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UNITED STATES TRUCKING CORP. v. STRONG

March 11, 1965

UNITED STATES TRUCKING CORPORATION, Plaintiff,
v.
John E. STRONG, Joseph M. Mangan, Walter O'Leary, Union Trustees, Joseph M.Adelizzi, George V. Conboy and James E. Whelan, Employer Trustees, and Hugh E.Sheridan, Impartial Chairman, of the Pension Fund of New York City TruckingIndustry,Local No. 807 and Truck Drivers and Chauffeurs Union, Local No. 807,Defendants



The opinion of the court was delivered by: BONSAL

Plaintiff, United States Trucking Corporation, has instituted an action against the Trustees and the Impartial Chairman of the Pension Fund of New York City Trucking Industry, Local No. 807 (Pension Fund), and Truck Drivers and Chauffeurs Union, Local No. 807 (Union), seeking a declaratory judgment that by reason of the participation of the Union in the Pension Fund, payments to the Trustees by employers are in violation of Section 302 of the Labor Management Relations Act (LMRA) (29 U.S.C. § 186). Defendants have answered, admitting all material allegations of the complaint, and defendant Union moves for judgment on the pleadings on the ground that as a matter of law such employer payments do not violate the statute. The Trustees of the Pension Fund have filed a memorandum stating that they take no position on the Union's motion for judgment on the pleadings, but urging that a declaratory judgment be entered. The memorandum of the Trustees supports the position taken by the Union.

The Union is the collective bargaining representative for approximately 10,000 employees engaged in the trucking and related industries in and around New York City. On December 1, 1950, as the result of collective bargaining between the Union and the trucking companies, the Pension Fund was created pursuant to an Agreement and Declaration of Trust. The Pension Fund is administered by six Trustees -- three selected by the Union, three by the employers (other than the Union) -- and by an Impartial Chairman selected by the Trustees, who acts in the event of a tie. The Agreement and Declaration of Trust provides that the Union shall be deemed an employer thereunder except for the purpose of the removal or the appointment of employer trustees. *fn1"

 The Agreement and Declaration of Trust provides, in Article I, Section 3, that 'The term PENSION FUND as used herein shall mean all contributions to the trust fund created hereunder received by the Trustees under said collective bargaining agreements * * *' Article I, Section 8 defines 'contributions' as 'the payments required to be made to the Pension Fund by the Employer and the Employees under the collective bargaining agreement between the Employer and the Union.' Article IX, Section 7 provides that 'The failure of an Employer to pay the contributions required hereunder promptly when due shall be a violation of the collective bargaining agreement between the said Employer and the Union as well as a violation of the Employer's obligations hereunder.' (Italics the Court's.)

 By resolution of September 5, 1963, the Trustees adopted certain Rules and Regulations under the Pension Plan, which stipulate, in Article I, Section 6, defining 'Covered Employment', that Covered Employement shall include fulltime service as an officer or an employee of the Union, provided that contributions are made to the Fund with respect to such service equal in rate to the rate of contributions contemporaneously in effect for participating employers and employees.

 Since 1950, the trucking companies having collective bargaining agreements with the Union have been making contributions to the Pension Fund on behalf of their employees at the rates stipulated in the collective bargaining agreements as amended from time to time, and the Union has been making contributions to the Pension Fund on behalf of its own officers and employees at the rates fixed in the collective bargaining agreements with the trucking companies. Under the current collective bargaining agreement the plaintiff is required to make payments to the Pension Fund.

 The issue raised is whether the inclusion of the Union, denominated as an employer, and the Union's officers and employees as beneficiaries under the Pension Plan, renders payments by the trucking company employers, including plaintiff, to the Pension Fund and their receipt by the Trustees, unlawful under Section 302 of the LMRA (29 U.S.C. § 186). The relevant provisions of Section 302 are:

 Sec. 302(a)

 'It shall be unlawful for any employer * * * to pay * * * any money * * *

 '(1) to any representative of any of his employees who are employed in an industry affecting commerce; * * *.'

 Sec. 302(c)

 'The provisions of this section shall not be applicable * * *

 '(5) with respect to money * * * paid to a trust fund established by such representative for the sole and exclusive benefit of the employees of such employer, and their families and dependents (or of such employees, families, and dependents jointly with the employees of other employers making similar payments, and their families and dependents) * * *.'

 Defendant, in its motion for judgment on the pleadings, contends, on the basis of the facts, that the Union is acting as an employer with respect to the Pension Fund and not as a labor organization, and that, accordingly, payments to the Pension Fund are exempted by Section 302(c)(5) from the prohibitions of Section 302(a) and (b) of the LMRA.

 Plaintiff, in opposing the Union's motion, contends that the Union is not an employer with respect to the Pension Fund within the meaning of Section 302(c) (5), even though so denominated in the Agreement and Declaration of Trust, and that, accordingly, the 302(c)(5) exemption does not apply, and payments by plaintiff ...


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