Gunten v. Central States, Etc.,

672 F.2d 586 (6th Cir. 1982); Central States Southeast

Pension Fund v. Hitchings Trucking, Inc., 472 F.Supp.

1248, 1247 (E.D. Mich. 1979). Moreover, in the view of

the Internal Revenue Service,

a multiemployer plan must credit an employee’s years

of service even though the employer failed to make

the required contributions . . . [b]ecause . . . the

employee should not bear the risk of employer non-

contribution.

Internal Revenue Service G.C.M. 39048, reprinted in

PENS. REP. (BNA), No. 471 at 1764-65 (Nov. 21, 1983).

In order “to make as certain as possible that pension

fund assets would be adequate” to pay benefits due, Con-

gress “prescribed standards of conduct” for plan fidu-

ciaries. Nachman Corporation v. PBGC, 446 U.S. 359, 375

(1980). See 29 U.S.C. § 1104. Therefore, the trustees,

upon whom Congress has imposed a nondelegable fiduciary

8

duty to maintain the financial integrity of the trust,

must have a meaningful mechanism to seek to collect the

amounts that employers are obligated to contribute. Rosen

v. Hotel and Restaurant Employees, Etc., 637 F.2d 592

(3d Cir. 1981).

In this regard, “neither the structure of ERISA nor

the legislative history show any Congressional intent that

trustees should rely primarily on centralized federal mon-

itoring of employer contribution requirements.” * Central

Transport, 86 L.Ed. 2d at 463. Indeed, Congress expressly

withheld from the Secretary of Labor the authority to

initiate actions to enforce an employer’s contribution ob-

ligations. See 29 U.S.C. §§ 1132(b) (2), 1145. In con-

trast, “trustees were given the authority to sue to en-

force an employer’s obligations to a plan.” Central

Transport, 86 L.Ed 2d at 463. “The Court of Appeals’

argument obviously conflicts with one of the principal

Congressional concerns motivating the passage of the

Act, that plans should assure themselves of adequate fund-

ing by promptly collecting employer contributions.” Id.

at 464. (citations omitted) (emphasis added).

Multiemployer plan trustees must seek to collect con-

tributions from employers, so long as the employers con-

tinue to have an obligation to contribute. 29 U.S.C.

§§ 1104, 1106, 1145. A trustee determination that an

employer has an obligation to contribute to the plan is

critical to the administration of the plan. As with all

matters of plan administration, the federal judiciary

defers to the decision of the trustees, unless the decision

is found to be arbitrary and capricious. See, e.g., Pokratz

2 For example, 8.3017 (entitled the “ERISA Improvements Act of

1978”) provided, inter alia, for the establishment of an independent

federal agency—-the Employee Benefits Commission—to administer

and enforce Titles I and IV of ERISA. Although 8.3017 included a

provision identical to 29 U.S.C. § 1145, obligating employers to

contribute, the bill expressly precluded the proposed Commission

from bringing collection actions to enforce the provision.

9

v. Jones Dairy Farm, 771 F.2d 206, 209 (7th Cir. 1985).

Accord, UMWA Health & Retirement Funds v. Robinson,

455 U.S. 562 (1982).

A trustee determination that an employer continues to

be obligated to contribute means that participant service

with the employer is credited for purposes of pension

benefit accrual and vesting. 29 U.S.C. §§ 1053, 1054. To

the extent employer contributions are not recovered on

behalf of the plan, the ability of the plan to provide

benefits generally is diminished. Moreover, to the extent

such contributions are not recovered, a plan’s underfund-

ing increases.

The 1980 amendments to ERISA were prompted by

Congressional anxiety about the financial stability of mul-

tiemployer plans and concern that the maintenance and

growth of such plans was being discouraged. See 29

U.S.C. §1001A. See generally Report of the House of

Representatives Committee on Education and Labor on

H.R. 3904, H.Rep. No. 96-869 (Part I), 96th Cong., 2d

Sess. (April 3, 1980). Certainly, “the purpose of Con-

gress is the ultimate touchstone,” Malone v. White Motor

Corp., 435 U.S. 497, 504 (1978), quoting Retail Clerks v.

Schermerhorn, 375 U.S. 96, 103 (1962). and the drafters

of the 1980 amendments did explain the problem they

sought to remedy by the enactment of section 515 of

ERISA, 29 U.S.C. § 1145:

Delinquencies of employers in making required con-

tributions are a serious problem for most multiem-

ployer plans. Failure of employers to make promised

contributions in a timely fashion imposes a variety

of costs on plans. While contributions remain un-

paid, the plan loses the benefit of investment income

that could have been earned if the past due amounts

had been received and invested on time. Moreover,

additional administrative costs are incurred in de-

tecting and collecting delinquencies. Attorneys fees

10

and other legal costs arise in connection with collec-

tion efforts.

