741 F.

2d 620
117 L.R.R.M. (BNA) 2083, 101 Lab.Cas. P 11,152,
5 Employee Benefits Ca 2081

Charles M. BYRNES, James M. Beros, William M. Cherilla,

Walter Chrzan, John Puskarich, Leslie Breman, Julius R.
Casali, John W. Flanigan, James H. Hutchinson, Jr., and
Joseph E. Zaucha, Trustees of the Western Pennsylvania
Teamsters and Employers Pension Fund
v.
DeBOLT TRANSFER, INC.
W.F. HARDY, Charles M. Byrnes, William M. Cherilla,
Michael
Garnder, Steve Missonak, Joseph P. Santone, John W.
Flanigan, James H. Hutchinson, Jr., John O'Connor, and
Joseph E. Zaucha, Trustees of the Western Pennsylvania
Teamsters and Motor Carriers Welfare Fund
v.
DeBOLT TRANSFER, INC.
Appeal of Charles M. BYRNES, et al., Trustees of the Western
Pennsylvania Teamsters and Employers Pension Fund, and
W.F.
Hardy, et al., Trustees of the Western Pennsylvania
Teamsters and Motor Carriers Welfare Fund, No. 83-5556.
Appeal of DeBOLT TRANSFER, INC., No. 83-5557.
Nos. 83-5556 and 83-5557.

United States Court of Appeals,

Third Circuit.
Argued April 23, 1984.
Decided Aug. 10, 1984.
As Amended Aug. 21, 1984.
Rehearing and Rehearing In Banc
Denied Sept. 11, 1984.

Charles J. Streiff (argued), Vincent P. Szeligo, Wick, Rich, Fluke &

Streiff, Pittsburgh, Pa., for appellants.
Debra D. Patti (argued), MacMullan & Associates, P.C., Pittsburgh, Pa.,
for appellee.
Before ALDISERT, WEIS and ROSENN, Circuit Judges.
OPINION OF THE COURT
ROSENN, Circuit Judge.

Plaintiffs, Charles M. Byrnes, et al., trustees of the Western Pennsylvania

Teamsters and Employers Pension Fund, and W.F. Hardy, et al., trustees of the
Western Pennsylvania Teamsters and Motor Carriers Fund (the Funds), appeal
from a judgment of the United States District Court for the Western District of
Pennsylvania. They contend that the court erred in rejecting their requests that
it apply a six-year statute of limitations and that it toll the applicable statute of
limitations. Defendant, DeBolt Transfer, Inc. (DeBolt), a freight carrier, crossappeals from the same judgment in which the court found it liable to plaintiffs
for the sum of approximately $185,000. We affirm in part and reverse in part,
and remand to the district court for further proceedings consistent with this
opinion.

I.
2

Beginning in 1973, DeBolt agreed in a series of collective bargaining and trust

agreements to make regular contributions to the Funds on behalf of a wide
range of employees.1 The payments it subsequently made were by means of a
self-reporting system: when the Funds sent it the monthly invoices, DeBolt
would adjust them, list the names of those individuals on whose behalf it
contributed, and return the invoices to the Funds with the tendered payment.

In the middle of 1980, the Funds instituted an audit of DeBolt's records

pursuant to the audit program authorized by the agreements. Based on both
information uncovered by a preliminary audit and DeBolt's denial of access to
employment records, the Funds' trustees brought suit on October 24, 1980,
under the Employee Retirement Income Security Act of 1974 (ERISA), 29
U.S.C. Sec. 1001 et seq., and the Labor Management Relations Act of 1947
(LMRA), 29 U.S.C. Sec. 185 et seq., alleging that DeBolt had systematically
failed to contribute on behalf of an entire range of individuals for whom the
agreements provided that it contribute. On stipulated facts, the district court on

