Opinion ID: 491025
Heading Depth: 1
Heading Rank: 3

Heading: T & U's Obligation to Contribute to the Trust Funds

Text: Under the 1981-84 Agreement 28 Hawaii Carpenters Funds also contend that T & U is liable for delinquent contributions required by the 1981-84 multiemployer collective bargaining agreement between the Wood Products Association (WPA) and the Carpenters Union. The district court granted T & U's motion for summary judgment on the ground that unusual circumstances warranted T & U's withdrawal from the WPA after contract negotiations had begun. 29 Over forty percent of collective bargaining agreements covering 1,000 or more employees are multiemployer agreements. See Charles D. Bonanno Linen Serv., Inc. v. NLRB, 454 U.S. 404, 410 n. 4, 102 S.Ct. 720, 724 n. 4, 70 L.Ed.2d 656 (1982). The National Labor Relations Board has long interpreted the National Labor Relations Act, 29 U.S.C. Sec. 157 et seq., as permitting the establishment of multiemployer bargaining units. See Shipowners Ass'n of the Pac. Coast, 7 NLRB 1002, 1024 (1938), review den. sub nom. AFL v. NLRB, 103 F.2d 933 (D.C.Cir.1939), aff'd, 308 U.S. 401, 60 S.Ct. 300, 84 L.Ed. 347 (1940); Taylor Motors, Inc., 241 NLRB 711 (1979) (ruling that absence of multiemployer bargaining history is not determinative of the inappropriateness of a multiemployer unit). Multiemployer bargaining is a vital factor in the effectuation of the national policy of promoting labor peace through strengthened collective bargaining. NLRB v. Truck Drivers Local Union No. 449 (Buffalo Linen), 353 U.S. 87, 95, 77 S.Ct. 643, 647, 1 L.Ed.2d 676 (1957). 30 Multiemployer associations are voluntary. The establishment of a multiemployer association is pursuant to contract among the members. Federal labor law does not preclude an employer from withdrawing from an association so long as federal interests are not implicated by that action. However, the National Labor Relations Board and the courts have developed rules governing the time and manner of withdrawals from multiemployer bargaining associations. The purpose of the withdrawal rules is to promote stability in bargaining relationships, especially during the period negotiations are being conducted. 31 Whenever an employer desires to withdraw from a multiemployer association that represents it for purposes of collective bargaining, it is required to provide written notice to the union prior to the date established for modification of the contract or for the commencement of negotiations. 9 [I]t is well settled now that an attempted withdrawal ... [during] negotiations is neither timely nor effective. Sheridan Creations, Inc., 148 NLRB 1503, 1505 (1964), enforced, 357 F.2d 245 (2d Cir.1966), cert. denied, 385 U.S. 1005, 87 S.Ct. 711, 17 L.Ed.2d 544 (1967). Accordingly, for T & U to have validly withdrawn from the WPA, it would have had to have given written notice to the union prior to the commencement of negotiations. 10 Here, T & U not only failed to give notice to the union at any time, it also attempted to withdraw after negotiations had commenced. 11 32 The district court relied on an exception to the rule requiring withdrawal prior to the commencement of negotiations, finding that unusual circumstances existed. We note first of all that even were the district court correct regarding the existence of unusual circumstances, T & U's withdrawal would still have been ineffective since the company failed to provide notice to the union. However, the court also clearly erred in reaching its conclusion that there were unusual circumstances. The basis for the district court's conclusion was the alleged misrepresentations to T & U by the President of the WPA, Percy Ching. Such misrepresentations do not constitute unusual circumstances. 33 We have given unusual circumstances a narrow and restrictive construction. The exception is generally limited to cases in which the employer faces such dire economic circumstances that its very existence ... as a viable business entity has ceased or is about to cease. Hi-Way Billboards, Inc., 206 NLRB 22, 23 (1973), enforcement denied, 500 F.2d 181 (5th Cir.1974). 12 What T & U claims to be unusual circumstances is a fraudulent inducement to join the multiemployer association--a fraud allegedly perpetrated by the association itself. The existence of any such fraud would not threaten the basic ability of the employer to exist as an enterprise and would therefore not justify our making an exception to the normal rules. The overriding federal interest in promoting stable collective bargaining requires that disruptions of the bargaining relationship be excused only on a showing of fundamental necessity--and not merely as the result of a claim, for example, that someone may have misled the employer. Thus, T & U simply does not fall within the unusual circumstances exception. 13 34 We hold that T & U's purported withdrawal from the WPA was ineffective. 14 Accordingly, it is liable for the delinquent trust fund contributions. 15 35