Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.


United States District Court, S.D. New York

February 18, 2004.

LOCAL 8A-28A WELFARE AND 401(k) RETIREMENT FUNDS, by their Trustees: Hector Lopez, Richard Croll, Jr., Laura Foster, Jacinto Perez, Thomas Hodgson, Michele Bodner, Douglas Golan and Robert Fabrizio, Plaintiffs, -v- THE MILLARD GROUP, INC., Defendant

The opinion of the court was delivered by: DENISE COTE, District Judge


On October 31, 2003, Trustees for the Local 8A-28A Welfare and 401(k) Retirement Funds ("Trustees" and "Funds," respectively) filed a Complaint alleging that the The Millard Group, Inc. ("Millard") failed to pay welfare and retirement contributions to the Funds for the period January 1, 1999 through December 31, 2001. The Trustees allege that Millard violated Section 515 of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1145, by failing to make contributions according to the terms of two employee benefit Page 2 plans, and the Agreement Between Metal Polishers Production and Novelty Workers Union and Local 8A-28A and Chicago Coalition of Metal Refinishers (the "CBA"). The Trustees seek to compel Millard to pay the outstanding contributions and to enjoin Millard permanently from failing and refusing to pay such contributions when and as they become payable for the period January 1, 1999 through December 31, 2003.

  On December 22, Millard moved pursuant to Rules 12(b)(1) and (b)(6), Fed.R. Civ. P., to dismiss the Complaint on the grounds that the CBA limits the Trustees' remedy to arbitration through the American Arbitration Association and requires the Trustees to begin any such arbitration within ninety days of raising any claim. For the following reasons, Millard's motion to dismiss is denied.


  The facts in this Opinion are taken from the Complaint and the documents upon which the Complaint relies. This action arises from the alleged nonpayment of certain contractual obligations by an employer to two multi-employer employee-benefit trust funds. The Funds were established by the Local 8A-28A, AFL-CIO (the "Union"), and Millard for the purposes of providing insurance and retirement benefits to employees. Both Funds are collectively bargained funds created pursuant to the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 186(c)(5).

  On December 17, 1998, the Union executed the CBA with Page 3 Millard Maintenance Service Company ("MMSC"), a division of Millard. Pursuant to Articles XVI and XVII of the CBA, Millard agreed to make certain payments to the Union's welfare and retirement funds, respectively. Article XXXII of the CBA provides that "[i]n the event of any dispute between [Millard] and the Union as to the meaning, application, performance, or operation of [the] Agreement, an employee must file a grievance" within a specified timeframe. If Millard and the Union are unable to resolve the employee's dispute through the grievance process, the dispute "shall be submitted for arbitration to the Chicago area office of the American Arbitration association [sic] (AAA)." The decision of the arbitrator "shall be final and conclusive" upon Millard and the Union.

  The Trustees are not signatories to the CBA, but are fiduciaries of the Funds. In performing this duty, the Trustees ordered an audit of the Funds' books and records for the period of January 1, 1999 through December 31, 2001. Based on the results of this audit, the Trustees claim that Millard owes the Welfare Fund the sum of $23,174.03 and the 401(k) Retirement Fund the sum of $2,675.43 in unpaid contributions. The Trustees allege that, by failing to pay contributions owed to the Funds pursuant to its CBA with the Union, Millard has violated the terms of the agreement and Section 515 of ERISA, 29 U.S.C. § 1145. Page 4


  Section 515 of ERISA covers delinquent contributions to plans made under "the terms of a collectively bargained agreement" and requires that

[e]very employer who is obligated to make contributions to a multi-employer plan under the terms of the plan or under the terms of a collectively bargained agreement shall, to the extent not inconsistent with the law, make such contributions in accordance with the terms and conditions of such plan or such agreement.
29 U.S.C. § 1145. Section 301(a) of the LMRA provides that "[s]uits for violation of contracts between an employer and a labor organization . . . may be brought in any district court in the United States having jurisdiction over the parties. . . ." 29 U.S.C. § 185 (a).