June 30, 1983 entered summary judgment for plaintiffs with regard to each of
the categories of employees for which they claimed defendant had wrongfully
failed to contribute--non-union owner-operators, fleet owners, owner-operators
at the Neville Island operation, and individuals who had worked less than 1,000
hours. The district court also held, however, that any payment that should have
been made prior to three years before the date on which the suit had been filed
could not be recovered because of the three-year statute of limitations in the
Pennsylvania Wage Payment and Collection Law, Pa.Stat.Ann. tit. 43, Sec.
260.9a(g) (Purdon 1983). The district court also concluded that the undisputed
facts did not justify tolling the statute of limitations. It entered summary
judgments for the Pension Fund in the amount of $149,378.78 and for the
Welfare Fund in the amount of $35,252.78. As noted above, each side appeals.
II.
A.
4

Defendant first contends that, under section 202 of ERISA, 29 U.S.C. Sec.
1052, it need not have made contributions to the pension fund on behalf of
employees until they worked 1,000 hours in a twelve month period.2 The
district court properly rejected this untenable argument.

The district court correctly noted that the 1,000 hour requirement has nothing to
do with DeBolt's obligations in this case. That requirement merely establishes a
statutory minimum after which pension rights begin to vest in employees. The
requirement in no way purports to supercede the contracts entered into between
the parties under which DeBolt agreed to contribute pursuant to the appropriate
collective bargaining agreements on behalf of individuals who work beyond the
thirty-day probationary period. See Talarico v. United Furniture Workers
Pension Fund, 479 F.Supp. 1072, 1082 (D.Neb.1979). Accordingly, the court
properly granted summary judgment on the 1,000 hour issue.

B.
6

Defendant next contends that the district court erred in concluding that
defendant's obligation to contribute under applicable collective bargaining
agreements applied equally to union and non-union owner-operators. It claims
that the agreements, as a matter of fact, do not extend to non-union drivers and,
as a matter of law, may not extend to non-union drivers. We do not agree.

The district court properly found that, on their face, the collective bargaining
agreements at issue here plainly contradict DeBolt's contention that it never

incurred an obligation to contribute on behalf of non-union owner-operators.

Article 40(2)(a) of the Eastern Conference Area Iron & Steel Rider defines
employees under the agreements to be "any driver, chauffeur or driver-helper
operating a truck, tractor ... or any other vehicle ...." Article 40(2)(c) and Article
55(4) likewise state that "hired or leased equipment shall be operated by an
employee of the certificated or permitted carrier." In sum, these provisions of
the collective bargaining agreements negate DeBolt's contentions that it was
obligated to contribute only on behalf of union employees. The defendant can
point to no provision in any of the agreements that supports its claim that only
union members were to receive the benefits of DeBolt's contributions.
8

The absence of any distinction in the agreements between union and non-union
members can be easily explained: the law does not permit such a distinction.
Section 8(a)(3) of the National Labor Relations Act, 29 U.S.C. Sec. 158(a)(3),
provides as follows:

9 shall be an unfair labor practice for an employer--by discrimination in regard to

It
hire or tenure of employment or any term or condition of employment to encourage
or discourage membership in any labor organization ....
10

The Supreme Court made clear in Radio Officers' Union v. NLRB, 347 U.S. 17,
39-42, 74 S.Ct. 323, 335-337, 98 L.Ed. 455 (1954), that section 8(a)(3) meant
precisely what it said: an employer may not encourage or discourage union
membership by means of discrimination. The district court found that DeBolt's
practice of making contributions to the Funds on behalf of union members only
will encourage union membership. Not even DeBolt disputes this observation.
Accordingly, section 8(a)(3) prohibits such a practice.

11

On appeal, DeBolt seems to recognize the futility of claiming that it may

contribute only on behalf of union owner-operators. Thus, it seeks to subtly
shift the trappings of its argument, contending that it incurred no obligation to
contribute on behalf of non-union owner-operators because non-union owneroperators are not "employees" within the meaning of the collective bargaining
agreements. Such an argument lacks merit.

12

As noted above, Article 40(2)(c) of the Iron & Steel Rider specifically sets
forth the employees covered by the agreement. With regard to hired or leased
equipment, the agreement provides that:

13 all cases, hired or leased equipment shall be operated by an employee of the

In
certificated or permitted carrier. The Employer expressly reserves the right to control
the manner, means and details of and by which the owner-operator performs his

services, as well as the ends to be accomplished. (Emphasis added.)

