Source: https://supreme.justia.com/cases/federal/us/472/559/
Timestamp: 2019-04-25 22:10:44+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 472 › Central States Pension Fund v. Central Transp.
Petitioners are multiemployer benefit plans governed by the Employee Retirement Income Security Act of 1974 (ERISA). The plans operate under trust agreements for the purpose of providing health, welfare, and pension benefits to employees performing work that is covered by collective bargaining agreements negotiated between a labor union and respondent trucking companies. Under these collective bargaining agreements, each employer must make weekly contributions to petitioners for each such employee, and each employer agrees to be bound by the trust agreements. Because they are so large, petitioners rely on employer self-reporting to determine the extent of an employer's contribution liability, and police this self-reporting system by conducting random audits of the participating employers' records. When respondents refused to allow petitioners' requested audit of respondents' payroll, tax, and personnel records, including records of employees who respondents claimed were not plan participants, petitioners filed an action in Federal District Court seeking an order permitting the audit. The District Court granted summary judgment in favor of petitioners. The Court of Appeals reversed, holding that petitioners had to show "reasonable cause" to believe that a specific employee was covered by the plans before gaining a right of access to that employee's records.
Held: Respondents must allow petitioners to conduct the requested audit. Pp. 472 U. S. 565-581.
(a) Various provisions of the trust agreements granting the trustees power to enable them to administer the trusts properly, including a provision granting power to demand and examine pertinent employer records, support the right to audit claimed by petitioners. Moreover, petitioners' assertion that the requested audit is highly relevant to the trust agreements' legitimate interests fully conforms to generally accepted auditing standards. Pp. 472 U. S. 565-568.
than explicitly enumerating all of the powers and duties of trustees, Congress invoked the common law of trusts to define the scope of their authority and responsibility. Under the common law, trustees have all such powers as are necessary or appropriate for the carrying out of the trust purposes, and an examination of ERISA's structure in light of the common law leaves no doubt as to the validity and weight of the audit goals on which petitioners rely. Both the concerns for fully informing participants of their rights and status under a plan and for assuring the financial integrity of the plans by determining the class of potential benefit claimants and by holding employers to the full and prompt fulfillment of their contribution obligations are proper and weighty within ERISA's framework. Pp. 472 U. S. 568-574.
(c) A benefit plan should not have to rely on union monitoring of an employer's compliance with its trust obligations as an alternative to audits by the plans themselves. Cf. Schneider Moving & Storage Co. v. Robbins, 466 U. S. 364. A trustee's duty extends to all participants and beneficiaries of a multiemployer plan, whereas a union's duty is confined to current employees employed in the bargaining unit in which it has representational rights. Nor would the Department of Labor's policing of employer compliance be an acceptable alternative. That Department has insufficient resources for such policing, and neither ERISA's structure nor its legislative history shows any congressional intent that benefit plans should rely primarily on centralized federal monitoring of employer contributions requirements. Pp. 472 U. S. 575-579.
(d) To rely on covered employees themselves to come forward to assure that employers make the required contributions would not be feasible. While ERISA's reporting requirements are designed to assure that participants receive information about their status and rights, they do so by placing a reporting duty on the plans. Thus, to give participants initial notice of their status, the plans would need to know the participants' identities, the very information that the requested audit here sought to verify. P. 472 U. S. 579.
(e) The fact that a benefit plan could bring an action against a delinquent employer as the employer's breaches of its obligations are discovered does not foreclose the plan from seeking to deter such breaches or discover them early. To suggest that a plan should be so foreclosed ignores the trustees' various fiduciary duties under ERISA and conflicts with ERISA's concern that plans should assure themselves of adequate funding by promptly collecting employer contributions. Pp. 472 U. S. 580-581.
filed an opinion concurring in part and dissenting in part, in which BURGER, C.J., and REHNQUIST, J., joined, post, p. 472 U. S. 582.
JUSTICE MARSHALL delivered the opinion for the Court.
