In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 04-2797

J.W. PETERS, INC.,

Plaintiff-Appellant,

v.

BRIDGE, STRUCTURAL AND REINFORCING

IRON WORKERS, LOCAL UNION 1, AFL-CIO,

ASSOCIATED STEEL ERECTORS OF CHICAGO,

ILLINOIS, and JOINT ARBITRATION BOARD,

established by the International Association

of Brick, Structural, Ornamental and Reinforcing

Iron Workers, Local Union 1 and the Associated

Steel Erectors of Chicago, Illinois,

Defendants-Appellees.

____________

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 04 C 2932—Milton I. Shadur, Judge.

____________

ARGUED JANUARY 4, 2005—DECIDED MARCH 1, 2005

____________

Before FLAUM, Chief Judge, and EVANS and WILLIAMS,

Circuit Judges.

FLAUM, Chief Judge. Plaintiff-appellant J.W. Peters, Inc.

(“Peters”) sought a declaratory judgment that it effectively

repudiated its pre-hire agreement with defendant-appellee

International Association of Bridge, Structural and Rein-
2 No. 04-2797

1 A pre-hire agreement is a contract agreed to by a union and an

employer before the workers to be covered by the contract have

been hired or before the union has attained majority status among

the firm’s employees. NLRB v. Bufco Corp., 899 F.2d 608, 609 n.1

(7th Cir. 1990); NLRB v. O’Daniel Trucking Co., 23 F.3d 1144,

1146 n.1 (7th Cir. 1994). These agreements generally are illegal,

except in the construction industry which enjoys a statutory

exemption under § 8(f). Martin v. Garman Constr. Co., 945 F.2d

1000, 1001 n.3 (7th Cir. 1991).

As the Supreme Court has explained, “[o]ne factor prompting

Congress to enact § 8(f) was the uniquely temporary, transitory

and sometimes seasonal nature of much of the employment in

the construction industry. Congress recognized that construction industry unions often would not be able to establish majority support with respect to many bargaining units.” Jim

McNeff, Inc. v. Todd, 461 U.S. 260, 266 (1983) (citing legislative

history). “Congress was also cognizant of the construction industry

employer’s need to know his labor costs before making

(continued...)

forcing Iron Workers, Local Unit 1 (“Union”). Peters also

moved to stay arbitration proceedings initiated by the

Union before defendant-appellee Joint Arbitration Board

(“JAB”), a body created by the Union and defendantappellee Associated Steel Erectors of Chicago, Illinois

(“Associated Steel Erectors”), a multi-employer bargaining

unit, to resolve grievances arising out of their collective

bargaining agreement. The district court denied Peters’s

requested relief and dismissed the action. For the reasons

stated herein, we vacate the district court’s order.

I. Background

Since 1970, Peters has been a signatory to a pre-hire

agreement between the Union and Associated Steel Erectors governed by § 8(f) of the National Labor Relations Act,

9 U.S.C. § 158(f) (“NLRA” or “Act”).1

 The pre-hire agree-
No. 04-2797 3

1 (...continued)

the estimate upon which his bid will be based and that the

employer must be able to have available a supply of skilled

craftsmen for quick referral.” Id.

ment establishes rates of pay, wages, hours of employment,

fringe benefit contributions and other terms and conditions

of employment for Union members.

On December 12, 2002, Peters executed a compliance

agreement with the Union, which extended the terms of the

existing pre-hire agreement—set to expire on May 31,

2003—through May 31, 2006. The December 12, 2002

compliance agreement provides in relevant part:

The Employer acknowledges the Union’s claim and

evidence that the Union represents an uncoerced

majority of the Employer’s employees in a unit acknowledged and stipulated as appropriate . . ., and therefore

and hereby recognizes the Union as the sole and

exclusive collective bargaining agent for all journeymen

and apprentice iron workers now or hereafter employed

in the bargaining unit with respect to and for the

purpose of establishing rates of pay, hours of employment, fringe benefit contributions and other terms and

conditions of employment within the geographical

jurisdiction in which the Union is authorized to act or

does act as such representative. . . .

