BOARD OF TRUSTEES, SHEET METAL WORKERS’ NATIONAL PENSION FUND, Plаintiff - Appellant, and BOARD OF TRUSTEES, INTERNATIONAL TRAINING INSTITUTE FOR THE SHEET METAL AND AIR CONDITIONING INDUSTRY; BOARD OF TRUSTEES, NATIONAL ENERGY MANAGEMENT INSTITUTE COMMITTEE; BOARD OF TRUSTEES, SHEET METAL OCCUPATIONAL HEALTH INSTITUTE TRUST FUND; BOARD OF TRUSTEES, SHEET METAL WORKERS’ INTERNATIONAL ASSOCIATION SCHOLARSHIP FUND; BOARD OF TRUSTEES, NATIONAL STABILIZATION AGREEMENT FOR THE SHEET METAL INDUSTRY TRUST FUND, Plaintiffs, v. FOUR-C-AIRE, INC., Defendant - Appellee. BAKERY AND CONFECTIONERY UNION AND INDUSTRY INTERNATIONAL PENSION FUND, Amicus Supporting Appellant.
No. 17-2295
UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT
July 3, 2019
PUBLISHED
Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. Liam O‘Grady, District Judge. (1:16-cv-01613-LO-IDD)
Argued: January 30, 2019
Decided: July 3, 2019
Before NIEMEYER, AGEE, and DIAZ, Circuit Judges.
Reversed, vacated, and remanded by published opinion. Judge Agee wrote the opinion, in which Judge Niemeyer and Judge Diaz joined.
ARGUED: Lauren Powell McDermott, MOONEY, GREEN, SAINDON, MURPHY & WELCH, PC, Washington, D.C., for Appellant. Joseph Ray Pope, WILLIAMS MULLEN, Richmond, Virginia, for Appellee. ON BRIEF: John R. Mooney, Diana M. Bardes, MOONEY, GREEN, SAINDON, MURPHY & WELCH, PC, Washington, D.C., for Appellant. Michael E. Avakian, WIMBERLY, LAWSON & AVAKIAN, Washington, D.C., for Appellee. Julia Penny Clark, Richard F. Griffin, Jr., BREDHOFF & KAISER, PLLC, Washington, D.C., for Amicus Curiae.
The Board of Trustees of the Sheet Metal Workers’ National Pension Fund (the “Fund“), a multiemployer pension plan, filed this suit claiming a delinquent exit contribution from Four-C-Aire, Inc., a former participating employer, pursuant to
I.
Before turning to the specific facts of this case, we review how multiemployer pension plans like the Fund operate and the law that governs them. As the name suggests, “[i]n a multiemployer pension plan, multiple employers [from within an industry] pool contributions into a single [trust] fund that pays benefits to covered retirees who spent a certain amount of time working for one or more of the contributing employers.” Bakery & Confectionary Union & Indus. Int‘l Pension Fund v. Just Born II, Inc., 888 F.3d 696, 698 n.1 (4th Cir. 2018) (internal quotation marks omitted). When an employer executes a CBA with a local union governing the terms of employment, the CBA will often require the employer to contribute to such a plan. Thus, in addition to signing on to a CBA with the union, an employer will also sign on to the terms and conditions of the plan‘s separate governing documents. But, as discussed further below, the plan is not a party to the CBA between the employer and union.
Plan participation provides multiple advantages to both employees and employers. Among them, employees receive benefits that follow them throughout jobs within a particular industry, and employers are able to offer those benefits while taking advantage of cost- and risk-sharing mechanisms. See Concrete Pipe & Prods. of Cal., Inc. v. Constr. Laborers Pension Trust Fund for S. Cal., 508 U.S. 602, 606 (1993).
But participation by an employer in a multiemployer pension plan is not without its risks and obligations. For example, if one participating employer fails to make a contribution to the plan—whether because their CBA has expired, they have gone out of business, or otherwise—the remaining employers must then make larger contributions or employees must receive reduced benefits to cover the shortfall. These “rising costs may encourage—or force—further withdrawals, thereby increasing the inherited liabilities to be funded by an ever-decreasing contribution base.” Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 722 n.2 (1984) (internal quotation marks omitted). “This vicious downward spiral may continue until it is no lоnger reasonable or possible for the pension plan to continue.” Id.; see also Cent. States, Se. & Sw. Areas Pension Fund v. Gerber Truck Serv., Inc., 870 F.2d 1148, 1151 (7th Cir. 1989) (en banc) (“Multi-employer plans are defined-contribution in, defined-benefit out. Once they promise a level of benefits to employees, they must pay even if the contributions they expected to receive do not materialize[.]“).
