Fifth Circuit Court Cases - Case Law and Opinions from the 5th Circuit Federal Court - Court of Appeals

	ROMINGER LEGAL
		Fifth Circuit Court of Appeals Opinions - 5th Circuit
					Need Legal Help?
					Need Legal Help?
LEGAL RESEARCH CENTER
LEGAL RESEARCH CENTER			LEGAL HEADLINES - CASE LAW - LEGAL FORMS	NOT FINDING WHAT YOU NEED? -CLICK HERE

This opinion or court case is from the Fifth Circuit Court or Appeals. Search our site for more cases - CLICK HERE

LEGAL RESEARCH

COURT REPORTERS

PRIVATE INVESTIGATORS

PROCESS SERVERS

DOCUMENT RETRIEVERS

EXPERT WITNESSES

Find a Private Investigator

Find an Expert Witness

Find a Process Server

Case Law - save on Lexis / WestLaw.

Legal News - Legal Headlines

United States Court of Appeals,
Fifth Circuit.
No. 915519.
D.E.W., INC., PlaintiffAppellee,
v.
LOCAL 93, LABORERS' INTERNATIONAL UNION OF NORTH AMERICA, et al.,
DefendantsAppellants.
April 3, 1992.
Appeal from the United States District Court for the Western District of Texas.
Before WILLIAMS, DUHÉ, and EMILIO M. GARZA, Circuit Judges.
JERRE S. WILLIAMS, Circuit Judge:
Plaintiff/appellee, D.E.W., Inc. ("D.E.W."), a San Antonio general contractor in the
construction business, brought suit against the Southern Texas Laborers' District Council Health &
Welfare Trust Fund, the Laborers' National Pension Fund, and the Southern Texas Laborers' District
Council Training Program (the "Laborers' Funds" or "Funds"), multi-employer trust funds
administered by defendant American Benefit Plan Administrators, Inc. (Administrators), as well as
Local Union 93 and the Laborers' International Union of North America. D.E.W. sought a
declaratory judgment under 28 U.S.C. § 1337 as a federal question involving the application of the
Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (ERISA). The
judgment was sought as to liability under an adoption agreement. The parties agree that the employer
was required to make contributions to the Laborers' Funds for its union employees. D.E.W. asserts,
however, that it had no obligation under the agreement to contribute for its non-union employees.
The district court agreed with D.E.W. and granted a summary judgment motion, ruling that D.E.W.
was not legally obligated to make benefit contributions to the enumerated Funds for its non-union
laborers. In its final judgment, the district court also awarded D.E.W. its reasonable attorneys' fees,
costs, and interest.1 We reverse and grant summary judgment in favor of the Laborers' Funds.
1D.E.W. originally sought a declaratory judgment regarding its rights under two adoption
agreements in which it had entered: a September 24, 1984 agreement with the Texas Iron

I. FACTS AND PRIOR PROCEEDINGS
On September 27, 1984, D.E.W. entered into an adoption agreement2 with the Laborers'
Funds under which D.E.W. undertook to make contributions to the Funds3 based on each hour the
covered employees worked. D.E.W. made the contractually obligated contributions only on behalf
of its union employees to the Laborers' Funds. An audit was conducted of D.E.W.'s payroll records
by the Administrators as to its contributions to the adopted Funds. The audit resulted in the
Administrators making a demand on D.E.W. for $124,683.28 for contributions they concluded were
owed to the Laborers' Funds for D.E.W.'s non-union employees. D.E.W. disputed the demand,
claiming that it was no t required to contribute benefit payments to the Laborers' Funds for its
non-union employees.4 It brought this suit for a declaratory judgment to that effect. After the civil
action was filed, the Funds filed an amended answer and counterclaim asserting that, pursuant to the
Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq., and the
Labor Management Relations Act of 1947 (LMRA), 29 U.S.C. § 185 et seq., D.E.W. had breached
the agreements by D.E.W. to pay contributions to the Funds on behalf of all of its laborers. After
D.E.W. and the appellants submitted a joint pretrial order, including several stipulations, both parties
Workers Health, Benefit & Pension Funds and a September 27, 1984 agreement with the
Laborers' Funds. In making its determination, the district court noted the uniformity and
continuity created by similarly construing both adoption agreements. According to the court, the
Laborers' Funds' reading of the adoption agreement strained credulity in that D.E.W. would have
entered into "two diametrically opposed agreements within three days of each other on the same
subject matter." It may raise some doubt that the district court made such an assessment at the
outset since the two agreements are wholly different. Ultimately, although the district court's
decision was applicable to both agreements, D.E.W. reached a settlement with the Iron Workers.
2An adoption agreement is an agreement independent of a collective bargaining agreement
under which in this case the employer individually assumed and agreed to adopt the terms of
multi-employer union trust funds agreements and agreed to make contributions to the funds for
covered workers. An adoption agreement often references an underlying collective bargaining
agreement, as it did in this case, though it does not have to do so.
3The Funds had been established pursuant to the provisions of the Labor Management
Relations Act of 1947 ("LMRA"), 29 U.S.C. § 185 et seq., and the Employer Retirement Income
Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., and are administered by the trustees
of the Laborers' Funds.
4D.E.W. asserts that it has made contributions to an insurance benefit fund for its non-union
employees. The record does not reflect the nature or amount of any such contribution.