(Ex. 3, ¶ 1.) The compliance agreement also sets forth the

following terms for terminating the pre-hire agreement:

This Compliance Agreement shall remain in effect and

shall be governed by Principal Agreements entered into

in the future and covering future time periods unless

and until it has been terminated by either party giving

written notice of termination to the other at least four

(4) months prior to the termination date of the applica-
4 No. 04-2797

ble Principal Agreement in which event this Agreement

shall terminate on the last day of the then applicable

Principal Agreement. In the event no such timely notice

is given this Agreement shall remain in effect until

terminated in accordance with its terms. Any such

notice as hereinabove provided for in this article

whether specifying a desire to terminate or to change at

the end of the current contract year shall have the

effect of terminating this agreement at such time.

(Id. ¶ 4.)

On April 2, 2004, Peters sent the Union a letter purporting to repudiate the pre-hire agreement, effective immediately. Peters asserted that it had “not employed any

Ironworkers since 2003” and, during the past two years,

had “not employed any Ironworkers for a period of more

than 30 days.” (Joint Appendix at 9.) Peters also stated that

it had “no intention of employing any ironworkers . . . in the

future.” (Id.) Peters sought confirmation of this repudiation

from the Union, stating:

While J.W. Peters, Inc. could assume that this letter

effects an end to any and all contractual relationships

between J.W. Peters, Inc. and the Ironworkers Union,

we would appreciate a written confirmation of this

fact from the Union. If we do not receive confirmation

of this fact by April 16, 2004, we will have to assume

that the Ironworkers Union continues to claim to

represent employees of J.W. Peters, Inc. and therefore,

we will be forced to file the appropriate petition with

the NLRB challenging any such claims.

(Id. at 10.)

Peters’s purported repudiation set into motion a series of

actions by both Peters and the Union. The Union initially

responded by letter dated April 9, 2004, insisting that the

pre-hire agreement remained in full force because Peters

failed to submit written notice of termination at least four
No. 04-2797 5

2 Section 9(c) outlines two situations in which the Board may

determine questions of representation. First, an employee, group

of employees, or labor organization may file a petition seeking

to unseat an existing representative. See 29 U.S.C. § 159(c)(1)(A).

Second, an employer may initiate a petition to determine representation. The statute provides, in pertinent part:

Whenever a petition shall have been filed . . . by an employer,

alleging that one or more individuals or labor organizations

have presented to him a claim to be recognized as the

representative defined in subsection (a) of this section; the

Board shall investigate such petition and if it has reasonable

cause to believe that a question of representation affecting

commerce exists shall provide for an appropriate hearing

upon due notice. Such hearing may be conducted by an officer

or employee of the regional office, who shall not make any

recommendations with respect thereto. If the Board finds

upon the record of such hearing that such a question of

representation exists, it shall direct an election by secret

(continued...)

months prior to May 31, 2003.

The Union did not receive a further response from Peters.

On April 14, 2004, the Union filed a grievance and request

for arbitration with the JAB pursuant to § 38 of the pre-hire

agreement. (Ex. 2 at 44.) The arbitration request advised

that “there is a dispute between [the Union] and J.W.

Peters & Sons, Inc. as to whether the Contractor can now

terminate its Compliance Agreement with Iron Workers,

Local 1.” (J.A. at 35.) The Union requested that a hearing

be scheduled before the JAB as soon as possible and that

Peters be notified to appear and participate in that hearing.

(Id.)

The following day, April 15, Peters filed a representation petition with the Regional Director of the National

Labor Relations Board (“NLRB” or “Board”) in Chicago

pursuant to § 9(c) of the NLRA.2

 In response to that peti-
6 No. 04-2797

(...continued)

ballot and shall certify the results thereof.

§ 159(c)(1)(B).

tion, the Regional Director issued notice of a representation

hearing for April 29, 2004. Peters subsequently withdrew

its petition and refiled an identical petition on April 21. The

Regional Director rescheduled the representation hearing

for May 5, 2004.

On April 23, 2004, while the representation petition

was pending, Peters filed a complaint in federal district

court seeking a declaratory judgment that the collective

bargaining agreement between Associated Steel Erectors

and the Union had been repudiated and was no longer

in effect with respect to Peters. The complaint alleged

that through their participation in, and conducting of, a

hearing, “and because there can be no JAB hearing without

the existence of a valid and enforceable collective bargaining agreement,” Associated Steel Erectors and the JAB

“maintain[ ] that there is a collective bargaining agreement

in effect between J.W. Peters, Inc., and the Iron Workers

Union.” (Compl. ¶¶ 12, 13.) Peters further alleged:

Because the Defendants seek to compel the Company to

arbitration, and because, if the Pre-hire Agreement has

been properly repudiated, there is no contractual obligation to participate in arbitration, Plaintiff,

J.W. Peters, Inc., brings this action seeking a declaration that the Pre-hire Agreement has been properly and

effectively repudiated and is no longer in effect.

