UNITED STATES SUPREME COURT DECISIONS ON-LINE

Petitioner employers entered into collective bargaining agreements with a union that required them to participate in two multiemployer employee benefit trust funds. The trust agreements required petitioners to contribute to the funds according to the applicable terms of their collective bargaining agreements. The terms of the trust agreements were incorporated by reference into the collective bargaining agreements and authorized respondent trustees to initiate

"any legal proceedings [that they] in their discretion deem in the best interest of the Fund to effectuate the collection or preservation of contributions."

Respondents filed complaints in Federal District Court, claiming that petitioners failed to meet their contribution requirements, and requesting the court to order an accounting and immediate payment of all sums thereby determined to be due. Petitioners defended on the ground that the complaints raised disputed interpretations under the collective bargaining agreements, that first must be submitted to arbitration. The bargaining agreements required arbitration of

"differences that arise between the Company and the Union or any employee of the Company as to the meaning or application of the provisions of this agreement,"

and no parties other than the union or the employer were given access to the arbitration process. The District Court dismissed the suits pending arbitration. The Court of Appeals reversed and remanded, holding that the relevant agreements indicated no intent to require the arbitration of contractual disputes between the trustees and the employers, and thus that failure to arbitrate could not bar respondents' suits.

Held: Respondents may seek judicial enforcement of the trust terms against petitioners without first submitting to arbitration an underlying dispute over the meaning of a term in the collective bargaining agreements. Pp. 466 U. S. 370-376.

(a) The presumption that a promisor may assert against a third-party beneficiary any defense that he could assert against the promisee if the promisee were suing on the contract should not be applied so inflexibly chanroblesvirtualawlibrary

Page 466 U. S. 365

as to defeat the intention of the parties. Whether the presumption applies in this case to require respondents, as third-party beneficiaries of the collective bargaining agreements, to arbitrate disputed terms of the collective bargaining agreements depends on the contractual intent of the parties to all the agreements at issue. Pp. 466 U. S. 370-371.

(b) The presumption of arbitrability of disputes between a union and an employer is not applicable in determining whether the parties agreed to require the arbitration of disputes between trustees of employee benefit funds and employers, even if those disputes raise questions of interpretation under the collective bargaining agreements. Pp. 466 U. S. 371-372.

(c) Neither the trust agreements nor the collective bargaining agreements at issue here evidence any intent on the part of the parties to condition the contractual right of respondents to seek judicial enforcement of the trust provisions on exhaustion of the arbitration procedures contained in petitioners' collective bargaining agreements. Pp. 466 U. S. 372-376.

700 F.2d 433, affirmed and remanded.

POWELL, J., delivered the opinion for a unanimous Court.