Opinion ID: 613676
Heading Depth: 3
Heading Rank: 1

Heading: Definition of “Gross Labor Payroll”

Text: We apply plenary review to the District Court‟s disposition of cross-motions for summary judgment, examining both its grant and its denial of the parties‟ respective motions. Int’l Union, United Mine Workers of Am. v. Racho Trucking Co., 897 F.2d 1248, 1252 & n.2 (3d Cir. 1990). Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56. Facts are “material” when they could affect the outcome of the proceeding, and a dispute about a material fact is genuine if the evidence is sufficient to permit a reasonable jury to return a verdict for the nonmoving party. In conducting our inquiry, we consider the evidence in the light most favorable to the nonmovant and draw all reasonable inferences in that party‟s favor. 5 Roth v. Norfalco LLC, --- F.3d ----, 2011 WL 2547576 at  (3d Cir. 2011) (internal quotation marks and citations omitted). Appellants argue that the District Court erred when it concluded that GLP “unambiguously consist[s] of all compensation from whatever source,” but “without examining undisputed extrinsic evidence” of various kinds – here including affidavits of officials associated with the parties, which, according to Appellants, suggests that the parties did not construe GLP to meal “all wages and other compensation.” Appellants‟ Br. at 2. We decline to decide whether Appellants‟ construction of GLP can or should prevail, but given the standard that applies to summary judgment, agree that the Court‟s decision must be vacated. See, e.g., Einhorn v. Fleming Foods of Pennsylvania, Inc., 258 F.3d 192, 197 (3d Cir. 2001) (remanding because disputed terms‟ ambiguity created “a genuine issue of material fact that preclude[d] entry of summary judgment for either side.”). “[F]ederal law governs the construction of collective bargaining agreements, [and] traditional rules of contract interpretation apply when not inconsistent with federal labor law.” Teamsters Indus. Emp. Welfare Fund, et al., v. Rolls-Royce Motor Cars, Inc., 989 F.2d 132, 135 (3d Cir. 1993). Whether contract terms are ambiguous is a pure question of law, subject to plenary review. Id. Thus, “[t]o affirm a grant of summary judgment on an issue of contract interpretation, we must conclude that the contractual language is subject to only one reasonable interpretation.” Sanford Inv. Co. v. Ahlstrom Mach. Holdings, 6 Inc., 198 F.3d 415, 420-21 (3d Cir. 1999) (quotation omitted). If we “determine[] that a given term in a contract is ambiguous, then the interpretation of that term is a question of fact for the trier of fact to resolve in light of the extrinsic evidence offered by the parties in support of their respective interpretations.” Id. at 421. Rolls-Royce provides that, in deciding whether a CBA is ambiguous, we hear the proffer of the parties and determine if there are objective indicia that, from the linguistic reference point of the parties, the terms of the contract are susceptible of different meanings. Before making a finding concerning the existence or absence of ambiguity, we consider the contract language, the meanings suggested by counsel, and the extrinsic evidence offered in support of each interpretation. Extrinsic evidence may include the structure of the contract, the bargaining history, and the conduct of the parties that reflects their understanding of the contract’s meaning. 989 F.2d at 135 (emphasis added; internal brackets, quotation marks, and citations omitted). As a threshold matter, the District Court did not apply Rolls-Royce‟s directive that it consider extrinsic evidence in determining whether the disputed contract term – here, GLP, as used in the CBA – is ambiguous. Rather, it simply concluded that Appellants‟ proffered evidence of the parties‟ course of dealing “is barred.” JA at 9. In doing so, it relied on the caution in one of our cases that “[t]here are … limits on the use of extrinsic evidence in interpreting collective bargaining agreements.” Int’l Union, United Auto., Aerospace & Agric. Implement Workers of America v. Skinner Engine Co., 188 F.3d 130, 146 (3d Cir. 1999). While that observation is salutary, it does not trump Rolls-Royce‟s rule, which Skinner expressly cites. See id. at 145. Moreover, Skinner rejects using 7 extrinsic evidence “to create an ambiguity where none exists.” Id. (emphasis added). Because, here, the CBA does not itself define GLP, Appellants‟ argument that the Court should have considered its proffered extrinsic evidence does not run afoul of Skinner, and comports with Rolls-Royce.3 Likewise, Appellees‟ contention that GLP‟s meaning is facially self-evident is unpersuasive,4 while their subsequent claim that the Trust Agreement “is of no relevance to the meaning of other terms in the … CBA,” Appellees‟ Br. at 19, curiously attacks the very basis for the Court‟s decision in their favor.5 That the Trust Agreement has a special status for the parties is clear, but what the Appellees‟ own argument on appeal also makes clear is that the extent to which that Agreement‟s definition of GLP carries over to the CBA is disputed. Moreover, to look to the Trust Agreement to supply a definition for GLP, as the District Court did, is to rely on extrinsic evidence, further undercutting the claim that that phrase, as used in the CBA, is unambiguous. Indeed, with respect to at least one fund, the Court noted that more than 3 Even if there were tension between Rolls-Royce (1993) and Skinner (1999), it would be resolved in favor of Rolls-Royce. Holland v. N.J. Dep’t of Corrs., 246 F.3d 267, 278 n.8 (3d Cir. 2001) (“[T]o the extent that [a case within this Circuit] is read to be inconsistent with earlier case law, the earlier case law . . . controls.”) (citation omitted). 4 Appellees‟ argument is striking: “The only reason the NEBF Trust Agreement had any bearing on the „meaning‟ of gross labor payroll is because the … Agreement uses a meaning that would not be evident to anyone reading the plain, simple and unambiguous words „gross labor payroll.‟” Appellees‟ Br. at 20-21 (emphasis added). 5 Appellees‟ reliance on a 1990 NEBF executive‟s memorandum clarifying the meaning of GLP, see Appellees‟ Br. at 17-18, contradicts their assertions (1) that the term is unambiguous, and (2) that its meaning can be determined without reference to materials extrinsic to the CBA itself. See also id. at 19-20 (asserting as error the District Court‟s conclusion that the CBA utilizes the Trust Agreement‟s definition for GLP for purposes of setting the contribution amounts to various benefit funds). 8 three-quarters of employers made contributions according to one qualified rendering of GLP, which “means that 22% … did something else. It is extremely unclear what all this means . . . .” JA at 9. To be sure, Appellants‟ emphasis on the CBA‟s qualifications of GLP does not convince us that their proposed definition is unambiguously correct. But the sum total of the vagaries that they highlight, especially given Rolls-Royce‟s requirement and the fact that all reasonable inferences are drawn in Appellants‟ favor, precludes awarding summary judgment in favor of Appellees. Contracts are construed as a whole, and the CBA uses too many terms, sometimes overlapping and other times not, for us to conclude that the critical term “gross labor payroll” is unambiguous such as to permit summary judgment.6 See RCI Northeast Svcs. Div. v. Boston Edison Co., 822 F.2d 199, 202 (1st Cir. 1987) (“[W]here the plain meaning of a contract phrase does not spring unambiguously from the page or from the context, its proper direction becomes one for the factfinder, who must ferret out the intent of the parties.”).