These costs detract from the ability of plans to for-

mulate or meet funding standards and adversely af-

fect the financial health of plans. Participants and

beneficiaries of plans as well as employers who honor

their obligation to contribute in a timely fashion bear

the heavy cost of delinquencies in the form of lower

benefits and higher contributions rates. Moreover, in

the context of this legislation, uncollected delin-

quencies can add to the unfunded liability of the plan

and thereby increase the potential withdrawal liabil-

ity for all employers.

Recourse available under current law for collecting

delinquent contributions is insufficient and unneces-

sarily cumbersome and costly. Some simple collection

actions brought by plan trustees have been converted

into lengthy, costly and complex litigation. This

should not be the case. Federal pension law must per-

mit trustees of plans to recover delinquent contribu-

tions efficaciously. Sound national pension policy de-

mands that employers who enter into agreements pro-

viding for pension contributions not be permitted to

repudiate their pension promises.

Senate Labor Committee Summary and Analysis of Con-

sideration of $.1076 (April 1980) (emphasis added).

See 126 Cong. Rec. 28089 (1980) (remarks of Rep.

Thompson) ; id. at 23288 (remarks of Sen. Williams).

Given the clear intent of Congress to foster the finan-

cial integrity of multiemployer plans and to provide

“ready access” to the federal judiciary, the language of

ERISA §515—which expressly provides the basis for

direct federal court jurisdiction of trustee suits to collect

contributions where the employer is obligated to con-

tribute “under the terms of the plan or under the terms

of a collectively bargained agreement”—is broad enough

to include an employer’s obligation to contribute in ac-

cordance with the terms of the plan or agreement that

11

has been extended by operation of labor-management rela-

tions law.’

B. The NLRB does not provide trustees with a forum

to satisfy their fiduciary duty of maintaining the

financial stability of multiemployer plans.

The court below predicated its decision, that the fed-

eral judicial forum should be displaced by the NLRB for

collection actions like the instant case, on the premise

that plan trustees can invoke the jurisdiction of the

NLRB. 779 F.2d at 503. Yet, in Board of Trustees v.

Universal Enterprises, 751 F.2d 1177, 1183 (11th Cir.

1985), the Eleventh Circuit concluded that multiemployer

plan trustees had no standing to invoke the jurisdiction

of the NLRB. Moreover, in Mo-Kan Teamsters Pension

Fund v. Botsford Ready Mix, 605 F.Supp. 1441, 1447

(W.D. Mo. 1985), a district court within the Eighth Cir-

cuit asserted that multiemployer plan trustees “are pow-

erless to initiate” an action before the NLRB. Therefore,

although “[p]ension plan trustees must have a forum in

which to enforce trust obligations,” Laborers Health &

Welfare Trust Fund v. Kaufman & Broad, 707 F.2d 412,

416 (9th Cir. 1983), there is a conflict among the cir-

cuits as to whether multiemployer plan trustees can even

gain access to the NLRB.*

* The court below arrived at a contrary conclusion through a strict

construction of a remedial statute. But see, e.g., Leigh v. Engle,

727 F.2d 118, 189 (7th Cir. 1984) (ERISA must be construed

broadly) ; 2A Sutherland Stat. Const. § 46.07 at 110 (4th ed.).

* Multiemployer plans often extend coverage over wide geographi-

cal areas. The duties and obligations of the trustees of these plans

must, therefore, be uniform throughout the circuits. Accord,

Roberts v. Burlington Industries, Inc., 54 U.S.L.W. 3886 (U.S.

June 24, 1986), affirming, Gilbert v. Burlington Industries, Inc.,

765 F.2d 320 (2d Cir. 1985); 29 U.S.C. §1144. This need for con-

sistency is also reflected in the express Congressional directive that

the United States courts fashion a federal common law of pensions

to fill the statutory interstices extant in ERISA. See, e.g., Smith

v. CMTA-IAM Pension Trust, 654 F.2d 650, 663 (9th Cir. 1981).

12

Assuming arguendo that trustees have standing to in-

voke the jurisdiction of the NLRB, the NLRB may of

its own volition decline to exercise that jurisdiction. See,

e.g., NLRB v. Marsden, 701 F.2d 238, 241 (2d Cir. 1983) ;

29 U.S.C. § 164(c) (1). The general counsel’s discretion-

ary decisions regarding the investigation of charges, and

the issuance and prosecution of complaints is precluded

from review under LMRA § 3(d), 29 U.S.C. § 153(d).

