In the
United States Court of Appeals
For the Seventh Circuit
____________________
Nos. 15‐2628, ‐3221, ‐3861, 16‐1870
MIDWEST OPERATING ENGINEERS WELFARE FUND, et al.,
Plaintiffs‐Appellees,
v.
CLEVELAND QUARRY, et al.,
Defendants‐Appellants.
____________________
Appeals from the United States District Court for the
Northern District of Illinois, Eastern Division.
Nos. 14 C 2557, 14 C 8752, 15 C 4446 — Milton I. Shadur,
John Z. Lee, Amy J. St. Eve, Judges.
____________________
ARGUED NOVEMBER 8, 2016 — DECIDED DECEMBER 20, 2016
____________________
Before WOOD, Chief Judge, and POSNER and ROVNER, Cir‐
cuit Judges.
POSNER, Circuit Judge. The plaintiffs in this labor litigation
are employee welfare and pension funds (we’ll drop “and
pension” to simplify the opinion). Three defendants are
named. Each is a division (not, so far as we are able to de‐
termine, a subsidiary) of RiverStone Group, Inc., a producer
of crushed stone, sand, and gravel. Each division is a de‐
2 Nos. 15‐2628, ‐3221, ‐3861, 16‐1870
fendant in a separate, but nearly identical, suit before a dif‐
ferent district judge. The judges were apparently confused
by the fact that each division had a separate collective bar‐
gaining agreement, but that turns out to be a distinction
without a difference. The proper defendant is the company,
RiverStone, not its divisions, and we shall assume it is in‐
deed the one and only defendant in what is really one case,
not three cases.
RiverStone’s collective bargaining agreements were with
Local 150 of the International Union of Operating Engineers,
AFL‐CIO. The latest agreement, made in 2010, was sched‐
uled to expire in 2015. It required RiverStone to contribute a
specified dollar amount to welfare funds specified in the
agreement “for each hour for which an employee receives
wages under the terms of this Agreement.” But in 2013 em‐
ployees in one of RiverStone’s divisions voted in an election
supervised by the National Labor Relations Board to decerti‐
fy Local 150 as their collective bargaining representative,
and this was followed by similar votes by employees at the
other two divisions mistakenly named as defendants in this
litigation. Whereupon RiverStone stopped contributing to
the welfare funds, precipitating these suits against it by the
funds under 29 U.S.C. § 1145, a provision of ERISA, added
by the Multiemployer Pension Plan Amendments Act of
1980, Pub. L. 96‐364, 94 Stat. 1208, that creates a right to sue
to collect delinquent employer contributions. The funds seek
payment of the contributions that would have been due pur‐
suant to the terms of the last collective bargaining agreement
until its 2015 expiration. In each suit a different district judge
granted summary judgment in favor of the funds, confirm‐
ing that RiverStone had to continue making the contribu‐
tions to the funds specified in that last, 2010, collective bar‐
Nos. 15‐2628, ‐3221, ‐3861, 16‐1870 3
gaining agreement until the agreement expired by its terms
in 2015.
It is arguable that the agreement expired earlier, when
the union was decertified, as a result of which one of the two
parties to the agreement effectively vanished, since it could
no longer enforce any part of it (the “agreement” among the
three divisions of RiverStone doesn’t count; RiverStone and
the union were the only real parties to the agreement). And
the collective bargaining agreement stated that “the Em‐
ployer’s responsibility to make contributions to the Welfare
Plan[s] shall terminate upon expiration of this agreement.”
RiverStone quotes our statement in Central States, South‐
east & Southwest Areas Pension Fund v. Schilli Corp., 420 F.3d
663, 669 (7th Cir. 2005), that “although the decertification
voided the 1994 CBA, the terms of the Participation Agree‐
ment make clear that [the company’s] obligations survive
that event,” even though the union, no longer representing
the employees, could not have enforced a participation
agreement. But because the agreement made the company’s
obligations to the pension fund survive the decertification,
Schilli didn’t have to, and didn’t, decide that a collective bar‐
gaining agreement could not continue to impose a contribu‐
tion obligation after the union’s decertification, which mere‐
ly eliminated its right to enforce the collective bargaining
agreement, including provisions relating to contributions to
employee welfare plans. Schilli was explicit that “the union
is not the only party with standing to enforce” an employer’s
obligation to contribute to an employee welfare plan, noting
that the Multiemployer Pension Plan Amendments Act “au‐
thorizes multiemployer plans to sue for delinquent contribu‐
4 Nos. 15‐2628, ‐3221, ‐3861, 16‐1870
tions owed ‘under the terms of the plan or under the terms
of a collectively bargained agreement.’” 420 F.3d at 670.