  A presumption of arbitrability applies to disputes arising between an employer and a union. Federal policy seeks to promote industrial stabilization through collective bargaining agreements, which themselves rely on arbitration to redress grievances. United Steelworkers of Am. v. Warrior & Gulf Nav. Co., 363 U.S. 574, 578 (1960). "Complete effectuation of the federal policy is achieved when the agreement contains both an arbitration provision for all unresolved grievances and an absolute prohibition of strikes, the arbitration agreement being the 'quid pro quo' for the agreement not to strike." Id. at n.4. "Such a presumption furthers the national labor policy of Page 5 peaceful resolution of labor disputes [between employers and unions] and thus best accords with parties' presumed objectives in pursuing collective bargaining." Schneider Moving & Storage Co. v. Robbins, 466 U.S. 364, 371-372 (1984).

  Unlike grievances between employers and unions, disputes between an employer and the trustees of employee-benefits trust funds are not subject to a presumption of arbitrability. Id. at 372 (1984). "The notion that federal policy favors union enforcement of an employer's collectively bargained obligations to a benefit plan, to the exclusion of enforcement by the plan's trustees, simply did not survive" the Schneider decision. Cent. States, Southeast and Southwest Areas Pension Fund v. Cent. Transp., Inc., 472 U.S. 559, 575 (1985). Because trustees of employee-benefit funds cannot avail themselves of the "economic weapons" of strikes and lockouts, requiring them to arbitrate disputes with an employer would not promote peaceful settlement of labor disputes. Schneider, 466 U.S. at 372. As a result, "the presumption of arbitrability is not a proper rule of construction" in disputes between trustees and employers, "even if those disputes raise questions of interpretation under the collective-bargaining agreements." Id.

  Further, arbitration is a matter of contract, and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit. See, e.g., United Steelworkers, at 582. Where the relevant agreements underlying a dispute do not Page 6 indicate the parties' intent to require arbitration between trustees of multi-employer plans and the employers, failure to arbitrate cannot bar the trustees' suit. Schneider, 466 U.S. at 367. See also O'Hare v. Gen'l Marine Transp. Co., 740 F.2d 160, 168 (2d Cir. 1984) (an arbitration provision did not apply to trustees where it referred only to claims by the employer or the union); Local 8A-28A Welfare and 401(k) Retirement Funds v. Golden Eagles Architectural Metal Cleaning and Refinishing, 277 F. Supp.2d 291, 297 (S.D.N.Y. 2003) (a collective bargaining agreement between the Local 8A-28A, AFL-CIO and an employer did not obligate the Trustees to submit their suit to arbitration).

  It is undisputed that the Trustees are not a party to the CBA. As was the case in Schneider, the terms of the CBA do not contain an arbitration requirement applicable to the Trustees "and the circumstances surrounding the execution of the [CBA] suggest that none should be inferred." Schneider, 466 U.S. at 372-373. Article XXXII of the CBA requires the arbitration of "any dispute between the Company and the Union as to the meaning, application, performance or operation of this Agreement." (Emphasis supplied.)

  The Trustees' authority to bring claims against Millard is established in The Restated Agreement and Declaration of Trust of the Metal Polishers Union Local 8A-28A Welfare Fund and The Restated Agreement and Declaration of Trust of the Metal Polishers Union Local 8A-28A Annuity Fund (the "Trust Page 7 Agreements"). Each of the Trust Agreements empowers the Trustees to "take whatever proceedings may be proper and necessary in their discretion for enforcement of an Employer's obligations including but not limited to proceedings at law and in equity and arbitration and any remedies which would be generally available to the parties for enforcement of" the CBA. Nothing in this passage requires the Trustees to arbitrate their disputes with Millard. The Trustees may exercise their discretion to choose the appropriate means to enforce Millard's obligations. As in Schneider, "[n]owhere in the trust agreements is the exercise of that authority expressly conditioned on the exhaustion of any contractual remedies" that might be found in the CBA with Millard. Id. at 373. As a result, the Trust Agreements' enforcement mechanisms "protect the collective interest of the parties . . . by allowing the trustees to seek prompt judicial enforcement of the contribution requirements." Schneider, 466 U.S. at 373.


  The defendant's motion to dismiss is denied.



© 1992-2004 VersusLaw Inc.

Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.