Withdrawal Liability

The attorneys at Friedman & Anspach have extensive experience with all stages of withdrawal liability assessment and collection, from the initial notice and demand, to responding to requests for review, to arbitrations, to federal court litigation. Below are some decisions from the federal courts.

HOP Energy, LLC v. Local 553 Pension Fund, I.B.T.:  We successfully represented the Board of Trustees of an ERISA multiemployer pension plan in arbitration, before the district court, and before the Second Circuit in this withdrawal liability matter. The Second Circuit panel affirmed the decisions of the federal district court and the arbitrator which upheld the assessment of $1,204,007 in withdrawal liability by the Fund. In this significant 2-1 decision, the Circuit upheld the ERISA protections for pension plans in one of the few decisions addressing ERISA Section 4204's sale of assets exemption to the assessment of withdrawal liability. Eschewing the relevance of the language of collective bargaining agreements or other labor accords, the majority found assessment was warranted here because the asset purchase agreement between HOP and its buyer, on its face, disavowed the buyer's statutory obligation to contribute for substantially the same number of contribution base units, i.e., hours, as HOP had prior to the sale. Thus, the agreement did not exempt HOP from withdrawal liability pursuant to ERISA 4204. HOP Energy, LLC v. Local 553 Pension Fund, I.B.T, No. 10 Civ. 3889, 2012 U.S. App. LEXIS 9088 (2d Cir. May 3, 2012).

La Barbera v. United Crane and Rigging Services, Inc.:  The court held the principal of a withdrawing employer who owned a sole proprietorship held in "common control" with the employer liable for the employer's withdrawal liability, and that the principal's receipt of the complaint in the lawsuit and subsequent participation in the litigation demonstrated that he had received proper notice of his withdrawal liability, as required under ERISA. This enabled the pension fund to enforce the judgment against the personal assets of the principal, even after the company had declared bankruptcy. La Barbera v. United Crane and Rigging Services, Inc., No. 08 Civ. 3274 (DLI), 2011 WL 1303146, 50 Employee Benefits Cas. 2238 (E.D.N.Y. March 02, 2011).

Miller v. Adco:  The court upheld a pension fund's assessment of withdrawal liability based on the company's default of its withdrawal liability under ERISA. Specifically, the court rejected the employer's argument that it had never been notified of its default of withdrawal liability, and the court's finding that the complaint constituted proper notice of default under ERISA established new law for pension fund trustees to use in pursuing withdrawal liability claims. Miller v. Adco, No. 04 Civ. 3378 (WJM), 2005 WL 2044941 (D.N.J. Aug. 24, 2005).

Miller v. Collectron Corporation:  A federal court upheld a pension fund's right to collect defaulted withdrawal liability from an employer, finding that the fund had properly notified the employer of its withdrawal liability, and that the employer had willfully disregarded these notices. Miller v. Collectron Corporation, No. 98 Civ. 2221 (JG), 1999 WL 730981 (E.D.N.Y. September 16, 2001).