CBA
Can Create Liability for Contribution
Iron Workers' Local No. 25 Pension Fund v. MCS General Contractors, Inc., 2000 U.S. App. LEXIS 22688 (5th Cir. Aug. 30, 2000) (unpublished)-The CBA required defendants to make contributions to the funds for "each employee covered by [the] Agreement." Plaintiffs asserted that the CBA required defendants to contribute for all covered work including covered work that pre-apprentices performed. Defendants interpreted the relevant provisions as requiring them to make contributions only for covered work that journeymen, apprentices, and probationary apprentices performed--thereby excluding covered work that pre-apprentices performed.
The District Court concluded that the CBA required defendants to make contributions for all covered work including work the pre-apprentices performed. The Court determined that defendants owed $ 372,234.47 in unpaid contributions.
After the entry of that judgment, the court entered judgment for the plaintiffs for a total of $ 217,219.17--$ 89,936.62 for interest on unpaid contributions, $ 76,671.30 for additional interest in lieu of liquidated damages, $ 45.653.50 for attorneys' fees, and $ 4,957.75 for filing and audit fees.
The district court ruled that defendants must contribute for all erection work on pre-engineered buildings by whomever it was done, whether union or nonunion. It did so because the CBA determined contributions based on the type of work performed not on who preformed the work.
Defendants argued that the district court erred in construing the CBA to require defendants to make pension fund contributions for covered work performed by pre-apprentices since the court found them liable without reviewing the plan documents.
The district court determined that the defendants owed contributions for pre-apprentices’ work based entirely upon the CBA with no mention of the plan documents or whether the pre-apprentices were participants under the plan. It appeared to the Fifth Circuit that the district court did not possess the plan documents. Defendants argued that before the court could rule that the CBA entitled the funds to contributions, it must determine whether the employees were entitled to benefits under the plan.
The Court disagreed since 29 U.S.C. § 1145 said that an employer's obligation might arise under a plan or a collective bargaining agreement.
Defendants attacked the district court's judgment awarding plaintiffs interest on unpaid contributions, additional interest in lieu of liquidated damages, and attorneys' fees pursuant to 29 U.S.C. § 1132(g)(2). As to the interest on the unpaid contributions, Defendants argued the CBA provided for an interest rate.
The magistrate stated the plan did not contain an interest rate provision. Thus the magistrate applied the rate in 26 U.S.C. § 6621. Defendants' assertion that the provision of the CBA controlled was incorrect. 29 U.S.C. § 1132(g)(2) requires that the court apply the rate prescribed in 26 U.S.C. § 6621 when the plan does not provide for a rate for determining interest to be charged on unpaid contributions. What the CBA or any other document provides is irrelevant in this case.
The Fifth Circuit determined that the district court correctly followed 29 U.S.C. § 1132(g)(2) in awarding additional interest in lieu of liquidated damages and attorneys’ fees.
