Court Opinion

ID: 2997508
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:36:59.733936+00
Date Added: 2024-06-11T15:02:49.770195
License: Public Domain

In the
 United States Court of Appeals
               For the Seventh Circuit
                          ____________

No. 04-2591
TRUSTEES OF THE CHICAGO PAINTERS AND
DECORATORS PENSION, HEALTH AND WELFARE, AND
DEFERRED SAVINGS PLAN TRUST FUNDS,
                                               Plaintiff-Appellant,
                                 v.

LACOSTA, INCORPORATED,
                                              Defendant-Appellee.
                          ____________
            Appeal from the United States District Court
       for the Northern District of Illinois, Eastern Division.
         No. 01 C 4952—Samuel Der-Yeghiayan, Judge.
                          ____________
ARGUED NOVEMBER 29, 2004—DECIDED FEBRUARY 10, 2005
                  ____________

 Before KANNE, EVANS, and SYKES, Circuit Judges.
  KANNE, Circuit Judge. The President and sole share-
holder of LaCosta, Inc. completed and signed a one-page
free membership application from the Chicago Painting and
Decorating Contractors Association (“Chicago PDCA”). The
membership offer indicated that applicants agreed to abide
by the constitution and bylaws of the Chicago PDCA, which
appoint that organization as the bargaining representative
of its active members and bind them to the collective
bargaining agreement (“CBA”) between the Chicago PDCA
and District Council 14. The terms of the CBA require
Chicago PDCA members to contribute to the Chicago
2                                              No. 04-2591

Painters and Decorators Pension, Health and Welfare, and
Deferred Savings Plan Trust Funds (“Funds”). The Trustees
of these Funds filed an action to collect contributions from
LaCosta, which did not pay any money into the Funds after
submitting the membership application. Because we find
that LaCosta did not demonstrate an unequivocal intent to
be bound by the District Council 14 CBA, we affirm the
district court’s grant of summary judgment for LaCosta.

                       I. History
   Karla Mota Johnson is the President and sole shareholder
of LaCosta, an Illinois corporation that provides painting,
janitorial, and supplemental labor services to businesses in
Illinois and several other states. LaCosta has belonged to
the National Painting and Decorating Contractors of
America (“National PDCA”) since 1981 and the Illinois
PDCA, a council of the National PDCA, since 1997. Neither
of these trade associations requires its members to be
parties to a CBA with a designated union. Nevertheless,
LaCosta entered a CBA with the Craftsman International
Union in December 2000. Prior to that time, LaCosta was
a non-union corporation. LaCosta provides its own health
insurance program and 401(k) plan to its employees.
  On January 3, 2001, Johnson signed a form from the
Chicago PDCA titled “Free Membership Application.” The
form had been placed on her desk for signature along
with some other papers. Although Johnson does not re-
member seeing or signing the application, her assistant
recalls that another LaCosta employee had expressed
interest in receiving a magazine distributed by the Chi-
cago PDCA.
  The Chicago PDCA, a non-party to this proceeding, is a
trade association of painting and decorating contractors
in the Chicago area. Like the Illinois PDCA, it is a council
of the National PDCA. Unlike the Illinois PDCA, however,
No. 04-2591                                               3

it is totally “unionized”; according to its constitution
and bylaws, each active member appoints the Chicago
PDCA as its agent for collective bargaining purposes. The
union with which the Chicago PDCA has entered a CBA
is District Council 14. The District Council 14 CBA requires
active Chicago PDCA members to pay certain wages to its
employees and to contribute to the Funds. Three members
of the Chicago PDCA board of directors and three members
of District Council 14 act as Trustees of the Funds.
  The Chicago PDCA free membership offer has been
extended to existing Chicago PDCA members and signato-
ries to the District Council 14 CBA each year since 1997. It
was not sent to contractors such as LaCosta, which
have neither an existing Chicago PDCA membership nor a
relationship with District Council 14, so it is unclear
how the form came to be placed on Johnson’s desk.
  Just above the signature line—on which Johnson
signed—is the statement: “I have read, understand, and
agree to abide by the Constitution and By-Laws of the
Chicago Council/PDCA and the Current Labor Management
Agreement between Painter’s District Council No. 14 and
PDCA (copies available on request).” LaCosta
never received or requested a copy of the Chicago
PDCA’s constitution or bylaws. A flier accompanying the
free membership application stated that any “Union Painter
Contractor Company that is in good standing with the
Industry Advancement Fund” was eligible to receive a free
membership for the year 2001.
  The signed free membership application was faxed to the
Chicago PDCA on January 17, 2001. At its February 14,
2001, meeting, the Chicago PDCA board of directors con-
sidered LaCosta’s application but did not take action
because of a lack of information regarding LaCosta’s
contribution history to the Funds. Following the meeting,
the Executive Director of the Chicago PDCA learned that
4                                               No. 04-2591

