Raymond Orrand v. Scassa Asphalt, Inc.
794 F.3d 556
6th Cir.2015Background
- Funds sued Scassa Asphalt for delinquent fringe benefit contributions under LMRA §185(a) and ERISA §§1132(a)(3),1145.
- Scassa signed a short-form Agreement (Feb 6, 2009) recognizing the Union as exclusive bargaining agent and agreeing to the 2007–2010 Ohio Highway Heavy Agreement terms.
- Scassa also signed a 2000 Hour Commitment Letter (Feb 2009) to contribute 2000 hours annually for Nick Scassa.
- The CBA and short-form Agreement contain evergreen clauses keeping them in force unless timely written termination.
- Audits (Oct 24, 2013) showed unpaid hours totaling substantial delinquencies; district court entered summary judgment for the Funds.
- Court affirmed, holding the agreements remained in force and the 2000 Hour Commitment Letter enforceable under ERISA §515.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| termination defense effectiveness | Orrand argues unions’ conduct irrelevant; written agreements govern. | Scassa asserts the Feb 10, 2010 notice terminated the short-form and CBA. | No termination; evergreen clauses kept contracts in force. |
| enforceability of the 2000 Hour Letter | Behnke/Gerber enforce the letter as part of the written deal. | Lack of consideration and termination gaps undermine enforceability. | Letter enforceable; damages based on 2000 hours admissible. |
| public policy exception for small family business | ERISA §515 collection defenses should not be shielded by contract defenses. | Policy exception should apply to small family business only. | No exception; policy concerns do not negate §515 enforcement. |
| audit findings and calculation | Audit properly computed delinquent hours as per the agreements. | Audit overstates hours by assuming the Letter was in force. | Audits uphold; contract remained in force; calculations sustained. |
Key Cases Cited
- Behnke, Inc. v. Behnke, 883 F.2d 454 (6th Cir. 1989) ( ERISA §515 preempts contract defenses; funds may enforce written agreements)
- New Bakery Co. of Ohio, 133 F.3d 955 (6th Cir. 1998) (funds entitled to enforce writing regardless of party understandings)
- Gerber Truck Serv., Inc. v. Cent. States, Se. & Sw. Areas Pension Fund, 870 F.2d 1148 (7th Cir. 1989) (funds rely on written commitments; union conduct defenses limited)
- Robbins v. Lynch, 836 F.2d 330 (7th Cir. 1988) ( Congress enacted §515 to restrain union conduct defenses)