Third Circuit Rejects Union’s Overtime Contribution Claim Under ERISA

In Board of Trustees Plumbers and Pipefitters Local Union No 74 Pension Fund, et al. v. Jones Lang Lasalle Americas Inc., No. 23-2202, 2025 WL 2682623 (3d Cir. Sept. 19, 2025), the Third Circuit considered whether an employer was obligated under collective bargaining agreements (CBAs) to increase its contributions to multiemployer benefit plans when employees worked overtime. The district court had found the term “hours paid” in the CBAs ambiguous and, after reviewing extrinsic evidence, concluded that overtime hours should be credited at a premium rate for contribution purposes. On appeal, however, the Third Circuit held that the agreements unambiguously tied contributions to actual compensated hours, not to the higher wage rates paid for overtime, and reversed the lower court’s ruling.

Jones Lang LaSalle (“Jones”) had entered into CBAs with Local 74 requiring it to make contributions to pension, welfare, annuity, and other funds based on “hours paid.” The agreements also provided for premium rates for overtime and holiday work. A 2013 union audit concluded that “hours paid” meant that contributions should be multiplied in line with overtime rates (for example, 8 hours of overtime at time-and-a-half would equal 12 contribution hours). Jones disagreed and continued contributing based only on the actual hours worked or otherwise compensated (such as bereavement or holiday leave), not inflated by premium rates. In 2018, a second audit again found that Jones had underpaid. Litigation followed under ERISA § 515 (29 U.S.C. § 1145).

The district court found the phrase “hours paid” ambiguous and, after considering extrinsic evidence, ruled in favor of the Union. It held that one hour of overtime counted as 1.5 “hours paid” for contribution purposes. Jones appealed.

The Third Circuit reversed, holding that the CBAs unambiguously tied contributions to actual compensated hours, not to the premium wage rate applied. The majority emphasized:

• Plain language: “Hours paid” simply referred to the number of hours for which employees received compensation, regardless of the rate.
• Structure of the CBAs: Overtime was consistently described as a “premium” rate of pay, not an increase in the number of hours credited.
• Consistency across provisions: “Hours paid” also covered non-worked compensated time like bereavement or holidays. Reading it as a multiplier for overtime would be inconsistent with its usage elsewhere.
• Rejection of extrinsic evidence: Because the term was unambiguous, industry practices or bargaining history could not alter the meaning.

Accordingly, the court held that Jones was not required to increase contributions to the funds for overtime hours and reversed the district court’s judgment.

Judge Krause dissented, arguing that “hours paid” was at least ambiguous. She reasoned that the majority wrongly focused on “overtime” and “premium” definitions rather than the disputed term “hours paid.” Both sides presented reasonable interpretations—Jones’s based on actual hours worked and the Union’s based on crediting overtime hours as more than one “hour paid.” Extrinsic evidence, including past practices of Jones’s predecessor and testimony about industry norms, supported the Union’s reading. Because ambiguity existed, the district court properly relied on factual evidence and credibility assessments to resolve the dispute, and those findings should not have been overturned. Judge Krause also criticized the district court’s handling of pre- and post-judgment interest, but noted she would have remanded for recalculation rather than reversing outright.