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Laborers Health and Welfare Trust Fund for Northern California Laborers Vacation-Holiday Trust Fund for Northern California Laborers Pension Trust Fund for Northern California Laborers Training and Retraining Trust Fund for Northern California v. Westlake Development, a Corporation First Doe Second Doe Third Doe Black Corporation White Corporation Blue Co. And Grey Company, a Corporation, Westlake Development Company, Inc., Petitioner-Counter-Respondent-Appellee v. Local 389 Laborers Union Northern California District Council of Laborers, Respondents-Counter-Petitioners-Appellants

Citations: 53 F.3d 979; 19 Employee Benefits Cas. (BNA) 1351; 95 Cal. Daily Op. Serv. 3014; 95 Daily Journal DAR 5263; 149 L.R.R.M. (BNA) 2138; 1995 U.S. App. LEXIS 9422Docket: 93-16584

Court: Court of Appeals for the First Circuit; April 25, 1995; Federal Appellate Court

Narrative Opinion Summary

This case involved trust funds representing employee benefit interests and a developer employer in a dispute over delinquent pension contributions allegedly owed under a pre-hire collective bargaining agreement (CBA) governed by the Labor Management Relations Act (LMRA) and the Employee Retirement Income Security Act (ERISA). The trust funds initiated litigation to recover unpaid contributions, but the employer asserted that it was exempt from the CBA due to the 'one-employee unit rule,' having employed only a single laborer during the relevant period. The district court granted summary judgment for the employer, finding its repudiation of the CBA valid and holding that no further contributions were required. In a parallel proceeding initiated by the union, an arbitration award in favor of the union was vacated by the district court on the grounds that the CBA was no longer binding following lawful repudiation. The appellate court conducted de novo review, affirming that under established precedent, an employer with only one employee in the bargaining unit may unilaterally repudiate a pre-hire agreement, thereby extinguishing any contractual or statutory basis for further contributions or arbitration. The court distinguished this situation from other ERISA cases, emphasizing that the CBA was void rather than voidable, and rejected all remaining arguments on appeal. The summary judgment and the order vacating the arbitration award were affirmed.

Legal Issues Addressed

Application of NLRB Policy Against Certifying Single-Person Bargaining Units

Application: The court reaffirmed that the NLRB will not certify single-person bargaining units, supporting the employer's right to repudiate the CBA when only one employee remains in the unit.

Reasoning: The National Labor Relations Board (NLRB) maintains a policy against certifying single-person bargaining units, meaning it will not direct an employer to bargain with such units.

Distinction Between Void and Voidable Collective Bargaining Agreements in ERISA Actions

Application: The court distinguished that a lawfully repudiated CBA under the one-employee unit rule is void rather than voidable, precluding actions by trust funds to collect delinquent contributions under ERISA.

Reasoning: However, in this case, the court concluded that Westlake's repudiation was lawful, rendering the CBA void rather than voidable, as it involved a one-employee unit scenario not addressed in *Bla-Delco*. Consequently, without a binding CBA, Westlake had no obligation to contribute to the Trust Funds.

Jurisdiction and Enforceability of Arbitration Awards Following Repudiation

Application: The court found that once the collective bargaining agreement was lawfully repudiated under the one-employee unit rule, the contractual basis for arbitration was extinguished, and thus, the arbitration award was vacated.

Reasoning: The district court found Westlake's repudiation of the CBA valid, vacating the arbitration award on the grounds that it removed the contractual basis for arbitration and the arbitration panel lacked jurisdiction.

Repudiation of Pre-Hire Collective Bargaining Agreements under the One-Employee Unit Rule

Application: The court upheld that an employer who becomes a 'one-employee employer' may lawfully repudiate a pre-hire collective bargaining agreement, terminating obligations for fringe benefit contributions.

Reasoning: Evidence from the Trust Funds' audit indicates that Westlake operated as a "one-employee employer" during the relevant period. Westlake issued a letter on September 24, 1990, providing actual notice of repudiation, leading the district court to correctly determine that this repudiation of the pre-hire agreement was lawful.

Standard of Review for Summary Judgment in LMRA/ERISA Disputes

Application: The appellate court conducted a de novo review of the summary judgment, focusing on the existence of genuine issues of material fact and the correct application of relevant law.

Reasoning: The standard of review for summary judgment is de novo, focusing on whether any genuine issues of material fact exist and if the district court applied the relevant law correctly.