ERISA-The Ninth Circuit Rules That The Employer Partially Withdrew From The Multiemployer Plan

In GCIU Employer Retirement Fund v. Quad/Graphics, Inc., No. 17-55667 (9th Cir. 2018) (Unpublished Memorandum), the issue for decision was whether Quad/Graphics, Inc. (“Quad”) partially withdrew from the GCIU-Employer Retirement Fund (“the Fund”) in 2010, after employees at Quad’s Versailles, Kentucky, facility voted to decertify a collective bargaining agreement (“CBA”).  An arbitrator found that Quad had not withdrawn, but on review, the district court disagreed.  Quad appeals.

In reviewing this case, the Ninth Circuit Court of Appeals (the “Court”) said that, like the district court, we must presume the arbitrator’s factual findings are correct but review his conclusions of law de novo.  As such, the Court affirmed the district court’s decision that Quad had partially withdraww from the Fund.

In explaining its decision, the Court noted that an employer partially withdraws from a multiemployer pension plan, such as the Fund, when it permanently ceases to have an obligation to contribute under one or more but fewer than all collective bargaining agreements under which the employer has been obligated to contribute.  The district court correctly held that Quad partially withdrew from the Fund in 2010.  The Versailles CBA-one of the CBAs that Quad had with the Union- became void prospectively as of the decertification of the union as the employee’s bargaining representative in December 2010, extinguishing Quad’s ongoing obligations to contribute to the Fund on behalf of Versailles employees under the Versailles CBA.

The Versailles CBA, continued the Court, did not explicitly extend Quad’s contribution obligation past the union’s decertification.  Rather, the CBA states only that Quad “will contribute monthly . . . for each . . . shift worked or paid for under this Agreement.”  It does not provide for contributions for any payments for work performed after decertification.  That Quad did not pay the contribution incurred because of shifts worked in December 2010 until after the following January 1 does not mean it had ongoing obligations under the CBA.

The Court further said that, although we may consider extrinsic evidence in interpreting a CBA, Quad has identified no evidence suggesting that the parties intended Quad to be contractually obligated to pay into the Fund after decertification.  The arbitrator’s factual finding, that Versailles employees used some CBA-banked vacation time after the decertification vote, at most indicates that Quad believed its employees were still entitled to vacation.  It does not bear on whether Quad had continuing obligations to the Fund.

 

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