Background
Penske Truck Leasing, L.P. and the Central States, Southeast and Southwest Areas Pension Plan were involved in a dispute over withdrawal liability. Penske sought to align the expiration dates of its collective bargaining agreements to facilitate a complete withdrawal in two thousand twenty-two. The plan trustees determined this arrangement threatened the fund’s actuarial soundness and moved to expel Local Seven Hundred Forty-Five, representing Penske employees in Dallas, effective two thousand twenty-one. Penske sued to enjoin the expulsion, while the plan counterclaimed to establish the withdrawal date. The district court granted summary judgment to the plan on the expulsion issue and dismissed the counterclaim for lack of exhaustion of arbitration remedies.
The court’s reasoning
The court applied deferential review to the Trustees’ interpretation of the Trust Agreement, finding they had the power to construe disputed terms. The court held that the Expulsion Provision allowed for the termination of a single bargaining unit without terminating the entire employer. The court rejected arguments that this violated uniformity requirements or the National Labor Relations Act. Regarding the counterclaim, the court affirmed that disputes over withdrawal liability dates are subject to mandatory arbitration under Section Fourteen Hundred One of Title Twenty-Nine of the United States Code before federal court review.
What it means going forward
Multiemployer pension plans may now more confidently expel specific bargaining units to prevent employers from manipulating withdrawal liability calculations, provided the decision is reasonable. Employers and plans must strictly adhere to mandatory arbitration procedures before seeking federal court intervention on withdrawal liability disputes.