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Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 

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In the 

United States Court of Appeals 

For the Seventh Circuit ____________________

Nos. 15‐2628, ‐3221, ‐3861, 16‐1870

MIDWEST OPERATING ENGINEERS WELFARE FUND, et al.,

Plaintiffs‐Appellees,

v.

CLEVELAND QUARRY, et al.,

Defendants‐Appellants.

____________________

Appeals from the United States District Court for the

Northern District of Illinois, Eastern Division.

Nos. 14 C 2557, 14 C 8752, 15 C 4446 — Milton I. Shadur,

John Z. Lee, Amy J. St. Eve, Judges.

____________________

ARGUED NOVEMBER 8, 2016 — DECIDED DECEMBER 20, 2016

____________________

Before WOOD, Chief Judge, and POSNER and ROVNER, Cir‐

cuit Judges.

POSNER, Circuit Judge. The plaintiffs in this labor litigation

are employee welfare and pension funds (we’ll drop “and

pension” to simplify the opinion). Three defendants are

named. Each is a division (not, so far as we are able to de‐

termine, a subsidiary) of RiverStone Group, Inc., a producer

of crushed stone, sand, and gravel. Each division is a de‐

Case: 15-2628 Document: 55 Filed: 12/20/2016 Pages: 6
2 Nos. 15‐2628, ‐3221, ‐3861, 16‐1870   

fendant in a separate, but nearly identical, suit before a dif‐

ferent district judge. The judges were apparently confused

by the fact that each division had a separate collective bar‐

gaining agreement, but that turns out to be a distinction

without a difference. The proper defendant is the company,

RiverStone, not its divisions, and we shall assume it is in‐

deed the one and only defendant in what is really one case,

not three cases.

RiverStone’s collective bargaining agreements were with

Local 150 of the International Union of Operating Engineers,

AFL‐CIO. The latest agreement, made in 2010, was sched‐

uled to expire in 2015. It required RiverStone to contribute a

specified dollar amount to welfare funds specified in the

agreement “for each hour for which an employee receives

wages under the terms of this Agreement.” But in 2013 em‐

ployees in one of RiverStone’s divisions voted in an election

supervised by the National Labor Relations Board to decerti‐

fy Local 150 as their collective bargaining representative,

and this was followed by similar votes by employees at the

other two divisions mistakenly named as defendants in this

litigation. Whereupon RiverStone stopped contributing to

the welfare funds, precipitating these suits against it by the

funds under 29 U.S.C. § 1145, a provision of ERISA, added

by the Multiemployer Pension Plan Amendments Act of

1980, Pub. L. 96‐364, 94 Stat. 1208, that creates a right to sue

to collect delinquent employer contributions. The funds seek

payment of the contributions that would have been due pur‐

suant to the terms of the last collective bargaining agreement

until its 2015 expiration. In each suit a different district judge

granted summary judgment in favor of the funds, confirm‐

ing that RiverStone had to continue making the contribu‐

tions to the funds specified in that last, 2010, collective bar‐

Case: 15-2628 Document: 55 Filed: 12/20/2016 Pages: 6
Nos. 15‐2628, ‐3221, ‐3861, 16‐1870 3

gaining agreement until the agreement expired by its terms

in 2015.

It is arguable that the agreement expired earlier, when

the union was decertified, as a result of which one of the two

parties to the agreement effectively vanished, since it could

no longer enforce any part of it (the “agreement” among the

three divisions of RiverStone doesn’t count; RiverStone and

the union were the only real parties to the agreement). And

the collective bargaining agreement stated that “the Em‐

ployer’s responsibility to make contributions to the Welfare

Plan[s] shall terminate upon expiration of this agreement.”

RiverStone quotes our statement in Central States, South‐

east & Southwest Areas Pension Fund v. Schilli Corp., 420 F.3d

663, 669 (7th Cir. 2005), that “although the decertification

voided the 1994 CBA, the terms of the Participation Agree‐

ment make clear that [the company’s] obligations survive

that event,” even though the union, no longer representing

the employees, could not have enforced a participation

agreement. But because the agreement made the company’s

obligations to the pension fund survive the decertification,

Schilli didn’t have to, and didn’t, decide that a collective bar‐

gaining agreement could not continue to impose a contribu‐

tion obligation after the union’s decertification, which mere‐

ly eliminated its right to enforce the collective bargaining

agreement, including provisions relating to contributions to

employee welfare plans. Schilli was explicit that “the union

is not the only party with standing to enforce” an employer’s

obligation to contribute to an employee welfare plan, noting

that the Multiemployer Pension Plan Amendments Act “au‐

thorizes multiemployer plans to sue for delinquent contribu‐

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4 Nos. 15‐2628, ‐3221, ‐3861, 16‐1870   

tions owed ‘under the terms of the plan or under the terms

of a collectively bargained agreement.’” 420 F.3d at 670.

