Supreme Court review over benefits liability likely in union jurisdictional disputes

Sometimes, companies sign collective bargaining agreements (CBA), not realizing that each promises the same work to different unions. In this case, the employer allegedly signed one CBA that promised forklift and skidster work to the Operating Engineers and another CBA that promised the same work to Laborers. This can create a jurisdictional dispute; in other words, it can lead the two unions to argue over the work.

Under section 10(k) of the National Labor Relations Act (NLRA), the National Labor Relations Board (NLRB) has authority to decide which union gets the work in a jurisdictional dispute.

In this 10(k) case, the Board decided that the Operating Engineers not the Laborers had the better claim to forklift and skidster work. Despite the Board’s ruling, the Laborers sued the company for benefits under its collective bargaining agreement. In effect, the Laborers argued that the Operating Engineers could have the work, but the company should have to pay benefits to both unions’ trust funds. The law that governs liability for benefits is the Employee Retirement Income Security Act. The Laborers argued that the Board’s 10(k) authority only extends to determinations of which union has the better claim to the work under the NLRA, not to which union is entitled to benefits under ERISA.

The Circuit Courts are split on the issue. The Third, Ninth, District of Columbia and now Sixth Circuits hold that the Board’s 10(k) ruling governs the ERISA claim, meaning the losing union has no claim to the work under the NLRA or for benefit payments under ERISA. The Seventh Circuit has held otherwise.

The split in Circuit Courts foretells possible Supreme Court review, especially because, here, even as it joined the majority of other Circuits, the Sixth Circuit did so over a strong dissent.

Employers with multiple CBAs should carefully review the way each of their agreements describes covered work. Overlapping descriptions should be clarified.

The case was Orrand v. Hunt Construction Group, Inc., — F.3d — (6th Cir. 2017).