LaCosta had no history of contributions to the Funds. After
a conversation with the Chicago PDCA President (who is
also one of the Trustees), the Executive Director signed
LaCosta’s membership application indicating that LaCosta
was approved for membership on February 20, 2001.
  The Chicago PDCA then began to send correspondence
and make calls to LaCosta regarding membership in the
association and the implications thereof, including
LaCosta’s obligation to contribute to the Funds. During
the week of March 5, 2001, LaCosta’s Chief Financial
Officer expressed confusion to the Chicago PDCA, saying
that he did not understand how LaCosta came to be a
District Council 14 union contractor and that LaCosta
did not wish to become such a contractor. LaCosta did
not pay its employees according to the District Council
14 CBA wage scale, nor did it ever contribute to the
Funds. None of its employees ever submitted claims to the
Funds.
  In June of 2001, the Trustees filed this action seeking the
contributions they believe are due as a result of LaCosta’s
membership in the Chicago PDCA. Finding that LaCosta
was not bound to the District Council 14 CBA by express
delegation or by conduct manifesting an unequivocal intent
to be bound, the district court granted summary judgment
for LaCosta. The Trustees appeal.
No. 04-2591                                                5

                       II. Analysis
  We review a district court’s grant of summary judgment
de novo. Penn v. Harris, 296 F.3d 573, 575 (7th Cir. 2002).
We must construe all facts and draw all reasonable infer-
ences in favor of the Trustees, the party against whom the
motion under consideration was made. See id. Summary
judgment is proper when there is no genuine issue of
material fact and the moving party is entitled to judgment
as a matter of law. Fed. R. Civ. P. 56(c).

  A. “Express” Delegation of Collective Bargaining Author-
     ity
  The Trustees argue that Johnson’s signature on the
Chicago PDCA membership application form indicates her
agreement to abide by the Chicago PDCA constitution
and bylaws and is an “express” delegation of collective
bargaining authority to the Chicago PDCA, binding
LaCosta to the CBA. In some cases, a signature on a
trade association’s membership application expressly
delegates collective bargaining power and binds the appli-
cant to a CBA. See Int’l Union of Operating Eng’rs, Local
150 v. G. Bliudzius Contractors, Inc., 730 F.2d 1093, 1097-
98 (7th Cir. 1984). However, such a signature is not
dispositive, because the well-established test for whether a
member of a multi-employer association is bound by
the association’s CBA is whether the member has shown an
unequivocal intention to be bound by group collec-
tive bargaining. See, e.g., Moriarty v. Pepper, 256 F.3d 554,
557 (7th Cir. 2001); Moriarty v. Glueckert Funeral Home,
Ltd., 155 F.3d 859, 865 (7th Cir. 1998); Trs. of the UIU
Health & Welfare Fund v. N.Y. Flame Proofing Co., 828
F.2d 79, 83 (2d Cir. 1987). In this case, we agree with the
district court that Johnson’s signature did not convey an
unequivocal intent to delegate collective bargaining author-
ity to the Chicago PDCA.
6                                               No. 04-2591

  First, the application form does not contain sufficient
information to show LaCosta’s unequivocal intent to be
bound to the District Council 14 CBA. It includes no
language suggesting the union implications of joining
the Chicago PDCA, but rather emphasizes the no-cost,
limited-time nature of the offer and the benefits of member-
ship, from magazine subscriptions to social events
and technical assistance.
  As noted above, the constitution and bylaws are refer-
enced on the application and “available on request,” but
were not provided with it. When sending an application
to non-union contractors, whose obligations would be
changed by membership, the Chicago PDCA generally
includes a cover letter clearly explaining that “[b]y becom-
ing a Member, you automatically become bound by the
[Labor Management Agreements with Painters District
Council No. 14].” (R. 40 at 40-41.) LaCosta obtained the free
membership application outside of normal channels and
thus was not provided with such a cover letter.
  This is a far cry from the application at issue in
Bliudzius, which clearly stated on both the front and
reverse sides that the employer was delegating its collective
bargaining rights to the association. 730 F.2d at 1095.
Although it was not informed of the exact CBAs in effect,
the employer in Bliudzius was bound by them because it
had clearly assigned away its collective bargaining rights to
the association. Id. at 1097.
  As we noted in Pepper, the “assignment and delegation”
language is critical. See 256 F.3d at 558. The application
form in that case, like this one, did not specifically state
that the applicant agreed to delegate and assign his
collective bargaining rights and was deemed insufficient
to show the employer’s express intent to be bound by
the trade association’s CBA. See id.
  The Chicago PDCA free membership application is also
problematic in that it does not specify the type of member-
No. 04-2591                                                 7