The issue presented is whether an employer who participates in a multiemployer benefit plan that is governed by the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq., must allow the plan to conduct an audit involving the records of employees who the employer denies are participants in the plan.
the Labor Management Relations Act, 1947, 29 U.S.C. § 186(c)(5), and the Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 829, 29 U.S.C. § 1001 et seq., as amended by the Multiemployer Pension Plan Amendments Act of 1980, Pub.L. 96-364, 94 Stat. 1208, these plans operate as trusts for the purpose of providing specified health, welfare, and pension benefits to employees performing work that is covered by collective bargaining agreements negotiated by various affiliates of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (Teamsters).
Respondents (hereinafter referred to collectively as Central Transport) are 16 interstate trucking companies, each of which, either individually or through a multiemployer association, engages in collective bargaining with the Teamsters. Pursuant to that bargaining, each has become a signatory to the National Master Freight Agreement and supplemental, individual collective bargaining agreements. Under these collective bargaining agreements, each employer must make weekly contributions to Central States for each employee who performs work covered by the collective bargaining agreements, and each employer agrees to be bound by the trust agreements that govern Central States.
system by conducting random audits of the records of participating employers.
On December 5, 1979, Central States contacted Central Transport to arrange an audit, which it described as part of a program of "periodic reviews of participating employer contributions for the benefit of Plan Participants and their Beneficiaries.'" 522 F.Supp. 658, 662 (ED Mich.1981). The audit was to take place at Central Transport's offices and was to encompass, among other subjects, the "`[d]etermination of eligible Plan Participants covered by Collective Bargaining Agreements.'" Ibid,. Among the documents the auditors requested access to were payroll, tax, and other personnel records of those employees who the employer claimed were not plan participants.
whether the duties and status of each of its employees has been accurately reported by Central Transport."
The Court of Appeals for the Sixth Circuit reversed. 698 F.2d 802 (1983). Interpreting the collective bargaining agreements and trust documents in light of ERISA, the Court of Appeals held that Central States had to show "reasonable cause" to believe that a specific employee was covered by the plans before gaining a right of access to that employee's records. Id. at 809-812. We granted certiorari, 467 U.S. 1250 (1984), and we now reverse the judgment of the Court of Appeals.
The documents governing Central Transport's contractual relationship with Central States include the collective bargaining agreements between Central Transport and various affiliates of the Teamsters and the trust agreements of the Central States plans. Generally, the collective bargaining agreements obligate Central Transport to participate in the Central States plans and to be bound by Central States' trust agreements. The trust agreements, which have been signed by Central Transport, govern the operation of the plans.
These trust documents include a number of provisions that are highly supportive of the right to audit claimed by Central States' trustees.
We note first that the Pension Fund trust agreement [Footnote 6] places on each participating employer the responsibility to make "continuing and prompt payments to the Trust Fund as required by the applicable collective bargaining agreement." App. to Pet. for Cert. A-44 (Art. III, § 1). The trustees are designated the recipients of all contributions and are "vested with all right, title and interest in and to such moneys." Ibid. (Art. III, § 3).
"take such steps . . . as the Trustees in their discretion deem in the best interest of the Fund to effectuate the collection or preservation of contributions . . . which may be owed to the Trust Fund."
"Production of Records -- Each employer shall promptly furnish to the Trustees, upon reasonable demand the names and current addresses of its Employees, their Social Security numbers, the hours worked by each Employee and past industry employment history in its files and such other information as the Trustees may reasonably require in connection with the administration of the Trust. The Trustees may, by their representatives, examine the pertinent records of each Employer at the Employer's place of business whenever such examination is deemed necessary or advisable by the Trustees in connection with the proper administration of the Trust."
Id. at A-46 (Art. III, § 5) (emphasis added).
unfunded liabilities chargeable against the plans. [Footnote 7] Moreover, an employer has an incentive to underreport the number of employees covered, because such underreporting would reduce his liability to the plans.
