ERISA-Sixth Circuit Rules That A Construction Industry Employer Did Not Have Any Withdrawal Liability To The Pension Fund From Which It Withdrew

In Stevens Engineers & Constructors, Inc. v. Local 17 Iron Workers Pension Fund, Nos. 16-4098, 16-4099 (6th Cir. 2017), the Sixth Circuit Court of Appeals (the “Court”) noted that, under the Multiemployer Pension Plan Amendments Act, a part of ERISA, a construction industry employer who withdraws from a multiemployer pension plan owes withdrawal liability to that plan if the employer conducts work “in the jurisdiction of the collective bargaining agreement of the type for which contributions were previously required.” 29 U.S.C. § 1383(b)(2)(B)(i).  In accordance with this provision, the Trustees of the Iron Workers Local 17 Pension Fund assessed withdrawal liability against Stevens Engineers & Constructors, a withdrawing employer, claiming that Stevens’s activities on a certain construction project involved such work within the jurisdiction of their previous collective bargaining agreement.

The Court continued by noting, however, that an arbitrator and the district court below found that Stevens did not owe withdrawal liability to the Local 17 Pension Fund, because the work identified by Local 17 did not fall within the jurisdiction of the relevant collective bargaining agreement, and did not otherwise require contributions by Stevens.  The collective bargaining agreement instead allowed Stevens to assign jobs like the ones at issue to other trade unions, and a job did not trigger withdrawal liability to the Local 17 Pension Fund if, as here, it was properly assigned to a different union.  Local 17 offers additional arguments as to why Stevens owed withdrawal liability, but these are also unavailing.

Accordingly, the Court ruled that Stevens had not incurred any withdrawal liability to the Local 17 Pension Fund.

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