The 7th Circuit Court of Appeals agreed with an Indiana federal court that a construction company that entered into a working agreement with a cement masons union had to contribute to two funds for all hours worked, not just bargaining unit work.
DLF Construction’s agreement with Local 692 of the Cement Masons Union bound DLF to all collective bargaining agreements between the union and various employer associations. Under the CBAs, DLF is required to make fringe benefit contributions to a pension fund and a health and welfare fund established by the union.
An audit of the funds revealed that DLF didn’t make contributions to the funds on behalf of a journeyman cement mason and member of the local union over the course of two years. DLF only contributed to the funds for cement-related work, not other work the union member performed for DLF, including painting and demolition. The audit report indicted DLF owed nearly $12,000 in fringe benefit contributions.
The District Court granted summary judgment in favor of the union funds.
DLF argued that under the Memorandum of Joint Working Agreement, it’s not contractually bound to make contributions for non-bargaining unit work, but DLF has misinterpreted the working agreement. It cited Section 2 in support, but that section binds DLF to the CBAs and establishes what type of employee is covered under the CBA. That section does not limit the CBAs coverage to employees only doing bargaining unit work, the appellate court held in Mark McCleskey, trustee, et al. v. DLF Construction Inc., an Indiana corporation, 11-1826.
There is no language in either the working agreement or CBAs that limits DLF’s obligations to make fringe benefit contributions, so the District Court was correct in finding DLF must pay into the funds for each hour worked by the union journeyman.