Thomas Kilkenny, in his capacity as a fiduciary with respect to the Plasterers Local… v. GUY C. LONG, INC. On Appeal from the United States District Court for the Eastern…

PRECEDENTIAL
Filed May 1, 2002
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 00-1396
THOMAS KILKENNY, in his capacity as a fiduciary with
respect to the Plasterers Local 8 Benefit Funds; WILLIAM
TAYLOR, in his capacity as a fiduciary with respect to the
Plasterers Local 8 Benefit Funds,
Appellants
v.
GUY C. LONG, INC.
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
D.C. Civil Action No. 99-cv-06146
(Honorable Harvey Bartle, III)
Argued January 15, 2002
Before: SCIRICA, GREENBERG and BRIGHT,*
Circuit Judges
(Filed May 1, 2002)
________________________________________________________________
* The Honorable Myron H. Bright, United States Circuit Judge for the
Eighth Circuit, sitting by designation.
BRUCE E. ENDY, ESQUIRE
(ARGUED)
Spear, Wilderman, Borish, Endy,
Spear & Runckel
230 South Broad Street, Suite 1400
Philadelphia, Pennsylvania 19102
Attorney for Appellants
VINCENT J. PENTIMA, ESQUIRE
(ARGUED)
Klett, Rooney, Lieber & Schorling
Two Logan Square, 12th Floor
18th & Arch Streets
Philadelphia, Pennsylvania 19103
Attorney for Appellee
OPINION OF THE COURT
SCIRICA, Circuit Judge.
This is a dispute between rival labor unions and an
employer over the proper assignment of work under a

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collective bargaining agreement and the employer’s
obligation to make contributions to the benefit fund of the
union that performed none of the contested work. Despite
mandatory arbitration provisions in both the industry-wide
collective bargaining agreement and the trust fund
agreement, a minority of aggrieved benefit fund union
trustees brought suit under the Labor Management
Relations Act and the Employee Retirement Income
Security Act for an accounting and recovery of
contributions allegedly due their fund for work performed
by a rival union.1 Concluding the trust agreements required
a majority of the trustees to institute suit, the District
Court dismissed this action for lack of standing. We will
affirm.
_________________________________________________________________
1. As required by LMRA 29 U.S.C. S 186(c)(5), the Local 8 employee
benefit funds are jointly administered by an equal number of union-
appointed trustees and employer-appointed trustees. This suit was
brought by two of three union-appointed trustees.
2
I.
Plaintiff invokes federal jurisdiction under S 301 of the
Labor Management Relations Act of 1947 (LMRA), 29 U.S.C.
S 1852 and under S 502 and S 515 of the Employee
Retirement Income Security Act of 1974 (ERISA), 29 U.S.C.
SS 1132, 1145.3 Although this matter reflects the underlying
tension between the LMRA and ERISA in the collective
bargaining context, the applicable law in this particular
case is provided by the LMRA.
We have appellate jurisdiction under 28 U.S.C. S 1291.
II.
We review the dismissal of an action for lack of standing
de novo. Gen. Instrument Corp. of Del. v. Nu-Tek Elecs. &
Mfg., Inc., 197 F.3d 83, 86 (3d Cir. 1999). We exercise
plenary review over legal questions concerning the
applicability and scope of an arbitration agreement.
Medtronic Ave, Inc. v. Advanced Cardiovascular Sys., Inc.,
247 F.3d 44, 53-54 (3d Cir. 2001). When a district court
interprets contract language, we review under the clearly
_________________________________________________________________
2. LMRA 29 U.S.C. S 185(a) provides: "Suits for violation of contracts
between an employer and a labor organization representing employees in
an industry affecting commerce as defined in this chapter, or between
any such labor organizations, may be brought in any district court of the
United States having jurisdiction of the parties, without respect to the
amount in controversy or without regard to the citizenship of the
parties." Id.; see also Plaintiff ’s Compl. P 6 ("Jurisdiction is invoked
pursuant to Section 301 . . . in that Defendant is an employer within the
meaning of the [LMRA], and party to a collective bargaining agreement
which forms the basis and substance of the matters at issue in this
litigation.").