ship for which the applicant is applying. The Chicago PDCA
Constitution and Bylaws provide for several classes of
membership, but only “Active” members are obligated
to contribute to the Funds as mandated by the District
Council 14 CBA. Active members are bound by the CBA,
while Honorary and Associate members receive the
other benefits of Chicago PDCA without being bound by the
association’s collective bargaining activities. (R. 26 Ex. 7.)
  The Trustees argue that a reading of the Chicago PDCA
Constitution and Bylaws would obviate this confusion,
because painting and decorating contractors currently in
business are only eligible for Active membership. This rule
is not explicitly stated, however, and the ambiguity is
more evidence that the signature on the application form
shows less than an unequivocal intent to be bound.
  As the district court noted, the way in which LaCosta
became “bound” to the District Council 14 CBA “borders
on deception.” Trs. of the Chi. Painters & Decorators
Pension, Health, & Welfare & Deferred Sav. Plan Trust
Funds v. LaCosta, Inc., No. 01 C 4952, 2004 WL 1243935,
at *3 (N.D. Ill. June 2, 2004). While the ultimate question
in determining whether LaCosta expressly assigned
away its collective bargaining rights is whether it demon-
strated an unequivocal intent to be bound, agency prin-
ciples play into this analysis. See Glueckert, 155 F.3d
at 865-66.
  The Trustees urge that any deceptive conduct on the part
of the Chicago PDCA is irrelevant to this case, because the
association was acting with apparent authority to bind
LaCosta to the CBA. “[A]pparent authority to do an act is
created as to a third person by written or spoken words or
any other conduct of the principal which, reasonably
interpreted, causes the third person to believe that the
principal consents to have the act done on his behalf by the
person purporting to act for him.” Id. at 866 (quoting
Restatement (Second) of Agency § 27).
8                                                No. 04-2591

  It is doubtful that Johnson’s signature on the applica-
tion form could be reasonably interpreted by the Trustees as
assigning away LaCosta’s collective bargaining rights.
When LaCosta’s application was received, it sparked
discussions at the Chicago PDCA because it was “unusual
that an application would come from a contractor not
known to be associated with [District Council 14].” (R. 40 at
p. 45.) Half of the Trustees of the Funds (there are
six Trustees in total) also serve on the Board of the Chicago
PDCA. One overlapping member, the President of the
PDCA, gave the Executive Director permission to approve
LaCosta’s membership despite its lack of past contributions
to the Funds. In light of this, and the deficiencies in the
application, we find that the membership application
submitted by LaCosta did not expressly assign its collective
bargaining rights to the Chicago PDCA.

    B. Conduct Showing Intent To Be Bound by CBA
  Having found that Johnson’s signature is not sufficient to
bind LaCosta to the CBA, we analyze the factors set forth
in Glueckert to determine whether LaCosta’s other conduct
manifested an unequivocal intent to be bound to the
District Council 14 CBA. The record is clear that none of
these factors weigh in favor of the Trustees.
  First, if negotiating a CBA is the principal or sole activity
in which an organization engages, or if the organization has
a long-standing and universally known custom of binding
its members to its CBAs, joining the organization might
show an unequivocal intent to be bound by the CBA. See
Glueckert, 155 F.3d at 866-67. The Trustees point out that
the Chicago PDCA has a seventy-year history of binding all
active members to the CBA. Still, as its flier advertises,
there are many other activities, both social and profes-
sional, in which it is involved. Also, it is not universal for
councils of the National PDCA to be unionized. For exam-
No. 04-2591                                               9

ple, the Illinois PDCA, with which LaCosta was familiar, is
a non-unionized council.
  Courts have also considered whether the individual
employer participated in or closely monitored the collective
bargaining process. Id. at 867. LaCosta had nothing to
do with the CBA between the Chicago PDCA and District
Council 14. Indeed, it had entered its own CBA with an
entirely different union just a month before Johnson signed
the free membership application.
   Finally, an employer’s intent to be bound can be estab-
lished if it adheres to the terms of the CBA. Id. LaCosta
in no way adhered to the District Council 14 CBA. It did not
contribute to the Funds, it did not pay its employees
according to the CBA wage scale, and its employees submit-
ted no claims to the Funds. During the week of March 5,
2001, just weeks after LaCosta was approved for Chicago
PDCA membership, its CFO expressed confusion to the
Chicago PDCA about why it was talking to him about
District Council 14.

                    III. Conclusion
  LaCosta never displayed an unequivocal intent to be
bound to the CBA between District Council 14 and the
Chicago PDCA through an express assignment of collec-
tive bargaining rights or through other conduct. “A mem-
bership by an employer in an association with resulting
consequences to be bound by a collective bargaining agree-
ment should be based upon mutual trust and a
clear understanding of the rights and obligations of all
the parties and not be based upon vagueness, confusion,
or trickery.” LaCosta, 2004 WL 1243935, at *5. The dis-
trict court’s grant of summary judgment for LaCosta is
AFFIRMED.

A true Copy:
10                                       No. 04-2591

     Teste:

                   ________________________________
                   Clerk of the United States Court of
                     Appeals for the Seventh Circuit

              USCA-02-C-0072—2-10-05