favorable to the non-moving party, and draw all reasonable inferences that favor the
non-moving party. Anderson, 477 U.S. at 255; Bay v. Cassens Transport Co., 212

F.3d 969, 972 (7th Cir. 2000).

DISCUSSION

Both cross motions for summary judgment concern the interpretaion of
whether or not LaCosta is bound by the CBA. Trustees’ motion for summary
judgment maintains that LaCosta intended to be bound by the CBA. LaCosta’s
motion for summary judgment maintains that it did not intend to be bound by the
CBA.

In discerning whether an employer is bound “through its involvement with a
multi-employer association, to collective bargaining agreements negotiated between
the association and a union”, - as is the case in this matter - a court must consider
agency principles and in addition determine whether the employer “manifested an
unequivocal intention” to be bound by a collective bargaining agreement. Moriarty
v. Glueckert, 155 F.3d 859, 865-66 (7th Cit. 1998).

Trustees contend that on January 3, 2001 LaCosta expressly delegated
authority to bind itself to the CBA when LaCosta’s President, Kara Mota Johnson,
signed an application for membership with the Employer Association. LaCosta
contends that when it’s President signed the application for free membership with

the Employer Association it did not intend to be bound by the CBA.


Members of the Employer Association, and not all members are bound by the CBA.
Therefore, the evidence fails to establish that it was universally known that the
custom of the Employer Association was to bind all members of the Employer
Association to the CBA.

With respect to the third Glueckert factor, Trustees contend that LaCosta’s
signature on the Application should be considered as indicative of participating in
some form of collective bargaining agreement. Trustees also state that an
introductory letter and a copy of the CBA that it sent to LaCosta also demonstrates
participation in the CBA. Trustees’ assertions are without merit. LaCosta’s signing
of the Association Membership Application and the subsequent receipt of an
introductory letter and copy of the CBA does not constitute participation in a
collective bargaining agreement. Trustees admit that LaCosta had no involvement in
the collective bargaining process between the Employer Association and the Union.
Pl.’s Resp. to Def.’s Rule 56.1 {’s 72, 73. Therefore, the evidence fails to establish
that LaCosta participated in any collective bargaining agreement.

With respect to the fourth Giueckert factor, LaCosta has maintained - and
Trustees do not dispute - that during the period Trustees allege LaCosta was bound
by the CBA, LaCosta provided its employees their own independent employee
benefits and continued to make contributions to the fund of another employee
association completely separate and not associated with Employer Association.

Therefore, it is clear that LaCosta manifested an intent to pursue its own individual


Employer Association contains separate provisions addressing and distinguishing the
different forms prescribed for applications for Active Membership and applications
for Associate Membership. P].’s Ex. 7 § 3.02(b), § 3.04(b). In addition, the
Constitution and By-Laws of the Employer Association provides that only “Active
Members” are bound by the CBA. Pl.’s Ex. 7 §10.01(a).

The Association Membership Application LaCosta signed did not inform
LaCosta of the different types of membership in the Employer Association or that by
signing the application it was becoming an “Active Member” of the Employer
Association subject to the CBA. The one page free membership application form
that LaCosta signed fails to make it clear to LaCosta whether the form is an
application for Active Membership or Associate Membership. Pl.’s Ex. 7 § 3.02(b),
§ 3.04(b). LaCosta was not provided with a copy of the Constitution and By-Laws
of the Employer Association when LaCosta’s President signed the Association
Membership Application. As a matter of fact, LaCosta has never been provided with
a copy of the Constitution and By-Laws of the Employer Association. As to the
Employer Association’s failure in providing LaCosta with a copy of its Constitution
and By-Laws, the words “copies available on request” appearing in parenthesis on
the bottom of the one page free membership form is insufficient and does not
provide the employer with clear and accurate information to make a sound decision
on an important matter in the nature of a binding collective bargaining agreement.

