10-1827 National Shopmen Pension Fund v. DISA Industries, Inc.

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Employment
MPPAA

An employer in a multiemployer pension plan must exhaust its administrative remedies, even if it is contesting a revised, rather than an original, assessment of withdrawal liability.

“We recognize that Shopmen I and Shopmen II expressed concern that under our reading of the statute a pension plan could arbitrarily jack up an employer’s payments after assessing a lower, perhaps uncontroversial, amount. But we do not share this apprehension. As long as an employer is able to seek the full panoply of administrative and judicial remedies set forth in the MPPAA, there is little reason to think that a pension plan would be any more inclined to revise an assessment of withdrawal liability gratuitously than it is to make an arbitrary assessment in the first instance. If a plan’s revised assessment is patently ridiculous, the arbitrator should promptly reject the revision. And if that avenue fails, the courts are available to vacate or modify the award—but only after the completion of arbitration proceedings. See § 1401(b)(2). Moreover, ERISA’s fee-shifting provision, § 1132(g), combined with the fact that the plan would naturally have to return any payments to which it was not entitled, is sufficient to prevent arbitrary revisions. True, the employer is stuck with the higher bill in the interim, and that may be a cost it would rather not bear. But as we have explained, there are good reasons for the MPPAA’s ‘pay now, fight later’ rule, and Congress has decided to assign that cost to the withdrawing employer. Yet if the employer is nevertheless confident that the revision is indisputably incorrect, we have recognized limited situations where it is not obligated to make interim liability payments while seeking arbitration. See Hunt Truck Lines, Inc., 272 F.3d at 1003 (recognizing one exception to the rule). The key, however, is that any dispute relating to the calculation of withdrawal liability must be resolved through arbitration.”

Reversed and Remanded.

10-1827 National Shopmen Pension Fund v. DISA Industries, Inc.

Appeal from the United States District Court for the Northern District of Illinois, Kendall, J., Wood, J.

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