## Facts

- A multi-employer collective-bargaining agreement between coal operators and the United Mine Workers of America (UMWA) required each employer to pay royalties (per ton of coal produced) into a welfare and retirement trust fund established for the “sole and exclusive benefit” of employees and their families and dependents.
- The trust was structured to qualify under § 302(c)(5) of the Labor Management Relations Act (Taft–Hartley Act).
- Benedict Coal Corporation underpaid required royalties, paying slightly more than half of what it owed.
- Benedict withheld the remaining amounts, asserting it had suffered strike-related losses from work stoppages that allegedly violated the agreement’s no-strike obligations.
- The trustees of the welfare fund sued Benedict in federal district court to recover delinquent contributions.
- Benedict argued the trustees were third-party beneficiaries of the collective-bargaining agreement and that Benedict could assert the union’s alleged breach as a defense or setoff to the payment obligation; Benedict also asserted a cross-claim against the union for strike damages.
- Benedict relied on a contract clause stating the agreement was an “integrated instrument” whose provisions were “interdependent,” claiming union performance was a condition precedent to Benedict’s duty to pay the fund.
- The district court awarded the trustees judgment for unpaid royalties but limited satisfaction of that judgment to proceeds Benedict might recover on its damages claim against the union; the court also awarded Benedict damages against the union.
- The court of appeals largely affirmed, and the Supreme Court granted review.

## Issues

1. Whether an employer may assert the union’s alleged breach of a collective-bargaining agreement as a defense or setoff to its obligation to make § 302(c)(5) welfare-fund contributions owed to the fund’s trustees.
2. Whether an “integrated” and “interdependent” contract clause makes union performance a condition precedent to the employer’s contribution obligation.
3. Whether a judgment for delinquent fund contributions may be made collectible only from the employer’s recovery against the union.

## Decision

- The Court held the employer could not assert the union’s alleged breach as a defense or setoff to the duty to contribute to the § 302(c)(5) fund, absent “unequivocal” contractual language authorizing that result.
- The Court held the “integrated” and “interdependent” clause did not make union performance a condition precedent to the employer’s promise to pay royalties to the trustees.
- The Court held the trustees were entitled to immediate and unconditional execution on their full judgment against Benedict, with interest, and the judgment could not be conditioned on Benedict’s separate recovery against the union.
- On whether the union in fact violated the agreement, the Court affirmed by an equally divided Court.

## Legal Principles

- In collective-bargaining agreements establishing § 302(c)(5) welfare funds for the “sole and exclusive benefit” of employees and their families, an employer’s contribution obligation is construed as independent of the union’s performance unless the agreement states in unequivocal terms that union breach is a defense.
- General third-party beneficiary defenses do not control where applying them would subject employee welfare benefits to employer-union disputes contrary to the statutory trust structure and beneficiary-protection purpose of § 302(c)(5).
- Contract language describing the agreement as “integrated” and “interdependent,” without an express condition tying contributions to union compliance, does not convert welfare-fund contributions into conditional promises.
- Courts may not structure judgments in a way that delays or restricts trustees’ collection of delinquent contributions by tying execution to the employer’s separate claims against the union.

## Conclusion

The Court required Benedict to pay delinquent welfare-fund royalties directly to the trustees, rejecting setoff based on alleged union strike breaches and ordering immediate, unconditional execution on the trustees’ judgment unless the parties had expressly and unequivocally made union performance a condition to contributions.


Lewis v. Benedict Coal Corp., 361 U.S. 459 (1960)