Michels Corp. v. Central States, Southeast, & Southwest Areas Pension Fund
800 F.3d 411
| 7th Cir. | 2015Background
- Michels Corporation, a Wisconsin pipeline-construction firm, is part of PLCA and contributes to the Central States, Southeast, and Southwest Areas Pension Fund.
- The 2006 National Pipeline Agreement (CBA) stated it would continue until Jan 31, 2011, with automatic year-to-year extension unless terminated on 60 days’ written notice.
- Schedule A and B set contributions and the relationship among employers, the Union, and the Fund, including a broad trust-authority provision.
- PLCA publicly notified its intent to terminate the 2006 CBA on Jan 31, 2011, and the parties briefly extended the terms via monthly letter agreements.
- Starting Nov 15, 2011, the parties agreed to stop employer contributions to the Fund and to escrow funds while negotiating a mutually acceptable plan; other CBA terms would continue.
- Michels and PLCA separately notified the Fund of withdrawal after the November 15, 2011 amendment; the Fund later asserted Michels owed back contributions through Oct 2012.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2006 CBA expired as of January 31, 2011 or continued via extensions. | Michels/PLCA: extensions carried forward old terms as interim CBAs. | Fund: extensions preserved the 2006 CBA term. | 2006 CBA expired Jan 31, 2011; extensions did not reincorporate new withdrawal obligations. |
| Whether the November 15, 2011 amendment terminated contributions to the Fund. | Michels/PLCA argued the signed amendment eliminated the contribution duty. | Fund contends extension did not validly end the duty. | The November 15, 2011 amendment terminated contributions to the Fund. |
| Whether the Trust Agreement authorizes termination based on a signed contract and whether the November 15 agreement qualifies. | Trust Agreement allows termination upon receiving a signed contract eliminating the duty. | Fund relies on broader interpretation of the Trust Agreement to block withdrawal. | The Trust Agreement supports termination; the November 15, 2011 agreement qualifies as the signed contract. |
Key Cases Cited
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (Supreme Court 1989) (standard for review of plan interpretations is de novo unless discretionary authority exists)
- Parmac, Inc. v. I.A.M. Nat'l Pension Fund Benefits Plan A, 872 F.2d 1069 (D.C. Cir. 1989) (withdrawal liability determined by the CBA; supports focus on governing documents)
- Central States, Southeast & Southwest Areas Pension Fund v. Cent. Transp., Inc., 472 U.S. 559 (U.S. 1985) (fiduciary duty to collect contributions; withdrawal mechanics under ERISA)
- M&G Polymers USA, LLC v. Tackett, 135 S. Ct. 926 (2015) (interpretation of collective-bargaining agreements under contract law)