14

Article 55(4), the provision devoted to owner-operators, repeats verbatim the

conditions of Article 40. Now, however, DeBolt contends that non-union
owner-operators are not employees because DeBolt simply does not exercise
control over them. In short, DeBolt asks us to relieve it of its obligations under a
series of collective bargaining agreements, resorting to subtle and specious
reasoning. We decline to do so.

15

DeBolt places great weight on Todd v. Benal Concrete Construction Co., 710
F.2d 581 (9th Cir.1983). In Todd, defendant Benal, a construction company,
had obligated itself in a collective bargaining agreement to treat owner-operator
ditch trenchers as employees and thus to contribute on their behalf to four trust
funds. Benal subsequently failed to make such contributions. The Ninth Circuit
permitted Benal to get out from under its contractual obligation because it
concluded that, under the common law agency test adopted by that court, the
unregulated ditch trenching operations at issue there demonstrated that those
owner-operators were in fact independent contractors rather than employees,
regardless of the contractual provision to the contrary.

16

Whatever the merits of the Todd v. Benal approach, we decline to extend the
principle of that case to cover the undisputed facts before us. As noted above,
DeBolt agreed that "all ... hired or leased equipment shall be operated by an
employee of [DeBolt]." It likewise agreed that it "reserves the right to control
the manner, means and details of and by which the owner-operator performs his
services." In his deposition, John DeBolt, II, the president of DeBolt, admitted
each of these facts. He also acknowledged that under regulations of the Public
Utility Commission of Pennsylvania and the Interstate Commerce Commission
DeBolt is required as a certificated carrier to have exclusive control of the
equipment leased by its owner-operators.3

17

In sum, DeBolt agreed in its collective bargaining agreements with the

Teamsters Union to classify the owner-operators at issue here as employees. It
agreed that it controlled the activities of such owner-operators. It agreed to
contribute to the Funds on their behalf. It may not now argue that such
individuals are not employees, not subject to DeBolt's control, and that DeBolt
is not required to make contributions in their behalf. The court properly entered
summary judgment for the Funds on this issue.

C.
18

For essentially the same reasons that apply to the owner-operators, the class of

18

For essentially the same reasons that apply to the owner-operators, the class of
sixteen unidentified individuals grouped by the parties under the category of
"fleet owners" (more accurately called "fleet drivers") is entitled to
contributions on its behalf.

19

To repeat, DeBolt agreed that "hired or leased equipment shall be operated by

an employee of [DeBolt]." It likewise agreed to make contributions to the
Funds on behalf of such drivers. Due in large measure to DeBolt's lack of
cooperation, the Auditor could not determine who actually drove the tractortrailers leased to DeBolt by fleet owners. The parties thus used the term "fleet
owners" as a concise way of referring to such drivers. Contrary to DeBolt's
contention, neither the Funds nor the district court has ever suggested that the
collective bargaining agreements obligate DeBolt to make contributions on
behalf of the equipment owners themselves. With respect to the drivers of such
equipment, however, the district court properly granted summary judgment for
the Funds.

D.
20

Throughout this litigation, the Funds have contended that DeBolt owes
contributions on behalf of those workers at the Neville Island operation. Not
surprisingly, DeBolt has steadfastly maintained that Neville Island has nothing
to do with the collective bargaining agreements at issue here and that it
therefore owes no such contributions. The district court agreed with the Funds.

