Burke v. French Equipment Rental, Inc.

Summary

The Ninth Circuit held that the district court erred in adjudicating Sully Miller’s National Labor Relations Act § 8(e) defense to the trustees’ § 301 action, and concluded that the defense failed on the merits in any event. The court held that benefit obligations measured by hours worked by a subcontractor’s sole shareholder could be enforceable even if that individual was ineligible for benefits, requiring a remand to determine the contractual obligations and amount due. It affirmed the denial of attorney’s fees based on California law and remanded for further proceedings.

Holdings

1. The section 8(e) defense fails on the merits because the delinquency provision, apart from its invalid self-help clause, is valid, and the Trustees sought to enforce only Sully Miller's promise to make payments to the trust fund. The court declined to decide whether, after Kaiser Steel Corp. v. Mullins, a district court should entertain a section 8(e) defense where the NLRB has already considered and rejected the charges.
2. An employer's obligation to make payments into a section 302(c)(5) trust is not conditioned on the existence of a particular employee who is eligible to receive benefits. Contributions may lawfully be measured by John French's employment hours even if French himself was ineligible for benefits.
3. Sully Miller could not recover attorney's fees under California Civil Code section 1717 because state law cannot supply the fee award in this section 301 action, and the master labor agreement did not provide for Sully Miller's receipt of attorney's fees.

Questions Presented

1. Whether the district court properly entertained and decided Sully Miller's section 8(e) unfair-labor-practice defense to the Trustees' section 301 action.
2. Whether the possible ineligibility of John French to receive benefits under section 302(c)(5) voided French's and Sully Miller's obligations to make trust-fund contributions measured by French's hours of employment.
3. Whether California Civil Code section 1717 supplied a basis for awarding Sully Miller attorney's fees in a section 301 action.

Disposition

reversed_and_remanded