"When planning a particular sample, the auditor should consider the specific audit objective to be achieved and should determine that the audit procedure, or combination of procedures to be applied will achieve that objective. The auditor should determine that the population from which he draws the sample is appropriate for the specific audit objective. For example, an auditor would not be able to detect understatements of an account due to omitted items by sampling the recorded items. An appropriate sampling plan for detecting such understatements would involve selecting from a source in which the omitted items are included."
American Institute of Certified Public Accountants, Codification of Statements on Auditing Standards, AU § 350.17, p. 223 (1985) (emphasis added).
The trustees' determination that the trust documents authorize their access to the records here in dispute has significant weight, for the trust agreement explicitly provides that "any construction [of the agreement's provisions] adopted by the Trustees in good faith shall be binding upon the Union, Employees and Employers." App. to Pet. for Cert. A-48 (Art. IV, § 17). [Footnote 8] There has been no evidence of a bad-faith motive behind the trustees' determination of the scope of their powers under the trust agreement or behind their determination of the auditing program's propriety. The trustees assert that the requested audit is highly relevant to the trust's legitimate interests, and this assertion fully conforms to generally accepted auditing standards. Thus, if our inquiry were merely an inquiry into the trust agreement, the trustees' right to conduct the audit in question would seem clear.
trustees' interpretation of their documents to be entirely reasonable in light of ERISA's policies.
An examination of the duties of plan trustees under ERISA, and under the common law of trusts upon which ERISA's duties are based, makes clear that the requested audit is highly relevant to legitimate trustee concerns.
U.S. at 446 U. S. 375. One of the methods of accomplishing this was the provision of "minimum standards" that would "assur[e] the equitable character of [employee benefit plans] and their financial soundness." 29 U.S.C. § 1001(a).
"shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and . . . for the exclusive purpose of providing benefits to participants and their beneficiaries; and . . . defraying reasonable expenses of administering the plan."
"shall discharge his duties with respect to a plan . . . with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims."
will take steps to identify all participants and beneficiaries, so that the trustees can make them aware of their status and rights under the trust's terms.
One of the fundamental common law duties of a trustee is to preserve and maintain trust assets, Bogert § 582, at 346, and this encompasses "determin[ing] exactly what property forms the subject matter of the trust [and] who are the beneficiaries." Id. § 583, at 348 (footnotes omitted). The trustee is thus expected to "use reasonable diligence to discover the location of the trust property and to take control of it without unnecessary delay." Id. at 355. [Footnote 13] A trustee is similarly expected to "investigate the identity of the beneficiary when the trust documents do not clearly fix such party" and to "notify the beneficiaries under the trust of the gifts made to them." Id. at 348-349, n. 40.
methods for the review of employer contribution accounts by means of, for example, . . . field audits."
In the Department's view, plans "which do not establish and implement [such] collection procedures" may "by failing to collect delinquent contributions" be found to have violated § 406's prohibition of extensions of credit to employers. Prohibited Transaction Exemption 76-1, 41 Fed.Reg. 12740, 12741 (1976); accord, Department of Labor Advisory Op.No. 78-28A (Dec. 5, 1978) (reprinted in App. to Pet. for Cert. A71-A74).
In light of the general policies behind ERISA as well as the particular provisions of the statute, we can only conclude that there is no conflict between ERISA and those concerns offered by Central States to justify its audit program. Both the concern for fully informing participants of their rights and status under a plan and the concern for assuring the financial integrity of the plans by determining the class of potential benefit claimants and holding employers to the full and prompt fulfillment of their contribution obligations are proper and weighty within the framework of ERISA.
liability . . . on the part of . . . the Funds [could] not justify the broad audit [the trustees] seek." Ibid.