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3. 29 U.S.C. S 1132(a)(3) provides that a civil action may be brought "by
a participant, beneficiary, or fiduciary (A) to enjoin any act or practice
which violates any provision of this subchapter or the terms of the plan,
or (B) to obtain other appropriate equitable relief . . . ." Id. 29 U.S.C.
S 1145 provides, "[e]very employer who is obligated to make
contributions to a multiemployer plan under the terms of the plan or
under the terms of a collectively bargained agreement shall, to the extent
not inconsistent with law, make such contributions in accordance with
the terms and conditions of such plan or such agreement." Id.
3
erroneous standard. Id. But if the district court engages in
contract construction, we exercise plenary review. Id.
III.
Plaintiffs Thomas Kilkenny and William Taylor are union
trustees for the Local 8 benefit funds,4 a group of employee
benefit plans cosponsored by the Local 8 Operative
Plasterers and Cement Masons International Association
and a multi-employer bargaining association known as the
Master Plasterers Company of Philadelphia, a sub-division
of the Interior Finish Contractors Association. Defendant
Long, Inc. is a plastering and drywall contracting company
who was represented by the Interior Finish Contractors
Association for collective bargaining purposes.
The multi-employer collective bargaining agreement
negotiated between the Local 8 Plasterers Union and the
Interior Finish Contractors Association provides that the
work of "erection and installation, including cutting and
fitting of rigid insulation, including the mechanical
fastening of same, as used in the fabrication of (E.I.F.S.)
Exterior Insulation Finished System and similar type
systems, shall be the work of the plasterers." The
agreement requires employers to make contributions of
fringe benefits to the Local 8 employee benefit funds for "all
employees represented by the Union while the employees
are working in the jurisdiction of the Union." 5 When
disputes arise between the employer and union concerning
_________________________________________________________________
4. The employee benefit plans include the Plasterers Local 8 Pension
Fund, Local 8 Welfare Fund, Local 8 Annuity Fund, and the Local 8
Apprenticeship and Training Fund. (Plaintiff ’s Compl. P 2.) We will refer
to these funds collectively as the "Local 8 benefit funds."
5. The Local 8 Pension Fund trust agreement also contains a clause
addressing fund contribution:
The contributions or payments of the Employer shall be made in the
amount set forth in the collective bargaining agreement . . . . The
contributions or payments of the Employer shall be made in
accordance with the Agreement and Declaration of Trust . . . The
Trustees may compel and enforce the payment of the contributions
in any manner which they deem proper. However, the Trustees shall
not be required to compel and enforce the payment of the
contributions or payments or to be personally or collectively

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responsible therefor if in the opinion of the Trustees such
enforcement would involve a greater expense to the Fund than
would be realized by any attempt to compel and enforce the
payment of the contributions or payments.
4
"interpretation or application" of the collective bargaining
agreement, the agreement mandates arbitration.6
In December 1998, Long contracted to perform work on
a construction project at Downingtown High School in
Chester County, Pennsylvania. Part of this project involved
fastening rigid foam insulation. Long assigned this work to
members of Plasterers Local 8 and to members of a rival
union, the Carpenters Union. Both Local 8 and the
Carpenters Union believe the mechanical fastening of rigid
foam insulation is work that should be performed
exclusively by their respective members. Long divided the
fastening work, allegedly assigning the "mechanical
fastening" of rigid foam insulation to Carpenters Union
members, and the "non-mechanical fastening" to Local 8
Plasterers Union members. Long made all required
contributions for the mechanical fastening work to the
Carpenters Union benefit fund, but none to the Plasterers
Union benefit fund, as their members had not performed
any of that work.
Believing the collective bargaining agreement obligated
Long to make benefit contributions for the mechanical foam
insulation work to Local 8 -- whether or not Local 8
members performed the work -- union trustees Kilkenny
and Taylor brought suit without the approval of the other
four trustees and without pursuing arbitration. After suit
was filed, the trustees met and discussed the pending
lawsuit. The employer trustees requested the lawsuit be
withdrawn, but the union trustees were opposed. A
deadlock ensued between the employer trustees and the
union trustees.
Subsequently the employer trustees sought to have the
deadlocked motion arbitrated under LMRA S 302(c)(5) and
the Local 8 Pension Plan Trust Agreement.7 Like the
_________________________________________________________________
6. The article on arbitration provides, "[s]hould any dispute concerning
the interpretation or application of this agreement arise between the
Employer and the Union which cannot be satisfactorily adjusted . . .
then such dispute will be placed in arbitration by the Employer or the
Union within seven (7) days of the date that the dispute cannot be
mutually adjusted."
7. In a letter to the American Arbitration Association, the employer
trustees requested arbitration because "there is currently a deadlocked
5
collective bargaining agreement, the Local 8 Pension Plan