The manner in which the Employer Association solicited LaCosta to free


In Moriarty v. Pepper, 256 F.3d 554, 558 (7th Cir. 2001), an action very
similar to this case, the Seventh Circuit examined whether the defendant, Pepper,
expressly authorized an employer association to bargain on his behalf simply
because he signed the employer association’s membership application. In that case,
the Seventh Circuit noted that the application Pepper signed did not “specifically
state” that he would be delegating his bargaining rights to the association. Pepper
256 F.3d at 558. After reviewing the employer association’s constitution and
application for membership, the Seventh Circuit found that Pepper’s signing of the
application “did not reveal an express intention” on Pepper’s part to be bound by the
employer association’s collective bargaining activities. Jd.
In this case, Trustees argue that the Association Membership Application
LaCosta signed unequivocally states that the applicant is bound by the CBA. The
last sentence of the Association Membership Application reads as follows:
Ihave read, understand, and agree to abide by the Constitution and By-Laws of the
Chicago Council/PDCA and the current Labor-Management Agreement between
| Painters’ District Council No. 14 and PDCA(copies available on request)
Pi.’s Ex. 3.

The court notes that, the Association Membership Application that LaCosta
| signed did not inform LaCosta that by signing the application it would be joining a
‘particular class of membership in the Employer Association. It is undisputed that
there are actually three classes of membership: Active Membership, Associate

| Membership, and Honorary Membership in the Employer Association. P].’s Rule
i 56.1 944; PL.’s Ex. 7 § 3.01. Furthermore, the Constitution and By-Laws of the

5


association’s collective bargaining agreements; (3) whether the individual member
participated in the collective bargaining agreements; (4) whether the individual
member manifested an intent to pursue an individual course of action regarding labor
relations; (5) whether the employer conducted itself as if it were bound to the
collective bargaining agreement. Id. at 866-67.

In support of the first Glueckert factor, Trustees maintain that the principal or
sole activity of the Employer Association is to negotiate collective bargaining
agreements with Labor Unions on behalf of its contractor members. However, the
Employer Association has submitted exhibits in which the Employer Association
advertises that it offers to its members (1) Reduced Bond Requirement Offers; (2)
Training Programs; (3) Tech Information; (4) Health & Safety Programs; (5)
Professional Business Management Materials; (6) Networking Opportunities With
Fellow Contractors and Associates; and (7) Employer Association Technical
Assistance. Pl.’s Ex. 8. Therefore, the evidence does not sufficiently establish that
the negotiation of collective bargaining agreements was a principal or sole activity in
which the Employer Association in which was engaged.

In support of the second Glueckert factor, Trustees contend that the Employer
Association has been incorporated since 1934 and that since that time the
Constitution and By-Laws of the Employer Association have made it universally
known that it is the custom of the Employer Association to bind all its members to

its collective bargaining agreements. However, it is undisputed that only Active


= Minute Ordeg Form (06/97)

\ \Q United States District Court, Northern District of Minois

ame of Assi . i Si ifn
wear Magis Juage | __Smuel Der-Yeghiayan than Aniged Judge
CASE NUMBER 01 C 4952 DATE 6/1/2004
CASE Trst Chgo P&D Pen vs. LaCosta, Inc.
TITLE ‘

[In the following box (a) indicate the party filing the motion, ¢.g,, plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
of the motion being presented.]

MOTION:
DOCKET ENTRY:
red) o Filed motion of [ use listing in “Motion” box above.]
(2) im Brief in support of motion due__.
@) Qo Answer brief to motion due___. Reply to answer briefdue___.
14 o Ruling/Hearing on___ set for__at
(5) Qo Status hearing[held/continued to] [set for/re-set for]on___setfor_____at
(9) oO Pretrial conference[held/continued to] [set for/re-set for]on__——ssetfor__ ss at_
) Oo Trial(set for/re-set for]on__at
(8) o [Bench/Jury trial] [Hearing] held/continuedto___at
(9) Qa This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

COFRCP4(m) OiLocal Rule 41.1 OFRCP41(2)(1) OC FRCP41(a\2).

