Cite as: 508 U. S. 581 (1993)
Opinion of the Court
comply with these latter purposes may be a breach of their contractual or fiduciary obligations and may subject them to suit for such breach; but it is no violation of § 302.3
A few courts and some academic commentators have drawn an analogy between §§ 301 and 302 of the LMRA and have suggested that, as § 301 has been held to create a federal common law governing labor contracts, see Textile Workers v. Lincoln Mills of Ala., 353 U. S. 448 (1957), so too should § 302 be viewed as authorizing the development of "a specialized body of federal common law of trust administration." Goetz, Developing Federal Labor Law of Welfare and Pension Plans, 55 Cornell L. Rev. 911, 930 (1970). One court
different section of petitioners' brief and claims that it is "disingenuous" to characterize that argument as a broad attack on a federal court's power. Post, at 598, n. 4. We do not do so.
3 Justice Stevens concludes that "it is perfectly clear that funds are no longer 'held in trust for the purpose' of benefiting employees if, immediately after deposit into a legitimate trust fund, they are diverted for some improper purpose." Post, at 597-598, n. 3. It is true that funds are "no longer" held in trust if they are misappropriated (just as it is true that funds are "no longer" held in trust when they are paid out in the form of pensions), but it is also irrelevant. If the payments, when received by the relevant employee representative, "are held in trust" and that trust satisfies the other requirements of § 302(c)(5) (including that it have been "established" for the proper purposes), the exception in § 302(c)(5) applies and the payments do not violate § 302. This was our precise holding in Arroyo v. United States, 359 U. S. 419 (1959). The union official in that case, immediately upon receiving the employer's contributions to the trust fund, had begun diverting the funds to improper purposes. See id., at 422. Indeed, "the evidence could properly support an inference that the [union official's] purpose from the outset was to appropriate the [contributions to the fund] for his own use." Id., at 423 (emphasis added). Nevertheless, we held that the employer's payments were "within the precise language of § 302(c)." Ibid. We deemed the payments to have been "held in trust for the purpose" of benefiting employees since they were made to a trust fund established for that purpose. See id., at 421, 423. Justice Stevens criticizes us for relying on this "half" of Arroyo while disregarding the other "half," see, post, at 595, n. 1, but the "half" to which we adhere is holding, and the "half" we disregard, dictum.
589
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