To address these risks, Congress amended ERISA by enacting the
With the enactment of the MPPAA, Congress placed multiemployer plans in a stronger position to collect outstanding contributions “than they [would] otherwise occupy under common law contract principles.” Ralph‘s Grocery, 118 F.3d at 1021. Ordinarily, any suit brought by a plan for contributions would be subject to common law defenses—such as the parties’ intent, fraud in the inducement, or mistake of fact—that the employer could assert against the local union. Id. (noting that although third party beneficiaries to a contract—which multiemployer pension plans are similarly situated to in the context of a CBA—can enforce contract terms that inure to their benefit, they are also “subject to defenses that the promisor could assert against the original party to the contract“). But under
a multiemployer plan can enforce, as written, the contribution requirements found in the controlling documents . . . . Consequently, an employer is not permitted to raise defenses that attempt to show that the union and the employer agreed to terms different from those set forth in the agreement. Nor is an employer permitted to raise defenses that relate to claims the employer may have against the union[.]
Id. (emphasis added) (internal citations omitted).
As Ralph‘s Grocery explained, this favored status arises from the interaction between
This strengthened position gives effect to the protections the MPPAA was designed to provide to plans and beneficiaries. Prior to the enactment of
Permitting a plan to bring an action against an individual employer in accordance with the plain language of the plan documents or CBA addresses these issues in three crucial ways. First, it streamlines the collections process and ensures plans remain funded pursuant to the plan‘s clear terms. Id. at 1021-22. Second, it permits plans to apply the written terms of plan participation uniformly, despite the existence of numerous individual CBAs—all with their own unique provisions—through which employers agreed to contribute to the plan. Cf. Sinai Hosp. of Balt., Inc. v. Nat‘l Benefit Fund for Hosp. & Health Care Emps., 697 F.2d 562, 568 (4th Cir. 1982) (binding a multiemployer pension plan to all the terms of an individual CBA would “completely dissipate the law of trusts, lеaving employee benefit funds vulnerable to the recurring whims of employer/union bargainers“). Third, it leaves for separate litigation any matters between the employer and the union arising from their individual CBA, to which the plan was not a party. This last point is particularly important given that plans necessarily do not have the same duties and interests as local labor unions or employers. See Cent. States, Se. & Sw. Areas Pension Fund v. Cent. Transport, Inc., 472 U.S. 559, 576 (1985) (noting that where a plan‘s “duty extends to all [national] participants and beneficiaries of [the] multiemployer plan,” “a local union‘s duty is confined to current employees employed in the bargaining unit in which it has representational rights“).
This Court has underscored the need for plans to be able to enforce their trust
In resolving the conflict between these provisions, the Court recognized as an initial matter that the purpose of
II.3
Having established these background principles, we turn to the facts at
the CBA required Four-C-Aire to contribute to the Fund6 and “incorporated by reference” the Fund‘s Trust Documents.7 The CBA also bound Four-C-Aire to abide by the terms and conditions of the Trust Documents, “including any amendments thereto and policies and procedures adopted by the [Fund‘s] Board[] of Trustees.”8 J.A. 10, 112-13. Specifically, the text of the CBA provided:
The parties agree to [be] bound by . . . the separate agreements and declarations of trusts of all other local or national programs to which it has been agreed that contributions will be made. In addition, the parties agree to be bound by any amendments to said trust agreemеnts as may be made from time to time[.]
In turn, under Article V, Section 6(a) of the Trust Documents, Four-C-Aire
not have to pay a statutorily-mandated withdrawal liability.9 While the CBA was in effect, the Trust Documents were amended to state:
[B]y agreeing to contribute, continuing to contribute, or continuing to be obligated to contribute, to the Fund, each Employer agrees to pay an Exit
Contribution in accordance with this [provision]. The Employer‘s obligation to pay an Exit Contribution under this [provision] is independent of the Employer‘s [CBA] and continues to apply after the termination of the [CBA] (notwithstanding any language to the contrary in the [CBA]).
J.A. 16 (emphasis in original) (the “Amendment“).