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Trust Agreement provides for arbitration when disputes
arise:
If the Trustees are unable to agree upon or settle any
of the matters arising under the administration of the
Fund, the Trustees representing the Employer and the
Trustees representing the Union will attempt to agree
upon the designation of an impartial arbitrator . . . The
decision of the arbitrator so agreed upon or appointed
by the American Arbitration Association or by the
District Court shall be final and binding on all
concerned.
Notwithstanding these provisions, Kilkenny and Taylor
refused to submit the deadlocked dispute to arbitration,
contending that as ERISA fiduciaries, they were entitled to
bring suit in federal court.
The District Court dismissed plaintiffs’ action for lack of
standing, concluding "the employer appointed trustees had
not authorized the lawsuit, and the union trustees cannot
act alone in this regard. If, as here, the trustees are
deadlocked in any matter of trust administration, the trust
agreements provide for an arbitration procedure to resolve
the impasse. The union trustees have not invoked the
arbitration procedure. Since the union trustees do not
presently have standing to bring this action, the complaint
is being dismissed." District Court Order, Apr. 4, 2000
(citing Alfarone v. Bernie Wolff Const. Corp. , 788 F.2d 76
(2d Cir. 1986)). This appeal followed.
IV.
The Local 8 employee benefit funds are employee benefit
plans governed by the Labor Management Relations Act
and the Employee Retirement Income Security Act. As
noted, the LMRA requires that employee benefit funds
_________________________________________________________________
motion . . . . concerning whether two Union Trustees individually may
seek contribution through litigation from an Employer signatory to the
[Local 8] contract where the Employer has assigned the work in question
to a different union with which it is signatory."
6
receiving employer contributions be jointly administered by
an equal number of employee and employer
representatives. 29 U.S.C. S 186(c)(5)(B). In the event of a
deadlock between the trustees, the LMRA requires the
employer and employee representatives to "agree on an
impartial umpire to decide [the] dispute . . .." Id.8
ERISA "protects employee pensions and other benefits by
providing insurance . . . specifying certain plan
characteristics in detail . . . and by setting forth certain
general fiduciary duties applicable to the management of
both pension and nonpension benefit plans." Varity Corp. v.
Howe, 516 U.S. 489, 496 (1996). ERISA fiduciaries include

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persons who exercise discretionary authority or control,
respecting management or administration of a benefit plan.
29 U.S.C. S 1002(21)(A). Fiduciaries are required to
discharge their duties with respect to a plan "solely in the
interest of the participants and their beneficiaries" and "in
accordance with the documents and instruments governing
the plan insofar as such documents and instruments are
consistent with the provisions of [ERISA]." 29 U.S.C.
S 1104(a). As fiduciaries, trustees must "take action against
employers who fail to contribute to the fund as required by
the plan. This obligation could require the trustees to
commence suit, or to picket the non-contributing employer;
but some action must be taken to safeguard beneficiaries’
credited service." Rosen v. Hotel & Rest. Employers &
Bartenders Union of Philadelphia, 637 F.2d 592, 600 (3d
Cir. 1981). Accordingly, ERISA permits fiduciaries to sue in
federal court as a means of enforcing the terms of a benefit
plan. 29 U.S.C. S 1132 (a)(3).
As we have recognized, there is often tension between the
"judicial remedies provided by ERISA and the arbitration
favored by general principles of labor law." Viggiano v.
_________________________________________________________________
8. "[T]he detailed basis on which such payments are to be made is
specified in a written agreement with the employer, and employees and
employers are equally represented in the administration of such fund
. . . and in the event the employer and employee groups deadlock on the
administration of such fund and there are no neutral persons
empowered to break such deadlock, such agreement provides that the
two groups shall agree on an impartial umpire to decide such dispute
. . . ." LMRA S 186(c)(5)(B).
7
Shenango China Div. of Anchor Hocking Corp., 750 F.2d
276, 279 (3d Cir. 1984). We have observed:
ERISA provides for immediate access to the federal
courts without resort to the labor arbitration forum in
proper circumstances. See Schneider Moving & Storage
Co. v. Robbins, 466 U.S. 364, 104 S. Ct. 1844, 80 L.
Ed. 2d 366, 52 U.S.L.W. 4476 (1984). But that result
does not automatically follow in each instance where
there is a controversy over some phase of [an] employee
welfare plan as defined by ERISA. Resort to arbitration
may still be appropriate where the parties contest the
meaning of a term in a collective bargaining agreement.
Whether the resolution of a controversy should proceed
under ERISA or under a labor contract is not always
clear, and in the nature of things, at times, there is an
overlap.
Id. (concluding the "presumption of arbitrability" in labor
disputes applied to the case presented because "the union
is a signatory to the contract and both parties have
economic measures available to them.").
We believe any tension is easily resolved in this case.