The Court of Appeals first noted that employer contributions could effectively be policed by interested unions or by the Secretary of Labor, thus diminishing the trustees' interests in independently monitoring employer compliance. Moreover, in the court's view, a plan's reliance on union or Government oversight of an employer's contributions would be more consistent with federal policies in the pension and labor fields than would be a plan's reliance on the sort of audit at issue here.
beneficiaries, and unions' duties toward beneficiaries are of a quite different scope.
"These are multiemployer trust funds. Each of the participating unions and employers has an interest in the prompt collection of the proper contribution from each employer. Any diminution of the fund caused by the arbitration requirements of a particular employer's collective bargaining agreement would have an adverse effect on the other participants."
"A primary union objective is 'to maximize overall compensation of its members.' Thus, it may sacrifice particular elements of the compensation package 'if an alternative expenditure of resources would result in increased benefits for workers in the bargaining unit as a whole.'"
Ibid. (citation omitted). See also NLRB v. Amax Coal Co., 453 U. S. 322, 453 U. S. 336 (1981) ("The atmosphere in which employee benefit trust fund fiduciaries must operate, as mandated by [29 U.S.C. § 186(c)(5)] and ERISA, is wholly inconsistent with th[e] process of compromise and economic pressure [that characterizes collective bargaining]").
There are also compelling reasons why the Department of Labor's power to police employer compliance must be rejected as an alternative to audits by the plans themselves. Indeed, the structure of ERISA makes clear that Congress did not intend for Government enforcement powers to lessen the responsibilities of plan fiduciaries.
"[i]t is thus wholly unrealistic to suggest that centralizing all auditing authority in the Secretary would provide protection to benefit plan participants comparable to that afforded by trustee audits."
Brief for United States as Amicus Curiae 20, n. 11.
were given the authority to sue to enforce an employer's obligations to a plan. § 1132.
The Court of Appeals' remaining reason for questioning Central States' interest in the audit focused on the fact that a benefit plan would have an action against a delinquent employer should any benefit claims ever be made by a participant who had never been the subject of contributions. We reject the notion that the plan's ultimate ability to remedy an employer's breach of its obligations forecloses the plan from seeking to deter such breaches or to discover them early. Such a suggestion ignores the trustees' fiduciary duty to inform participants and beneficiaries of their rights, to gain immediate use of trust assets for the benefit of the trust, to avoid the time and expense of litigation, and to avoid unfunded liabilities that might eventually prove uncollectable as a result of insolvencies. For a plan passively to allow an employer to create such unfunded liabilities would jeopardize the participants' and beneficiaries' interests as well as those of all participating employers who properly comply with their obligations. See Schneider, 466 U.S. at 466 U. S. 373, and n. 17.
and with a contribution rate sufficient to maintain that status at all times."
As the Court of Appeals noted: "The record . . . indicates that the Funds are among the largest Taft-Hartley trust funds in the United States, that more than 13,000 employers participate and that they serve more than 500,000 employees whose job classifications are covered in thousands of collective bargaining agreements." 698 F.2d 802, 811 (CA6 1983). See also Schneider Moving & Storage Co. v. Robbins, 466 U. S. 364, 466 U. S. 373, n. 16 (1984).
"Traditionally, the Central States Funds have operated on a self-reporting basis, which required the employer to initially establish a base group of employees entitled to weekly contributions and then to inform [Central States] monthly of any fluctuations in the employment status of individuals covered by the collective bargaining agreement. Central States relies upon the status reports of [Central Transport] to compute an invoice statement which it forwards to Central Transport. Thus, when the employer reports the termination or layoff of an individual formerly covered by the collective bargaining agreement, Central States will adjust its records and reduce the defendant's invoice to reflect the reported change. Conversely, when an employer reports the addition of new employees, Central States will increase the invoice by an amount which corresponds to the weekly contribution figure multiplied by the number of weekly hired employees."
522 F.Supp. 658, 662 (ED Mich.1981).
See infra at 472 U. S. 566-568.
The action was filed pursuant to § 301(a) of the Labor Management Relations Act, 1947, 29 U.S.C. § 185(a), and § 502 of ERISA, 29 U.S.C. § 1132.
