Carpenters Health and Welfare v. Management Resource Systems In
2016 U.S. App. LEXIS 16722
| 3rd Cir. | 2016Background
- Plaintiffs are union‑sponsored benefit funds and plans that enforce employer contributions and audit rights under CBAs in the construction industry.
- MRS, a nonmember commercial contractor, signed a 1997 "me‑too" assent letter agreeing to be bound by the then‑operative IFCA‑union CBA and by "any addition, modification or renewal" until written termination.
- A later 2012–2015 CBA contained contribution and audit obligations; Plaintiffs allege MRS failed to comply and sought audit relief and collection of unpaid ERISA contributions.
- MRS moved to dismiss under Rule 12(b)(6), arguing (1) it never signed the 2012–2015 CBA and the 1997 letter does not bind it to successor CBAs, and (2) the NLRB’s Luterbach test precludes binding a nonmember employer absent additional acts.
- The district court dismissed the complaint for failure to state a claim; the Third Circuit reversed, holding the complaint plausibly alleged the evergreen me‑too letter bound MRS to the successor CBA and that Luterbach did not apply.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 1997 me‑too assent letter’s evergreen clause binds MRS to the 2012–2015 CBA | The letter’s language binding MRS to "any addition, modification or renewal" created continuing authority and thus binds successor CBAs absent written termination | The letter only bound MRS to the specific 1997–2001 CBA; Plaintiffs failed to plead that the 2012–2015 CBA is a modification/renewal | Held: Allegations plus attachments plausibly show the evergreen clause bound MRS to successor CBAs; dismissal reversed |
| Whether the complaint sufficiently pleaded a claim under Rule 12(b)(6) | Complaint and attached agreements gave fair notice that MRS was "otherwise bound" by CBAs via the me‑too letter | Complaint lacked explicit allegations that the 2012–2015 CBA fell within the letter’s scope; such specifics can’t be supplied in briefing | Held: Complaint, read with attachments, met notice and plausibility standards and survived dismissal |
| Whether the NLRB’s Luterbach test prevents binding a non‑signatory employer absent membership or a "distinct affirmative action" | Luterbach does not apply to cases where an employer has expressly granted continuing bargaining authority via an evergreen clause | Luterbach requires both preexisting membership in the multiemployer unit and a subsequent affirmative act to recommit; MRS fails that test | Held: Luterbach is inapplicable to evergreen/me‑too delegations of bargaining authority; it was wrongly applied by the district court |
| Remedy / Further proceedings (including personal liability of MRS’s VP Marion) | Plaintiffs sought audits, post‑audit collection under ERISA and LMRA, and injunctions; alleged Marion signed agreements so may be personally liable | MRS challenged liability and the sufficiency of pleadings | Held: Case remanded for further proceedings (including whether Marion is personally liable); only dismissal reversed at pleading stage |
Key Cases Cited
- W.D. George Constr. Co. v. Carpenters Local Union No. 345, 792 F.2d 64 (6th Cir. 1986) (enforced me‑too evergreen clause to bind employer to successor CBA)
- Local 257, Int’l Bhd. of Elec. Workers v. Grimm, 786 F.2d 342 (8th Cir. 1986) (evergreen me‑too clause creates continuous delegation binding employer to successor agreements)
- Jim McNeff, Inc. v. Todd, 461 U.S. 260 (1983) (voluntary execution of construction‑industry agreements must be honored)
- Sheet Metal Workers’ Int’l Ass’n Local 19 v. Herre Bros., Inc., 201 F.3d 231 (3d Cir. 1999) (distinguishing §8(f) and §9(a) relationships; discusses bargaining authority context)
- Constr. Teamsters Health & Welfare Tr. v. Con Form Constr. Corp., 657 F.2d 1101 (9th Cir. 1981) (me‑too signatory may be bound by future modifications, extensions, and renewals)