SINAI HOSPITAL OF BALTIMORE, INC.; The Johns Hopkins Hospital; Maryland General Hospital; Greater Baltimore Medical Center; The Lutheran Hospital of Maryland, Appellants, v. NATIONAL BENEFIT FUND FOR HOSPITAL & HEALTH CARE EMPLOYEES, Henry Nicholas, Fund Trustee, et al., Appellees, 697 F.2d 562

SPROUSE, Circuit Judge: The appellants are five Baltimore, Maryland hospitals (the Hospitals). The appellees are the trust fund and its trustees (the Fund) who administer a health and welfare benefits program for the Hospitals employees. The Hospitals contribute to the Fund pursuant to collective bargaining agreements with locals of the National Union of Hospital & Health Care Employees (the Union). The Fund is a national, multiemployer trust fund receiving contributions and providing benefits for approximately 91,000 employees of some 1,500 retail drug stores, hospitals and related health care institutions.

The Fund was established by an “Agreement and Declaration of Trust” (Trust Agreement) in 1949, but most of the current contributing employers began participating in the Fund subsequent to that time. The Hospitals first began contributing in 1974. The Hospitals here appeal the district court’s denial of an injunction restraining the Fund from increasing benefits to the Hospitals’ employees effective September 1,1981. The basis of the Hospitals’ request for an injunction is that the Union agreed in collective bargaining that benefits should not be increased during the life of the 1980-1982 contract.

In ruling against the Hospitals, the district court con-eluded that the trustees and the Fund were governed by the provisions of the Trust Agreement and could not be bound by contrary provisions of the subsequent collective bargaining contracts between the Hospitals and the Union. We agree and affirm. The Fund’s operations are national in scope, and it is administered along district lines. Benefits are provided to employees according to three basic plans—plans “A”, “B” and “C”. Plan “A” provides the greatest benefits, plan “B” lesser benefits, and plan “C” the least.

The Trust Agreement calls for the trustees to determine both the eligibility of employees for benefits and the level of benefits. Benefits are paid from pooled contributions, but the amount of each employer’s contribution affects the trustees’ choice of plan for those employees. There are currently 40 Fund trustees— one-half are appointed by the Union and one-half by the employers. The employer trustees vote as a unit and the union trustees vote as a unit. The majority of each of the two categories of trustees determines the vote of that unit. An arbitrator decides any issue where there is disagreement.

The appellant Hospitals and the Union in the Baltimore area are represented on the Board of Trustees. Two Union-appointed trustees in their capacity as Union officials were also on the negotiating team which concluded the collective bargaining agreements involved in this action. During the 1978-1980 contract period, the Hospitals contributed 10% of their covered payrolls to the Fund, and their employees were covered under plan “B”.

In bargaining for the 1980-1982 contract, the Hospitals secured concessions from the Union reducing the percentage contribution to the Fund, and an agreement that benefits would remain constant. The Sinai Hospital 1980-82 contract provided for an 8% of payroll contribution level to the Fund, and stated that the hospital’s payments shall be for benefits “... as provided as of 12/1/80 under plan B.

No change in the level or quality of such benefits shall be made without the express written approval of the Hospital.” The contracts of the other four hospitals provided for 9% contributions and also required the maintenance of plan “B” benefits. The 1980 agreements were the first wherein the Hospitals and the union agreed to a specific level of benefits. Contributions to the Fund had been a major obstacle to settling a difficult economic impasse between the Hospitals and Union and the quoted language represents one of the agreements breaking the deadlock.

The Fund and its trustees, however, were not parties to the negotiations nor were they consulted before the agreement was reached. After receiving notice of the 1980 collective bargaining agreements, the Fund notified the Hospitals in February 1981 that the Fund could and would not be bound by the parties’ agreements fixing the level of benefits, because this power was reserved to the Fund by law and by the Trust Agreement.