"mindful of the fact that Central States ha[d] repeatedly stated that confidential payroll data [would] not be copied or removed from the Central Transport premises once the auditors have satisfied themselves that particular individuals are not performing [bargaining] unit work."
The trust agreement governing the Pension Fund and the trust agreement governing the Health and Welfare Fund are identical in all pertinent respects. References will therefore be made only to the Pension Fund trust agreement.
"solely on the basis of service performed for a participating employer, regardless [of] whether that employer is required to contribute for such service or has made or defaulted on his required contributions."
In the Secretary's judgment, "[a]ny plan term or Trustees' resolution to the contrary is . . . unlawful and unenforceable." Department of Labor Advisory Op.No. 76-89 (Aug. 31, 1976) (reprinted in App. to Pet. for Cert. A70-A71); accord, Department of Labor Advisory Op.No. 78-28A (Dec. 5, 1978) (reprinted in App. to Pet. for Cert. A71-A74).
Similarly, the collective bargaining agreement provides that each employer is deemed to have "ratif[ied] all action already taken or to be taken by [Trustees] within the scope of their authority." 522 F.Supp. at 661 (quoting National Master Freight Agreement, Art. 60). A trust "participation agreement" entered into by Central Transport is of similar effect, providing that Central Transport "assent[s] to . . . all of the actions of the Trustees in administering such Trust Fund in accordance with the Trust Agreement and rules adopted." Ibid. (quoting paragraph one of the Pension Fund participation agreement).
Although most of ERISA's legislative history focused on pension plans, Congress also studied the operation of other employee benefit plans and developed a similar regulatory framework respecting these other plans. For example, ERISA's rules concerning reporting, disclosure, and fiduciary responsibility apply to all employee benefit plans. See 29 U.S.C. §§ 1021-1031, 1101-1114. See also 29 U.S.C. § 1001(a) (stating congressional findings and policies with respect to "employee benefit plans"); 29 U.S.C. § 1002(3) (defining "employee benefit plan" as including both "pension benefit plan[s]" and "welfare benefit plan[s]"). See generally Shaw v. Dell Air Lines,Inc., 463 U. S. 85, 463 U. S. 91 (1983).
See, e.g., 29 U.S.C. § 1103(a) ("assets of an employee benefit plan shall be held in trust"); S.Rep. No. 93-127, p. 29 (1973) ("The fiduciary responsibility section, in essence, codifies and makes applicable to these fiduciaries certain principles developed in the evolution of the law of trusts"); H.R.Rep. No. 93-533, p. 11 (1973) (identical language); cf. NLRB v. Amax Coal Co., 453 U. S. 322, 453 U. S. 329-334 (1981) (Congress intended that union welfare funds regulated by the Taft-Hartley Act, see 29 U.S.C. § 186(c)(5), be operated under traditional trust law principles, and this desire became explicit in ERSA).
Accord, G. Bogert & G. Bogert, Law of Trusts and Trustees § 551, p. 41 (2d rev. ed.1980) (hereinafter Bogert) (trustee has the power to use all "ordinary and natural means" for accomplishing the trust's objective); Restatement (Second) of Trusts § 186(b) (1959) (hereinafter Restatement) (trustee has all powers "necessary or appropriate to carry out the purposes of the trust").
In light of ERISA's standards, Central Transport correctly argues that the audit request would be illegitimate under the standard of loyalty if it were actually an effort by plan trustees to expand plan coverage beyond the class defined in the plans' terms or to acquire information about the employers to advance union goals. It similarly argues that the audit would be imprudent if it were clearly wasteful of plan assets or unrelated to legitimate plan concerns.
