Pension fund fight headed to final trial

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Brownsville-based Michels Corp. and 34 other contractors will find out in November how much they owe to a union pension fund following their refusal in 2011 to continue paying.

Michels sued the Central States, Southeast and Southwest Areas Pension Fund and its trustees in March 2012 in Illinois, claiming the group illegally refused to let the contractor stop paying into the fund.

The Pipe Line Contractors Association, which negotiates with the International Brotherhood of Teamsters on behalf of Michels, joined the lawsuit in May 2012, echoing the contractor’s concerns.

David Haase, an attorney with Chicago-based Littler Mendelson PC, who represents Michels Corp., declined to comment. Attorneys for the PCLA and the pension fund did not immediately respond to requests for comment Thursday afternoon. The Teamsters are not involved in the lawsuit.

In 2011, while negotiating the terms of a new collective bargaining agreement, the Teamsters agreed Michels and other contractors represented by the PCLA could cancel their pension fund coverage, according to court documents. The PCLA sent letters to the pension fund to withdraw but did not receive a response.

The pension fund later claimed the letters were not enough to cancel coverage, according to court documents, and responded to Michels’ lawsuit in August 2012 with a counterclaim against the contractor and 34 others that had stopped paying into the fund after the PCLA sent its letters.

Four of those other companies are based in Wisconsin: Chippewa Falls-based IndianHead Pipeline Services LLC, Ashland-based Northern Clearing Inc., Eau Claire-based Precision Pipeline LLC and Mayville-based Schmid Pipeline Construction Inc. Requests for comment from representatives of the Wisconsin contractors and their attorneys were not immediately returned Thursday afternoon.

All of the contractors faced allegations from pension fund representatives that the companies should have been making payments, according to court documents. Pension fund representatives did not specify how much money the contractors owe.

Any agreement between the Teamsters and the PCLA about pension payments was void because the expired collective bargaining agreement had not yet been replaced, according to the allegations from pension fund representatives. Until a new agreement was in place, pension fund representatives alleged, the terms of the expired agreement, such as pension coverage, were extended, according to court documents.

In September, Northern District of Illinois Judge Charles Norgle ruled in favor of the pension fund, finding that the 35 pipeline contractors were required to pay. But the judge did not determine how much money they owed.

Michels and the PCLA in December filed a request for an interlocutory appeal, a special type of review for an open case, that temporarily prevented Norgle from calculating damages and that could have overrode the judge’s decision.

But the appeal request was denied June 16, and Norgle scheduled the case for a Nov. 4 trial to determine how much money the pipeline contractors owe the pension fund. Follow @bkevit