Source: https://m.openjurist.org/484/us/539
Timestamp: 2020-08-07 19:23:53
Document Index: 572483386

Matched Legal Cases: ['§ 515', '§ 1145', '§ 515', '§ 502', '§ 502', '§ 515', '§ 515', '§ 8', '§ 1383', '§ 1392', '§ 1132', '§ 4301', '§ 1451', '§ 4212', '§ 515', '§ 185', '§ 502', '§ 301']

484 U.S. 539 - Laborers Health and Welfare Trust Fund for Northern California v. Advanced Lightweight Concrete Co Inc
484 US 539 Laborers Health and Welfare Trust Fund for Northern California v. Advanced Lightweight Concrete Co Inc
LABORERS HEALTH AND WELFARE TRUST FUND FOR NORTHERN CALIFORNIA, et al., Petitioners
ADVANCED LIGHTWEIGHT CONCRETE CO., INC.
In its 1980 amendments to ERISA, Congress responded to two concerns that are relevant to the question presented by this case. It was primarily concerned about the burden placed upon the remaining contributors to a multiemployer fund when one or more of them withdraw.8 In response to this concern Congress enacted an elaborate provision imposing "withdrawal liability" on such withdrawing employers.9 That liability arises when an employer ceases to have an "obligation to contribute" to the plan.10 That term is defined for the purposes of the withdrawal liability portion of the statute in language that unambiguously includes both the employer's contractual obligations and any obligation imposed by the NLRA.11 That definition is significant because it demonstrates that Congress was aware of the two different sources of an employer's duty to contribute to covered plans.
Congress was also concerned about the problem that had arisen because a substantial number of employers had failed to make their "promised contributions" on a regular and timely basis.12 Sections 515 and 502(g)(2) of ERISA, the provisions at issue in this case, were enacted in response to that concern. The text of § 515 plainly describes the employer's contractual obligation to make contributions but omits any reference to a noncontractual obligation imposed by the NLRA. Section 515 provides:
"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." 94 Stat. 1295, 29 U.S.C. § 1145.
The liability created by § 515 may be enforced by the trustees of a plan by bringing an action in federal district court pursuant to § 502. The special remedy against employers who are delinquent in meeting their contractual obligations that is created by § 502(g)(2) includes a mandatory award of prejudgment interest plus liquidated damages in an amount at least equal to that interest, as well as attorney's fees and costs.13
The legislative history of these provisions explains that Congress added these strict remedies to give employers a strong incentive to honor their contractual obligations to contribute and to facilitate the collection of delinquent accounts.14 That history contains no mention of the employer's statutory duty to make postcontract contributions while negotiations for a new contract are being conducted.15 Thus, both the text and the legislative history of §§ 515 and 502(g)(2) provide firm support for the Court of Appeals' conclusion that this remedy is limited to the collection of "promised contributions" and does not confer jurisdiction on district courts to determine whether an employer's unilateral decision to refuse to make postcontract contributions constitutes a violation of the NLRA.16
With respect to the asserted "gap" in the enforcement scheme, three observations are pertinent. First, the incidence of the asserted gap is unknown. Presumably most employers who anticipate a continuing relationship with a union honor their obligations to preserve the status quo during negotiations for a new contract. If a new contract is ultimately signed, it should define the employer's obligations during the period subsequent to the expiration of the preceding contract; therefore, any delinquency during that period would be covered by § 515. On the other hand, if no new contract is ever signed, there is at least a possibility that an impasse had been reached either before, or only a short time after, the expiration of the old contract. The fact that this type of delinquency appears not even to have been called to the attention of Congress indicates that it may not be a problem of serious magnitude.17
Second, the issues that must be decided in a dispute over an employer's refusal to make any postcontract contributions are more complex than those that are presented in a simple collection action. Whereas it is entirely appropriate to award prejudgment interest or liquidated damages as a remedy for an employer's failure to make the payments specified in a contract, those remedies are problematic in cases in which there is a good-faith dispute over both the existence and the extent of the employer's liability. The question whether and when an impasse has been reached is often a matter of judgment based on an evaluation of the parties' bargaining history against standards that are imprecise at best.18
Third, whether an employer's unilateral decision to discontinue contributions to a pension plan constitutes a violation of the statutory duty to bargain in good faith is the kind of question that is routinely resolved by the administrative agency with expertise in labor law. There are situations in which district judges must occasionally resolve labor issues, but they surely represent the exception rather than the rule. In cases like this, which involve either an actual or an "arguable" violation of § 8 of the NLRA, federal courts typically defer to the judgment of the NLRB. See San Diego Building Trades Council v. Garmon, 359 U.S. 236, 245, 79 S.Ct. 773, 779, 3 L.Ed.2d 775 (1959).19
"The definition of an 'impasse' is understandable enough—that point at which the parties have exhausted the prospects of concluding an agreement and further discussions would be fruitless but its application can be difficult. Given the many factors commonly itemized by the Board and courts in impasse cases, perhaps all that can be said with confidence is that an impasse is a 'state of facts in which the parties, despite the best of faith, are simply deadlocked.' The Board and courts look to such matters as the number of meetings between the company and the union, the length of those meetings and the period of time that has transpired between the start of negotiations and their breaking off. There is no magic number of meetings, hours or weeks which will reliably determine when an impasse has occurred.
"For purposes of this part, a complete withdrawal from a multiemployer plan occurs when an employer—
"(2) permanently ceases all covered operations under the plan." 94 Stat. 1218, 29 U.S.C. § 1383(a).
"For purposes of this part, the term 'obligation to contribute' means an obligation to contribute arising—
"does not include an obligation to pay withdrawal liability under this section or to pay delinquent contributions." 94 Stat. 1233, 29 U.S.C. § 1392(a).
"In any action under this title by a fiduciary for or on behalf of a plan to enforce section 515 of this title in which a judgment in favor of the plan is awarded, the court shall award the plan—
"(C) an amount equal to the greater of—
"For purposes of this paragraph, interest on unpaid contributions shall be determined by using the rate provided under the plan, or, if none, the rate prescribed under section 6621 of the Internal Revenue Code of 1954." 94 Stat. 1295, 29 U.S.C. § 1132(g)(2).
Petitioners next point out that ERISA § 4301(b) provides that "[i]n any action under this section to compel an employer to pay withdrawal liability, any failure of the employer to make any withdrawal liability payment within the time prescribed shall be treated in the same manner as a delinquent contribution (within the meaning of section 515)." 94 Stat. 1263, 29 U.S.C. § 1451(b). Because of this "statutory linkage" between the remedies available for withdrawal and delinquency liability, petitioners contend, "it is appropriate and instructive in gleaning the intended scope of the Section 515 duty to examine how Congress defined the obligation to contribute for withdrawal liability purposes." Brief for Petitioners 21. Since withdrawal liability may arise from either a contractual or a statutory duty, see ERISA § 4212(a), n. 11, supra, petitioners conclude that delinquency liability must be similarly engendered.
Finally, petitioners maintain that if § 515 "were read to apply only to obligations imposed by collective bargaining agreements, the section would be entirely duplicative of Section 301 of the LMRA, 29 U.S.C. § 185, which creates a federal cause of action for the breach of such contracts." Brief for Petitioners 24. But, as respondent points out, "this argument conveniently ignores the specific purpose of Section 515." Brief for Respondent 22. That is, the new § 502(g)(2) remedies of mandatory prejudgment interest, liquidated damages equal at least to that interest, and attorney's fees and costs, plus such other relief as the court deems appropriate, are indeed "the potent new weapon previously unavailable to plans under" § 301 of the LMRA. Brief for Respondent 23.