United Food & Commer. Workers Union - Emplr. Pension Fund v. Rubber Assocs.
United States Court of Appeals for the Sixth Circuit
December 2, 2015, Argued; February 4, 2016, Decided; February 4, 2016, Filed
File Name: 16a0025p.06
[*522] [***2] JULIA SMITH GIBBONS, Circuit Judge. Rubber Associates appeals the district court's dismissal of its counterclaim for equitable relief to reduce the withdrawal liability it incurred after the union-mandated withdrawal from the United Food and Commercial Workers Union- Employer Pension Fund (the "Fund")—which is governed by the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001-1461. After the United Food and Commercial Workers Union (the "Union") disclaimed interest in representing the company's employees, Rubber Associates was deemed to have withdrawn from the Fund, pursuant to the Multiemployer Pension Protection Amendments Act of 1980 ("MPPAA"). The Fund calculated Rubber Associates' [**2] withdrawal liability obligation to be $1,713,169, which the arbitrator awarded in full to the Fund. The Fund then sued Rubber Associates in the district court to enforce the arbitrator's award. Rubber Associates counterclaimed on the basis that because its withdrawal from the Fund was union-mandated, its withdrawal liability should be calculated by an alternate method, making its liability only $312,000. The district court granted the Fund's motion to dismiss Rubber Associates' [*523] counterclaim. For the following reasons, we affirm the district court's decision.
Rubber Associates is an Ohio corporation which manufactures custom rubber parts and whose employees were represented by the Union since 1973. Pursuant to a series of collective bargaining agreements ("CBAs") with the Union, Rubber Associates was a contributing employer to the Fund. The Fund is a multiemployer pension plan with approximately fifty (50) contributing employers and fourteen thousand (14,000) employees or "participants," largely associated with the region's supermarkets and drug stores. Although separate entities, the Union and the Fund are interrelated: The Fund's Board of Trustees is composed of Union and employer [**3] trustees, who were named as individual plaintiffs in the complaint. In particular, Barbara Caruso ("Caruso") was employed by the Union at the same time she served as a Fund trustee. The [***3] Fund's assets are invested in the stock market and other investments, and after the stock market crash in 2008 and subsequent recession, the Fund's assets declined and its finances "went into critical zone or red zone." DE 23-2, Day Two Arbitration Tr. at 327, Page ID 2856.
In late 2006 or early 2007, Rubber Associates and the Union began negotiations for a new CBA. As was customary, Rubber Associates requested an estimate of withdrawal liability from the Fund, and the Fund estimated $1,518,872 in withdrawal liability in January 2007. During negotiations, Rubber Associates proposed to the Union that it decrease its contribution rate to the Fund from 62 cents per hour to 30 cents per hour. The Fund rejected the 30-cent rate proposal, with the Fund's actuary, Henry Wong, opining that collecting withdrawal liability would result in a better funding status for the Fund than accepting reduced pension contributions. Rubber Associates withdrew its proposal for the 30-cent rate and agreed to maintain its previous [**4] contribution rate of 62 cents, which the Union accepted. Thereafter, negotiations resumed without success. In response to the Union's demand for a final offer, Rubber Associates proposed a contract that would have largely maintained the status quo, though it included a two-tier benefit level on holiday pay and vacations. The Union did not recommend the contract and authorized a strike.Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.
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812 F.3d 521 *; 2016 U.S. App. LEXIS 1873 **; 2016 FED App. 0025P (6th Cir.) ***; 205 L.R.R.M. 3382; 166 Lab. Cas. (CCH) P10,849; 62 Employee Benefits Cas. (BNA) 1539
UNITED FOOD AND COMMERCIAL WORKERS UNION - EMPLOYER PENSION FUND; ROBERT W. GRAUVOGL; BARBARA CARUSO; CARL IVKA; F. STEVEN ALBRECHT; JOHN HALKIAS; RAY HUBER, Plaintiffs-Appellees, v. RUBBER ASSOCIATES, INC., Defendant-Appellant.
Prior History: [**1] Appeal from the United States District Court for the Northern District of Ohio at Akron. No. 5:14-cv-00183—Sara E. Lioi, District Judge.
United Food & Commer. Workers Union-Employer Pension Fund v. Rubber Assocs., Inc., 2015 U.S. Dist. LEXIS 22075 (N.D. Ohio, Feb. 24, 2015)
withdrawal, Rubber, union-mandated, calculated, plans, equitable relief, contributing, counterclaim, district court, employees, multiemployer pension plan, federal common law, multiemployer, arbitration, collusion, pension fund, gap, negotiations, bargaining, benefits, factual allegations, special rule, self-dealing, attribution, disclaimed, pension, silent, vested
Civil Procedure, Appeals, Standards of Review, De Novo Review, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Pleading & Practice, Pleadings, Counterclaims, Business & Corporate Compliance, Employee Retirement Income Security Act (ERISA), Pensions & Benefits Law, ERISA, Multiemployer Plans, Liability Payments, Pensions & Benefits Law, Liability for Withdrawals, Multiemployer Plans, Liability Calculations, Regulators, US Pension Benefit Guaranty Corporation, Complete Withdrawals, ERISA, Civil Litigation, Federal Common Law, Limitations on Liability, Governments, Legislation, Interpretation, Statutory Remedies & Rights, Disclosure, Notice & Reporting, Fiduciaries, Fiduciary Responsibilities, Remedies, Standing, Preliminary Considerations, Justiciability