21

The collective bargaining agreements provide:

22 no event will a separate division, terminal or facility be established that is not

In
covered by the terms of the National Master Freight Agreement and the Appropriate
Area Supplements.
23

DeBolt claims that its connections with Neville Island are too tenuous to bring
that operation within the scope of this provision. It claims that, in exchange for
a percentage of the revenue, it merely permits a commissioned agent to use its
(DeBolt's) Interstate Commerce Commission (ICC) rights to solicit freight and
haulers. The district court labeled this "a subterfuge operation ... established by
DeBolt to avoid its contractual contributory obligations to the [Funds]." This
may be so. As it stands, however, nothing in the record supports this harsh
allegation. It is not uncommon for carriers to lease ICC rights with the approval
of the Interstate Commerce Commission. See 49 C.F.R. Sec. 1181.26. Because
the record on the Neville Island issue is so hazy, however, we remand to the
district court with direction to reexamine that operation and to make more
detailed factual findings and a clearer explanation as to how it reached its

result.
III.
24

In their appeal, the Funds assert that the district court erred in holding that (a)
the three-year statute of limitations governed the action and (b) the undisputed
facts did not justify tolling the statute.

A.
25

Because neither the LMRA nor ERISA contains an explicit limitation period
with regard to actions such as this, federal courts must determine the timeliness
of the suit by reference to the most appropriate statute of limitations of the state
in which the action arose. International Union v. Hoosier Cardinal Corp., 383
U.S. 696, 705, 86 S.Ct. 1107, 1113, 16 L.Ed.2d 192 (1966). Eleven days prior
to oral argument in the case sub judice, another panel of this court decided that,
when a Fund sues to recover unpaid contributions to employee benefit trust
funds, the three-year statute of limitations contained in Pennsylvania's Wage
Payment and Collection Law, Pa.Stat.Ann. tit. 43, Sec. 260.9a(g) (Purdon
1983), governs the action. Teamsters Pension Trust Fund v. John Tinney
Delivery Service, Inc., 732 F.2d 319 (3d Cir.1984). On appeal, the Funds have
devoted much effort toward persuading us that the Tinney court failed to make
the proper inquiry and thus reached an unfortunate result. They contend that
because they allege violations of the collective bargaining agreement, the
district court should have applied the six-year limitations statute governing an
action on a written contract. 42 Pa.Cons.Stat.Ann. Sec. 5527(2) (Purdon 1981).

26

Whatever the merits of this position, the policies of our court dictate that no
subsequent panel, but only the in banc court, may overrule the reported opinion
of a previous panel. See Internal Operating Procedures Chapter 8C ("...
[R]eported panel opinions are binding on subsequent panels .... Court in banc
consideration is required to overrule a published opinion of this court.").
Accordingly, the district court in this case did not err in applying the shorter
limitations period.

B.
27

Throughout this litigation, the Funds have contended that the search for the
proper statute of limitations may ultimately prove beside the point because such
statute did not begin to run until the completion of the compliance audit in early
1981. In a brief discussion of the issue of tolling under Pennsylvania law, the
district court rejected the contention and refused to toll the statute. We believe

that the issue should be reexamined by the district court on remand, at which
time the district court will have the opportunity to further develop the factual
record and integrate such findings with the relevant case law.
28

In recent years, other courts have encountered the tolling question in situations
similar to that faced here by the district court. In Seymour v. Hull & Moreland
Engineering, 418 F.Supp. 190 (C.D.Cal.1976), modified on other grounds, 605
F.2d 1105 (9th Cir.1979), trustees of health and welfare and pension funds
brought suit against an employer obligated under a collective bargaining
agreement to make payments by means of a self-reporting system, alleging inter
alia that the employer had failed to make contributions on behalf of certain
employees. Holding for the funds on most of the elements of their claim, the
court, applying California law, concluded that "no portion of plaintiffs' claims
are [sic] barred by the statute of limitations" because:

29 statute of limitations was tolled until plaintiffs obtained knowledge of the facts
The
upon which their cause of action is based. The tolling was caused by defendants'
breach of the trust and confidence plaintiffs placed in defendants to report hours and
pay contributions required by the Agreement.
30

418 F.Supp. at 197.

31

A similar situation unfolded in Bugher v. Consolidated X-Ray Service Corp.,

515 F.Supp. 1180, aff'd, 705 F.2d 1426 (5th Cir.1983). Trustees of health and
welfare and pension funds brought suit against an employer likewise obligated
under a collective bargaining agreement to make payments to the funds by
means of a self-reporting system. As in Seymour, the funds in Bugher alleged
that the employer had underreported and thus failed to contribute as much as it
owed. The court agreed with the funds. Accordingly, it concluded that under
Texas law such conduct by the employer served to toll the applicable statute of
limitations, permitting the funds to recover all contributions that the employer
had failed to make. 515 F.Supp. at 1183.

