NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 15a0238n.06
Case No. 14-3255
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
Apr 01, 2015
DEBORAH S. HUNT, Clerk
BUNN ENTERPRISES, INC., et al., )
)
Plaintiffs-Appellants, )
) ON APPEAL FROM THE UNITED
v. ) STATES DISTRICT COURT FOR
) THE SOUTHERN DISTRICT OF
OHIO OPERATING ENGINEERS FRINGE ) OHIO
BENEFIT PROGRAMS, et al., )
)
Defendants-Appellees. )
)
BEFORE: KEITH, COOK, and DONALD, Circuit Judges.
BERNICE BOUIE DONALD, Circuit Judge. This case presents a dispute over an
employer’s contributions to a benefits fund for its employees under the terms of a collective
bargaining agreement. The agreement requires employer signatories to contribute a certain
amount to the fund per “hour paid” to its employees. Plaintiff employer Bunn Enterprises, Inc.,
asserts that the agreement requires contributions only for hours an employee performs “covered”
work under its terms. Defendant fund manager Ohio Operating Engineers Fringe Benefit
Programs argues that the agreement requires employers to make contributions for all hours
worked by an employee, regardless of whether such work is “covered.” Based on case law
interpreting the contested provisions of this particular agreement, the district court held that
Case No. 14-3255
Bunn Enterprises, Inc., et al. v. Ohio Operating Engineers Fringe Benefit Programs, et al.
Bunn Enterprises, Inc., is responsible for payment for all hours worked, without distinction. For
the reasons that follow, we AFFIRM.
I. BACKGROUND
The district court explained the parties’ arrangement in its June 19, 2013 opinion and
order:
Plaintiff Bunn Enterprises, Inc. (“Bunn”) is an employer under . . .
the Employee Retirement Income Security Act (“ERISA”). Bunn
is signatory to, among other collective bargaining agreements, the
Ohio Heavy Highway Agreement (the “CBA”), with the
International Union of Operating Engineers Local 18 and its
various branches (“Local 18”). By the terms of the CBA, Bunn
Enterprises pays “fringe benefit contributions” for hours worked
by its employees into Defendant Ohio Operating Engineers Fringe
Benefit Programs (. . . the “Fund”), an ERISA fund for Local 18
members.
Bunn Enters. Inc. v. Ohio Operating Eng’rs Fringe Benefit Programs (Bunn I), No. 2:13–CV–
357, 2013 WL 3147956 at *1 (S.D. Ohio Jun. 19, 2013).
The Fund provides employees benefits through the Ohio Operating Engineers Health and
Welfare Plan (the “Plan”). Under the Plan, employees become eligible for various health and
pension benefits based on complex rules regarding the number of hours they have worked in a
specific period of time. These rules also govern whether an employee remains eligible for
benefits, so calculations of the hours they have worked are essential to receipt of benefits under
the Plan.
In 2012, the Fund conducted an audit of Bunn’s payroll records to ensure the company’s
contributions were up to date. The audit revealed that Bunn had not contributed to the Fund for a
significant number of hours performed by certain Bunn employees. The Fund requested
payment of the outstanding amount, but Bunn refused, stating that the employees had not
performed “covered” work under the CBA during the disputed hours, and therefore were not
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Bunn Enterprises, Inc., et al. v. Ohio Operating Engineers Fringe Benefit Programs, et al.
entitled to benefits contributions for those hours. Many of these disputed hours were performed
by Plaintiff employee Delbert Newlon.
Under the Fund’s “oldest outstanding balance policy,” when an employer has a deficit in
its contribution payments, the Fund will apply whatever money is available toward the deficient
employee accounts in chronological order. Thus, the earliest created debt (as defined by the
Fund) is paid off first, then the next chronogically, and so on. Accordingly, “the Fund has
implemented the Policy to apply all of Bunn’s contributions to the alleged Newlon deficiency,
irrespective of whether Bunn identified such payments as corresponding to other employee
hours. In particular, Bunn’s contributions on behalf of [the other individual plaintiffs] have not
been credited to those individuals.”1 Bunn I, WL 3147956 at *2. Instead, the Fund sent
employees letters explaining that their benefits would be discontinued due to “insufficient
employer contributions” and that they had the option of either paying their own way or seeking
coverage elsewhere.