Four-C-Aire‘s obligation to contribute to the Fund in the ordinary course ended on or around April 30, 2016, when the terms of the CBA expired and Four-C-Aire had not entered into a new CBA or other agreement requiring it to contribute to the Fund.10 Several months later, in
The Fund then filed a complaint, subsequently amended, in the United States District Court for the Eastern District of Virginia, alleging that the corporation owed an exit contribution to the Fund as a delinquent contribution under
(codified at
The district court granted Four-C-Aire‘s motion to dismiss the Fund‘s claim, relying on three independent grounds: first, it determined the duty to pay an exit contribution did not survive the CBA‘s expiration because the CBA did not specifically state that obligation would survive. The court therefore cоncluded that the corporation was not bound after the expiration of the CBA by any requirements in the Trust Documents, including the requirement to pay an exit contribution. Second, the district court relied on an alternative ground—not advanced by Four-C-Aire‘s motion to dismiss—that the complaint‘s allegations were insufficient to demonstrate that the Amendment had been properly incorporated into the Trust Documents. Specifically, it determined that without allegations (1) that Four-C-Aire knew and consented to the Amendment, and (2) that described the amendment process and that the process had been followed, the Amendment could not be applied against the corporation. Third—and as another alternative ground that Four-C-Aire had not advanced—the district court held that the CBA‘s grant of “unilateral” modification power to the Fund was illusory and therefore unenforceable under ordinary principles of contract law. Four-C-Aire, 2017 WL 1479425, at *10.
The Fund noted a timely appeal and the Court has jurisdiction under
III.
The Court reviews de novo the district court‘s decision to grant a motion to dismiss under
The Fund contends that none of the district court‘s grounds for dismissing its claim for an exit contribution withstand review. Pointing to principles of ERISA that govern multiemployer pension plans as well as general contract principles, the Fund asserts that the district court misinterpreted the plain language of the CBA and Trust Documents. In
addition, it argues the complaint‘s allegation that the Trust Documents “were amended” requires the inference that those documents were properly amended and that any challenge to the amendment process should be raisеd as a defense to liability later in the proceedings. Lastly, the Fund argues the district court misunderstood how multiemployer pension plans work when it held that Four-C-Aire‘s liability was premised on an illusory promise and was unenforceable. For the reasons set forth below, we agree with the Fund on each of these points and conclude it has adequately alleged a claim for an exit contribution against Four-C-Aire.
A.
The district court‘s first ground for dismissing the Fund‘s claim was its conclusion that the language in the CBA incorporating the Trust Documents did not survive the CBA‘s expiration, so any of Four-C-Aire‘s duties under the Trust Documents likewise did not survive. In order to fully understand the district court‘s errors in reaching this conclusion, we first provide a lengthier explanation of its reasoning.
At the outset, the district court held “that exit contribution requirements imposed by an incorporated trust document do not survive the termination of the CBA unless explicitly noted in the CBA.” Four-C-Aire, 2017 WL 1479425, at *10 (emphasis added). The court‘s analysis on this point was truncated because it relied on its own prior holding to this effect in a case involving a different former participating employer but a similarly worded CBA and the same multiemployer pension plan (the Fund). See id.; Bd. of Trs., Sheet Metal Workers’ Nat‘l Pension Fund v. Caddo Sheet Metal, LLC, No. 1:14-cv-858, 2015 WL 4032037 (E.D. Va. June 30, 2015). In Caddo Sheet Metal, the district court held that when a CBA contained an evergreen clause specifically stating which provisions survive the expiration of the CBA, and the provision incorporating the Trust Documents was not listed in that clause, the incorporation provision—and therefore any duties contained only in the Trust Documents—did not survive the CBA‘s expiration. 2015 WL 4032037, at *3. That reasoning led the district court in Caddo Sheet Metal to hold that the Fund was not entitled to seek an exit obligation from a former participating employer after its CBA expired. Id. at *6.13
In dismissing the Fund‘s claim against Four-C-Aire, the district court adopted its
that any obligations set out in the Trust Documents—including the duty to pay the exit contribution—did not survive the CBA‘s expiration.
The district court then observed that the Amendment was the only changed circumstance from Caddo Sheet Metal, but concluded that the Amendment did not lead to a different result. It noted that both Caddo Sheet Metal and M & G Polymers had focused “on the bargaining agreement and not on the secondary documents,” i.e., the Trust Documents, when analyzing the extent of the employer‘s obligations. Four-C-Aire, 2017 WL 1479425, at *11. Consequently, the court concluded that any changes to the Trust Documents did not alter the barrier it had identified in Caddo Sheet Metal, which was that the CBA did not specifically provide that the incorporation clause (and therefore any duties set out in the Trust Documents) would survive the CBA‘s expiration. Relying on Caddo Sheet Metal, the district court held that Four-C-Aire‘s agreement to pay an exit contribution did not survive the CBA‘s expiration. However, in the course of its reasoning, the district court never considered the impact of
The district court‘s reasoning thus runs counter in at least two respects to Four-C-Aire‘s alleged contractual obligations. First, under
reopening is given not less than ninety (90) days prior to the expiration date. In the event such notice of reopening is served, this Agreement shall continue in force and effect until conferences relating thereto have been terminated by either party by written notice, provided, however, that, if this Agreement contains [an arbitration provision], it shall continue in full force and effect until modified by order of the National Joint Adjustment Board or until the procedures under [the arbitration provision] have otherwise been completed.