32

The district court's discussion of the tolling issue in the case sub judice gives no
indication that previous courts have struggled with the identical issue and
concluded that tolling may represent the appropriate course of action. Instead,
the district court merely cites several recent cases that discuss the Pennsylvania
law of tolling in cases having little in common with the case at bar--Gee v.
CBS, Inc., 471 F.Supp. 600 (E.D.Pa.), aff'd, 612 F.2d 572 (3d Cir.1979), and
Knuth v. Erie-Crawford Dairy Association, 463 F.2d 470 (3d Cir.1972)--and
concludes that those cases compel us to reject the Funds' plea to toll the statute.
We do not find the question so uncomplicated.

33

In Gee, 471 F.Supp. at 617-37, the court engaged in an extensive discussion of

the matter of tolling under Pennsylvania law. The court enumerated several
types of situations in which tolling had been invoked, among them cases
involving the doctrines of inherent fraud, fraudulent concealment, and breach
of a fiduciary duty.

34

The district court in this case, citing Gee and Knuth, apparently believed that, of
the diverse situations justifying tolling under Pennsylvania law, only fraudulent
concealment could potentially apply. It then proceeded to conclude that,
because "the plaintiffs' complaints in the consolidated actions do not contain
any allegations of affirmative, independent acts of concealment by the
[d]efendant," the Funds could not have the statute tolled. These conclusions
raise at least two problems that must be addressed on remand.

35

First, the district court should examine the rationale of Seymour and Bugher,
together with applicable Pennsylvania law to determine whether DeBolt's
breach of the duty to make accurate reports and contributions under a selfreporting system itself tolled the limitations period, irrespective of any fraud,
until the Funds should reasonably have learned of the breach. See Seymour,
418 F.Supp. at 197, and Bugher, 515 F.Supp. at 1183. See also Livolsi v. City
of New Castle, 501 F.Supp. 1146, 1151 (W.D.Pa.1980); Developments in the
Law--Statutes of Limitations, 63 Harv.L.Rev. 1177, 1214-16 (1950). This
inquiry necessarily requires the district court to examine Seymour and Bugher
and decide whether the theory underlying such cases proves inconsistent with
Pennsylvania law. It may also require further development of the record in
order to determine whether, given all the circumstances, the Funds exercised
sufficient diligence to preserve their rights. See Gee, 471 F.Supp at 630.

36

Second, the district court's conclusions with regard to the fraudulent

concealment issue need to be spelled out in greater detail. If the problem is with
the Funds' complaints, the court should act on the plaintiffs' motion to amend.4
We agree, of course, that fraud, and thus fraudulent concealment, must be
pleaded with particularity. Walters v. Ditzler, 424 Pa. 445, 227 A.2d 833
(1967); Fed.R.Civ.P. 9(b). Nevertheless, the district court should reexamine the
means by which DeBolt regularly submitted its list of names and contributions.
If, for instance, such submissions contained an express certification clause
equivalent to that in Bugher, 5 the court should determine whether such a clause
satisfies the requirement of an "affirmative effort ... to conceal" under Gee,
Knuth, and Overfield v. Pennroad Corp., 146 F.2d 889 (3d Cir.1944). Should
no such certification clause be present, the court should decide whether the
mere act of submitting an incomplete list of names and contributions under a
self-reporting system constitutes an affirmative act under the Pennsylvania law

of fraudulent concealment. The court should make whatever additional factual

findings it deems necessary to the disposition of the tolling issue.
37

Accordingly, we will affirm in part and reverse in part, and as to the issues on
which we reverse, we will vacate the judgments and remand for further
proceedings consistent with this opinion.6

38

WEIS, Circuit Judge, concurring.

39

I join in the court's opinion but wish to add a few comments on the tolling
issue.