Bunn and the impacted employees2 filed a complaint seeking, inter alia, declaratory
judgment that 1) the CBA does not require contributions for all hours worked, but rather only for
work “covered” by the agreement and that 2) the Fund may not withhold coverage from the
named plaintiffs by crediting “their” contributions to the Newlon deficiency. They also sued
Local 18 for tortious interference with contract, claiming that the union had influenced the
Fund’s audit process. The Fund moved for summary judgment on the ground that the CBA
requires fringe benefit contributions for all hours worked, regardless of whether the work is
“covered” under the CBA. Local 18 moved for judgment on the pleadings, arguing that, because
1
The district court’s order of June 19, 2013 contains a detailed account of how the Fund’s policy offset
payments for each plaintiff. Bunn I, WL 3147956 at *2-4.
2
In addition to Bunn Enterprises, Inc., Kevin Bunn (owner) brought suit as an individual, as did Bunn
employees Delbert Newlon, Daniel Lantz, Mark Morgan, Michael Shau, and David Welch.
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Bunn Enterprises, Inc., et al. v. Ohio Operating Engineers Fringe Benefit Programs, et al.
the Fund properly interpreted the CBA, there was no breach of contract. The district court ruled
in favor of Defendants, granting summary judgment and judgment on the pleadings, respectively,
and dismissed Plaintiffs’ claims. Plaintiffs now appeal.
II. ANALYSIS
A. Standard of Review
We review de novo a district court’s order granting summary judgment. S.L. ex rel. K.L.
v. Pierce Tp. Bd. of Trustees, 771 F.3d 956, 961 (6th Cir. 2014) (citing Johnson v. Karnes, 398
F.3d 868, 873 (6th Cir. 2005)). Summary judgment is properly granted “if the movant shows
that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a). “In reviewing such a grant, we view all evidence and
draw all inferences in the light most favorable to the nonmoving party.” Johnson v. Memphis
Light Gas & Water Div., 777 F.3d 838, 843 (6th Cir. 2015) (citing Chapman v. UAW Local
1005, 670 F.3d 677, 680 (6th Cir. 2012) (en banc); Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 587 (1986).). “However, ‘the mere existence of some alleged factual
dispute between the parties will not defeat an otherwise properly supported motion for summary
judgment; the requirement is that there be no genuine issue of material fact.’” F.T.C. v. E.M.A.
Nationwide, Inc., 767 F.3d 611, 629 (6th Cir. 2014) (quoting Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 247-48 (1986)) (emphasis in original). “A genuine issue of material fact exists
where ‘there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for
that party.’” Id. (quoting Anderson, 477 U.S. at 249).
B. Language of the CBA
All parties agree that the dispositive issue regarding their respective claims is whether the
CBA requires employer signatories to make benefit contributions for only “covered” hours
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Bunn Enterprises, Inc., et al. v. Ohio Operating Engineers Fringe Benefit Programs, et al.
worked by employees under the agreement, or for all hours worked by employees under the
agreement.
Article I of the CBA sets out the “Geographical and Industrial Scope of [the]
Agreement[,]” and Sections 1 and 2 state that
The provisions of this Agreement shall govern the employment of
and conditions under which employees shall work and rates of pay
they shall receive on work as defined herein for all counties of the
State of Ohio except Columbiana, Mahoning, and Trumbull, and
including Boone, Campbell, Kenton, and Pendleton counties in
Kentucky. . . . The word “work” when used herein means
“Highway Construction, Airport Construction, Heavy
Construction, [etc.]” as hereinafter defined within the jurisdiction.
Article I, § 2(A) through (I) then define the types of work each category of construction
includes. Article II adds that
All [employer signatories to this agreement] . . . shall be bound to
make Health and Welfare payments, Pension payments, [and other]
payments required under Article V for all work performed
within the work jurisdiction outlined in Article I of this
Agreement, or any other payment established by the appropriate
Agreement.
Article V specifically addresses “Fringe Benefit Programs” and sets out related employer
requirements under the CBA. Section 35 states: “Fringe benefit contributions shall be paid at the
following rates for all hours paid to each employee by the Employer under this Agreement
which shall in no way be considered or used in the determination of overtime pay. Hours paid
shall include holidays and reporting hours which are paid.”
C. Context
As discussed, Plaintiffs argue that the CBA’s language requires us to draw a distinction
between work covered by the agreement and work that falls outside its ambit with regards to
benefits contributions. They state that the district court failed to recognize this distinction
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Bunn Enterprises, Inc., et al. v. Ohio Operating Engineers Fringe Benefit Programs, et al.
because it read Article V § 35 “in a vacuum” rather than considering it in the context of the rest
of the agreement: “Common sense dictates that an employer will only pay employees ‘under this
Agreement’ when the employees perform the type of work expressly outlined in Article I of the
CBA.” Article II requires employers to make benefits contributions “for all work performed
within the work jurisdiction outlined in Article I[.]” In their view, because Article I defines
“work” as various construction activities, only those construction activities are “covered” work
to which the contract’s other provisions apply.