Because there was a surplus in the national “pool” of funds, the trustees in their May 1981 meeting decided to increase benefits on a nationwide basis for many covered employees, including the employees of the appellant Hospitals. Their benefits were increased by transferring them from the “B” plan to the “A” plan, effective September 1,1981. The Hospitals objected to this action, and after the trustees persisted in implementing the increase, the Hospitals filed their complaint and application for temporary injunction in the district court.

In the complaint, the Hospitals charge that the Union represented to them that a 9% contribution level was necessary to maintain class “B” benefits; and further charge that the change in benefits breached the collective bargaining contracts between the Union and the Hospitals, violated the provisions of

section 302(c)(5) of the Labor Management Relations Act of 1947, as amended, (LMRA), and constituted tortious interference with the contractual relationship between the Hospitals and the Union. The Hospitals contend that:

(1) The Fund is a party to the collective bargaining agreements between the Hospitals and the Union because the Fund accepted contributions knowing the contractual provisions; or, alternatively, that (2) the Fund is bound to honor the contractual provisions limiting the level of benefits because the Fund is a third party beneficiary of the contract; or that (3) the benefit increase violates several provisions of the LMRA, by permitting an outside party (the Fund) to alter collective bargaining agreements, and by permitting the Union to obtain more than what is provided for by collective bargaining agreements; and that the increase also violates § 302(c)(5)’s specificity requirements.

Trustees of any trust, of course, can contract and will be bound by the terms of their contracts, as long as they act within the authority granted them by the trust instrument creating the trust. See generally A. Scott, Abridgement of the Law of Trusts, §§ 186-192; Restatement (Second) of Trusts §§ 186-192. To that extent, the Hospitals are correct in their intimation that contract law applies to employee funds as well as to a testamentary, charitable or any other trust. The basic law governing the actions of trustees, however, is the law of trusts.

Moreover, the requirements of the common law of trusts relating to employee benefit trust funds have been made more exacting by congressional action. The Supreme Court made this clear in NLRB v. Amax, 453 U.S. 322, 101 S.Ct. 2789, 69 L.Ed.2d 672 (1981). The central issue in Amax was whether the employer-appointed trustee of a benefits trust fund was a management representative within the meaning of § 8(b)(1)(

B) of the LMRA. The Court held that such a trustee was not a management representative but owed his complete fiduciary loyalty to the trust and its beneficiaries. Congress intended, said the Court, that the actions of trustees of union/management trust funds should be governed by the law of trusts, as tailored by Congress in enacting

section 302(c)(5) and ERISA. The Court said: Congress directed that union welfare funds be established as written formal trusts, and that the assets of the funds be “held in trust,” and be administered “for the sole and exclusive benefit of the employees ... and their families and dependents.... ” 29 U.S.C. § 186(c)(5). Where Congress uses terms that have accumulated settled meaning under either equity or the common law, a court must infer, unless the statute otherwise dictates, that Congress means to incorporate the established meaning of these terms. NLRB v.

Amax, 453 U.S. 322, 329, 101 S.Ct. 2789, 2794, 69 L.Ed.2d 672, 680 (1981). And the legislative history of the LMRA confirms that § 302(c)(5) was designed to reinforce, not to alter, the long established duties of a trustee. Id., 453 U.S. at 330-331, 101 S.Ct. at 2794-2795, 69 L.Ed.2d at 681. Whatever may have remained implicit in Congress’ view of the employee benefit fund trustee under the Act became explicit when Congress passed the Employee Retirement Income Security Act of 1974 (ERISA). ERISA essentially codified the strict fiduciary standards that a § 302(c)(5) trustee must meet.

Moreover, the fiduciary requirements of ERISA specifically insulate the trust from the employer’s interest. Id., 453 U.S. at 332-333, 101 S.Ct. at 2795-2796, 69 L.Ed.2d at 682. In short, the fiduciary provisions of ERI-SA were designed to prevent a trustee “from being put into a position where he has dual loyalties and therefore he cannot act exclusively for the benefit of a plan’s participants and beneficiaries.” H.R. Conf.Rep. No. 93-1280, supra, at 309. Id., 453 U.S. at 334, 101 S.Ct. at 2796, 69 L.Ed.2d at 683.