40

A statute of limitations represents a legislative policy judgment on how long a

plaintiff may delay bringing suit without being unfair to the defendant. That
being so, exceptions should not be freely allowed, and the plaintiff bears the
burden of establishing that the statute has been tolled. Swietlowich v. County of
Bucks, 610 F.2d 1157 (3d Cir.1979).

41

In this case, the defendants' reporting obligation is based on contract. The

characterization of that duty as "self-reporting" is not a talismanic phrase that
imbues the obligation with fiduciary status. Also of importance is that the same
contract gives plaintiffs the right to conduct periodic audits. Therefore, the
inquiry into the plaintiffs' diligence has more significance than where a party
does not have the access to information available to plaintiffs here.

42

The district court cases of Seymour v. Hull & Moreland Engineering, 418
F.Supp. 190 (C.D.Cal.1976), modified on other grounds, 605 F.2d 1105 (9th
Cir.1979), and Bugher v. Consolidated X-Ray Service Corp., 515 F.Supp. 1180
(N.D.Tex.1981), aff'd, 705 F.2d 1426 (5th Cir.1983), must be viewed with
caution. As this court's opinion notes, those cases apply the laws of California
and Texas; here, Pennsylvania law controls. In addition, there was a factual
finding in Seymour that the defendant, "knowingly in breach of the
Agreement," failed to report hours worked. 418 F.Supp. at 196. In Bugher, the
court found that there had been fraudulent concealment under Texas law.

43

Whether those cases are helpful in interpreting Pennsylvania law necessarily

hinges first, on factual matters that are not presently in the record, and second,
on a comparison of the respective state's laws on tolling. Resolution of those
matters is entrusted to the district court on remand.

The relevant agreements are the National Master Freight Agreement, the
Eastern Conference Area Iron & Steel Rider, and the Teamsters Joint Council
No. 40 Over-The-Road Supplemental Agreement

Section 202(a)(1)(A) provides:

No pension plan may require as a condition of participation in the plan, that any
employee complete a period of service with the employer or employers
maintaining the plan extending beyond the later of the following dates-(i) The date on which the employee attains the age of 25: or
(ii) the date on which he completes 1 year of service.
Section 202(a)(3)(A) provides:
For purposes of this section, the term "year of service" means a 12-month
period during which the employee has not less than 1000 hours of service.

State and federal regulations suggest a stark contrast between the unregulated
activities of the owner-operators of the construction industry in Todd v. Benal
and the heavily regulated activities of the owner-operators of the transportation
industry in the case at bar. See 49 C.F.R. Sec. 1057 (1983) and 52 Pa. Code
Sec. 31.32. See also Teamsters Local 162 v. Mitchell Brothers Truck Lines,
682 F.2d 763, 768 (9th Cir.1982) (under common law agency test, owneroperators in the transportation industry within the control of lessee-carrier
constitute employees and not independent contractors as a matter of law)

At oral argument on May 28, 1981, the district court advised the Funds that in
order to have the statute tolled they would have to amend their complaints to
allege "some kind of fraud." Counsel replied that plaintiffs would do so. On
appeal, the Funds allege that they moved to amend their complaint but that the
district court failed to act on their motion. Should this be the case, the confusion
should be clarified on remand

With its reports, the employer in Bugher returned the following statement:
We certify that this report is a true and complete report of the hours worked by
employees represented in collective bargaining by the local union shown above
and such other employees as may be approved by the board of trustees but in no
event includes any other employees, owners, partners or proprietors of this
firm.

515 F.Supp. at 1183

6

In its memorandum order of June 30, 1983, the district court awarded
substantial prejudgment interest ($47,089.50 to the Pension Fund and
$12,956.31 to the Health and Welfare Fund) and attorney fees ($10,000 to the
Pension Fund and $5,000 to the Health and Welfare Fund) to each plaintiff.
Should the remand require a recalculation of the amounts owed to the Funds,
the district court should likewise recalculate the awards of interest and attorney
fees in accordance with Sec. 502(g) of ERISA, 29 U.S.C. Sec. 1132. The
district court should in any event set forth the findings that form the basis for its
determination of interest and fees