The “delinquent contributions” in the present case were
the contributions that RiverStone had failed to make in the
interim between the decertification of the union and the ex‐
piration of the collective bargaining agreement. That an em‐
ployer could cease making contributions to a plan once its
employees’ union is decertified is no defense. For “once
[multiemployer plans] promise a level of benefits to employ‐
ees, they must pay even if the contributions they expected to
receive do not materialize.” Central States, Southeast &
Southwest Areas Pension Plan v. Gerber Truck Service, Inc., 870
F.2d 1148, 1151 (7th Cir. 1989) (en banc) (emphasis added).
Their promise is binding, contractual. And so “if some em‐
ployers do not pay, others must make up the difference.” Id.
In short, “nothing in ERISA makes the obligation to contrib‐
ute depend on the existence of a valid collective bargaining
agreement.” Id. at 1153.
But what is one to make of the provision of the collective
bargaining agreement that “the employer’s responsibility to
make contributions to the Welfare Plan[s] shall terminate upon
expiration of this agreement” (emphasis added)? The mean‐
ing depends on whether “expiration” means the date on
which the agreement becomes unenforceable or the date on
which it lapses by passage of time. It became unenforceable
by the union when the union was decertified, whereby the
employer was no longer bound to the promises it had made
to the union; but the agreement did not thereby cease to ex‐
ist—and therefore did not expire—until its five‐year term
ended. By prematurely ceasing to contribute to the welfare
funds, RiverStone became liable under 29 U.S.C. § 1145 to
Nos. 15‐2628, ‐3221, ‐3861, 16‐1870 5
make delinquent contributions, which is the relief sought by
the funds and ordered by the three district judges whose
identical rulings RiverStone challenges. RiverStone might
have negotiated a collective bargaining agreement that obli‐
gated it to contribute to the funds only unless and until the
union was decertified. But it didn’t.
Another path to the same result is to note that the plain‐
tiff funds were third‐party beneficiaries of the collective bar‐
gaining agreement and therefore entitled to enforce it even if
another enforcer—the union—fell out.
RiverStone makes two other arguments for reversal. The
first is that the collective bargaining agreement required it
only to contribute to the funds for each hour an employee is
paid “under the terms of the [Collective Bargaining] Agree‐
ment.” True, but irrelevant to this case. After the decertifica‐
tion, RiverStone’s employees were no longer working “un‐
der the terms of” the collective bargaining agreement, so
RiverStone could pay them lower wages or otherwise
change the terms of their employment from what the collec‐
tive bargaining agreement had provided. But as we’ve ex‐
plained, so far as benefits law is concerned the employees
were still working “under the terms of” the collective bar‐
gaining agreement. The agreement established a five‐year‐
long obligation for RiverStone to contribute to the funds for
each employee in the bargaining unit (that is, each employee
who received wages “under the terms of the agreement”).
The funds budgeted accordingly. The agreement did not
provide that RiverStone could stop contributing as soon as
its employees’ union was decertified.
The second argument is that the Labor Management Re‐
lations Act forbids payments to trust funds that are not “es‐
6 Nos. 15‐2628, ‐3221, ‐3861, 16‐1870
tablished by such representative” of the employer’s employ‐
ees, 29 U.S.C. § 186(c)(5). Again true, but again irrelevant.
The union, Local 150, established the funds and did so at a
time when it was the representative of RiverStone’s employ‐
ees. The decertification of the union, years later, did not alter
the fact that the funds had been established by the repre‐
sentative.
Each of the district judges ordered RiverStone (more pre‐
cisely, each judge ordered one of the three divisions that are
the named defendants) to reimburse the union for the delin‐
quent contributions. Those judgments are
AFFIRMED.
Midwest Operating Engineers v. Cleveland Quarry
Combined Opinion