filed summary judgment motions. The district court granted D.E.W.'s motion, concluding that the
adoption agreement was unambiguous and a reading of the agreement compelled only one reasonable
construction--that the contributions to the Laborers' Funds were due only for union workers and that
the defendants take nothing on their counterclaim. The court subsequently entered a final judgment
awarding D.E.W. $32,169.29 as its reasonable attorneys' fees, plus costs, and interest.
II. DISCUSSION
On appeal, the Laborers' Funds raise one definitive issue: whether the district court erred in
granting summary judgment and entering final judgment in favor of D.E.W.? According to the Funds,
by entering into the adoption agreement D.E.W. agreed to adopt the terms of the MultiEmployer
Union Trust Fund Agreements and agreed to make contributions to the Laborers' Funds for its
employees, regardless of union affiliation.
We review a summary judgment de novo, applying the same standard as the district court.
NL Indus., Inc. v. GHR Energy Corp., 940 F.2d 957, 963 (5th Cir.1991), cert. denied, U.S.
, 112 S.Ct. 873, 116 L.Ed.2d 778 (1992). In reviewing a grant of summary judgment, this Court
must determine if there are any genuine issues of fact material to the resolution of the case in dispute,
and if not, whether under the undisputed facts the moving party is entitled to judgment as a matter
of law. Fed.R.Civ.P. 56. Bozé v. Branstetter, 912 F.2d 801, 804 (5th Cir.1990) (per curiam). A
mere scintilla of evidence is insufficient to avoid summary judgment. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 2512, 91 L.Ed.2d 202 (1986). We must view the evidence
and draw all inferences, however, in the light most favorable to the non-moving party.
The parties are in agreement that there is no genuine issue as to any material fact regarding
D.E.W.'s contractual obligations to make contributions to the Laborers' Funds. According to the
parties, the adoption agreement is unambiguous. Both parties contend that no genuine issue exists,
and both parties assert that the adoption agreement is unambiguous. Yet, the interpretations of the

contract by the parties result in diametrically opposed conclusions as to the obligation to contribute
for non-union laborers.
The Funds counterclaimed against D.E.W. under, inter alia, section 301(a) of LMRA, 29
U.S.C. § 185(a). United Paperworkers Int'l Union, AFLCIO, CLC v. Champion Int'l Corp., 908
F.2d 1252, 125556 (5th Cir.1990). Federal substantive law governs the interpretation and
enforcement of contracts under section 301(a). Textile Workers Union v. Lincoln Mills, 353 U.S.
448, 455, 77 S.Ct. 912, 917, 1 L.Ed.2d 972 (1957). In interpreting a labor contract, " "traditional
rules for contractual interpretation are applied as long as their application is consistent with federal
labor policies.' " United Paperworkers Int'l Union, 908 F.2d at 1256 (citations omitted).
The construction of the adoption agreement, and the interpretation of its language, is pivotal
in this case. The interpretation of this adoption agreement, as with any contract, is a question of law.
Id. The determination of whether a contract is ambiguous is also a question of law. Richland
Plantation Co. v. JustissMears Oil Co., 671 F.2d 154, 156 (5th Cir.1982). A contract is not
ambiguous merely because the parties disagree upon the correct interpretation or upon whether it is
reasonably open to just one interpretation. REO Indus., Inc. v. Natural Gas Pipeline Co. of America,
932 F.2d 447, 453 (5th Cir.1991) (footnotes omitted). The mere disagreement of the parties upon
the meanings of contract terms will not transform the issue of law into an issue of fact. General
Wholesale Beer Co. v. Theodore Hamm Co., 567 F.2d 311, 313 (5th Cir.1978). If the written
instrument is so worded that it can be given a certain or definite legal meaning or interpretation, then
it is not ambiguous, and this Court will construe the contract as a matter of law. Of course, if the
contract is ambiguous, summary judgment is deemed inappropriate because its interpretation becomes
a question of fact. Fireman's Fund Ins. Co. v. Murchison, 937 F.2d 204, 207 (5th Cir.1991).
Two sections of the adoption agreement, sections 1 and 3, control the critical inquiry in this
case: whether D.E.W. is obligated to make contributions on behalf of non-union member employees?