/{qao) (Other docket entry] For the reasons stated on the attached memorandum opinion, defendant’s
motion for summary judgment is granted and plaintiff's motion for summary judgment is denied. In
addition, plaintiff's motion to strike is denied as moot. All pending dates and motions are hereby stricken
as moot. Terminating case. Enter Memorandum Opinion.

al. [For further detail see order attached to the original minute order.]
1.) | | Ne notices required, advised in open court,

number of tices
tices mailed by judge's staff. JUN 0 b) 2004
tified counsel by telephone. ane docked

ny
Docketing to mail notices. Judge's staff
distributed Memorandum Opinion.

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‘Copy to judge/magistrate judge. 2

‘Na notices required.

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| MW6 deputy’s
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there attempt at this stage of the proceedings to capitalize on an error in order for
Trustees to establish that LaCosta conducted itself as if it was bound to the CBA is
not supported by the record and is disingenuous.

The evidence submitted by both parties fails to establish that LaCosta
conducted itself as if it were bound by the CBA. Therefore, under the Glueckert test
and based on the above analysis we find that LaCosta is not bound by the CBA.

The court further notes that the Association Membership Application was both
deficient and misleading. The form that the Employer Association lured LaCosta
into signing is predominantly a solicitation for a free membership in the Employer
Association and does not provide the individual employer with sufficient
information to bind such employer to a collective bargaining agreement. A
membership by an employer in an association with resulting consequences to be
bound by a collective bargaining agreement should be based upon mutual trust and a
clear understanding of the rights and obligations of all the parties and not be based
upon vagueness, confusion, or trickery.

We find that LaCosta did not expressly or unequivocally manifest an intent to
be bound by the CBA and that there is no genuine issue of any material fact.
Furthermore, we find that no reasonable trier of fact could conclude that LaCosta is

bound by the CBA.


course of action regarding labor relations.

Finally, with respect to the fifth Glueckert factor, Trustees contend that in the
summer of 2001 they received two reports for fringe benefits relating to LaCosta in
their attempt to show that LaCosta conducted itself as if it were bound by the CBA.
LaCosta contends that it did not submit any fringe benefit reports to the Trustees and
that its accountant, Kathleen Eremo (“Eremo”), who performed accounting for both
LaCosta and another company Bel-Rae, accidently forwarded fringe benefit reports
related to LaCosta to the Trustees. The record reflects that a company named Bel-

| Rae (“Bel-Rae”) is a signatory to the CBA and that Bel-Rae’s accountant, Eremo,
‘regularly submitted fringe benefit reports relating to Bel-Rae to the Trustees. The
record further reflects that during the summer of 2001 the Trustees had not received

fringe benefit reports relating to Bel-Rae and that Eremo who was performing

accounting services for both LaCosta and Bel-Rae had inadvertently forwarded

LaCosta’s fringe benefit reports to the Trustees when in fact Eremo should have

forwarded the fringe benefit reports relating to Bel-Rae to the Trustees. Trustees

have not disputed LaCosta’s account of events described above and furthermore the
record reflects that the same counsel who brought suit against LaCosta in the

|| summer of 2001 on behalf of the Trustees were the same counsel who sent letters in
August 2001 to Bel-Rae inquiring as to Bel-Rae’s failure to submit the monthly

| / / fi ge benefit reports for the summer of 2001. Trustees were fully aware of the

\ inadvertent submission of the fringe benefit reports by the accountant, Eremo, and

10


membership in the Employer Association with the ensuing consequence of being
bound by a collective bargaining agreement borders on deception. LaCosta could
not have expressly intended to be bound by the CBA because the Association
Membership Application was deficient in that it did not inform the applicant,
LaCosta, that it was applying to become an “Active Member” of the Employer
Association and hence bound by the CBA nor did it provide LaCosta with sufficient
information to enter into a binding collective bargaining agrrement.