We perceive no conflict between general principles of contract law and these specific pronouncements relating to trusts —rather, courts when faced with such contract claims, interpret rules of contract law in light of the specific purposes of the involved trust laws. There is no firmer principle in the common law of trusts than that requiring the trustees to act only in accordance with the terms of the trust. See Scott, supra, § 164; Restatement (Second) of Trusts, § 164.

The Trust Agreement which established the Fund, and which governs the trustees’ actions, requires the trustees to determine eligibility rules and benefit levels by establishing a benefit plan. Thus, the Agreement provides in pertinent part: The Trustees shall receive, use, and apply the Fund Estate ... 2. To pay or provide for the payment of social benefits as defined in the Plan .... (Article II, § 2). “Plan” means the Benefit Plan established by the Trustees hereunder and as it may be amended from time to time. (Article I, § 6).

The Trustees shall have the power to adopt actuarial tables, mortality tables and a Plan and to promulgate rules, regulations, resolutions and decisions governing the operation thereof, subject to change and amendment as they may determine from time to time, ... the Trustees shall obtain an actuarial evaluation of the costs of the Plan, and on the basis thereof establish and carry out a funding policy including the establishment and accumulation of such reserves as the Trustees determine to be necessary or advisable for the sound and efficient operation of the Benefit Plan. (Article V, § 4). [Emphasis added.] The provisions of this Agreement and Declaration of Trust may be amended at any time by an instrument in writing executed by one more than a majority of the Trustees provided, however, that no amendment shall alter the purposes of this Fund. (Article VII, § 1).

The Trustees, in their names as Trustees, . .. shall have the power to demand, collect, receive and hold Contributions .... (Article IV, § 1). There was no attempt during the 1980 collective bargaining session to initiate amendment of the Trust Agreement under

Article VII to authorize the negotiators to fix benefit levels. Likewise, there was no attempt to have the trustees accept the agreed benefit level for the period of the negotiated contract. The Hospitals contend only that because the Fund accepted the Hospitals’ post-agreement contributions, the Fund on the principle of offer and acceptance became bound by the contracts between the Hospitals and the unions. The Hospitals cite no authority, nor can they, for such a startling proposition. The authorities are clear that both the powers and obligations of the trustees are determined by the provisions of the trust.

Scott, supra; Restatement (Second) of Trusts, supra. The Hospitals also insist that when the surplus in the Fund developed in 1980-1981, it was the duty of the trustees to use the surplus to reduce the future contributions of the Hospitals. The contrary is true. The sole duty of the board of trustees was their fiduciary duty to consider the welfare of the employees. The decisions are uniform that the duties of trustees of employee trust funds are owed to employee beneficiaries of the trusts, not to the parties to the collective bargaining agreements creating or sustaining them. See Amax, supra; NLRB v.

Construction & General Laborers’ Union Local 1140, 577 F.2d 16, 20 n. 6 (8th Cir.1978), cert. denied, 439 U.S. 1070, 99 S.Ct. 839, 59 L.Ed.2d 35 (1979); Toensing v. Brown, 528 F.2d 69 (9th Cir.1975); Miniard v. Lewis, 387 F.2d 864, 865 n. 5 (D.C.Cir.1967), cert. denied, 393 U.S. 873, 89 S.Ct. 166, 21 L.Ed.2d 144 (1968); Talarico v. United Furniture Workers Pension Fund A, 479 F.Supp. 1072 (D.Neb.1979); Huge v. Overly, 445 F.Supp. 946, 947 (W.D.Pa.1978); Zaucha v. Polar Water Co., 444 F.Supp. 602, 606 (W.D.Pa.1978); Hurd v. Hutnik, 419 F.Supp. 630, 656 (D.N.J.1976); Teamsters Local Union v.

