KAISER STEEL CORP. V. MULLINS, 455 U. S. 72 (1982)

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U.S. Supreme Court

Kaiser Steel Corp. v. Mullins, 455 U.S. 72 (1982)

Kaiser Steel Corp. v. Mullins

No. 80-1345

Argued November 10, 1981

Decided January 13, 1982

455 U.S. 72


Petitioner coal producer, as a party to a collective bargaining agreement between the United Mine Workers of America and hundreds of coal producers, agreed to contribute to specified employee health and retirement funds on the basis of each ton of coal it produced and each hour worked by its covered employees. The agreement also required an employer to report its purchases of coal from producers not under contract with the union and to make contributions to the union welfare funds on the basis of such purchases. After petitioner failed to report and make contributions as required by the "purchased coal" clause, respondents, the trustees of the union trust funds, filed suit in Federal District Court to enforce the collective bargaining agreement. Petitioner admitted its failure to comply with the purchased coal clause, but contended that the clause was void and unenforceable as violative of §§ 1 and 2 of the Sherman Act and § 8(e) of the National Labor Relations Act (NLRA), which forbids collective bargaining agreements whereby the employer agrees to cease doing business with, or to cease handling the products of, another employer (hot cargo provision). The District Court entered summary judgment for respondents, and the Court of Appeals affirmed. Both courts rejected petitioner's defense without passing on the legality of the purchased coal clause under either the Sherman Act or the NLRA.

Held: Petitioner was entitled to plead and have adjudicated its defense based on the alleged illegality of the purchased coal clause. Pp. 455 U. S. 77-88.

(a) Illegal promises will not be enforced in cases controlled by federal law. This rule is not rendered inapplicable here on the asserted grounds that employers' contributions to union funds are not, in themselves and standing alone, illegal acts and that ordering petitioner to pay would therefore not command conduct that is inherently contrary to public policy. Petitioner's obligation to pay money to the union funds arose from and was measured by its purchases from other producers who did not contribute to the union funds, and if this obligation is illegal under the antitrust or labor laws, to order petitioner to pay would command unlawful conduct. Pp. 455 U. S. 77-83.

Page 455 U. S. 73

(b) Although as a general rule federal courts do not have jurisdiction over activity that is arguably subject to § 8 of the NLRA and must defer to the exclusive competence of the National Labor Relations Board to determine what is and is not an unfair labor practice, a federal court has a duty to determine whether a contract violates federal law before enforcing it. Section 8(e) renders hot cargo clauses void at their inception and at all times unenforceable by federal courts. Thus, where a § 8(e) defense is raised by a party which § 8(e) was designed to protect, and where the defense is not directed to a collateral matter, but to the portion of the contract for which enforcement is sought, a court must entertain the defense. Pp. 455 U. S. 83-86.

(c) Assuming, arguendo, that § 306(a) of the Multiemployer Pension Plan Amendments Act of 1980 -- which requires employers to make contributions to a multiemployer pension plan in accordance with the employer's obligation under the terms of the plan or a collective bargaining agreement -- is applicable to this case, it does not alter the result. Section 306(a) does not abolish all illegality defenses, but explicitly requires employers to contribute to pension funds only where doing so would not be "inconsistent with law," and it was intended to simplify collection actions by precluding only defenses that are "unrelated" or "extraneous" to the employer's promise to make contributions. Nor does the statute's language or history indicate that Congress intended to implicitly repeal the antitrust laws, the labor laws, or any other statute which might be raised as a defense to a provision in a collective bargaining agreement requiring an employer to contribute to a pension fund. Pp. 86-88.

206 U.S.App.D.C. 334, 642 F.2d 1302, reversed and remanded.

WHITE, J., delivered the opinion of the Court, in which BURGER, C.J.,and POWELL, REHNQUIST, STEVENS, and O'CONNOR, JJ., joined. BRENNAN, J., filed a dissenting opinion, in which MARSHALL and BLACKMUN, JJ., joined, post, p. 455 U. S. 89.

Page 455 U. S. 74

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