Opinion ID: 2790576
Heading Depth: 2
Heading Rank: 4

Heading: Jurisprudence

Text: Plaintiffs rely heavily on a case we decided in 1994 to support their interpretation of the CBA. In Michigan Laborers’ Health Care Fund v. Grimaldi Concrete, Inc., a panel of this Court considered another ERISA agreement dispute. 30 F.3d 692, 697 (6th Cir. 1994). The employer, Grimaldi, failed to make payments to the ERISA fund for hours worked by some of its employees. Id. at 693-94. The ERISA fund manager attempted to audit Grimaldi’s payroll records, but found them so vague and incomplete that it was impossible to determine which hours had been performed pursuant to the agreement. Id. at 694. The fund manager therefore demanded contributions for all hours the employees had worked, and the parties proceeded to suit. Id. We held that, because Grimaldi was required to maintain accurate records under -7- Case No. 14-3255 Bunn Enterprises, Inc., et al. v. Ohio Operating Engineers Fringe Benefit Programs, et al. ERISA, the company’s failure to do so meant “[t]he burden thus shifted to Grimaldi to prove what work was covered and what work was not covered” under the agreement. Id. at 696. Accordingly, Plaintiffs claim, we have recognized a distinction between “covered” and “notcovered” work as essential to determining what contributions must be made under a collective bargaining agreement, and therefore must continue to recognize that distinction here. Plaintiffs’ reading of Grimaldi is problematic. The agreement at issue in that case was different from the CBA here; it had different language, requirements, and limitations. More importantly, the parties in Grimaldi stipulated at the outset that the only contributions in dispute were those related to “covered work” under the agreement. (Id. at 694.) The issue before the court was not, therefore, interpretation of the parties’ rights under the agreement, but whether Grimaldi had effectively forfeited an undisputed right to pay solely for “covered” work by failing to keep adequate records. (Id. at 694-96.) The distinction between “covered” and “not-covered” work was not before the court—or even contested by the parties—in Grimaldi. Here, the distinction (or lack thereof) is the central issue.3 Plaintiffs insist that their interpretation of Grimaldi is controlling even in the face of 22 years of district court precedent that interprets the same CBA regarding the same issue—and does so in Defendants’ favor. As discussed in its March 14, 2014 opinion, the District Court for the Southern District of Ohio has unanimously held that employer signatories of the Ohio Heavy 3 Plaintiffs cite a number of other cases they claim support their interpretation of the CBA, but each is inapposite. One case features an agreement interpreted in a manner similar to Plaintiffs’ interpretation of the CBA here, but the case is from another jurisdiction and deals with a different agreement. See Cent. Pension Fund of the Int’l Union of Operating Eng’rs & Participating Emp’rs v. Ray Haluch Gravel Co., 695 F.3d 1, 8 (1st Cir. 2012), rev’d on other grounds, 134 S. Ct. 773 (2014), remanded to 745 F.3d 1 (1st Cir. 2014). Plaintiffs also cite cases from within the Sixth Circuit which incorporate Grimaldi’s holding, but which do not present the issue at bar. See, e.g., Plumbers Local 98 Defined Benefit Pension Fund v. M & P Master Plumbers of Mich., Inc., 608 F. Supp. 2d 873, 881 (E.D. Mich. 2009) (“Under Sixth Circuit precedent, where an ERISA fund plaintiff has provided proof of an employer's failure to pay fringe benefit contributions on behalf of its employees for work covered by a collective bargaining agreement, the burden shifts to the employer to produce evidence as to what work is not covered.” (citing Grimaldi, 30 F.3d at 696-97)). -8- Case No. 14-3255 Bunn Enterprises, Inc., et al. v. Ohio Operating Engineers Fringe Benefit Programs, et al. Highway Agreement are required to pay contributions for all hours worked, regardless of whether the hours are “covered” under the CBA. Bunn Enters. Inc. v. Ohio Operating Eng’rs Fringe Benefit Programs (Bunn II), 7 F.Supp.3d 752, 756-58 (S.D. Ohio 2014) (discussing Noe v. R.D. Jones, Excavating, Inc., 787 F.Supp. 759, 764-65 (S.D. Ohio 1992); Orrand v. Maint. Unlimited, Inc., No. 2:96-CV-00766, Doc. 17 at 4-5 (S.D. Ohio Feb. 24, 1998); Orrand v. Shope, No. C2-00-1161, 2001 WL 1763437, at  (S.D. Ohio Jan. 30, 2001); Orrand v. Keim Concrete Pumping, Inc., No. 2:08-CV-1046, 2010 WL 3447647, at  (S.D. Ohio Aug. 30, 2010)). As the court explained in its initial case dealing with this issue, ERISA dictates a resolution that provides for the simplification of collection procedures for the trustees of fringe benefit funds in order to protect the funds from unnecessary collection costs. . . . Determining the amount of an employer’s obligation based upon the total hours worked by an employee covered under a collective bargaining agreement is consistent with this policy concern given that the amount of the contribution obligation can easily be determined by simply examining the employer’s payroll records. . . . Therefore, the Defendant is obligated to contribute to the Fringe Benefit Funds based upon all the hours worked by the employees, no matter the totality of their assignments. Noe, 787 F. Supp. at 765. Plaintiffs highlight that Noe was decided before Grimaldi, but Noe’s holding has been applied repeatedly since Grimaldi was decided in 1994, to no sturm und drang. In 2001, the court again explained the policy supporting its position: If an employer were entitled to receive a reduction in the amount of benefits paid based upon hours spent in non-covered work, and it were the sole arbiter of what type of work was performed and its records were the only source of that information, it would be exceedingly difficult for a fund to dispute an employer’s allocation of hours between covered and non-covered work, and it would therefore be possible for an employer to skew its records in such a way as to minimize its contributions. By providing that benefits are due for all hours worked and paid, whether for covered or non- -9- Case No. 14-3255 Bunn Enterprises, Inc., et al. v. Ohio Operating Engineers Fringe Benefit Programs, et al. covered work, the ability to manipulate the facts is reduced or eliminated, and the audit process is much simpler. Shope, 2001 WL 1763437, at . The district court added, “Of course, these benefits would not permit the Court to rewrite the parties’ agreement, but the language in this agreement appears unambiguously to obligate the employer to make contributions for all hours paid.” Id. This last observation is the key reason Plaintiffs’ arguments regarding interpretation of the CBA fail: the language of the CBA, as we have discussed, is not ambiguous. And as the district court noted, “Plaintiffs have offered no arguments which [the court] has not already considered and rejected in the last 22 years.” Bunn II, 7 F.Supp.3d at 757. We agree. Accordingly, we find that the CBA unambiguously requires employer signatories to contribute the appropriate benefits contributions for all hours worked by their employees, regardless of whether those hours are “covered” under the contract. The district court did not err in granting Defendants’ motions for summary judgment and judgment on the pleadings.