On December 29th, the Sixth Circuit issued a 2-1 decision holding that an employer could be bound by a collective bargaining agreement (“CBA”) even if the employer did not sign the CBA or expressly authorize someone else to sign on the employers behalf. The Court explained that its holding is in line with Sixth Circuit decisions in previous cases such as Nat’l Leadburners Health & Welfare Fund v. O.G. Kelley & Co., as well as case law from the Fifth Circuit (NLRB v. Beckham, Inc.) and the Second Circuit (Trustees of U.I.U. Health & Welfare Fund v. N.Y. Flame Proofing Co.).
In Bd. of Trs. Local 392, et al. v. B&B Mech. Servs., five multi-employer fringe benefit funds (“the Funds”) of the Plumbers, Pipe Fitters, and Mechanical Equipment Service, Local Union 392 (“the Union”) brought suit against B&B Mechanical Services (“B&B”), an Ohio commercial plumbing contractor, for failure to pay required employer contributions. The Funds were seeking more than $130,000 in unpaid contributions from B&B that were required under the CBA with the Union between January of 2009 and December of 2010. B&B claimed that they had never signed the CBA and, therefore, were not bound by the requirements of it. B&B maintained that the contributions that the corporation had been making to the Funds from 2002 – 2008 and 2011 – 2012 were purely voluntary. The district court granted summary judgment in favor of B&B and the Union appealed.
Upon review, the Sixth Circuit determined that it was an uncontested fact that, at all times during the applicable period, B&B was both a member of the Mechanical Contractors Association (“MCA”), an organization that serves as the multi-employer bargaining representative in contract negotiations with the Union, and receiving funds from the Union’s Equality and Stabilization Program, a program that subsidized the cost of hiring union members under the CBA. This two factors helped drive the Sixth Circuit’s decision that, “during the ten years between 2002 and 2012, B&B conducted itself as if it were bound by the CBAs negotiated between MCA and the Union.” Despite the fact that B&B neither signed nor authorized MCA to sign the CBA, the Sixth Circuit determined that the corporation was still bound by the CBA because MCA represented all of its members when MCA negotiated the CBA with the Union. Additionally, the majority explained that the applicable section of the Taft-Hartley Act (29 U.S.C. § 186(c)(5)(B)) has been interpreted by the Sixth Circuit as imposing no requirement that a corporation independently sign the CBA in order to be bound by a written agreement to make contributions to a fund.
In dissent, Judge Gibbons criticized the majority’s resolution of these issues as a matter of law. Rather, she would have found factual issues concerning whether B&B was bound by the written documents in question: “it remains an open question whether B&B intended to be bound or was ever in fact bound to the CBA.”