Schneider Moving & Storage Co. v. Robbins

Background

The dispute involves the trustees of two large multiemployer benefit funds and two employers that had agreed to participate in those funds. The trustees sued the employers in federal court, saying the companies failed to make required contributions and resisted payroll audits. The employers argued that the disputes about how to read the union contracts had to go to arbitration first. A federal district court dismissed the trustees’ suits pending arbitration, but the Eighth Circuit en banc reversed and said the trustees could sue in court. The Supreme Court granted review because other courts had disagreed on this issue.

Reasoning

The Court focused on what the contracts actually say. The trust agreements give trustees broad power to examine records and to bring legal proceedings to collect contributions. The arbitration clauses in the union contracts allow only the union or the employer to start arbitration; trustees are not given that access. The Court also declined to apply the usual presumption favoring arbitration in union-employer disputes because trustees cannot use strikes or lockouts, so arbitration does not serve the same labor-peace purpose here. The Court concluded the agreements show no intent to force trustees to arbitrate disputes with employers, and it therefore allowed the trustees to pursue their claims in court.

Real world impact

This ruling lets trustees of multiemployer funds seek prompt court orders for audits and unpaid contributions without first requiring arbitration. It protects the collective interests of many fund participants who could be harmed by delays or by leaving trustees dependent on the union to pursue claims.