(1) Adopting of Trust Funds:
(a) Effective as of September 27, 1984, the undersigned Employer adopts the
Southern Texas Laborers' District Council Health & Welfare Trust Fund for all those
employees (the "employees"): (i) who are members of a participating Local Union of
the Laborers' International Union of North America, or (ii) who have their wage rate
and working conditions established by the collective bargaining agreement negotiated
by the Association and the Local Union which established this Fund; it agrees to
make contributions on behalf of its employees; and it agrees to be bound by all the
terms, provisions, limitations, and conditions of the Welfare Fund.
(b) Effective as of September 27, 1984, the undersigned Employer adopts the
Laborers' National Pension Fund for its employees; it agrees to make contributions
on behalf of its employees; and it agrees to be bound by all the terms, provisions,
limitations and conditions of the Pension Fund.
(c) Effective as of September 27, 1984, the undersigned Employer hereby adopts the
Southern Laborers' District Council Training Program for its employees; it agrees
to make contributions on behalf of its employees; and it agrees to be bound by all the
terms, provisions, limitations and conditions of said Training Program.
* * * * * *
(3) The undersigned Employer agrees to contribute to each: the Welfare Fund, the Pension
Fund and the Training Program, the contributions required by the then current collective
bargaining agreement which is in effect from time to time between L.I.U.N.A. Local 93 and
South Texas Contractors Association at the times and in the amounts set forth therein and in
accordance with the Trust Agreement establishing each of the Trust Funds as they may be
amended from time to time. The Employer further agrees that it is aware of the due dates
required for each of the contributions and further agrees that all past due payments shall be
subject to the liquidated damages, interest and to all costs of collections, including reasonable
attorney's fees, auditor's fees and costs of court as may be required under either the applicable
collective bargaining agreement or the Trust Agreement establishing the Trust Fund in
question.
The trial court considered the definition of the term "employees" under 1(a) within the
agreement and found two groups of covered employees within the definition: 1) employees who are
members of a participating Local Union of the Laborers' International Union of North America; and
2) employees who have their wage rate and working conditions established by the collective
bargaining agreement negotiated by the Association and Local Union which established the Fund.
Moreover, according to the court, because the parties stipulated that they never entered into a
collective bargaining agreement, category one constituted the only applicable group. The lynchpin
of D.E.W.'s and the district court's position is that section 1(a) controls the entire adoption agreement
and requires contributions only on behalf of union members.

Section (1), and particularly subsection (1)(a), cannot be the only pertinent part of the
adoption agreement when t he agreement must be considered as a whole. "Contracts are to be
construed in their entirety to give effect to the intent of the parties, considering each provision with
reference to the entire contract, so that every clause has some effect, and no clause is rendered
meaningless." REO Indus., 932 F.2d at 453 (footnotes omitted). The district court wholly failed to
analyze and apply the adoption agreement in its entirety. The district court never addressed the
remainder of the contract, in particular section 3. A court cannot disregard as surplusage the
succeeding provisions of a contract; it must give effect to all.
The adoption agreement is equally as clear that in section 3 it adopted the contribution
provisions of the collective bargaining agreement. The agreement itself provides for contributions
in the amount set out in Article XXV. Article XXV provides without any ambiguity that all
employees in the defined laborer classifications receive the benefits, including contributions to all of
the Funds. What is critical in these provisions of the bargaining agreement which the parties adopted
is that "union" and "non-union" are not even mentioned in the provision. There is no distinction made
in benefits or contributions between union and non-union employees. We have so held in a case
involving the same contribution provisions of this collective bargaining contract. Laborers' National
Pension Fund v. Jaydee Masonry Co., 931 F.2d 890 (5th Cir.1991) (table). This is an unpublished
per curiam opinion.
In essence, the district court relied entirely on the parties' stipulation that D.E.W. had never
signed nor authorized a bargaining agent to sign the collective bargaining agreement with the
defendants. But the stipulation can have no significance to this issue. An employer can in writing
obligate itself to follow portions of a collective bargaining agreement without signing the collective
bargaining agreement itself. D.E.W. did not need to have signed the collective bargaining agreement
to be bound by its terms because it clearly adopted them in the adoption agreement.

