Total Articles: 11
Ogletree Deakins • June 13, 2018
n June 1, 2018, the U.S. Court of Appeals for the Ninth Circuit ruled that an asset purchaser that was deemed a successor was liable to pay the seller’s withdrawal liability even though the purchaser did not have actual knowledge of the liability. The Ninth Circuit found that constructive notice of the liability was sufficient to impose withdrawal liability on the asset purchaser. This ruling raises the hurdles that a successor must overcome to avoid withdrawal liability in an asset sale transaction.
Jackson Lewis P.C. • June 10, 2018
The expansion of the multiemployer pension plan successor withdrawal liability doctrine continues for asset purchasers. Establishing a constructive notice standard, the federal appellate court in San Francisco has ruled that a common law successor of a seller that withdrew from a multiemployer pension plan covered by the Employee Retirement Income Security Act (ERISA), as amended by the Multiemployer Pension Plan Amendment Act (MPPAA), had constructive notice of, and was therefore liable for, withdrawal liability incurred by the asset seller. Heavenly Hana, LLC v. Hotel Union & Hotel Industry of Hawaii Pension Plan, No. 16-15481 (9th Cir. June 1, 2018).
Jackson Lewis P.C. • April 02, 2018
The district court erred in finding a multiemployer pension plan did not show sufficient continuity of business operations to support imposing successor liability on an asset purchaser, the federal appeals court in Chicago has ruled in a case under the Multiemployer Pension Plan Amendments Act (MPPAA) involving withdrawal liability of $661,978. Indiana Electrical Workers Pension Benefit Fund v. ManWeb Services, Inc., No. 16-2840 (7th Cir. Mar. 12, 2018).
Jackson Lewis P.C. • April 02, 2018
In a decision that could have far-reaching implications for multiemployer pension plans and employers, a federal district court has held that the use of the “Segal Blend” to calculate a company’s withdrawal liability when it withdrew from a multiemployer pension plan violated the Employee Retirement Income Security Act (ERISA), as amended by the Multiemployer Pension Plan Amendments Act (MPPAA). The New York Times Co. v. Newspapers & Mail Deliverers’-Publishers’ Pension Fund, No. 1:17-cv-06178-RWS (S.D.N.Y. Mar. 26, 2018). The decision likely will be appealed to the U.S. Court of Appeals for the Second Circuit in New York.
FordHarrison LLP • February 16, 2017
Executive Summary: In a recent decision involving a withdrawal liability assessment by a multiemployer pension plan, an arbitrator reduced the assessment by approximately 50 percent and ruled in favor of the employer on several significant legal issues.
Jackson Lewis P.C. • June 09, 2016
Employers who cease contributing to an ERISA multiemployer pension plan are liable for their allocable share of any underfunding, or “withdrawal liability.”
Jackson Lewis P.C. • May 22, 2016
In a case of first impression, the United States Court of Appeals for the Tenth Circuit held that work performed by a non-union company acquired after a construction industry employer ceased contributing to a multiemployer pension plan (MEP) triggered withdrawal liability. The case, Ceco Concrete Construction, LLC v. Centennial State Carpenters Pension Trust, Nos. 15-1021, 15-1190 (10th Cir. May 3, 2016), should be paid close heed by unionized construction companies.
FordHarrison LLP • July 29, 2015
There are approximately 1,400 multiemployer pension plans and nearly 10 percent are projected to become insolvent within the next 15 years. Plan insolvency will trigger a termination and the assessment of withdrawal liability. Collectively, these plans have over $30 billion in unfunded liabilities. These plans are now being designated as in "critical and declining status" and have the authority to reduce benefits under the changes to the law made in 2014. While those benefit cuts, which require regulatory approval, may forestall insolvency for a while, they are not going to reduce any withdrawal liability over the next 10 years.
Vedder Price • May 08, 2015
Labor & Employment Shareholders Charles B. Wolf and Patrick W. Spangler recently updated their white paper on Withdrawal Liability to Pension Plans Under ERISA, which has been used by Mr. Wolf and Mr. Spangler in prior meetings of the ERISA Litigation National Institute, presented by the American Bar Association. The paper was originally authored by Mr. Wolf.
Ogletree Deakins • April 04, 2012
The Sixth Circuit Court of Appeals recently held that a collective bargaining agreement (CBA) provision, which obligated a union to indemnify an employer for withdrawal liability did not violate public policy under the Employee Retirement Income Security Act of 1974 (ERISA), as amended by the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA). This issue was undecided in the Sixth Circuit, and the decision provides some much-needed guidance for employers. Shelter Distribution, Inc. v. Genâ€™l Drivers, Warehousemen & Helpers Local Union No. 89, No. 11-5450, Sixth Circuit Court of Appeals (March 16, 2012).
Franczek Radelet P.C • April 02, 2012
In the case of Shelter Distribution, Inc. v. General Drivers, Warehousemen & Helpers Local Union No. 89, No. 11-5450 (6th Cir. Mar. 16, 2012), a court considered whether a collective bargaining agreement shifted employer withdrawal liability to a union. In Shelter Distribution, a multi-employer pension fund assessed withdrawal liability against an employer. In response, the employer attempted to enforce language contained in its collective bargaining agreement in which the union agreed to indemnify the employer if withdrawal liability was assessed by the pension fund. At arbitration, the union argued that the indemnification language violated the policy expressed in the Multiemployer Pension Plan Amendments Act which prohibits the shifting of withdrawal liability through collective bargaining agreements. The arbitrator rejected the Unionâ€™s argument, and ordered the union to pay the employer the withdrawal liability that was assessed by the pension fund. A district court upheld the arbitration award and the union appealed to the U.S. Court of Appeals for the Sixth Circuit.