(Id. ¶ 15.)

On April 26, 2004, Peters filed a separate motion in the

district court to stay the arbitration proceedings before

the JAB, arguing that the JAB lacked jurisdiction.

On April 29, 2004, following a hearing, the district court
No. 04-2797 7

denied Peters’s motion to stay the arbitration proceedings

and dismissed the action. Citing this Court’s decision in

NLRB v. Bufco Corp., 899 F.2d 608 (7th Cir. 1990), the

district court concluded that Peters’s purported unilateral

repudiation of the pre-hire agreement was a “nullity and

totally invalid.” (J.A. at 20.) It held that the pre-hire

agreement remained “in full force and effect and is in turn

governed by the most recent Agreement between the

Associated Steel Erectors of Chicago, Illinois and Union

for the period beginning June 1, 2003, and ending May 31,

2006.” (Id. at 20-21.)

On May 4, 2004, the day before the rescheduled representation hearing, the NLRB Regional Director dismissed

Peters’s representation petition, finding that further

proceedings were not warranted because “there are no

employees employed by the Employer in the bargaining unit

at this time, and there is no evidence that there have been

employees employed during the relevant eligibility period.”

(J.A. at 37.)

On May 13, 2004, Peters filed a Rule 59(e) motion to

amend the district court’s April 29 order, relying in part

on the Regional Director’s May 4 dismissal of its petition as

“new evidence not previously available.” On May 17, Peters

sought review by the Board of the dismissal of

the representation petition. On May 20, Peters sought leave

to file an amended complaint for declaratory judgment in

the district court, incorporating “the particulars relevant to

the Plaintiff’s employment of Defendant Union’s bargaining

unit members.” (J.A. at 24.)

On June 3, 2004, while its motions were pending in the

district court, Peters filed an unfair labor practice charge

against the Union with the NLRB. Peters alleged that

the Union had filed grievances and attempted to enforce a collective bargaining agreement that Peters had

lawfully repudiated on April 2, 2004, in violation of
8 No. 04-2797

§§ 8(b)(1)(A) and (b)(2) of the NLRA.

On June 14, 2004, the district court denied Peters’s

motion to amend judgment and motion to file an amended

complaint. The court concluded that its prior ruling

would remain in effect “unless and until . . . the Board itself

holds that the unilateral repudiation is effective in this

circumstance.” (J.A. at 72.)

This appeal followed.

II. Discussion

In reviewing a decision to deny declaratory or injunctive relief, we review the district court’s findings of fact

for clear error and its legal conclusions de novo. Bhd.

of Maint. Way Workers v. Union Pac. R.R. Co., 358 F.3d

453, 457 (7th Cir. 2004). The parties raise only legal issues

on appeal.

A. Jurisdiction

We begin with the threshold question of jurisdiction.

Despite the concerns expressed by the district court

about the existence of a live controversy, both parties argue

that the district court had subject matter jurisdiction to

resolve the dispute that was before it. We agree.

Section 301 of the Labor Management Relations Act

(“LMRA”) provides:

Suits for violation of contracts between an employer

and a labor organization representing employees in

an industry affecting commerce as defined in this

chapter, or between any such labor organizations, may

be brought in any district court of the United States

having jurisdiction of the parties, without respect to the

amount in controversy or without regard to the citizen-
No. 04-2797 9

ship of the parties.

29 U.S.C. § 185(a).

In International Brotherhood of Electrical Workers, Local

481 v. Sign-Craft, Inc., this Court held that “under § 301(a)

any disputes about the meaning or validity of collective

bargaining agreements come within the jurisdiction of

the federal courts.” 864 F.2d 499, 502 (7th Cir. 1988)

(holding that district court had jurisdiction over claim filed

by union alleging that employer improperly repudiated

collective bargaining agreement between union and multiemployer association), overruling NDK Corp. v. Local 1550

of the United Food & Commercial Workers Int’l Union, 709

F.2d 491 (7th Cir. 1983).

