Document: 429 U.S. 401 97 S.Ct. 679 50 L.Ed.2d 641 Thomas J. WALSH, Jr., dba Tom Walsh & Co., Petitioner,v.E. A. SCHLECHT et al., as Trustees, etc. No. 75-906. Argued Nov. 1, 1976. Decided Jan. 18, 1977. Syllabus Section 302(a)(1) of the Labor Management Relations Act prohibits agreements employers to pay money any representative their employees, but §§ 302(c)(5) and (6) exempt from this proscription trust funds jointly created administered by trustees representing employer associations a labor union for purpose providing medical or hospital care, pensions, pooled vacations employees signatory employers, defray costs apprenticeship other training programs. A collective-bargaining agreement between petitioner general contractor carpenters' required contributions at an aggregate rate 96 cents per hour worked carpenter certain (Health Welfare, Pension, Vacation Savings, Apprenticeship Training, Construction Industry Advancement (CIAF) ) respondent trustees. With respect nonsignatory subcontractors, subcontractor's clause specified that should require subcontractor be bound maintain daily records employees' hours liable payment with these employees. Petitioner subcontracted carpentry work on federally subsidized low-income apartment project in Oregon (whose were not entitled benefits funds), did exercise either above options. Instead, paid directly his fringe benefits, addition wages scale, thus paying out same form funds. Upon completion project, respondents sued state court enforce clause, defended ground violated § 302(a)(1). The trial sustained respondents' demurrer, and, while holding it would "inequitable" Health Pension Savings Funds because they amount double ordered accounting limited CIAF trusts "not accrue workmen." Supreme Court affirmed sustainment but, construing giving all equal standing, reversed judgment insofar trusts. Held : 1. Federal- rather than state-law principles contract construction apply determining meaning since is provision application federal law necessary avoid "possibility individual terms might have different meanings under law," Local 174, Teamsters, v. Lucas Flour 369 95, 103, 82 571, 577, 7 593. Pp. 407-408. 2. construed make measured being payable only carpenters employed does violate authorized (6). Enforcement so consistent wording 302(c) (5) also no disservice congressional enacting 302 combat "corruption collective bargaining through bribery employee representatives . extortion representatives, possible abuse officers power which achieve if welfare left sole control." Arroyo United States, 359 419, 425-426, 79 864, 868, 3 915. 408-411. 3. objective Davis-Bacon protect contractors' substandard earnings fixing floor Government projects, "frustrated" such clearly when contractual arrangements result higher compensation established Act. P. 411. 273 Or. 221, 540 P.2d 1011, affirmed. Carl R. Neil, Portland, Ore., petitioner. Paul T. Bailey, respondents. Mr. Justice BRENNAN delivered opinion Court. 1 question presented case whether petitioner, contractor, State Council Carpenters, requiring performed subcontractor, (Taft-Hartley) Act, 29 U.S.C. 186(a)(1). That section generally Sections (6), however, written programs.1 2 constructed Salem, Ore. Carpenters five employer-union multiemployer contractors associations, respondents, designated numbers union. are, respectively, Welfare Trust Fund, Training Fund (CIAF). Only may contribute funds, Funds, three provide employees.2 Contributions done project. framing Lloyd Jackson, specialist, who was whose therefore eligible fund benefits. In cases had option "subcontractor's clause," Art. IV agreement, "such provisions Agreement," maintaining "daily subcontractors jobsite (sic (trust fund) accordance Agreement."3 neither. He "be bound" made Instead scale,4 4 Nor Therefore, after brought action Circuit Multnomah County, IV. Grounded upon petitioner's (the subcontractor's) .," complaint sought, inter alia, hour. Petitioner's principal defense demurrer defense. held, effect "to benefits" It based "funds standing 225-226, 1013-1014 (1975). We granted certiorari, 424 942, 1408, 47 347 (1976). affirm. 