Summary
The Second Circuit held that compliance with the Multiemployer Pension Plan Amendments Act's asset-and-liability transfer provisions is not a precondition to assessing or collecting an employer's withdrawal liability. The court further held that the statutory transfer provisions applied after a certified change in collective bargaining representative and directed the old plan to provide the required notice. The judgment granting summary judgment was vacated and the case was remanded for further proceedings.
Topics
Practice areas
Questions Presented
- Whether the MPPAA's arbitration requirement deprived the federal courts of jurisdiction over the statutory question whether compliance with 29 U.S.C. § 1415 was a condition precedent to assessment and payment of withdrawal liability.
- Whether compliance with the MPPAA's transfer-of-assets-and-liabilities provisions under 29 U.S.C. § 1415 is a condition precedent to determining, demanding, or collecting an employer's withdrawal liability.
- Whether a certified change of bargaining representative occurs under § 1415 when employees previously represented by one bargaining unit are placed under the jurisdiction of an existing bargaining unit.
- Whether § 1415 applies when only some of the employees formerly covered by the old plan participate in the new plan.
- Whether the district court properly granted summary judgment and what relief was required concerning the ILA Fund's statutory notice.
Holdings
- The MPPAA's arbitration requirement does not bar federal jurisdiction over the threshold statutory question whether § 1415 compliance is a condition precedent to withdrawal-liability assessment. Exhaustion in this context is prudential, and statutory interpretation issues outside the matters assigned to arbitration may be resolved judicially.
- Compliance with the asset-and-liability transfer and notice provisions of 29 U.S.C. § 1415 is not a condition precedent to determining, demanding, or collecting an employer's withdrawal liability.
- A certified change of collective-bargaining representative occurs under § 1415 when the NLRB determines that employees previously represented by one bargaining unit will be represented under the jurisdiction of a second, existing bargaining unit.
- Section 1415's applicability does not depend on the number of employees who ultimately participate in the new plan; the number of transferred employees affects the amount of assets and liabilities to be transferred, not whether the statute applies.
- Because § 1415 applied and the ILA Fund had not provided the required notice, the district court had to order the ILA Fund to provide notice to T.I.M.E.-DC and the Teamsters Fund.
Key quotations
“The most significant aspect of the notice scheme is that no matter what disputes arise between the old plan sponsor and the employer over the amount of liability, the employer is obligated to pay the withdrawal liability demanded as soon as the plan sponsor has provided notice of the payment schedule under Sec. 1399(b)(1).” (¶ 28)
“Compliance with Sec. 1415 is not, as TIME-DC contends, a precondition to the payment of withdrawal liability.” (¶ 33)
“The district court's grant of summary judgment to appellee is vacated, and the case is remanded for further proceedings consistent with this opinion.” (¶ 39)
Factual background
T.I.M.E.-DC closed its Carteret, New Jersey terminal and transferred approximately nineteen employees to its North Bergen terminal. After the NLRB determined that Teamsters Local 641, rather than ILA Local 1730, represented the transferred platform employees, T.I.M.E.-DC stopped contributing to the ILA Fund and began contributing to the Teamsters Fund. The ILA Fund assessed approximately $228,000 in withdrawal liability, while T.I.M.E.-DC contended that the Fund first had to transfer appropriate assets and liabilities to the Teamsters Fund under 29 U.S.C. § 1415.
Procedural history
T.I.M.E.-DC sued in the Southern District of New York after the ILA Fund assessed approximately $228,000 in withdrawal liability and demanded payment. The district court granted the Fund summary judgment, holding that the withdrawal-liability provisions were constitutional, that compliance with the asset-and-liability transfer provisions was not a condition precedent to withdrawal-liability assessment, and that disputes concerning withdrawal liability had to proceed to arbitration. After the employer abandoned its constitutional challenge, the Second Circuit affirmed the statutory interpretation concerning the nonprecedential nature of section 1415 compliance as a condition precedent, but vacated the judgment and remanded for an order requiring the ILA Fund to provide the statutory notice.
Remand instructions
The district court must order the ILA Fund to provide T.I.M.E.-DC and the Teamsters Fund the notice required by 29 U.S.C. § 1415(b)(2). The parties may then proceed with the statutory transfer procedures, and T.I.M.E.-DC may pursue arbitration under § 1401 concerning other aspects of the withdrawal-liability calculation.