BNA Construction Labor News — Feb. 13, By Jacklyn Wille
A Pennsylvania concrete company can’t force the union that formerly represented its workers to foot a $680,698 withdrawal liability assessment from the union-connected pension plan, the Third Circuit ruled.
Nitterhouse Concrete Products Inc. withdrew from a pension plan covering workers represented by the Glass, Molders, Pottery & Plastics Workers Union after the union declined to renew its collective bargaining agreement with the company. Nitterhouse said an indemnification clause in its previous CBA required the union to cover the withdrawal liability assessed by the pension plan, but the U.S. Court of Appeals for the Third Circuit disagreed in a Feb. 6 decision.
The indemnification clause covered only liabilities that arose while the CBA was in effect, the court said. Because the withdrawal liability assessment arose after the bargaining relationship ended, the union can’t be forced to pay this amount, the court said.
“Like a chain of dominoes, withdrawal liability could only be imposed if Nitterhouse no longer had an obligation to contribute to the Plan; Nitterhouse’s contribution obligation could only cease if the CBA terminated, and the CBA terminated only if it was not renewed by the expiration deadline,” the court said. “These events did not occur in unison, but in succession, with the accrual of liability following the CBA’s expiration.”
The unpublished decision was written by Judge D. Michael Fisher and joined by Chief Judge D. Brooks Smith and Judge Theodore A. McKee.
McNees Wallace & Nurick represented Nitterhouse. Bredhoff & Kaiser and Killian & Gephart represented the union.
The case is Nitterhouse Concrete Prods., Inc. v. Glass & Pottery Workers, 2019 BL 39961, 3d Cir., No. 18-1429, unpublished 2/6/19.