The “delinquent contributions” in the present case were

the contributions that RiverStone had failed to make in the

interim between the decertification of the union and the ex‐

piration of the collective bargaining agreement. That an em‐

ployer could cease making contributions to a plan once its

employees’ union is decertified is no defense. For “once

[multiemployer plans] promise a level of benefits to employ‐

ees, they must pay even if the contributions they expected to

receive do not materialize.” Central States, Southeast &

Southwest Areas Pension Plan v. Gerber Truck Service, Inc., 870

F.2d 1148, 1151 (7th Cir. 1989) (en banc) (emphasis added).

Their promise is binding, contractual. And so “if some em‐

ployers do not pay, others must make up the difference.” Id.

In short, “nothing in ERISA makes the obligation to contrib‐

ute depend on the existence of a valid collective bargaining

agreement.” Id. at 1153.

But what is one to make of the provision of the collective

bargaining agreement that “the employer’s responsibility to

make contributions to the Welfare Plan[s] shall terminate upon

expiration of this agreement” (emphasis added)? The mean‐

ing depends on whether “expiration” means the date on

which the agreement becomes unenforceable or the date on

which it lapses by passage of time. It became unenforceable

by the union when the union was decertified, whereby the

employer was no longer bound to the promises it had made

to the union; but the agreement did not thereby cease to ex‐

ist—and therefore did not expire—until its five‐year term

ended. By prematurely ceasing to contribute to the welfare

funds, RiverStone became liable under 29 U.S.C. § 1145 to

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Nos. 15‐2628, ‐3221, ‐3861, 16‐1870 5

make delinquent contributions, which is the relief sought by

the funds and ordered by the three district judges whose

identical rulings RiverStone challenges. RiverStone might

have negotiated a collective bargaining agreement that obli‐

gated it to contribute to the funds only unless and until the

union was decertified. But it didn’t.

Another path to the same result is to note that the plain‐

tiff funds were third‐party beneficiaries of the collective bar‐

gaining agreement and therefore entitled to enforce it even if

another enforcer—the union—fell out.  

RiverStone makes two other arguments for reversal. The

first is that the collective bargaining agreement required it

only to contribute to the funds for each hour an employee is

paid “under the terms of the [Collective Bargaining] Agree‐

ment.” True, but irrelevant to this case. After the decertifica‐

tion, RiverStone’s employees were no longer working “un‐

der the terms of” the collective bargaining agreement, so

RiverStone could pay them lower wages or otherwise

change the terms of their employment from what the collec‐

tive bargaining agreement had provided. But as we’ve ex‐

plained, so far as benefits law is concerned the employees

were still working “under the terms of” the collective bar‐

gaining agreement. The agreement established a five‐year‐

long obligation for RiverStone to contribute to the funds for

each employee in the bargaining unit (that is, each employee

who received wages “under the terms of the agreement”).

The funds budgeted accordingly. The agreement did not

provide that RiverStone could stop contributing as soon as

its employees’ union was decertified.  

The second argument is that the Labor Management Re‐

lations Act forbids payments to trust funds that are not “es‐

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6 Nos. 15‐2628, ‐3221, ‐3861, 16‐1870   

tablished by such representative” of the employer’s employ‐

ees, 29 U.S.C. § 186(c)(5). Again true, but again irrelevant.

The union, Local 150, established the funds and did so at a

time when it was the representative of RiverStone’s employ‐

ees. The decertification of the union, years later, did not alter

the fact that the funds had been established by the repre‐

sentative.

Each of the district judges ordered RiverStone (more pre‐

cisely, each judge ordered one of the three divisions that are

the named defendants) to reimburse the union for the delin‐

quent contributions. Those judgments are

AFFIRMED.

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