This is a convoluted reading of the contract’s plain language. Article II refers to the
geographical “work jurisdiction” separately from the industrial categories of work outlined in
Article I. For example, Article II, § 4 requires “The Employer [to] employ Operating Engineers
for the erection, operation, assembly and disassembly, and maintenance and repair of [the listed
construction equipment] within the jurisdiction[,]” and requires “[e]stablishment of, transferring
of, all original lines and grades . . . appertaining to the work scope outlined in the Highway
Heavy Agreement, [to] be performed exclusively by Field Survey Crews.” Such passages of the
contract would be redundant and confusing under Plaintiffs’ interpretation, but make perfect
sense if “jurisdiction” means the named counties to which the CBA applies.
Article V sets out the details regarding payment of benefits contributions. This section
explicitly requires such contributions to be made “for all hours paid to each employee by the
Employer under this Agreement[.]” Had the drafters wanted to limit benefits contributions
solely to “covered” work hours, they could have stated as much, either plainly or through
reference to the specific sections of Article I. They did neither. Furthermore, under the terms of
Article V, contributions must be made even for hours paid to employees for “holidays and
reporting hours[,]” during which it is understood they will not be working at all. It would be
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Bunn Enterprises, Inc., et al. v. Ohio Operating Engineers Fringe Benefit Programs, et al.
nonsensical to read the contract as requiring benefits to be paid for those non-working hours and
then to infer from the same language that no contributions are required for hours spent
performing work designated “non-covered.”
Other aspects of the agreement also counsel against adopting Plaintiffs’ interpretation.
The concept of “covered” work does not appear in any of the CBA provisions highlighted supra
in Section II.B. Nor is “covered/not-covered” a distinction present in the CBA’s provisions
regarding holiday pay. The concept is also absent from Exhibits A and D, which provide
detailed wage classifications, rates of pay, and benefit contribution amounts for employees in
different work categories. Thus, the only language in the CBA that even potentially
contemplates the “covered/non-covered” distinction would be implied from the definition of
“work” in Article I. As we have discussed, however, to adopt Plaintiffs’ reading of that
definition would require us to ignore not only the remaining text of the agreement itself, but also
the law and policy arguments supporting Defendants’ interpretation.
D. Jurisprudence
Plaintiffs rely heavily on a case we decided in 1994 to support their interpretation of the
CBA. In Michigan Laborers’ Health Care Fund v. Grimaldi Concrete, Inc., a panel of this
Court considered another ERISA agreement dispute. 30 F.3d 692, 697 (6th Cir. 1994). The
employer, Grimaldi, failed to make payments to the ERISA fund for hours worked by some of its
employees. Id. at 693-94. The ERISA fund manager attempted to audit Grimaldi’s payroll
records, but found them so vague and incomplete that it was impossible to determine which
hours had been performed pursuant to the agreement. Id. at 694. The fund manager therefore
demanded contributions for all hours the employees had worked, and the parties proceeded to
suit. Id. We held that, because Grimaldi was required to maintain accurate records under
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Bunn Enterprises, Inc., et al. v. Ohio Operating Engineers Fringe Benefit Programs, et al.
ERISA, the company’s failure to do so meant “[t]he burden thus shifted to Grimaldi to prove
what work was covered and what work was not covered” under the agreement. Id. at 696.
Accordingly, Plaintiffs claim, we have recognized a distinction between “covered” and “not-
covered” work as essential to determining what contributions must be made under a collective
bargaining agreement, and therefore must continue to recognize that distinction here.