Although the Supreme Court subsequently held in

Textron Lycoming Reciprocating Engine Div. v. United

Automobile Workers, 523 U.S. 653, 657 (1998), that “ ‘[s]uits

for violation of contracts’ under § 301 are not suits that

claim a contract is invalid, but suits that claim a contract

has been violated,” Textron does not foreclose jurisdiction in

this case. In Textron, the union sought a declaratory

judgment that its collective bargaining agreement with

employer Textron was invalid after Textron announced that

it would subcontract out a substantial volume of work,

causing half of the union members to lose their jobs. Id. at

655. The union alleged that Textron had fraudulently

induced it to sign the agreement by concealing its plans to

subcontract work. Id. The union did not allege, however,

that either it or Textron ever violated the terms of the

collective bargaining agreement. Id. The Court concluded:

“Because the Union’s complaint alleges no violation of the

collective-bargaining agreement, neither we nor the federal

courts below have subject matter jurisdiction over this case

under § 301(a) of the Labor-Management Relations Act.” Id.

at 661-62.

 The Supreme Court specifically stated, however, that “a
10 No. 04-2797

declaratory judgment plaintiff accused of violating a

collective-bargaining agreement may ask a court to declare the agreement invalid” and emphasized that, in

the case before it, “the Union neither alleges that Textron

has violated the contract, nor seeks declaratory relief from

its own violation.” Id. at 658. In this case, by contrast,

Peters was accused of violating the terms of the collective bargaining agreement by attempting to terminate

the collective bargaining relationship without providing

proper notice. Peters sought declaratory relief from this

alleged violation. Thus, this is a suit “for violation of

contracts” within the meaning of § 301. Moreover, unlike in

Textron, where the Court found that there was no evidence

of a concrete dispute between the parties over the contract’s

voidability at the time the suit was filed, id. at 660-61, here,

there is undoubtedly a ripe dispute between the parties.

The district court therefore had jurisdiction to resolve the

legal issues and decide whether Peters’s unilateral repudiation was valid, or whether it should allow the case to

proceed to arbitration before the JAB. We now turn to that

question.

B. Unilateral Repudiation

This Court has recognized that, generally, a signatory to a

§ 8(f) pre-hire agreement “is bound to its terms for

the duration of the agreement unless the employees covered

by that agreement reject the signatory union in a Board

conducted election.” Bufco, 899 F.2d at 610 (relying on the

decision of the Board in John Deklewa & Sons, 282 NLRB

184 (1987), enf. sub nom. Int’l Ass’n of Bridge Workers,

Local 3 v. NLRB, 843 F.2d 770 (3d Cir. 1988)). Deklewa

marked a significant change in the policy of the NLRB.

Prior to that decision, the Board interpreted § 8(f) as

permitting the unilateral repudiation of pre-hire agreements until the union achieved majority support. Id. at 609.

In Bufco, we determined that the Board had not been
No. 04-2797 11

3 We noted in Martin that our Bufco holding had not yet been

modified in relation to the one-man unit rule but expressly

declined to address the issue. 945 F.2d at 1005, 1006.

precluded by Supreme Court or Seventh Circuit precedent

from reversing its prior policy, and stated that “we must

enforce the Board’s Deklewa rule if we deem it to be based

upon a reasonably defensible construction of the Act.” Id. at

611. Finding it “reasonable and consistent with the Act,” we

joined several of our sister Circuits in accepting the Board’s

Deklewa rule. Id.

The issue before us now is whether this case falls within a

recognized exception to the Deklewa rule in situations involving bargaining units of one or no employees.3

Peters points to several decisions in which the Board

articulated this so-called “one-man unit” rule. In Stack

Electric, Inc., 290 NLRB 575 (1988), the Board explained:

It is settled that if an employer employs one or fewer

unit employees on a permanent basis that the employer, without violating Section 8(a)(5) of the Act, may

withdraw recognition from a union, repudiate

its contract with the union, or unilaterally change

employees’ terms and conditions of employment without

affording a union an opportunity to bargain.

Id. at 577 (citations omitted).

The Board first explained the basis for this rule in

Foreign Car Center, Inc., 129 NLRB 319, 320 (1960) (“[T]he

principle of collective bargaining presupposes that there

is more than one eligible person who desires to bargain. The

Act therefore does not empower the Board to certify a oneman unit.”) (internal citations omitted), quoted in Stack

Electric, 290 NLRB at 577.