The adoption agreement signed by both part ies contains at its inception the following
statement: "WHEREAS, each of the Trust Agreements establishing the Welfare Fund, the Pension
Fund and the Training Program provides that other employers are not bound by a collective
bargaining agreement requiring contributions to the Trust fund may adopt the Trust Funds."
In oral argument D.E.W. placed great weight upon Walsh v. Schlecht, 429 U.S. 401, 97 S.Ct.
679, 50 L.Ed.2d 641 (1977) and Culinary Workers and Bartenders Union No. 596 Health and
Welfare Trust v. Gateway Cafe, Inc., 95 Wash.2d 791, 630 P.2d 1348 (Wash.1981), cert. denied sub
nom. Restaurant Employees, Bartenders & Hotel Service Employees Welfare and Pension Trusts v.
Gateway Cafe, Inc., 459 U.S. 839, 103 S.Ct. 87, 74 L.Ed.2d 81 (1982). These cases do not avail
the appellee. In urging Schlecht as authority, D.E.W. incorrectly stated as the Court's ruling an
argument that the Court posited but later rejected. Furthermore, the facts in that case are entirely
distinguishable. A collective bargaining agreement between a general contractor and the Oregon
State Council of Carpenters required that the general contractor pay contributions to certain trust
funds with respect to hours of carpentry work performed by employees of a non-signatory
subcontractor but not in their behalf. It was urged that such a provision violated § 302(a)(1) of the
Labor Management Relations Act. Contrary to D.E.W.'s analysis, the Supreme Court held that it did
not. In view of the adoption agreement in the case before us, D.E.W. has adopted as binding certain
provisions and is not in the legal status of a "non-signatory" employer as to those provisions.
D.E.W. also relied heavily on Gateway Cafe for the proposition that a trust fund cannot
collect contributions on behalf of employees from an employer whose employees were not union
members or who did not select the union as its bargaining representative. The case is not at all
apposite. The employer signed a collective bargaining agreement for its employees although they
were non-union and they had never expressed an interest in collective bargaining. The only
expression by the employees was an earlier vote rejecting collective bargaining. The collective
agreement set up the payments. Further, it also required all employees either to join the union or face

discharge. The court pro perly held that such contributions would violate federal law as
discriminatory.
This Court finds that the provisions in the adoption agreement concerning the collective
bargaining agreement make it clear that it is irrelevant that D.E.W. has not signed the full collective
agreement. D.E.W. has agreed because its adoption of the contribution provisions of the collective
bargaining agreement between Local 93 and the Association that it will pay for all laborers the
contributions as mandated by the collective bargaining agreement. Under the agreement,
contributions are not limited to those in behalf of union members only. Consequently, adoption of
the contribution pro visions in the collective bargaining agreement plainly contradicts D.E.W.'s
contention that it never incurred an obligation to contribute on behalf of non-union employees.
It might well be the conclusion at this stage of analysis that the contract is ambiguous because
of a conflict between the application of section 1(a) and section 3 of the agreement. The validity of
this conclusion is destroyed, however, by one strong and persuasive consideration. Except for the
rarest of circumstances, this adoption agreement if it limits contribution to union members only is in
violation of federal law. The illegality arises under section 8(a)(3), 29 U.S.C. § 158(a)(3), of the
Labor Management Relations Act, Title I, Sec. 101 (the National Labor Relations Act, as amended).
If the contribution plan is limited to union members only and no virtually identical benefits are
paid to non-union employees, membership in the union is encouraged. Since Texas is a right-to-work
state, advantageous benefits to union members violate the Texas statute as encouraging a union shop
which is forbidden by the state. Tex.Civ.St. art. 5207a(3) (West 1987). On the other hand, if there
is a separate benefit program for non-union employees which is more favorable to them, membership
in the union is discouraged in violation of the law.
Such a discriminatory provision as is present under the interpretation of Sec. 1(a) by the

