Stevens Engineers & Constructors, Inc. v. Local 17 Iron Workers Pension Fund

877 F.3d 663
CourtCourt of Appeals for the Sixth Circuit
DecidedDecember 13, 2017
Docket16-4098; 16-4099
StatusPublished
Cited by4 cases

This text of 877 F.3d 663 (Stevens Engineers & Constructors, Inc. v. Local 17 Iron Workers Pension Fund) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stevens Engineers & Constructors, Inc. v. Local 17 Iron Workers Pension Fund, 877 F.3d 663 (6th Cir. 2017).

Opinion

OPINION

ROGERS, Circuit Judge.

Under the Multiemployer Pension Plan Amendments Act, part of ERISA, a construction industry employer who withdraws from a multiemployer pension plan owes 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. § 138S(b)(2)(B)(i). In accordance with this provision, the Trustees, of the Iron Workers Local 17 Pension Fund assessed pension liability against Stevens Engineers & Constructors, claiming that Stevens’s activities on a certain construction project involved such work within the jurisdiction of their previous collective bargaining agreement. As an arbitrator and the district court below found, however, Stevens did not owe pension 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 pension 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.

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In 1980, Congress passed the Multiem-ployer Pension Plan Amendments Act (MPPAA), which modified and extended the coverage of ERISA. Pub. L. 96-364, 94 Stat. 1208 (1980). ERISA had allowed collective bargaining agreements for employers in large, fragmented industries like construction to collect employer contributions for a single centralized industrywide pension fund, rather than for individual plans for each employer. See 29 U.S.C. § 1301(a)(3).. To avoid incentives for employers to flee when a multiemployer plan becamé underfunded, the MPPAA imposed a provision for withdrawal liability, under which an employer leaving an industry or a plan would be responsible for paying additional contributions to that plan at the time of their exit, 29 U.S.C. § 1381. An employer subject to withdrawal liability owes a proportionate share of the unfunded amount of the plan, determined on the date of exit from the plan. 29 U.S.C. § 1391.

The MPPAA also provides that a plan’s sponsor, often an entity supported by the local union, is normally responsible for calculating withdrawal liability, pursuant to the collective bargaining agreement’s terms. 29 U.S.C. § 1382. Where an employer and a plan disagree about the existence or extent of such withdrawal liability, the MPPAA also imposes a scheme for resolution of disputes, primarily through arbitration. 29 U.S.C. § 1401. The MPPAA states that, in civil actions to enforce an assessment of withdrawal liability, “there shall be a presumption, rebuttable only by a clear preponderance of the evidence, that the findings of fact made by the arbitrator were correct.” Id, § 1401(c). 1

Although withdrawal liability attaches to most types of employers, a special withdrawal scheme— the one at issue in this case—covers the construction industry. 29 U.S.C. § 1383(b). Under this arrangement, construction industry employers are not subject to withdrawal liability if they completely "withdraw from “work in the jurisdiction of the collective bargaining agreement of the type for which contributions were previously required.” Id. § 1383(b)(2)(B)(i). The Ninth Circuit has explained that this provision exists because “the construction industry as a whole does not necessarily shrink when a contributing contractor leaves the industry; employees are often dispatched to another contributing contractor.” H.C. Elliott, Inc. v. Carpenters Pension Tr. Fund for N. California, 859 F.2d 808, 811 (9th Cir. 1988). On these premises, the withdrawal of an employer, from work within the jurisdiction of a collective bargaining agreement “do[es] not pose an undue threat to a plan as long as .contributions are made for whatever work is done in the area.” Id. at 812 (quoting H.R. Rep. No. 96-869, 96th Cong., 2d Sess, pt. 1, at 75). At the same time, “[t]he withdrawal of any employer from the plan does decrease the base, however, if the employer stays in the industry but goes non-union and ceases making payments to the plan.” Id. In those latter circumstances, the MPPAA provides that an employer must pay a proportional share of the unfunded amount in the plan, determined based on the employer’s share of contributions for work prior to withdrawal, rather than after withdrawal. 29 U.S.C. § 1391(b)(1)(A)'.'

The Iron Workers Local 17 Pension Fund (Fund) is a multiemployer pension plan subject to the MPPAA. It provides pensions for members of the International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers Local Union No. 17 (Local 17). The Board of Trustees of the Iron Workers Local 17 Pension Fund oversees and administers the Fund. The Fund is severely underfunded, with.a deficit of over $170 million. An employer that withdraws from the Fund and cannot avail itself of the construction industry exception thus faces significant liability.

Stevens Engineers-& Constructors (Stevens) is a company in the building and construction industry. Stevens specializes in heavy industrial construction, and at any. given time generally employs several hundred, union workers in a variety of trades. Betwéen 1985 and April 2013, Stevens was a party to a series of collective bargaining agreements (CBAs) with Local 17, pursuant to which Stevens paid into the Fund. Like all previous CBAs, the final CBA between Stevens and Local 17 contained a statement of the jurisdiction establishing where the CBA applied. Article I of the CBA defined “craft jurisdiction,” the ironworker work covered by the CBA, as the “unloading, handling, fabrication, re-fabrication, erection, and dismantling of structural, ornamental, reinforcing steel, metals, plastic, [and] composite and engineered materials.” Article II of the CBA defined the “territory” of the CBA as a geogr£ phic range covering various counties in Northern Ohio. Jobs within the craft jurisdiction and the geographic jurisdiction of the CBA required payment by Stevens into the Fund, and Stevens made payments when so required.

The CBA between Stevens and Local 17 contained an additional qualifier. The craft jurisdiction section stated that the jurisdiction of the CBA was “subject to ....

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Bluebook (online)
877 F.3d 663, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stevens-engineers-constructors-inc-v-local-17-iron-workers-pension-ca6-2017.