The Board also applied the one-man unit rule in Haas

Garage Door Co., 308 NLRB 1186 (1992). In that case, the

employer was a member of a multi-employer association,
12 No. 04-2797

through which it signed a § 8(f) agreement effective from

1990 through 1993. Id. at 1186. At some point during that

period, the employer refused to execute the collective

bargaining agreement despite explicit requests from the

union that it do so. Id. The employer also refused to furnish

information requested by the union, arguing that it was not

bound by the agreement because it had no employees doing

unit work. Id. The administrative law judge (“ALJ”) found

that the employer had violated §§ 8(a)(5) and (1) of the Act.

Id. Relying on the one-man unit rule, the Board reversed

the ALJ’s decision, stating: “[W]e disagree with the judge’s

finding that even if an employer has no employees doing unit work it cannot repudiate an 8(f) contract.” Id. at

1187. Because the Board found no evidence that the

employer had more than one employee performing unit

work at all material times, it concluded that the employer “did not violate Section 8(a)(5) and (1) by repudiating

the contract, by refusing to execute the contract, or

by refusing to furnish information to the Union.” Id.; see

also Searls Refrigeration Co., 297 NLRB 133, 135 (1989)

(upholding ALJ’s conclusion that employer’s mid-term

repudiation of a § 8(f) agreement did not violate NLRA

because the “appropriate unit consisted of no employees

for approximately 2 years”); Garman Constr. Co., 287 NLRB

88, 89 (1987) (relying on one-man unit rule to affirm ALJ’s

dismissal of allegations that employer violated §§ 8(a)(5)

and (1) by repudiating a § 8(f) contract and withdrawing

recognition from union).

Appellees argue that these NLRB decisions stand for

the limited proposition that an employer’s unilateral

repudiation of a collective bargaining agreement applicable to a one or no-man bargaining unit would not be

a violation of the employer’s statutory duty to bargain.

According to appellees, these cases do not speak to the

continued validity of the collective bargaining agreement itself, or to the employer’s contractual obligations

thereunder. The Board’s decisions do not support appellees’
No. 04-2797 13

argument. While many of its decisions specifically addressed the statutory duty to bargain, the Board has

not limited the one-man unit rule to excusing an employer from this particular duty. Rather, the Board’s

decisions explicitly allow an employer, more generally, to

repudiate a pre-hire agreement and discontinue its

duties under the agreement where it employs no more than

one employee in the relevant unit. See, e.g., Sunray Ltd.,

258 NLRB 517, 518 (1981) (“[T]he Board will not enforce a

contract covering a single-person unit. Nor will we certify or

find appropriate a single-person unit in a representation

proceeding.”); SAC Constr. Co., Inc., 235 NLRB 1211, 1220

(1978) (where employer had a unit consisting of only one

employee, it “did not violate Section 8(a)(1) and (5) of the

Act by discontinuing payments to the health and welfare,

apprenticeship, and pension fringe benefit plans”), enforcement denied on other grounds, NLRB v. SAC Constr. Co.,

Inc., 603 F.2d 1155 (5th Cir. 1979).

Peters urges this Court to recognize explicitly the oneman unit exception to the Board’s Deklewa rule and apply it

to this case. We have traditionally extended the Board

deference in fashioning national labor policy and find no

reason to proceed otherwise in this case. See Bufco, 899

F.2d at 609. The Board’s decisions applying the one-man

unit rule accord with the principles of collective bargaining

and the terms of the NLRA. See, e.g., 29 U.S.C. § 159(a)

(“Representatives designated or selected for the purposes of

collective bargaining by the majority of the employees in a

unit appropriate for such purposes, shall be the exclusive

representatives of all the employees in such unit for the

purposes of collective bargaining in respect to rates of pay,

wages, hours of employment, or other conditions of employment”) (emphases added). Moreover, as a matter of common

sense, it seems illogical to continue to bind Peters to a prehire agreement simply because it has no employees who

could reject the Union as their bargaining representative in
14 No. 04-2797

a Board-conducted election. We therefore conclude that

Peters’s unilateral repudiation of the pre-hire agreement

was lawful under the one-man unit rule and hold that

Peters’s repudiation of the contract relieved it of its contractual obligation to arbitrate before the JAB.

