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Mackillop v. Lowe's Market Inc.

filed: July 11, 1995.

KEN MACKILLOP; KATHY MORRIS; KEN GABRIEL; CARL WOJCIECHOWSKI; HAROLD CARLSON, AS TRUSTEES FOR THE OREGON FEDERATION OF BUTCHERS PENSION TRUST; ET AL., PLAINTIFFS-APPELLEES,
v.
LOWE'S MARKET, INC., D/B/A ST. HELENS SHOP N' KART, DEFENDANT-APPELLANT. KEN MACKILLOP; KATHY MORRIS; DARREL COFFEY; CARL WOJCIECHOWSKI; ARTHUR DULEMBA; ROBERT HEWETT, AS TRUSTEES FOR THE OREGON FEDERATION OF BUTCHERS PENSION TRUST, PLAINTIFFS-APPELLEES, V. LOWE'S MARKET, INC., AN OREGON CORPORATION, D/B/A ST. HELENS SHOP N' KART, DEFENDANT-APPELLANT.



Appeal from the United States District Court for the District of Oregon. Appeal from the United States District Court for the District of Oregon. D.C. No. CV-92-00713-MFM. Malcolm F. Marsh, District Judge, Presiding. D.C. No. CV-93-00650-JAR. James A. Redden, District Judge, Presiding.

Before: James R. Browning, Thomas M. Reavley,*fn* and William A. Norris, Circuit Judges. Opinion by Judge Reavley.

Author: Reavley

REAVLEY, Circuit Judge:

Lowe's Markets, Inc. (Lowe's) appeals a summary judgment in which the district court held it liable for pension and health care contributions to certain multiemployer benefit plans. We affirm.

BACKGROUND

Lowe's operates an Oregon grocery store. Union representatives for the United Food and Commercial Workers Local 555 began picketing the store in 1991. This had a negative effect on business, and Lowe's eventually signed two collective bargaining agreements (CBAs) in August of 1991. One CBA, a retail meatcutter agreement, required Lowe's to make contributions on behalf of its employees to the Oregon Federation of Butchers Pension Trust. The second CBA, a grocery, produce and deli agreement, required Lowe's to make contributions to the Oregon Retail Employees Pension Trust Fund. Both agreements also required Lowe's to make contributions to a multiemployer health plan, the Portland Area UFCW Local 555-Employers' Health Trust. These three fringe benefit plans (the Plans), are multiemployer benefit plans covered by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1001-1461.

In November of 1991, a Lowe's employee brought an unfair labor practices complaint before the National Labor Relations Board (NLRB). The complaint was against the union and Lowe's. Some of the employees had never wanted to join the union and claimed that they had been coerced by Lowe's and the union into approving union representation. They did not like having to pay dues and claimed that the union had told them they would not have jobs unless they paid dues and joined the union. After the complaint was filed, Lowe's stopped making payments to the Plans. It obtained its own health insurance to provide its employees with health benefits.

In February of 1993 an NLRB administrative law Judge (ALJ) concluded that the CBAs were invalid because the union was selected as the exclusive representative of the employees at a time when it did not represent an uncoerced majority of the employees, in violation of various provisions of section 8 of the National Labor Relations Act (NLRA), 29 U.S.C. § 158. The ALJ recognized that "a union must represent an uncoerced majority in the appropriate unit and when the employer renders unlawful assistance in establishing the union's majority, recognition and acceptance thereof violates [the NLRA]." The ALJ concluded that Lowe's had improperly coerced the employees to join the union, and ordered Lowe's and the union "to cease and desist from giving effect to, or in any manner enforcing the [CBAs]." However, the order stated that "nothing shall require Respondent Lowe's to vary or alter any substantive feature or term of its relations with the unit employees which have been established by performance under the agreements, or prejudice any rights the employees may have acquired under the agreements." The order further required the posting of a notice to employees with similar language.

In August of 1993 the NLRB affirmed the ALJ's decision on administrative appeal, noting in a footnote that "for purposes of the [National Labor Relations] Act, we view the collective- bargaining agreements as never having had legal effect." Lowe's places great emphasis on this language, as discussed below.

Beginning in June of 1992, the trustees of the Plans sued Lowe's for unpaid employer contributions to the Plans. The district court denied a motion to stay pending the NLRB proceeding, and eventually granted the trustees' motion for summary judgment, entering money judgments for the amount of unpaid employer contributions to the Plans up to the date of the ALJ's ruling, together with interest and attorney's fees.

Discussion

A. Effect of the NLRB's Invalidation of the CBAs

Lowe's argues that it has no obligation to the Plans by virtue of invalid collective bargaining agreements. The trustees argue that under ERISA Lowe's obligations remain even if the CBAs are invalid for not meeting the uncoerced majority requirement of the labor laws. The district court has awarded to the Plans those contributions due from Lowe's up to the date of the ALJ's ...


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