In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 13-3613

JAMES RUSS, et al.,

Plaintiffs-Appellants,

v.

SOUTH WATER MARKET, INC., and WILLIAM STEINBARTH,

Defendants-Appellees.

____________________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 10 C 6337 — Ronald A. Guzmán, Judge.

____________________

ARGUED SEPTEMBER 29, 2014 — DECIDED OCTOBER 15, 2014

____________________

Before EASTERBROOK, WILLIAMS, and SYKES, Circuit Judges.

EASTERBROOK, Circuit Judge. South Water Market and Local 703 of the Teamsters Union had a collective bargaining 

agreement that ran from 2004 through April 30, 2007. From 

April to September 2007 they negotiated to reach a new deal. 

On September 12, 2007, they shook hands on an agreement. 

Michael Abramson, South Water Market’s bargaining representative, was supposed to write up the agreed terms and 

send them to the Union.
2 No. 13-3613

Nothing happened. Howard Murdoch, the Union’s president, began sending Abramson emails asking for the text. 

Abramson promised to provide one but didn’t. By February 

2008 Murdoch was worried that the pension and welfare 

funds covering South Water Market’s employees represented by the Teamsters would cut off participation (since the 

only written contract had expired) or sue. On March 21, 

2008, Abramson begged off, stating: “I’m having trouble 

with my notes.”

On April 3 Murdoch sent Abramson a document with the 

terms that Murdoch’s notes said had been agreed. Abramson

did not reply, one way or the other—but South Water Market did begin paying the wages, and making the pension and

welfare contributions, specified in Murdoch’s text. Murdoch

also sent the document to the pension and welfare funds, 

telling them that South Water Market had agreed to its 

terms. The funds (all of them multi-employer plans) submitted bills calculated according to those terms. South Water 

Market paid them—until August 2009.

At the end of July 2009 Juventino Castillo retired. He had 

been one of two workers in the “Warehouse/Driver” classification; he received higher wages, and larger fringe-benefit 

contributions, than workers in the “Grocery Workers” classification. The parties have referred to workers in the “Warehouse/Driver” classification as “full boat” employees, meaning that they enjoy maximum wages and fringe benefits. For

simplicity we refer to “driver” and “grocery” as the two categories. The document that Murdoch sent Abramson (and 

the funds) in April 2008 provided that South Water Market 

would employ at least two drivers. After Castillo retired, it

refused to provide more than one of its workers with the 
No. 13-3613 3

wages and fringe benefits of the driver classification. The 

pension and welfare funds contend in this suit under §515 of 

the Employee Retirement Income Security Act (ERISA), 29 

U.S.C. §1145, that South Water Market must make delinquent contributions for a second driver position.

South Water Market’s defense is that it never agreed to 

the terms that Murdoch drafted in April 2008. After a bench 

trial, the district judge agreed with South Water Market. Our 

narration comes from the district judge’s findings of fact, 

which largely rest on the parties’ stipulations. The basis of 

the district judge’s ruling boils down to the observation that 

Abramson never signed Murdoch’s draft and did not convey 

assent in any other way, such as by return email. All South 

Water Market did was comply with Murdoch’s terms until 

August 2009, and performing according to someone else’s 

proposal is not enough, the district judge ruled, to require an 

employer to continue doing so indefinitely.

The fundamental problem with the district court’s approach is that the Labor Management Relations Act makes a 

written agreement essential to participation in a pension or 

welfare plan, 29 U.S.C. §186(c)(5)(B), and ERISA provides 

that multi-employer pension and welfare funds can enforce 

these agreements as written. South Water Market does not 

contend that it wants to drop out of the pension and welfare 

plans, or that it did withdraw in September 2007. But if the 

April 2008 document is not the indispensible written agreement, then what is? At oral argument, South Water Market’s 

lawyer replied: “the 2004 collective bargaining agreement.” 

That won’t do. The 2004 agreement expired by its own terms 

in 2007; what’s more, the parties formally terminated it. 

Nothing remains except the April 2008 document. If South 
4 No. 13-3613

Water Market is to participate at all, those are the only available terms.

More than that: performance under a proposal is one

means of giving assent to be bound. Bricklayers Local 21 of Illinois Apprenticeship and Training Program v. Banner Restoration, Inc., 385 F.3d 761, 766 (7th Cir. 2004); Robbins v. Lynch, 

836 F.2d 330, 332 (7th Cir. 1988); Restatement (Second) of Contracts §30. Murdoch reduced the terms to writing; South Water Market performed for more than a year, paying wages 

and making contributions at rates higher than those specified in the 2004 agreement. It now maintains that its payments to the funds did not really show assent to the twodrivers clause, because until August 2009 it had two drivers. 

Making fringe benefit contributions for two was only to be 

expected; until some difference developed between what 

South Water Market wanted and what the April 2008 document required, its performance was ambiguous. Yet South 

Water Market put all other terms of the April 2008 document 

into effect, and it is hard to see why an employer would do 

that if it thought the document merely a union’s proposal. If 

it wanted to accept some clauses and reject others, it should 

have said so in April 2008. Yet its first protest came in response to the funds’ August 2009 bills.

Pension and welfare funds are entitled to rely on the 

writings they receive. Central States Pension Fund v. Gerber 

Truck Service, Inc., 870 F.2d 1148 (7th Cir. 1989) (en banc), 

analogizes them to holders in due course, not to simple 

third-party beneficiaries whose rights can be cut off at the 

contracting parties’ whim. Usually they are not privy to negotiations between unions and employers; they cannot tell 

when one or the other (or both) had mental reservations. 
No. 13-3613 5

Pension and welfare funds set both benefit levels and contribution rates based on actuarial calculations, and those calculations depend on the terms of the written agreements that 

control coverage and eligibility. That’s why funds can enforce the writings they receive. Gerber Truck Service held that 

a multi-employer pension fund can enforce a contract as 

written even though the union and the employer have a side 

agreement that certain parts of the contract will be ignored. 

See also, e.g., Central States Pension Fund v. Schilli Corp., 420 

F.3d 663 (7th Cir. 2005); Central States Pension Fund v. Joe 

McClelland, Inc., 23 F.3d 136 (7th Cir. 1994). Whatever reservations Abramson had were not conveyed to the funds until 

August 2009, much too late.

The judgment in favor of South Water Market is reversed. The case is remanded for calculation of how much it 

owes under the April 2008 document and entry of a judgment in that amount.