Only one other appellate court has applied the oneman unit rule in a similar case. See Laborers Health &

Welfare Trust Fund v. Westlake Dev., 53 F.3d 979 (9th Cir.

1995). Noting “the unique circumstances of a single-employee bargaining unit in the construction industry,” the

court held in Westlake that “[a] construction industry

employer who employs a single employee pursuant to a

Section 8(f) pre-hire agreement is entitled to repudiate

the agreement by conduct sufficient to put the union

and the employee on notice that the agreement has

been terminated.” Id. at 982 (quoting Operating Eng’rs

Pension Trust v. Beck Eng’g & Surveying Co., 746 F.2d 557,

565-66 (9th Cir. 1984)). Reviewing the relevant

NLRB authority, the Ninth Circuit concluded:

Clearly these post-Deklewa decisions by the Board

speak not only in terms of the standard application

of the one-employee unit rule (where there is no statutory obligation to bargain in a representation proceeding), but also directly in terms of lawful unilateral

repudiation of section 8(f) agreements where there is a

single (or no) employee unit. We adopt the Board’s

reasoning in concluding that Westlake, a “one-employee

employer,” lawfully repudiated the CBA.

Id. at 983.

Because the employer had lawfully repudiated the

collective bargaining agreement, the court held that the

employer was relieved of all of its obligations thereunder, including its duties to pay into a trust fund and

to arbitrate disputes arising out of the agreement. Id. at
No. 04-2797 15

4 Section 8(b)(7)(C) prohibits a union from picketing an employer unless it is the certified representative of the employer’s

employees. See 29 U.S.C. § 158(b)(7)(C).

984 (concluding that the employer’s repudiation rendered

the collective bargaining agreement “void, not merely

voidable”). Thus, the Ninth Circuit explicitly rejected

the argument appellees make here—that the one-man

unit rule relieves an employer of its statutory duty to

bargain but does not allow it to invalidate the agreement itself.

Appellees take issue with the Ninth Circuit’s reasoning in

Westlake, arguing that there is a “critical distinction”

between the statutory duty to bargain under § 8(a)(5) of the

Act and an employer’s contractual obligations under a prehire agreement. Appellees rely primarily on the following

statement by the Supreme Court in Jim McNeff, Inc. v.

Todd:

There is a critical distinction between an employer’s

obligation under the Act to bargain with the representative of the majority of its employees and its duty

to satisfy lawful contractual obligations that accrued after it enters a prehire contract.

461 U.S. 260, 267 (1983). Appellees read too much into

this language. In McNeff, the Court was discussing its prior

decision in NLRB v. Local 103, International Association of

Bridge Workers (Higdon), 434 U.S. 335 (1978), in which it

affirmed the Board’s view that a pre-hire agreement does

not make a union the “representative of an employer’s

employees” under § 8(b)(7)(C) of the NLRA.4 McNeff, 461

U.S. at 266-67. The Court explained that only the former

obligation—the duty to bargain—was treated in Higdon,

and that different concerns animated its analysis in the

case before it. Id. at 267.
16 No. 04-2797

5 See McNeff, 461 U.S. at 271 n.13 (“We need not consider in

this case whether considerations properly cognizable by a court

under § 301 might prevent either party, in particular circumstances, from exercising its option under § 8(f) to repudiate

a prehire agreement before the union demonstrates majority

status.”).

The Court held in McNeff that monetary obligations

assumed by an employer under a pre-hire agreement

could be recovered in a § 301 action brought by the union

prior to the repudiation of the contract. Id. at 271-72.

That decision did not address whether an employer

who employs one or no employees may lawfully repudiate a

pre-hire agreement. McNeff was decided several years prior

to the Board’s decision in Deklewa, and the Court assumed

without deciding that a party to a § 8(f) agreement could

repudiate such an agreement.5

 Significantly, in McNeff, the

employer “never manifested an intention to void or repudiate the contract,” and the record showed conclusively that

the employer “accepted the benefits of the prehire agreement and misled the union of its true intention never to

fulfill its contractual obligations.” Id. at 270. This decision

does not support appellees’ argument that repudiation of

the pre-hire agreement leaves unaffected an employer’s

contractual obligations under the agreement.

