Demopoulos v. United Metro Energy Corp.
24-1684
2d Cir.Mar 21, 2025Background
- United Metro Energy Corp. (“United”) acquired two heating oil companies in 2013, both with unionized employees of Local 553 and subject to multiemployer collective bargaining agreements (“CBAs”), specifically the "Master Contract" for retail delivery employees.
- United signed a separate "Bulk Contract" CBA for bulk deliveries, which did not require contributions to the benefit funds but did not sign the relevant Master Contracts for retail deliveries.
- Despite not signing, United paid Master Contract wages and benefits to some retail delivery employees and made required fund contributions until those employees’ job statuses changed.
- In 2017, after the retirement of a key employee, United signed a Memorandum of Agreement adopting the 2016–2019 Master Contract for five retail drivers.
- The Funds sued after United refused a full audit request for 2018; the District Court granted summary judgment and ordered United to comply with an audit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether United adopted the unsigned Master Contracts by conduct | United’s actions (making contributions, audits, reporting) demonstrate adoption of Master Contracts for covered employees | United did not intend to be bound by unsigned Master Contracts; only intended Bulk Contract to apply | United’s conduct indicated intent to adopt Master Contracts for covered work |
| Scope of audit relief and obligations under Trust Agreements | Audit rights are embedded in Master Contracts, which United adopted | United is not an "Employer" under the Trust Agreements, so not subject to audit requirements | United adopted Master Contracts (incorporating Trust Agreements), is subject to audit |
| Whether audit period ordered by District Court was overly broad | Authority exists for audit as ordered | Audit period not permissible; only Bulk Contract should apply for retail work during time | Audit order affirmed; United’s new argument not considered on appeal |
| Effect of testimony about United's intent to avoid Master Contract | Testimony shows United adopted, then breached contracts | Testimony supports that United tried to avoid obligations | Court found United adopted and breached the contracts despite any efforts to limit coverage |
Key Cases Cited
- Brown v. C. Volante Corp., 194 F.3d 351 (2d Cir. 1999) (employer can be bound by CBA through conduct, not just signature)
- Baskin v. Hawley, 807 F.2d 1120 (2d Cir. 1986) (factors for determining employer’s adoption of unsigned CBA)
- Moglia v. Geoghegan, 403 F.2d 110 (2d Cir. 1968) (lack of employer’s willingness to accept CBA terms; distinguished here)