Central States, Southeast and Southwest Areas Pension Fund v. Gerber Truck Service

870 F.2d 1148 (1989)

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Central States, Southeast and Southwest Areas Pension Fund v. Gerber Truck Service

United States Court of Appeals for the Seventh Circuit
870 F.2d 1148 (1989)

  • Written by Alexander Hager-DeMyer, JD

Facts

James Gerber (defendant) acquired Fat’s Express Truck Service to expand his trucking operation. With the acquisition, Gerber gained three drivers, known as the Fat’s Three. The drivers were union members and had been receiving pension and welfare coverage under multiemployer plans established by the union and employers in the industry. Gerber’s other employees were not union members and received healthcare through another entity. Gerber did not want to pay union wages to those other employees or the Fat’s Three. However, Gerber did want to allow the Fat’s Three to maintain their pension and welfare coverage. Gerber and the union’s business representative signed a written collective- bargaining agreement (CBA) that, on its face, required Gerber to make pension and welfare contributions for all employees who were or could become members of the union. The parties also signed a written participation agreement requiring Gerber to contribute weekly sums for all drivers represented by the union. Gerber and the representative orally agreed that the documents would not be enforced and that they intended only to collect contributions and provide coverage for the Fat’s Three. The documents were submitted to the Central States Southeast and Southwest Areas Pension Fund (fund) (plaintiff). The union honored the oral agreement and collected contributions only for the Fat’s Three. When the Fat’s Three retired, Gerber notified the fund and stopped paying contributions. However, the fund audited Gerber’s books and discovered that Gerber had additional employees covered under the CBA. The fund opened pension and welfare accounts for those employees and credited them for covered employment time. The fund demanded that Gerber make contributions for the employees backdated from the signing of the CBA and participation agreement. Gerber refused, and the fund filed suit in federal district court seeking past-due contributions under the Employee Retirement Income Security Act (ERISA). The district court ruled in favor of Gerber, finding that Gerber and the union representative had negotiated orally to modify the signed agreements. The fund appealed.

Rule of Law

Issue

Holding and Reasoning (Easterbrook, J.)

Concurrence/Dissent (Cudahy, J.)

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