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Although plaintiffs frame this suit as an action brought by
ERISA fiduciaries to recover delinquent benefit payments,
there is no true delinquency here. Long has made the
required contributions, but to another union’s benefit fund.
When faced with disputes involving labor arbitration, "a
federal court must first determine whether resolution of the
disagreement is for the court or for an arbitrator to
undertake." Bell Atl. Penn. Inc. v. Communications Workers
of Am., 164 F.3d 197, 200 (3d Cir. 1999). The law compels
a party to submit his grievance to arbitration only if he has
contracted to do so. United Steelworkers of Am. v. Warrior
& Gulf Navigation Co., 363 U.S. 574, 582 (1960); RCA Corp.
v. Local 241, 700 F.2d 921, 923 (3d Cir. 1983) ("Whether or
not a party to a contract is bound to arbitrate, as well as
what issues it must arbitrate, is a matter to be determined
by the Court, not by the arbitrator, on the basis of the
contract entered into by the parties.").
Invoking the right to sue for breach of a collective
bargaining agreement under S 301 of the LMRA, plaintiffs
8
contend Long owes contributions to the Local 8 benefit
funds because of a contractual clause stating that the
mechanical fastening of rigid foam insulation shall be the
work of the plasterers. (Plaintiff ’s Compl.PP 6, 10). They
may be right. But their remedy is to pursue arbitration. As
noted, the collective bargaining agreement between the
Local 8 Union and the Interior Finish Contractors
Association provides:
Should any dispute concerning the interpretation or
application of this agreement arise between the
Employer and the Union which cannot be satisfactorily
adjusted . . . then such dispute will be placed in
arbitration by the Employer or the Union within seven
(7) days of the date that the dispute cannot be
mutually adjusted . . . . In further consideration of the
mutual promises made by and between the Union and
the Employer as set forth in this Agreement, the Union
and the Employer agree that neither party shall bring,
or cause to be brought or support any suit, claim, or
grievance or dispute pending or instituted before any
Court, Administrative Agency or Board or any other
Body unless and until all of the terms and provisions
of the Article have been followed.
Furthermore, the Local 8 Pension Fund trust agreement
provides "[i]f the Trustees are unable to agree upon or settle
any of the matters arising under the administration of the
Fund, the Trustees representing the Employer and the
Trustees representing the Union will attempt to agree upon
the designation of an impartial arbitrator . . . ." The basis
of plaintiffs’ claim flows directly from the underlying
collective bargaining and trust agreements. Yet plaintiffs
eschew the labor agreements and contend ERISA governs
this matter.9 We disagree. Plaintiffs were required to submit

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their grievances to arbitration.
_________________________________________________________________
9. In the alternative, plaintiffs contends this dispute is non-arbitrable
and should be governed by the Funds’ "Delinquency Procedure," a
procedure which enables trustees to institute litigation for the recovery
of employer contributions. This argument is without merit because, as
noted, there is no true delinquency here.
9
V.
Although under these facts the LMRA provides the
applicable law, arbitration under the labor and trust
agreements is also consistent with ERISA’s exhaustion
doctrine. Under ERISA, internal administrative remedies
like the arbitration procedures mandated in the labor
agreements must be exhausted prior to bringing suit in
federal court. Harrow v. Prudential Ins. Co., 279 F.3d 244
(3d Cir. 2002) (" ‘Except in limited circumstances . . . a
federal court will not entertain an ERISA claim unless the
plaintiff has exhausted the remedies available under the
plan.’ " (quoting Weldon v. Kraft, Inc. , 896 F.2d 793, 800
(3d Cir. 1990))); Zipf v. Am. Tel. & Tel. Co. , 799 F.2d 889
(3d Cir. 1986); see also Amato v. Bernard, 618 F.2d 559,
567 (9th Cir. 1980) ("[S]ound policy requires the application
of the exhaustion doctrine in suits under [ERISA]."). In
part, courts require exhaustion of administrative remedies
because trustees "are granted broad fiduciary rights and
responsibilities under ERISA . . . and implementation of the
exhaustion requirement will enhance their ability to
expertly and efficiently manage their funds by preventing
premature judicial intervention in their decision-making
processes." Amato, 618 F.2d at 567 (observing exhaustion
helps to "reduce the number of frivolous lawsuits under
ERISA; to promote the consistent treatment of claims for
benefits; to provide a nonadversarial method of claims
settlement; and to minimize the costs of claims settlement
for all concerned.").10
As noted, the trust agreements here mandate arbitration
in the event of deadlock. Moreover, the gravamen of
plaintiffs’ suit was the proper interpretation of a collective
bargaining agreement requiring arbitration of matters
_________________________________________________________________
10. We apply the exhaustion requirement to ERISA benefit claims, not to
claims arising from violations of substantive statutory provisions. Zipf,
799 F.2d at 891 (administrative exhaustion not required when plaintiff
alleged termination in violation of ERISA S 510). This distinction is of no
moment here, though, because this suit does not involve the violation of
a substantive ERISA provision. Plaintiffs have sued an employer for
benefit contributions allegedly due under a collective bargaining
agreement.
10