Plaintiffs’ reading of Grimaldi is problematic. The agreement at issue in that case was
different from the CBA here; it had different language, requirements, and limitations. More
importantly, the parties in Grimaldi stipulated at the outset that the only contributions in dispute
were those related to “covered work” under the agreement. (Id. at 694.) The issue before the
court was not, therefore, interpretation of the parties’ rights under the agreement, but whether
Grimaldi had effectively forfeited an undisputed right to pay solely for “covered” work by failing
to keep adequate records. (Id. at 694-96.) The distinction between “covered” and “not-covered”
work was not before the court—or even contested by the parties—in Grimaldi. Here, the
distinction (or lack thereof) is the central issue.3
Plaintiffs insist that their interpretation of Grimaldi is controlling even in the face of 22
years of district court precedent that interprets the same CBA regarding the same issue—and
does so in Defendants’ favor. As discussed in its March 14, 2014 opinion, the District Court for
the Southern District of Ohio has unanimously held that employer signatories of the Ohio Heavy
3
Plaintiffs cite a number of other cases they claim support their interpretation of the CBA, but each is
inapposite. One case features an agreement interpreted in a manner similar to Plaintiffs’ interpretation of the CBA
here, but the case is from another jurisdiction and deals with a different agreement. See Cent. Pension Fund of the
Int’l Union of Operating Eng’rs & Participating Emp’rs v. Ray Haluch Gravel Co., 695 F.3d 1, 8 (1st Cir. 2012),
rev’d on other grounds, 134 S. Ct. 773 (2014), remanded to 745 F.3d 1 (1st Cir. 2014). Plaintiffs also cite cases
from within the Sixth Circuit which incorporate Grimaldi’s holding, but which do not present the issue at bar. See,
e.g., Plumbers Local 98 Defined Benefit Pension Fund v. M & P Master Plumbers of Mich., Inc., 608 F. Supp. 2d
873, 881 (E.D. Mich. 2009) (“Under Sixth Circuit precedent, where an ERISA fund plaintiff has provided proof of
an employer's failure to pay fringe benefit contributions on behalf of its employees for work covered by a collective
bargaining agreement, the burden shifts to the employer to produce evidence as to what work is not covered.” (citing
Grimaldi, 30 F.3d at 696-97)).
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Bunn Enterprises, Inc., et al. v. Ohio Operating Engineers Fringe Benefit Programs, et al.
Highway Agreement are required to pay contributions for all hours worked, regardless of
whether the hours are “covered” under the CBA. Bunn Enters. Inc. v. Ohio Operating Eng’rs
Fringe Benefit Programs (Bunn II), 7 F.Supp.3d 752, 756-58 (S.D. Ohio 2014) (discussing Noe
v. R.D. Jones, Excavating, Inc., 787 F.Supp. 759, 764-65 (S.D. Ohio 1992); Orrand v. Maint.
Unlimited, Inc., No. 2:96-CV-00766, Doc. 17 at 4-5 (S.D. Ohio Feb. 24, 1998); Orrand v. Shope,
No. C2-00-1161, 2001 WL 1763437, at *3 (S.D. Ohio Jan. 30, 2001); Orrand v. Keim Concrete
Pumping, Inc., No. 2:08-CV-1046, 2010 WL 3447647, at *16 (S.D. Ohio Aug. 30, 2010)). As
the court explained in its initial case dealing with this issue,
ERISA dictates a resolution that provides for the simplification of
collection procedures for the trustees of fringe benefit funds in
order to protect the funds from unnecessary collection costs. . . .
Determining the amount of an employer’s obligation based upon
the total hours worked by an employee covered under a collective
bargaining agreement is consistent with this policy concern given
that the amount of the contribution obligation can easily be
determined by simply examining the employer’s payroll
records. . . . Therefore, the Defendant is obligated to contribute to
the Fringe Benefit Funds based upon all the hours worked by the
employees, no matter the totality of their assignments.
Noe, 787 F. Supp. at 765.
Plaintiffs highlight that Noe was decided before Grimaldi, but Noe’s holding has been
applied repeatedly since Grimaldi was decided in 1994, to no sturm und drang. In 2001, the
court again explained the policy supporting its position:
If an employer were entitled to receive a reduction in the amount
of benefits paid based upon hours spent in non-covered work, and
it were the sole arbiter of what type of work was performed and its
records were the only source of that information, it would be
exceedingly difficult for a fund to dispute an employer’s allocation
of hours between covered and non-covered work, and it would
therefore be possible for an employer to skew its records in such a
way as to minimize its contributions. By providing that benefits
are due for all hours worked and paid, whether for covered or non-
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covered work, the ability to manipulate the facts is reduced or
eliminated, and the audit process is much simpler.
Shope, 2001 WL 1763437, at *2. The district court added, “Of course, these benefits would not
permit the Court to rewrite the parties’ agreement, but the language in this agreement appears
unambiguously to obligate the employer to make contributions for all hours paid.” Id. This last
observation is the key reason Plaintiffs’ arguments regarding interpretation of the CBA fail: the
language of the CBA, as we have discussed, is not ambiguous. And as the district court noted,
“Plaintiffs have offered no arguments which [the court] has not already considered and rejected
in the last 22 years.” Bunn II, 7 F.Supp.3d at 757. We agree. Accordingly, we find that the
CBA unambiguously requires employer signatories to contribute the appropriate benefits
contributions for all hours worked by their employees, regardless of whether those hours are
“covered” under the contract. The district court did not err in granting Defendants’ motions for
summary judgment and judgment on the pleadings.
III. CONCLUSION
Based on the foregoing analysis, we AFFIRM the district court’s disposition of this case.
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