Therefore, Trustees have failed to establish that LaCosta’s signing of the

Employer Association Application revealed an expressed intention to be bound by

the CBA.
r T I

In Glueckert, the Seventh Circuit adopted a test that is used to determine
whether an employer member is bound by a collective bargaining agreement
between the employer association and the union. 155 F.3d at 865(citing Trustees of
the UIU Heath and Welfare Fund v. New York Flame Proofing Co., 828 F.2d. 79
(2nd Cir. 1987). The test set forth in Glueckert is instructive in deciding whether the
employer member “manifested an unequivocal intention to be bound” by the
employer association’s collective bargaining agreement. Id. The Glueckert factors
include: (1) whether negotiation of collective bargaining agreements was a principal
or sole activity in which the association engaged; (2) whether it was universally

known that the custom of the association was to bind all members to the


Summary judgment is appropriate when the record reveals that there is no
genuine issue as to any material fact and the moving party is entitled to judgment as
a matter of law. Fed. R. Civ. P. 56(c). In seeking a grant of summary judgment the
moving party must identify “those portions of ‘the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any,’ which it
believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp.
v. Catrett, 477 U.S. 317, 323 (1986) (quoting Fed. R. Civ. P. 56(c)). This initial
burden may be satisfied by presenting specific evidence on a particular issue or by
pointing out “an absence of evidence to support the non-moving party’s case.” Id. at
325. Once the movant has met this burden, the non-moving party cannot simply rest
on the allegations in the pleadings, but, “by affidavits or as otherwise provided for in
[Rule 56], must set forth specific facts showing that there is a genuine issue for
trial.” Fed. R. Civ. P. 56(e). A “genuine issue” in the context of a motion for
summary judgment is not simply a “metaphysical doubt as to the material facts.”
Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).
Rather, a genuine issue of material fact exists when "the evidence is such that a
reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986); Insolia v. Philip Morris, Inc., 216 F.3d 596,

599 (7th Cir. 2000). The court must consider the record as a whole, in a light most


Additionally, Trustees’ motion to strike is denied as moot.
BACKGROUND

The Chicago Painting and Decorating Contractors’ Association (“Employer
Association”) is a trade association of painting and decorating contractors. Plaintiff
is the trustee of the Chicago Painters and Decorators Pension, Health and Welfare,
and Deferred Savings Plan trust funds. These trust funds are employee benefit trusts
to which certain contributions are made pursuant to collective bargaining
agreements. LaCosta is an Illinois Corporation in the business of providing painting,
janitorial, and supplemental labor services.

Trustees allege that LaCosta is a member of the Employer Association and as
a member has failed to submit to an audit or contribute to the trust funds pursuant to
the Employer Association collective bargaining agreement (“CBA”) between the
Employer Association and the Painters’ District Council No. 14 (“Union”). LaCosta
contends that it has not entered into the CBA and has no obligation to submit to an
audit or contribute to the trust funds. LaCosta further contends that it merely
responded to a solicitation by the Employer Association for free membership and
filled out a one page form application entitled “Free 2001 PDCA & FCA
Membership Application” (“Association Membership Application”).

LEGAL STANDARD



IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

TRUSTEES OF THE CHICAGO
PAINTERS AND DECORATORS
PENSION, HEALTH, AND WELFARE
AND DEFERRED SAVINGS PLAN
TRUST FUNDS No. 01 C 4952

Plaintiff,

ve.

DOCKETED

LACOSTA, Inc., JUN 0 2 2004

an Illinois corporation

wee NS wa SS eS we eww

Defendant.

MEMORANDUM OPINION
SAMUEL DER-YEGHIAYAN, District Judge

This matter is before this court on Plaintiff Trustees of the Chicago Painters
and Decorators Pension, Health and Welfare, and Deferred Savings Plan Trust
Funds’, (“Trustees”) and Defendant LaCosta, Inc.’s (“LaCosta”) cross-motions for
summary judgment. In addition, Trustees have filed a motion to strike a portion of
Karla Mota Johnson’s Affidavit. For the reasons stated below, we grant LaCosta’s

motion for summary judgment and deny Trustees’ motion for summary judgment.

oe


CONCLUSION
Therefore, based upon foregoing, LaCosta’s motion for summary judgment is
granted and Trustees’ motion for summary judgment is denied. In addition,

Trustees’ motion to strike is denied as moot.

or a

Samuel etek Des
United States District Court Judge

Dated: June 1, 2004

12