See, e.g., NLRB v. Sears, Roebuck & Co., 421 US. 132,

138-39 (1975); Saez v. Goslee, 463 F.2d 214, 215 (ist

Cir.), cert. denied, 409 U.S. 1024 (1972). As the Ninth

Circuit itself admits,

We confess that it is difficult to imagine a situation

where the refusal of the general counsel to issue a

complaint would violate an express statutory com-

mand of the [Labor] Act as it now exists, because

nothing in it requires the general counsel to issue

complaints upon the finding of a violation. As we

have already pointed out, his statutory authority is

permissive. 29 U.S.C. §§ 153(d), 160(b).

Baker v. International Alliance of Theatrical Stage Em-

ployees, 691 F.2d 1291, 1296-97 (9th Cir. 1982). Thus,

forcing trustees to resort to the NLRB is clearly at odds

with the Congressional intent to facilitate collection ac-

tions in the federal courts. See 29 U.S.C. § 1001(b).

Moreover, a proceeding before the NLRB “is not to

adjudicate private rights but to effectuate a public pol-

icy” of promoting labor peace. NLRB v. Shipbuilding

Local 22, 391 U.S. 418, 424 (1968). See Republic Steel

Corp. v. NLRB, 311 U.S. 7, 10-12 (1940). Preserving

the financial integrity of multiemployer plans was not

even an afterthought in the Congressional design of the

statute regulating the collective bargaining process. “The

atmosphere in which employee benefit trust fund fiduci-

aries must operate, as mandated by § 302(c)(5) and

ERISA, is wholly inconsistent with this process of com-

promise and economic pressure.” Amazx Coal, 453 U.S.

at 336.

13

The Congressional intent to give trustees real clout in

collection actions by providing for mandatory awards of

contributions, plus interest, liquidated damages, costs, and

reasonable attorney fees, 29 U.S.C. § 1182(g) (2), is in-

consistent with requiring trustees to proceed before the

NLRB, where the grant of relief, if any, resides in the

sole discretion of the Board.’ Thus, for example, in

Botsford Ready Mix, 605 F.Supp. at 1448, the court

acknowledged that the NLRB’s general counsel settled a

union unfair labor practice charge by requiring the em-

ployers to pay only 80 percent of the contributions, which

the employers owed to the multiemployer benefit plan.

See, e.g., NLRB v. Laborers International Union of North

America, AFL-CIO, Local 282, 567 F.2d 833 (8th Cir.

1977) ; 29 C.F.R. § 101.9 (permitting the general counsel

to settle under terms opposed by the charging party) ;

29 C.F.R. § 101.4 (case may be disposed of through in-

formal methods of withdrawal, dismissal, and settlement).

This less than adequate remedial power of the NLRB

is a broad discretionary one, subject only to limited re-

view. See Fibreboard Corporation v. NLRB, 379 U.S. 203,

216 (1964); NLRB v. Seven-Up Bottling Co., 344 U.S.

344, 346 (1953). Consequently, under the decision below,

multiemployer pension plan trustees, who must provide

full benefits for hours worked, would be at the mercy of

the NLRB and its general counsel, who—unlike the trus-

tees—may not be bound by any of ERISA’s fiduciary

duties in deciding whether and to what extent to exercise

the jurisdiction of the Board.

Contrary to “the structure of ERISA [which] makes

clear that Congress did not intend for government en-

5 “The regulatory scheme established for labor relations by Con-

gress is ‘essentially remedial,’ and the [NLRB] is not generally

authorized to impose penalties solely for the purpose of deterrence

or retribution. Republic Steel Corp. v. NLRB, 311 U.S. 7, 10-12

(1940).” Wisconsin Department of Industry v. Gould, Inc., 475 U.S.

—, 89 L.Ed. 2d 223, 229 n.5 (1986).

14

forcement powers to lessen the responsibilities of plan

fiduciaries,” Central Transport, 86 L.Ed.2d at 462, the

decision below diminishes trustees’ fiducial authority and

undermines the financial stability of multiemployer plans.

CONCLUSION

For the foregoing reasons, the NCCMP respectfully

urges this Court to issue a Writ of Certiorari.

Respectfully submitted,

GERALD M. FEDER *

NIK B. EDES

DAVID R. LEVIN

FEDER & EDES

1527 - 18th Street, N.W.

Washington, D.C. 20036

(202) 387-1515

Attorneys for National

Coordinating Committee

for Multiemployer Plans

* (Counsel of Record)

Dated: July 1986