10th Circuit Expands Employer Withdrawal Liability in the Construction Industry

July 8, 2016

The United States Court of Appeals for teh Tenth Circuit recently expanded employer withdrawal liability in the construction industry. The court held that work performed by a non-union company after the construction industry employer ceased contributing to a pension plan triggered withdrawal liability. Traditionally, withdrawal occurs when an employer permanently ceases to have a contribution obligation or permanently ceases performing work. However, in the construction industry there is an exception that withdrawal does not occur unless the employer continues to perform on a non-contributory basis or resumes work within 5 years in the collective bargaining agreement’s jurisdiction. The court needed to consider whether the control group for assessing withdrawal liability in the construction industry was to be determined from the date the employer ceased its obligation to contribute or when the control group triggers withdrawal liability by resuming covered work. The Tenth Circuit, reversing the arbitrator and district court, held that common control status for withdrawal liability purposes is established at the time that the control group resumes work, not when there is a cessation of the obligation to contribute. Union pension funds should carefully monitor construction employers for the five years after the obligation to contribute.

 

Ceco Concrete v. Centennial State Carpenters Pension Trust, No. 15-1021 (10th Cir. May 3, 2016)

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