Appellees also argue that Westlake is contrary to this

Court’s decision in Martin v. Garman Construction Co., 945

F.2d 1000 (7th Cir. 1991). Our opinion in Martin followed

an earlier decision by the Board in Garman Construction

Co., 287 NLRB 88. In that case, the parties had entered into

a collective bargaining agreement in 1978 governing fringe

benefit contributions to several pension and trust funds on

behalf of the union members that Garman employed. Id. at

89. Because Garman did not provide timely notice of

termination, that agreement was automatically extended

from 1981 to 1984. Id. at 89 & n.6. During the relevant
No. 04-2797 17

6 See Employee Retirement Income Security Act, 29 U.S.C.

§ 1145. That provision states:

Every employer who is obligated to make contributions to

a multiemployer plan under the terms of the plan or under

the terms of a collectively bargained agreement shall, to

the extent not inconsistent with law, make such contributions

in accordance with the terms and conditions of such plan or

such agreement.

period, Garman employed only one member of the union,

and until September 1981, made regular, monthly contributions to the funds on behalf of this employee. Id. at 89. On

September 3, 1981, however, the company sent a letter to

the union stating that the agreement “is null and void as of

the present date.” Id. The union then brought a complaint

before the Board, alleging that Garman violated Sections

8(a)(5) and (1) of the Act by repudiating the contract and

withdrawing recognition from the union. Id. The remedy

sought by the union included compensation to the funds for

missed contributions. The ALJ found that Garman’s

repudiation was not an unfair labor practice and dismissed

the complaint, relying on the one-man unit rule. Id. The

Board affirmed on the same ground. Id.

At issue before this Court in Martin was the preclusive

effect of the Board’s decision on a separate action filed

in district court by the trustee of the funds to recover money

from the employer under ERISA.6

 The trustee had filed an

ERISA suit in the district court prior to the Board’s decision, and the district judge stayed proceedings pending the

outcome of the Board’s action, stating that she would give

“collateral estoppel effect to the NLRB’s determination that

a contract existed between July 1, 1981 and May 31, 1984.”

Martin, 945 F.2d at 1002. Following the Board’s decision,

the district court held Garman liable for unpaid contributions to the funds during this period, and Garman appealed.

Id. at 1003. This Court affirmed.
18 No. 04-2797

Garman’s argument on appeal was that the Board’s

decision had established the parties’ rights under both

the NLRA and ERISA, and that the district court failed

to afford appropriate preclusive effect to the Board’s

decision. We rejected that argument on the ground that the

Board lacked jurisdiction over the ERISA claim, which

enjoys exclusive jurisdiction in the federal courts. Id. (citing

29 U.S.C. § 1132(e)(1)). We also explained that our decision

rested on the statutory language and unique considerations

present in the ERISA context, concerns that are not at issue

here. See id. at 1005 (“[M]any of the defenses available

under the NLRA or under traditional contract law do not fly

under ERISA. The one-man rule may remain valid for

purposes of unfair labor practice proceedings while counting

for naught when the contract is cognizable under ERISA.”).

As this Court explained in Central States, Southeast &

Southwest Areas Pension Fund v. Gerber Truck Service, Inc.,

Congress added § 515 to ERISA in 1980 to address the

problems that arose when employers repudiated pre-hire

agreements and refused to make pension and welfare contributions. 870 F.2d 1148, 1152-53 (7th Cir. 1989)

(en banc). That statute made employers’ promises to

contribute to such plans “enforceable ‘to the extent not

inconsistent with the law.’ ” Id. at 1153 (quoting 29 U.S.C.

§ 1145). “If the contract provides for the commission of

unlawful acts, it will not be enforced.” Id. (citation omitted).

However, if “the employer simply points to a defect in its

formation—such as fraud in the inducement, oral promises

to disregard the text, or the lack of majority support for the

union and the consequent ineffectiveness of the pact under

labor law—it must still keep its promise to the pension

plans.” Id. (emphasis added), quoted in Martin, 945 F.2d at

1004. In other words, “nothing in ERISA makes the obligation to contribute depend on the existence of a valid collective bargaining agreement.” Id.

Appellants have not claimed that Peters has refused to
No. 04-2797 19

comply with its obligations under ERISA; they have spoken

solely in terms of Peters’s contractual duty to arbitrate.

Therefore, Martin does not restrict us from applying the

Board’s one-man unit rule in this context.

III. Conclusion

For the foregoing reasons, the order of the district court is

VACATED. We REMAND this case for proceedings consistent

with this opinion.
20 No. 04-2797

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—3-1-05