district court is a violation of Sec. 8(a)(3) of the statute and in turn of Sec. 8(a)(1) prohibiting
coercive conduct. Within the test of the leading case, NLRB v. Great Dane Trailers, Inc., 388 U.S.
26, 34, 87 S.Ct. 1792, 1798, 18 L.Ed.2d 1027 (1967), it is " "inherently destructive' of important
employee rights." As the Third Circuit said in Byrnes v. DeBolt Transfer, Inc., 741 F.2d 620, 623
(3rd Cir.1984): "The absence of any distinction in the agreements between union and non-union
members can be easily explained: the law does not permit such a distinction."
It follows that the wording of section 1(a) may be inept but its purpose must be one of
inclusion of non-union employees rather than exclusion. The coverages definition was copied from
the definition of covered employees in the Health and Welfare Fund basic document itself. This
document, and its definition, on its face was written originally to cover employers who had signed
a collective agreement and had both union and non-union employees covered by bargaining.
Inclusion of non-union employees was necessary to make the provision lawful, and it was difficult to
define the employees included. The non-union employees had to be those, but only those, who were
counterparts of the union employees in their work. Actually, spelling it out in more detail, the
non-union employees had to be those who would be included in the same collective bargaining unit
as included the union employees if there had been a bargaining unit.
Yet, if this interpretation is unacceptable, it makes no difference. The provision otherwise is
illegal and we are still left with a contract that is unambiguous and requires employer contribution to
the funds for the non-union employees doing the same work in the laborer classification as union
employees.
As a final contention, D.E.W. asserts that the courts are not the proper forum to raise the
issue of legality because the NLRB should deal initially with unfair labor practice claims. Vaca v.
Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967). But Vaca v. Sipes merely held that an
employee bound by a collective agreement pro viding a grievance procedure must first invoke and

carry through the grievance procedure on behalf of that employee. The case before us does not
involve a grievance by employees nor is there an available grievance procedure.
D.E.W. omits the application of firmly established Supreme Court precedent. The Supreme
Court has concluded that "[t]he authority of the [National Labor Relations] Board to deal with an
unfair labor practice which also violates a collective bargaining contract is not displaced by § 301,
but it is not exclusive and does not destroy the jurisdiction of the courts in suits under § 301." Smith
v. Evening News Ass'n, 371 U.S. 195, 197, 83 S.Ct. 267, 269, 9 L.Ed.2d 246 (1962). See also
Atkinson v. Sinclair Refining Co., 370 U.S. 238, 82 S.Ct. 1318, 8 L.Ed.2d 462 (1962); Boys
Markets, Inc. v. Retail Clerk's Union, Local 770, 398 U.S. 235, 90 S.Ct. 1583, 26 L.Ed.2d 199
(1970); Arnold Co. v. Carpenters Dist. Council, 417 U.S. 12, 94 S.Ct. 2069, 40 L.Ed.2d 620
(1974); Gorman, Labor Law, Chap. 23, § 4, at 548 (1976). The district court properly exercised
jurisdiction over the Funds' § 301 action to recover contributions due. The suit clearly involved a
dispute "governed by the terms of the collective-bargaining agreement itself." Amalgamated Ass'n
of Street, Elec. Ry. & Motor Coach Employees of America v. Lockridge, 403 U.S. 274, 300301,
91 S.Ct. 1909, 1925, 29 L.Ed.2d 473 (1971).
We find that the adoption agreement on its face, in adopting the fund contributions provisions
of the collective bargaining agreement, makes no distinction between union employees and similarly
situated non-union employees. In any event, the law requires this result.
III. CONCLUSION
We hold that the adoption agreement unambiguously incorporates the health and welfare,
pension, and training contribution provisions of the applicable collective bargaining agreement. We
also hold that the provisions in the signed adoption agreement incorporating parts of the collective
bargaining agreement make irrelevant the fact that D.E.W. has not signed the collective agreement.
D.E.W. has agreed in writing in a signed adoption agreement that it will make contributions for all

laborer employees both union and non-union as provided in the collective bargaining agreement.
Indeed, the adoption agreement would violate federal labor law if it did not.
The district court erred in failing to apply the entire adoption agreement, including those
portions of the collective bargaining agreement made applicable in terms by Section 3 of the adoption
agreement. We reverse and grant summary judgment in favor of the appellants.
REVERSED.
SUMMARY JUDGMENT FOR APPELLANTS GRANTED.