Central Transport, however, has submitted no evidence that Central States' audit program's actual goal was to expand the trust's coverage beyond that provided in the applicable collective bargaining agreements or to acquire information for union goals; nor did it submit any evidence that the audits were unjustifiably costly. Thus, whether the auditing power claimed by Central States is consistent with ERISA must be analyzed in terms of the goal upon which Central States has rested its audit, that of policing Central Transport's "[d]etermination of eligible Plan Participants covered by Collective Bargaining Agreements,'" 522 F.Supp. at 662 (quoting Central States' letter to Central Transport), so as to verify that Central Transport is indeed contributing all required amounts on behalf of all covered employees.
See also Bogert 355 (where the settlor retains possession of trust assets, "the trustee must hold the settlor to [his] obligation"); 2 Scott § 175, at 1415 ("trustee is under a duty to take such steps as are reasonable to secure control of the trust property and to keep control of it").
See also 29 CFR §§ 2520.104b-1 - 2520.104b-30 (1984).
That the reporting requirements presuppose a plan's knowledge of participants' identities is highlighted by the Labor Department's determination that to comply with the minimum reporting standards a plan "must [send the prescribed material] by a method or methods of delivery likely to result in full distribution." 29 CFR § 2520.104b-1 (1984). Mail distribution is one of the suggested methods, and more importantly, the Department cautions that "in no case is it acceptable [for a plan] merely to place copies of the material in a location frequented by participants" as a means of complying with ERISA's reporting requirements. Ibid.
See also 29 U.S.C. § 1103(c)(1) (providing that "the assets of a plan shall never inure to the benefit of any employer"); § 1145 (requiring employers to fulfill the contribution obligations in accordance with the terms of plan documents). For a more detailed discussion of Congress' concern for assuring full and prompt compliance with contribution obligations, see 472 U. S. infra.
The benefit plans involved in Schneider were the same plans that are petitioners here, and the trust agreements at issue in Schneider are also the same as those here.
This potential conflict was also discussed in Chemical Alkali Workers v. Pittsburgh Plate Glass Co., 404 U. S. 157, 404 U. S. 171-175 (1971), where we recognized that the interests of retirees may substantially conflict with the interests of active workers. Because of the potential conflicts, we held that retirees cannot be considered part of a collective bargaining unit represented by a union and that retirees' benefits are not within the mandatory subjects of union-employer collective bargaining. Retirees, as beneficiaries of a pension plan, clearly are within the class to whom trustees owe a duty.
In Schneider we not only concluded that compelling benefit plan reliance on union enforcement of trust obligations would have significant costs to the protections of ERISA, but we also concluded that compelling such reliance would produce few benefits in terms of federal labor policies. For example, such policies as the presumption in favor of arbitrability derive in large part from the desire to promote alternatives to strikes, lockouts, and other exercises of economic power. But that goal has little relevance to the field of trust administration, where disputes between plans and participating employers do not normally have such results. 466 U.S. at 466 U. S. 372, and n. 13.
The Court of Appeals also questioned the importance of the audit's goal, speculating that the plan might simply be able to deny benefit claims of participants who had been notified of their status through the reporting requirement but had nevertheless taken no action to assure that their employers properly contributed on their behalf. 698 F.2d at 813. Obviously, this "estoppel argument" has the same flaw as the argument that a participant, once notified of his status, will come forward to identify himself: Before the plan can notify a participant of his status, it must have identified him, and such identification was the purpose of the requested audit.
In addition, however, the argument has other major problems. First, we note that the Labor Department has consistently taken the position that any pension plan document language denying benefits to a participant because of an employer's failure to make required contributions would violate ERISA and would thus be unenforceable. See n 7, supra. At a minimum, this means that Central States is reasonable in operating its audit program under the assumption that it would be liable for pension claims regardless of an employer's failure to make required contributions. Second, the Court of Appeals did not contend that the reports Central States sends to participants inform them of a burden of verifying their employer's contributions, or that the plan documents deny benefits on the basis of an employer's failure to make proper contributions. Thus, even if ERISA allowed a plan to operate in one of these manners, there has been no finding that the plans at issue here have done so.
