A recent case serves as a reminder to employers that arbitration of disputes of withdrawal liability of the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA) must be pursued in a timely manner or the employer may have no recourse. In a recent case, an employer experienced a withdrawal from a multiemployer pension fund when it ceased to have any collectively bargained employees for whom contributions to the fund were required. The employer was informed of its withdrawal liability, the administrative remedies under MPPAA, and the fund’s administrative rules. The employer did not respond to this notice. Under law, the deadline for requesting arbitration of the dispute was January 28, 2008. In October 2007, the employer wrote to the fund protesting the determination of complete withdrawal and requested a review of assessment of withdrawal liability. The request for review also informed the fund that it had hired a union employee and would resume making contributions to the fund. The fund denied the request for review in November 2007 and indicated that whether the hiring of an additional employee would abate withdrawal liability would depend on the law. The employer did not pursue any course of action at that time. In October 2008, the fund sued the employer and in February 2009, more than one year after the deadline for arbitration, the employer filed a demand for arbitration. The District Court for the District of New Jersey ruled in favor of the plan on a motion for summary judgment, finding that the employer’s failure to timely seek arbitration waived all administrative remedies it had with respect to the plan. Employers facing withdrawal liability assessments or claims should be careful to be certain that all deadlines are met to seek arbitration or else face the possibility of loss of the ability to pursue what may or may not be a legitimate defense to the assessment. (Einhorn v. Kaleck Brothers Inc., D.N.J., 2010)
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Arbitration in multi-employer withdrawal liability disputes must be pursued timely
- Hodgson Russ LLP
- Peter K. Bradley, Anita Costello Greer, Michael J. Flanagan, Richard W. Kaiser, Arthur A. Marrapese III and Daniel R. Sharpe
- July 30 2010
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