Dairies Can’t Avoid ERISA Obligations to Unions

FRESNO (CN) - A group of dairies allegedly coerced by the unions representing their truck drivers are still responsible for withdrawal payments under ERISA, a federal judge concluded.

Plaintiffs Irigaray Dairy, Charles Van Der Kooi Dairy, Henry Jongsma & Son Dairy and Cow-West Northstar Dairy argued in a declaratory relief action that a provision of ERISA that makes employers who withdraw from employee benefit plans subject to "unfunded fund liability" does not apply to them.

Plaintiffs argued they made contributions for decades to an employee benefit plan administered by a Board of Trustees for two unions. Further, they said the Christian Labor Association Union is not a union certified by the Agricultural Labor Relations Board and cannot lawfully represent milk truck drivers through any collective bargaining agreement.

They also claim the milk truck drivers had "threatened and extorted Plaintiffs into making payment to defendants' employee benefit plan by refusing to pick up milk from plaintiffs' dairies unless plaintiffs made payments to the CLA Union and defendants."

Ultimately, the plaintiffs say, they continued to make payments under the false assumption that they were legally required to do so. They argued the defendant unions forced them to make the payments and took advantage of their ignorance of the law.

U.S. District Judge Anthony Ishii concluded that plaintiffs' allegations of fraud and coercion are barred under various statutes of limitations.

"Given that events having any bearing on the 'first instance' of plaintiffs' contributions to the Plan are admitted to have occurred 'decades' ago, there is no conceivable basis upon which plaintiffs could allege those contributions were unlawful because they were the result of fraudulent coercive or otherwise tortious conduct," the opinion stated. "It is elementary that ignorance of legal rights does not toll the running of any limitations period."

The plaintiffs also moved for a determination that there was never a valid agreement between the parties to begin with. Ishii found fault with this argument. "Although plaintiffs have been careful to allege there was never a valid writing of any kind between plaintiffs and defendants, they have not alleged there was no writing at all," the opinion stated.

Plaintiffs made contributions to the plan for decades, Ishii pointed out, which is strong evidence that plaintiffs made a commitment to the Plan in writing, and provided reason for an employee to expect that the Plain was established and maintained for the employee's benefit.

Ishii concluded that plaintiffs cannot avoid their responsibilities under ERISA. "Plaintiffs are equitably estopped from asserting they have no responsibility under ERISA to the Plan based on the invalidity of the plan at its inception."

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