5 * (1, 2) parties agree determinative decision proper clause: binds "on behalf of" "for benefit participate provided Thus interpreted, are ineligible him. On hand, merely obligates then exceptions prohibition 302(a) enacted 6 (3-5) Before turning we must address threshold construction, differ, applied. Plainly apply. Although courts foreclosed entertaining suit invoked Taft-Hartley Charles Dowd Box Co. Courtney, 368 502, 519, 483 (1962), proceeded "upon hypothesis exercising (such) jurisdiction" "incompatible doctrines local give way law." Teamsters 102, 576, 593 (1962) (citations omitted). Application id., S.Ct., 577. specify guided concurring conclusions read violating shall assume event, fact rules interpretation employed, courts' construction. Since rule presumes legality enforceability contracts, 6A Corbin, Contracts 1499, 1533 ambiguously worded contracts interpreted render them illegal unenforceable where lends itself logically acceptable renders legal enforceable. although inartfully worded, ties both own construed, 8 argues Court's reads payments Jackson's order This reading, he contends, implicit following passage opinion: 9 "In requirement satisfied defendant specifically event engaged do covered into various subcontractor." Or., 229, P.2d, 1015 (emphasis added). 10 Read isolation, somewhat ambiguous appear support argument. context entire opinion, particularly its reliance lower decisions upholding whole part receive becomes clear contractor's solely employers. conclusion follows, think, treatment Moglia Geoghegan, 403 F.2d 110 (CA2 1968), Kreindler Clarise Sportswear 184 F.Supp. 182 (SDNY1960). rejecting argument (1) making except employers' characterized language Moglia, cited case, there binding case." 229 n.4, n.4.5 Rather, relied Kreindler, involving nonunion contention rejected employer's another quoted extensively opinion's reasoning concluding even though employer. stated flatly: "We (the) statement" " '(t)he Clarise's cannot share payrolls has agreed right illegal.' 230, 1015.6 Accord, Budget Dress Corp. Joint Board Waistmakers' Union, 198 (SDNY1961), aff'd, 299 936 1962); Minkoff Scranton Frocks, Inc., 181 542 (SDNY), 279 115 1960); Greenstein National Skirt Assn., 178 681 (SDNY1959). 11 (6, 7) enforcement 3027 915 (1959). II 12 (8) advances argument, apparently courts, "frustrates" objectives 40 276a, increasing over minimum However, "was contractors, projects." States Binghamton Constr. 171, 176-177, 74 438, 441, 98 L.Ed. 594 (1954). 13 Affirmed. 14 WHITE, dissenting. 15 Because subscribe "liable (sic) wages, travel, Health-Welfare Dental, Vacation, Agreement." Record 82-83. described means me appears straightforward reading "subcontractors contributions" Had been contributions, surely sensible inference intended result. Common sense tells us intention could never benefit. 16 As way, noncontributing beneficiary them. But first time drafted provisions, design, accident, mistake. 17 I understand why feels compulsion save mean issue behalf. full price each held contributing excluding simply penalty employing creates does. due respect, dissent reverse below. 1947, 61 Stat. 157, amended, 186 provides pertinent part: "(a) unlawful association pay, lend, deliver, thing value "(1) industry affecting commerce; "(c) applicable representative, exclusive employer, families, dependents (or similar payments, families dependents): Provided, (A) paying, income both, dependents, pensions retirement death injuries illness resulting occupational activity insurance foregoing, unemployment life insurance, disability sickness accident insurance; (B) detailed basis .; vacation, holiday, severance defraying programs: requirements proviso subsection ." conceded will accept App. 53. involved expressly limit participation makes claim subcontractors' received Article Master Agreement Southwest Washington District Councils Brotherhood Joiners America, memorandum comply, follows: "If Agreement, subcontracts, job site alteration repair building, structure person proprietor (Emphasis added.) Agreements Department Housing Urban Development participating Salem according prevailing wage defined 276a. Under workmen union-employer workmen. applies party. 28 years single party 302(c)(5)(B). F.2d, 114. Appeals Second concluded lawfully fund. controlling Clarise, member multiple-employer association, union's health manufactured product. establishing administration outside coverage 302. Our unnecessary 302(c)(6) incorporate "exclusive benefit" 302(c)(5).

Category: 6