Mizerany Warehouse, Inc., 413 F.Supp. 911 (E.D.Mo.1974). Parties to a collective bargaining agreement can of course affect in different ways the level of benefits to be received by employees. Normally, an employer is bound to contribute a specific amount to a trust fund for a stated term—in the instant case, 8% and 9% for the period 1980-1982. There is nothing except considerations of employee relations to prevent the Hospitals, when their agreements expire in December 1982, from reducing their contributions to or withdrawing entirely from future participation in the National Benefit Fund.

Future benefits necessarily would be reduced by such a withdrawal or by a valid agreement limiting contributions. Trustees of this or any other fund can only provide benefits from funds available to them. Labor-management contracting parties, however, cannot control expenditures from funds already vested in a trust entity where the trust instrument reposes that authority solely with the trustees.

Likewise, neither an employer nor a union, singly or together, can alter the terms of a trust instrument such as the one involved in this case unless the power to do so was reserved when the trust was created or properly amended. See NLRB v. Driver Salesmen, etc., 670 F.2d 855 (9th Cir.1982). The Hospitals urge that the Supreme Court’s recent decision in United Mine Workers, etc. v. Robinson and Hager, 455 U.S. 562, 102 S.Ct. 1226, 71 L.Ed.2d 419 (1982), supports their position that bargaining parties may control the level of benefits paid from an existing employee trust fund.

The Hospitals have misconstrued that decision. Although the Court’s decision in Robinson illustrates one method by which the parties to a collective bargaining agreement may permissibly control the level of benefits paid by an employee benefit fund, conversely Robinson also demonstrates that the level of benefits cannot be affected by actions such as those taken by the Hospitals and the Union in the case sub judiee.

The union and employers in Robinson in 1974 dismantled the pre-1974 trust funds which had left the benefit levels to the trustees’ discretion, and created new trusts by whose terms any change in benefit levels required the approval of the employers and the unions. Robinson, 455 U.S. at 565 n. 2, 574 n. 13, 102 S.Ct. at 1229 n. 2, 1233 n. 13. The Court’s ruling was that there was no federal rule of reasonableness limiting the type of benefit level-setting provision inserted in original trust agreements by the bargaining parties.

This is consistent with the trust-law principle that settlors generally are uninhibited in crafting original trust instruments or permitted amendments. See Scott, supra, §§ 59, 331; Restatement (Second) of Trusts §§ 59, 331. The power and duty to determine the benefits to be provided by the Fund is granted to the trustees in the case sub judiee by Articles I and V of the Trust Agreement. The Hospitals knew this at the time of each of their collective bargaining agreements from 1974 to 1980, when they agreed to contribute to and subscribe to the Fund.

The obligations of the trustees to the beneficiaries of the trust are to be interpreted in accordance with the terms of the trust and it is clear from a reading of the entire trust instrument that the trustees’ May 1981 action raising the benefit levels was consistent with their obligations. The Hospitals contend that the trustees nevertheless are bound by the collective bargaining agreements fixing the level of benefits because the Fund is a third party beneficiary to those agreements.

The Hospitals reason that because the Fund can enforce provisions of the agreements requiring the Hospitals to contribute, the trustees are bound by all the provisions of the contracts between the Hospitals and the Union. We cannot agree and hold that while the trustees as representatives of the Fund are indeed third party beneficiaries of the collective bargaining contracts, they were not parties to the contracts in the sense that they are held to have agreed in absentia to all of the contracts’ provisions.

It is true that the trustees of an employee benefit fund, like the trustees of most trust groups, may enforce collections of contributions under the terms of the agreement creating the trust. The trustees here have specific authority under the Trust Agreement to collect contributions; moreover, absent this specific authority, the Fund would still be empowered as a third party beneficiary to compel payment by legal action. See Lewis v. Lowry, 295 F.2d 197 (4th Cir.1961), cert. denied, 368 U.S. 977, 82 S.Ct. 478, 7 L.Ed.2d 438 (1962); Trustees v.