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involving "plan administration."11 Thus plaintiffs were
required to exhaust administrative remedies.
Nor can plaintiffs demonstrate a "clear and positive"
showing of futility excusing exhaustion of administrative
remedies. Harrow, 279 F.3d at 249. In record
correspondence, plaintiffs state: "As it was likely that the
employer trustees might pass on authorizing this law suit,
the union trustees determined that they should satisfy their
fiduciary obligations to the plans by initiating this action."
This is clearly insufficient.
VI.
The Court of Appeals for the Second Circuit addressed a
nearly identical case in Alfarone v. Wolff Construction Corp.,
788 F.2d 76, 79 (2d Cir. 1986) ("[The Union-appointed
trustees’] filing of this suit without either receiving the
approval of a majority of the trustees or employing the
arbitration procedure contravenes both the Taft-Hartley Act
and the trust agreements.").12 In Alfarone, a group of union-
appointed trustees brought suit to recover benefit
contributions and liquidated damages for work which
allegedly should have been performed by certain union
members under the collective bargaining agreement. Id. at
77. As here, the trustees were evenly divided on whether
there was a delinquency and on bringing suit. Id. In
addition, the trust agreements mandated arbitration in the
_________________________________________________________________
11. For the first time on appeal, plaintiffs maintain that their ability to
bring this suit does not constitute "plan administration" and is therefore
not governed by the agreements. We decline to address this issue.
12. Plaintiffs contend Alfarone has not survived the Supreme Court’s
decision in Local 144 Nursing Home Pension Fund v. Demisay, 508 U.S.
581 (1993). But Demisay does not abrogate the equal representation
mandates of the Taft Hartley Act. See id. (holding "302(e) does not
provide authority for a federal court to issue injunctions against a trust
fund or its trustees requiring the trust funds to be administered in the
manner described in S 302(c)(5)."). Moreover, in promulgating ERISA,
Congress did not intend to "alter, amend, modify, invalidate, impair, or
supersede any law of the United States." 29 U.S.C. S 1144(d). In the
alternative, plaintiffs contend Alfarone was wrongly decided and should
not be followed. We disagree.
11
event of a deadlock, but the union-appointed trustees failed
to pursue this administrative remedy. Id. Affirming a
dismissal for lack of standing, the Court of Appeals for the
Second Circuit stated:
The limitation in the trust agreements on the powers
and duties of less than a majority of the trustees under
the instant plans is consistent with the power granted
fiduciaries to bring a civil suit under ERISA. ERISA
expressly requires that the acts of trustees be in
accordance with trust agreements, 29 U.S.C.

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S 1104(a)(1), and expressly contemplates joint
administration of trust funds. 29 U.S.C. S1102(a)(1).
ERISA does not abrogate the equal representation
mandates of the Taft-Hartley Act. 29 U.S.C. S 1144(d).
. . . Permitting the Union-appointed trustees to sue
without first submitting the issue to arbitration would
violate the firmly established federal policy favoring
exhaustion of administrative remedies in ERISA cases.
. . . Because the trustees have not exhausted their
administrative remedies, their actions are premature
and were properly dismissed.
Id. at 79 (citations omitted).
Similarly, plaintiffs here were not authorized under the
trust agreements to bring suit without either receiving the
approval of a majority of the trustees or employing the
arbitration procedures. The trust agreements describe the
authority of "the trustees" to bring suit as a collective
power, and not an individual power, providing "the entire
right, title and interest to the Fund is vested in the Board
of Trustees . . ."13 Furthermore, the powers and duties of
"the Trustees" include collecting and receiving "all
contributions and/or payments due to and payable to the
Fund. In so doing, in their sole discretion, the Trustees
shall have the right to maintain any and all actions and
legal proceedings necessary for the collection of the
_________________________________________________________________
13. The terms "Board of Trustees," "Board," and "Trustees" are defined in
the Local 8 Pension Fund agreement as: "those persons designated by
the Employer as its representatives along with those persons designated
by the Union as its representatives, as well as any successors who shall
be in charge of the overall administration of the Trust Fund."
12
contributions . . . ." Nonetheless, plaintiffs instituted suit
on their own without majority approval and refused to
arbitrate a deadlocked motion over their authority to sue
for allegedly delinquent funds. For these reasons, they lack
standing to sue at this time.
We will affirm the judgment of the District Court.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
13

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