See 472 U. S. supra.
"Failure of employers to make promised contributions in a timely fashion imposes a variety of costs on plans. While contributions remain unpaid, the plan loses the benefit of investment income that could have been earned if the past due amounts had been received and invested on time. Moreover, additional administrative costs are incurred in detecting and collecting delinquencies. Attorneys' fees and other legal costs arise in connection with collection efforts."
"These costs detract from the ability of plans to formulate or meet funding standards and adversely affect the financial health of plans. Participants and beneficiaries of plans as well as employers who honor their obligation to contribute in a timely fashion bear the heavier cost of delinquencies in the form of lower benefits and higher contribution rates. Moreover, . . . uncollected delinquencies can add to the unfunded liability for all employers."
126 Cong.Rec. 23039 (1980) (statement of Rep. Thompson).
We note that in this case Central States has agreed to various limits on its audit so as not to exceed what would be reasonably appropriate for the service of the audit's legitimate purposes. See n 5, supra. Central States does not dispute that its right to demand access to employer records does not reach beyond what is appropriate for the proper administration of the plans, and, of course, a court ordering an employer to comply with a particular audit demand could, upon a proper showing by the employer, limit the auditors accordingly. Cf. Central States, Southeast and Southwest Areas Pension Fund v. Theut Products, Civ. NO. 82-71080 (ED Mich., Oct. 21, 1982) (Cohn, J.) (reprinted in APP. to Pet. for Cert. A-96) (ordering an employer to comply with a benefit plan's audit request but allowing the employer to withhold specific information that was not relevant to the audit's purposes and allowing the employer to restrict the auditors' ability to copy or disclose information where the auditors' did not need to do so).
JUSTICE STEVENS, with whom THE CHIEF JUSTICE and JUSTICE REHNQUIST join, concurring in part and dissenting in part.
If an employer who participates in a multiemployer benefit plan enters into an agreement that authorizes the trustees of the plan to conduct an audit of the employer's personnel records, such an agreement is not prohibited by ERISA. That is the proposition of law that I understand the Court to announce today and I agree with it.
In my opinion, the right to conduct an audit of the kind involved in this case must be granted by contract; it is not conferred by ERISA itself. My disagreement with the Court is based on our differing interpretations of the particular contract documents in this case.
The Pension Fund trust agreements, as the Court accurately quotes, provide that "each Employer shall promptly furnish to the Trustees, upon reasonable demand" information concerning "its Employees." App. to Pet. for Cert. A-46. The term "Employees," however, the first letter of which is capitalized in the trust agreements, does not comprise all employees of respondents. Instead, Article I, § 3, expressly provides that "[t]he term Employee' as used herein shall include," in pertinent part, persons who are both employed pursuant to the collective bargaining agreement and covered by the pension plan. Id. at A-43. * Thus, the trustees have power to audit personnel records only of covered employees.
"does not . . . give the trustees carte blanche powers to undertake an audit of the records of all of [respondents'] employees. They are limited in their discretion by . . . the common law concept that a trustee may only act within the scope of his or her authority."
698 F.2d 802, 810 (1983).
In sum, although I acknowledge that the provisions of those documents that the Court has quoted lend support to its conclusion, I find the painstaking and accurate analysis of the complete set of documents in Judge Kennedy's opinion for the Court of Appeals far more persuasive. See id. at 806-810. Because the dispute over the meaning of these particular documents is not a matter of special public interest, I simply record my agreement with the Court of Appeals' interpretation of the contract. To that extent, I respectfully dissent.
* The general language italicized by the Court, ante at 472 U. S. 566, in context authorizes audits Of records in addition to those specifically listed, but only as to covered employees. If the language were construed to encompass records Of noncovered employees, the limitations in the preceding sentence of the trust agreements would be read out of the contract.

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 § 1132
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 § 185
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 Art. 60
 § 1001
 § 1002
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 § 551
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 § 175
 § 2520
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