Constant Care Community Health Center, Inc., 669 F.2d 213 (4th Cir.1982). To say, however, that by accepting or collecting such contributions the trustees are bound by all of the terms of the collective bargaining agreement would be to completely dissipate the law of trusts, leaving employee benefit funds vulnerable to the recurring whims of employer/union bargainers. One of the principal purposes of both § 302(c)(5) and ERISA was to avoid just such an effect. Amax, supra.

There is likewise no merit to the Hospitals’ argument that the failure of the district court to enforce the level-fixing provisions of the collective bargaining agreements permits avoidance of the specificity requirements of § 302(c)(5)(

B) of the LMRA. The Hospitals have subscribed to the Fund since 1974 and there is no question but that the Trust Agreement describes in great detail the basis on which payments to beneficiaries are to be made. This satisfies the specificity requirement of

section 302(c)(5)(B), see Landy Packing Co. v. Amalgamated Meat Cutters, 471 F.Supp. 1218 (D.Minn.1979). To hold otherwise would require collective bargaining agreements to duplicate in detail the language of trust instruments governing the administration of employee benefit funds. We are in full agreement with the reasoning of the district court and its judgment is affirmed. AFFIRMED. . Also defendants in the action below were the National Union of Hospital and Health Care Employees and District Local 1199E of that union, but the union takes no position in this appeal. .

The Hospitals’ complaint also included claims of misrepresentation by the Union during bargaining negotiations, but the court did not rule on those claims. . The Hospitals’ application for a stay of the proposed benefit increase pending appeal was denied by the district court and by a panel of this court. . Currently there are 62,000 employees covered under Plan “A”, 28,000 under Plan “B” and 700 under Plan “C”. . The actual benefits provided under each plan were also improved. .

The district court granted the Hospitals time to amend their complaint to allege that certain trustees were party to the misrepresentation during negotiations, but the record on appeal does not show that the complaint had been amended at the time of appeal. The issue involving alleged misrepresentation by the Union was still pending in the district court at the time of this appeal. .

Section 302(c)(5), 29 U.S.C. § 186(c)(5), permits employer payments to a trust fund established by such [employee] representative, for the sole and exclusive benefit of the employees of such employer, and their families and dependents (or of such employees, families, and dependents jointly with the employees of other employers making similar payments, and their families and dependents): Provided, That (

A) such payments are held in trust for the purpose of paying, either from principal or income or both, for the benefit of employees, their families and dependents, for medical or hospital care, pensions on retirement or death of employees, compensation for injuries or illness resulting from occupational activity or insurance to provide any of the foregoing, or unemployment benefits or life insurance, disability and sickness insurance, or accident insurance; (

B) the detailed basis on which such payments are to be made is specified in a written agreement with the employer, and employees and employers are equally represented in the administration of such fund, together with such neutral persons as the representatives of the employers and the representatives of employees may agree upon and in the event the employer and employee groups deadlock on the administration of such fund and there are no neutral persons empowered to break such deadlock, such agreement provides that the two groups shall agree on an impartial umpire to decide such dispute, or in event of their failure to agree within a reasonable length of time, an impartial umpire to decide such dispute shall, on petition of either group, be appointed by the district court of the United States for the district where the trust fund has its principal office, and shall also contain provisions for an annual audit of the trust fund, a statement of the results of which shall be available for inspection by interested persons at the principal office of the trust fund and at such other places as may be designated in such written agreement; and (

C) such payments as are intended to be used for the purpose of providing pensions or annuities for employees are made to a separate trust which provides that the funds held therein cannot be used for any purpose other than paying such pensions or annuities;.... .

Section 302(c)(5), Labor Management Relations Act of 1947, 29 U.S.C. § 186(c)(5); Employee Retirement Income Security Act of 1974 (ERISA), including Multi-Employer Pension Plan Amendments of 1980, 29 U.S.C. § 1001, et seq. . 29 U.S.C. § 158(b)(1)(B). . Quoted supra at note 7.