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CPC Logistics, Inc. v. Abbott Laboratories, Inc.

United States District Court, E.D. Missouri, Eastern Division

November 13, 2014

CPC LOGISTICS, INC., Plaintiff,
v.
ABBOTT LABORATORIES, INC., Defendant.

MEMORANDUM AND ORDER

JEAN C. HAMILTON, District Judge.

This matter is before the Court on Defendant Abbott Laboratories, Inc.'s ("Abbott") Motion for Summary Judgment, filed September 5, 2014. (ECF No. 104). The motion is fully briefed and ready for disposition.

BACKGROUND

Abbott is a U.S. pharmaceutical and healthcare products company with several manufacturing operations located throughout the country. (Defendant Abbott Laboratories, Inc.'s Statement of Uncontroverted Material Facts ("Abbott's Facts"), ¶ 1). Historically, Abbott owned or leased its own trucks, and used drivers to deliver its products within operation sites and to healthcare facilities. ( Id., ¶ 2). During the period in question, Abbott did not employ truck drivers; rather, it contracted with driver leasing companies, such as TLI, Incorporated ("TLI"), the predecessor of Plaintiff CPC Logistics, Inc. ("CPC"), to provide drivers. ( Id., ¶ 3). The driver leasing companies employed the drivers and managed every aspect of their employment, including hiring, training, wages, payroll, and benefits. ( Id., ¶ 5). In the case of union drivers, the leasing company also was responsible for the negotiation and management of any applicable collective bargaining agreements. (Id.).

On or about February 1, 1992, Abbott and TLI entered into a contract for the supply of a single non-union driver to Abbott's Kansas City facility (the "Agreement"). (Abbott's Facts, ¶¶ 7, 15, 18). The Agreement required TLI, inter alia, to provide Abbott with licensed drivers, pay all wages and benefits due to the drivers, pay all applicable taxes, and bear sole responsibility for all labor negotiations and related items concerning drivers furnished to Abbott under the Agreement. ( Id., ¶ 8). Abbott in turn agreed, inter alia, to pay TLI for the services provided in accordance with the Schedules attached to the Agreement, for which TLI would invoice Abbott on a weekly basis. ( Id., ¶¶ 9, 10). Either party was permitted to cancel the Agreement with thirty days' written notice. ( Id., ¶ 11).

The Agreement included an original Schedule A, also dated February 1, 1992 ("1992 Schedule A"), that identified the specific payments "for services rendered" for which Abbott, the "CUSTOMER", would reimburse TLI, the "CONTRACTOR". (Abbott's Facts, ¶¶ 13, 16). These payments included:

A.) The amount of wages, fringe benefits and other payment required to be made by CUSTOMER (sic)[1] under the Agreement, including all payments made to or for the benefit of the employees supplied under the Agreement pursuant to any agreement, statute or governmental regulation.
B.) It is understood and agreed that if, during the effective term of this Agreement, CONTRACTOR is required to increase such payroll cost as a result of the determination of any governmental authority, then CUSTOMER will reimburse CONTRACTOR for such increases, at cost.
C.) CUSTOMER also agrees to reimburse CONTRACTOR for employees' holiday and vacation pay and health insurance together with any other employee benefits paid for or in behalf (sic) such employees as a result of mutual agreement.

( Id., ¶ 16). Both the Agreement and the 1992 Schedule A were form documents drafted by TLI, and neither mentions "withdrawal liability." ( Id., ¶¶ 14, 19). Furthermore, Charles Jones, the CPC employee who executed the 1992 Agreement and 1992 Schedule A for CPC, testified that he never had any discussions, nor knew about any discussions concerning withdrawal liability, either with Abbott or internally at CPC. ( Id., ¶ 20).[2]

CPC assumed the Agreement, including the 1992 Schedule A, from TLI in February, 1997. (Abbott's Facts, ¶ 25). The parties entered into several other Schedules A after the 1992 Schedule A, to address additional Abbott locations or changes in the service charges. ( Id., ¶ 26). CPC also began providing union drivers to perform services for Abbott in the mid- to late-1990s, and for those drivers CPC managed all labor union responsibilities, including negotiating collective bargaining agreements and making pension fund contributions. ( Id., ¶¶ 27, 28).[3] Certain of the collective bargaining agreements required CPC to make pension fund contributions to the Central States, Southeast and Southwest Areas Pension Fund ("Central States") on behalf of its drivers, some of whom provided services to Abbott. ( Id., ¶ 29).

In April, 2002, CPC and Abbott entered into a subsequent Schedule A (the "April 2002 Schedule A"), that covered all of the locations for which CPC supplied drivers to Abbott. (Abbott's Facts, ¶ 30). The April 2002 Schedule A was also a form schedule prepared by CPC, and CPC cites to this Schedule as the basis for Abbott's withdrawal liability obligation. ( Id., ¶¶ 31, 32; Complaint, ¶ 30).[4] The language of the April 2002 Schedule A differed from that of the original 1992 Schedule A, in that it included reimbursement for payments that CPC made pursuant to collective bargaining agreements, including pension fund contributions. (Abbott's Facts, ¶ 34). Specifically, the April 2002 Schedule A required Abbott to pay CPC "for services rendered as follows:"

A.) The amount of wages, fringe benefits and other payment required to be made by CUSTOMER (sic)[5] under the Agreement, or pursuant to any collective bargaining agreement, statute or governmental regulation, including, but not limited to, all payments made to, for the benefit of or in any manner relating to the personnel supplied under the Agreement.
B.) It is understood and agreed that if, during the effective term of this Agreement, CONTRACTOR is required to increase such payroll cost as a result of the determination of any governmental authority, then CUSTOMER will reimburse CONTRACTOR for such increases, at cost, effective as of the date CONTRACTOR shall become subject thereto.
C.) CUSTOMER also agrees to reimburse CONTRACTOR holiday and vacation pay and health, welfare and pension fund contributions applicable to or required with respect to the employees provided hereunder, together with any other employee benefits paid for, in behalf of or in any other manner relating to such employees as a result of or in any manner relating to a union agreement obligation.

( Id., ¶ 35). The April 2002 Schedule A makes no mention of withdrawal liability, and the CPC employee who executed the April 2002 Schedule A-its then Vice President-admits that withdrawal liability was not discussed in ...


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