The Third Circuit held that where an employer has been party to multiple collective bargaining agreements (“CBAs”) with a multiemployer fund, an employer’s withdrawal liability should be based on “the single highest contribution rate” established under the CBAs. In so ruling, the Court observed that ERISA requires annual withdrawal liability payments to be based on “the highest contribution rate at which the employer had an obligation to contribute under the plan,” and rejected the employer’s argument that a “weighted average” of the contribution rates should apply.
Brian DeShannon
Ninth Circuit Applies “Successorship Doctrine” to Claim for MPPAA Withdrawal Liability
By Brian DeShannon on
The Ninth Circuit concluded in a case of first impression that an employer could be held liable for its predecessor’s withdrawal liability to a multiemployer pension fund pursuant to the “successorship doctrine.” The Court ruled that “the most important factor in assessing whether an employer is a successor for purposes of imposing MPPAA withdrawal liability is whether there is substantial continuity in the business operations between the predecessor and the successor, as determined in large part by whether the new employer has taken over the economically critical bulk of the prior employer’s customer base.” The Ninth Circuit concluded that the district court failed to weigh whether the alleged successor had retained a significant portion of its predecessor’s customer base, or “market share.” In addition,