Opinion ID: 186875
Heading Depth: 2
Heading Rank: 2

Heading: Effect of Section 302 of LMRA

Text: 20 The Florida CBA at issue requires an employer to contribute pension and retirement benefit payments into the Fund for union work performed within the territorial jurisdiction of the CBA. JA 603. While the LMRA prohibits employer contributions to a labor organization, section 302 provides an exception with respect to the payment ... of any money ... in satisfaction of a judgment of any court or a decision or award of an arbitrator. 29 U.S.C. § 186(c)(2). The IPF asserts that the benefit contributions Dick Corporation owes pursuant to the Florida CBA are lawful under this exception because the Company breached the CBA by hiring non-union subcontractors on its Florida projects. See Appellants' Br. at 11; Pls.' Mot. for Summ. J. at 13-14. The Florida CBA provides: 21 The Employer agrees that neither he nor any of his subcontractors on the jobsite, will contract or subcontract work coming under the trade or territorial jurisdiction of [the BAC], to be done at the site of construction ... except to a person, firm or corporation bound to this agreement. 22 Pls.' Mot. for Summ. J. at 13. Dick Corporation admitted that it employed non-union subcontractors on its Florida projects. See Decl. of Raymond Crothers at JA 152. 8 As a result of the Company's breach, the Fund claims, it is entitled — pursuant to the section 302(c)(2) exception — to the benefit contributions the Company would have been required to pay absent the breach. See Appellants' Br. at 16. 23 In Washington Post v. Washington-Baltimore Newspaper Guild, Local 35, 787 F.2d 604 (D.C.Cir.1986), we upheld an arbitrator's award against a LMRA challenge, finding section 302(c)(2) exempted the award from section 302(a)'s general prohibition. See id. at 606-07, 609. The arbitrator found that The Washington Post breached a collective bargaining agreement by failing to pay union dues from the salaries of columnists — viewing the columnists as not covered by the CBA — and ordered the newspaper to reimburse the union fund for the dues not paid on account of the breach. See id. at 605. On appeal, we concluded that the arbitrator's order came within the section 302(c)(2) exception. See id. at 606-07. 24 Dick Corporation, however, argues that Washington Post and section 302(c)(2) of the LMRA are inapplicable because the IPF has no underlying court judgment or arbitration award establishing the Company's breach of the Florida CBA, see Appellee's Br. at 27-29, relying on Jackson Purchase Rural Elec. Coop. Ass'n v. Local Union 816, Int'l Bhd. of Elec. Workers, 646 F.2d 264, 268 (6th Cir.1981). In that case, the court refused to enforce the arbitration award because the only alleged contractual breach — the breach upon which the arbitrator relied — involved an otherwise illegal provision in the collective bargaining agreement. See id. at 266, 267-68 (illegal union dues check-off provision). The problem in Jackson Purchase was not the lack of an underlying judgment; instead, there was no breach of a valid, legally enforceable contractual provision. Indeed, Washington Post distinguished Jackson Purchase on this ground, recognizing that [t]he opinion says nothing about an arbitrator's power to award a union the dues it lost as a consequence of the employer's breach of a valid collective bargaining agreement. Washington Post, 787 F.2d at 608. 25 Section 302(c)(2) requires no more than vigorous and genuine litigation and the court's (or arbitrator's) determination of the merits of the alleged contractual breach. Id. at 607 (The Post will pay this money on the order of the arbitrator, after vigorous and genuine litigation.). From a practical standpoint, Dick Corporation's claim that an underlying judgment is necessary to invoke section 302(c)(2) would be cumbersome and duplicative, requiring two separate sets of litigation: an initial determination of breach and a second enforcement proceeding. Instead, once the court finds a valid contractual provision breached, the satisfaction of a judgment language of section 302(c)(2) is met and the same court may award damages for the violation. See Trs. of Int'l Bhd. of Teamsters Local 531 Sick & Welfare Fund v. Marangi Bros., Inc., 289 F.Supp.2d 455, 463 (S.D.N.Y.2003) (If defendants are found to have breached the CBA, plaintiffs would be entitled to an award of damages because Section 302(c)(2) specifically excludes the application of § 302(a) ....) (citing Washington Post, 787 F.2d at 607). Here, the IPF alleges, and the Company concedes, that Dick Corporation breached the Florida CBA by hiring non-union subcontractors. See Pls.' Mot. for Summ. J. at 13-14; Decl. of Raymond Crothers at JA 152. The Fund is entitled to damages resulting from the breach in the form of benefit contributions in a sum equal to that which they would have received if the agreement between the defendant and the union had been fully performed by all parties. Trs. of the Teamsters Constr. Workers Local 13, Health & Welfare Trust Fund for Colo. v. Hawg N Action, Inc., 651 F.2d 1384, 1386-87 (10th Cir.1981); see also Chicago Painters & Decorators Pension, Health & Welfare, and Deferred Sav. Plan Trust Funds v. Karr Bros., Inc., 755 F.2d 1285, 1290 (7th Cir.1985) (breaching employer required ... to pay ... the amount that [employer] would have been required to contribute to the trust funds if it had complied with the collective bargaining agreements). 9