Court Opinion

ID: 9478848
Source: CourtListenerOpinion
Date Created: 2023-08-05 07:00:30.283272+00
Date Added: 2024-06-11T17:46:39.542286
License: Public Domain

CUDAHY, Circuit Judge,
with whom WOOD, Jr., Circuit Judge joins, concurring in part and dissenting in part:
The majority opinion is long on legal, economic and actuarial theory and short on facts and a sense of proportion. This case was originally heard by a unanimous panel that required Mr. Gerber to make contributions through the end of March 31, 1985, and to pay liquidated damages and attorneys’ fees (as reiterated in Part II of the majority en banc opinion), but confined the required contributions to those on behalf of the “Fat’s Three.” The panel, however, *1157required Gerber, in order to escape the broader liability now imposed by the en banc court, to prove to the district court that “no employee (other than the Fat’s Three) has a colorable potential claim to benefits from the [pension and welfare] Funds and that no employee has ever had a reasonable basis for believing himself entitled to make such a claim.” Only if Gerber could make such a difficult and demanding showing, would the panel relieve him of the broader obligations purportedly owed on behalf of the other employees pursuant to the written documents. I rely principally on the panel opinion, 854 F.2d 1074 (7th Cir.1988), as furnishing an alternative — and fairer — solution of this difficult problem. I note that the conditions imposed by the panel opinion are so rigorous and virtually impossible of fulfillment in the general case that it is hardly a precedent for the chicanery the majority purports to foresee.
This case is quite atypical, however. Gerber was a truck driver1 who acquired Fat’s trucking business as a sole proprietor and with it the Fat’s Three. Fat’s had been a party to the 1979-1982 National Freight Agreement, which, among other things, entitled the Fat’s Three, who were members of Teamsters’ Local 50, to employer-paid health and pension benefits administered by the plaintiff funds. Gerber had no intention of conducting a unionized operation but apparently generously sought to continue pension and health benefits for the Fat’s Three (two of whom were approaching retirement age). Gonzales, the union business agent, testified that neither party intended anything but benefits specifically for the Fat’s Three. There is no evidence in the record that anyone, including any Gerber employee, had any other understanding.
ERISA does not repeal basic contract law. What was intended and agreed to was not a collective bargaining agreement since it did not give the parties or any employees who knew about it any rights beyond the specific, limited benefits to the Fat’s Three. This, of course, does not mean that Gerber did not have problems with the Funds based on ERISA and the written documents which he ill-advisedly signed — on a sort of estoppel principle— but it is simply incorrect to say that the “contract” amounted to anything more than what both parties unequivocally intended and to what they testified. In this respect, this case is different than any other I have seen. Typically, in these cases, an employer signs a broad agreement (which is unarguably a “collective bargaining” agreement), the union hopes he will perform and the employer later cuts corners, with or without the union’s tacit consent. Here the intention of both union and employer was clear from the very start. The employer reinforced their understanding by securing health insurance for his other employees from another source. The implication of the majority that Gerber acted with sinister motives or possibly engaged in “strategic behavior” is preposterous. Gerber was a truck driver, unassisted by lawyers and accountants, who apparently sought nothing more sinister than to keep in force the pensions of three older employees who came to him from a failed firm. He may have erred in attempting to accomplish this by using the National Master Freight Agreement form, but the district court did not find, nor does the record disclose, that he was attempting to cheat or mislead anyone. And the majority opinion is totally off base in its charge that Gerber failed to “live up to his commitment.” In the view of the union and of Gerber’s employees, as well as of Gerber himself, his only commitment at any time was to the Fat’s Three.
The majority opinion fails to clarify one very puzzling aspect of the written documents. The majority notes the rather broad description of job categories covered by the Master Agreement (“all truckdri-vers, helpers, dockmen, warehousemen, checkers ... and such other employees as may be presently or hereafter represented by the Union”). It also notes the much *1158more limited description contained in the Participation Agreement (“DRIVERS represented by the Union”). The latter description was specifically intended to describe the Fat’s Three. And it literally does describe them since the union never purported to represent any other drivers. If the district court so finds on remand, the en banc rehearing may result in a nullity. In any event, this discrepancy in description, although patent on the face of the documents, was never noted or questioned by the Funds, whose reliance on documents we are told is so crucial.
I take no issue with the broad purposes of ERISA as described in the majority opinion nor in the need to achieve a match between the contributions to, and the liabilities of, pension and welfare funds. Judge Easterbrook’s excellent opinion in Robbins v. Lynch, 836 F.2d 330 (7th Cir.1988), was cited and quoted at length in the original panel opinion as an authoritative statement of general principles. But all rules must admit of equitable exception and modification in appropriate cases lest the tyranny of theory over reality bring about obnoxious results. Whatever asymmetries there may be in the funding of pension and welfare plans, it was likely that under the panel opinion, where Gerber had to make contributions plus liquidated damages through March 1985, the Plans were more than fully funded with respect to their liabilities for the Fat’s Three. To require contributions for all the other employees, who have no corresponding claim for any benefits, is to present the Funds with a fat windfall. Gerber bought health insurance for his other employees from another source which presumably has already covered their health needs. And these other employees can hardly claim pensions they knew neither Gerber nor the union intended to provide them.2
Of course, in 99% of the cases it is necessary to enforce the written pension or welfare contribution requirements in order to avoid backsliding by employers — possibly abetted by unions. But here is a case where a miniscule employer’s effort to help three superannuated truckdrivers has brought down on his head the full fury of a rule that knows no exceptions. A Gerber with his handful of trucks is no match for adversaries with platoons of accountants, actuaries and lawyers out to maximize his liabilities (in a good cause, no doubt). Yet, it sepms to me that the Gerbers of the world (as the majority refers to them), starting to build a business beginning with their own single truck, deserve some consideration in preserving a common-sense balance.
I respectfully dissent.

. Mr. Gerber testified that he had been an owner/operator with one truck since 1975. See Transcript at 43.

. In any event, there was no time in the short span covered in this case for any pension to vest.