PAUL A. MAGNUSON, District Judge.
This matter is before the Court on Plaintiffs' Motion for Summary Judgment.
The Complaint in this matter alleges that Defendant Integrity Acoustic Solutions, Inc., entered into a collective bargaining agreement with several building trade unions in 2012. Defendant Seth Eskew signed the agreement on behalf of Integrity. Among other duties, the CBA required Integrity to submit monthly fringe-benefit-fund reports and payments to the unions' fringe benefit funds based on the number of hours its employees worked. The funds audited Integrity's reports and discovered work for which fringe benefit contributions were not made: a total of $34,811.13 in unpaid contributions for the period February 2012 through November 2013. The funds submitted an invoice to Integrity but Integrity did not pay the invoice, and this lawsuit followed. The funds now seek a total of $47,827.47 in unpaid contributions, liquidated damages, and fees and costs from Integrity and from Eskew personally.
Defendants raise several arguments against the Motion. First, Eskew contends that he cannot be individually liable under the CBA under settled principles of agency law. Second, Eskew says that he is not personally obligated because he is not an "employer" under ERISA. Finally, both argue that discovery is necessary to determine the extent of Integrity's obligations, because several employees ostensibly were not members of the union and thus no contributions were due for their work, and because one employee was an "owner-operator" for whom contributions are not due. This employee alone is responsible for nearly half of the total amount of damages Plaintiffs claim. Defendants have sought discovery on both of these issues and ask that the Court defer ruling on the Motion or deny it without prejudice to allow discovery to run its course.
The CBA provides: "[i]f this Agreement is signed for or on behalf of a corporation, the person signing the Agreement not only binds the corporation but agrees to be bound individually to the full and faithful performance of all the terms and provisions of this Agreement." (Nasstrom Aff. (Docket No. 23) Ex. A at 25.) Eskew contends that this language does not bind him individually to the contract, citing a decision of this Court.
Intervening decisions have persuaded the Court that
Under these principles, the guaranty provision in the CBA is unambiguous: by signing the Agreement, Eskew agreed to be bound individually to the performance the corporation promised. His first argument therefore fails.
Defendants' next theory is that Eskew is not obligated to make contributions because he is not an employer under ERISA. He notes that ERISA allows an action to recover funds for an employee benefit plan only against an "employer who is obligated to make contributions to a . . . plan." 29 U.S.C. § 1145. Because he is not obligated to make contributions, he contends that he is not the proper subject of an action to recover funds under ERISA.
But ERISA broadly defines "employer" as "any person acting directly as an employer, or indirectly in the interest of an employer, in relation to an employee benefit plan."
Finally, Defendants contend that summary judgment is inappropriate no matter the outcome of the previous arguments because the amount of delinquent contributions is in dispute. They argue that several of the employees for whom the funds have calculated contributions were not members of the union and thus the company was not obligated to make contributions on their behalf. And they contend that one employee was an owneroperator for whom contributions are not required.
Defendants' first argument notes that the CBA obligates the employer to make contributions for "each hour worked by all employees covered by this Agreement." (Nasstrom Aff. Ex. A at 10.) The CBA does not define "employees," nor does it otherwise set forth who is covered by the agreement. Therefore, according to Defendants, the CBA does not mandate contributions for non-union workers. But the case on which they rely for this proposition is not on point.
In this case, the CBA and related agreements provide that the Carpenters Union is the exclusive bargaining agent for all employees of signatory employers such as Defendant Integrity. (Nasstrom Aff. Ex. A, Art. 3.) The Eighth Circuit has not addressed the issue, but at least three other courts of appeals have found that a designation of a union as "the exclusive bargaining agent for all employees indicates that fringe benefit contributions are required for both union and non-union members."
As to whether one individual qualified as an owner-operator, however, Defendants have established a need for further discovery. Defendants noted at the hearing that a deposition with the individual may be required. Moreover, Defendants have sought documents from Plaintiffs to define the parameters of the owner-operator exception. Defendants must be allowed an opportunity to determine whether the owner-operator exception applies.
Because Defendants are entitled to discovery on the owner-operator issue, the Motion must be denied without prejudice in part. Accordingly,