Four-C-Aire, 2017 WL 1479425, at *7 (emphasis omitted).
must be interpreted so that Four-C-Aire is held to the requirements set forth by the plain language of those Documents—and as adequately alleged in the complaint, these requirements included payment of an exit contribution after the expiration of the CBA. Second, even if
B.
1.
“According to section 515, the scope of [an employer‘s] obligation to [a
C-Aire signed the CBA and thereby agreed to be bound by the Trust Documents, (2) the Trust Documents provided that a participating employer would be obligated to pay an exit contribution under certain circumstances, (3) the Amendment additionally stated that the obligation would survive the expiration of the CBA, and (4) the complaint alleged that Four-C-Aire failed to pay the exit contribution despite the occurrence of events requiring such a contribution, the Fund has set forth a viable claim for an exit contribution from Four-C-Aire.
First, the controlling documents determining the extent of Four-C-Aire‘s obligations to the Fund included both (1) the CBA and (2) the Trust Documents (as well as any amendments to the Trust Documents). Specifically, the complaint alleged that when Four-C-Aire signed onto the CBA, it agreed to “abide by the terms and conditions of” the Trust Documents and “expressly incorporated” the Trust Documents. J.A. 10 ¶ 11. Furthermore, as set forth in the complaint, the text of the CBA stated: “The parties agree to [be] bound by . . . the separate agreements and declarations of trusts of all other local or national programs to which it has been agreed that contributions will be made.” Four-C-Aire, 2017
We conclude that the exit contribution in this case constituted a “contribution” under
Second, Article V, Section 6(a) of the Trust Documents required that Four-C-Aire pay an exit contribution if three criteria were met: (1) it ceased to have an obligation to contribute to the Fund, and (2) as a result of the cessation of its obligation to contribute, it had an event of withdrawal under Title IV of ERISA, but (3) did not have to pay a statutorily-mandated withdrawal liability. Put another way, the pre-Amendment Trust Documents provided that Four-C-Aire would pay an exit contribution to the Fund “after the expiration of its [CBA] if it ceased to have an obligation to contribute to the Fund as a result of such expiration, and it did not enter into a successor [CBA] requiring contributions to the Fund.” J.A. 15 ¶ 40. Thus, according to the well-pleaded allegations in the complaint, the plain terms of the Trust Documents required Four-C-Aire to pay an exit contribution upon the expiration of the CBA (if no successor CBA had been reached), even prior to the Amendment.
The complaint further alleged that all the events triggering an exit contribution occurred as to Four-C-Aire: that is, the corporation ceased having an obligation to contribute to the Fund because of the CBA‘s expiration; this cessation resulted in an event of withdrawal; but Four-C-Aire did not have to pay the statutory withdrawal liability because of ERISA‘s de minimis rule. Altogether, this is sufficient to allege that Four-C-Aire‘s duty to pay an exit contribution survived the CBA‘s expiration, even if the triggering event was the CBA‘s expiration.16
Third, regardless of whether the original Trust Documents created a duty to pay that survived the CBA‘s expiration (they did), the Trust Documents were also explicitly amended to provide that the exit contribution requirement would survive the CBA‘s expiration.17 Contrary to the district court‘s analysis, the complaint‘s allegations concerning the Amendment further support the Fund‘s claim against Four-C-Aire. In particular, the complaint alleges that the CBA‘s language incorporating the Trust Documents specifically indicated that Four-C-Aire would be bound by not only the provisions of the Trust Documents in effect at the time it became a participating employer, but also “any amendments thereto and policies and procedures adopted by the” Trustees, which were also “expressly incorporated” into the CBA. J.A. 10 ¶ 11. The complaint further alleges that the Trust Documents were amended to include the following language: “[a participating employer‘s] obligation to
Consequently, the only remaining question for purposes of thе motion to dismiss is whether the complaint sufficiently alleged a violation of the obligation to pay an exit contribution. In short, it did. Specifically, the complaint alleged Four-C-Aire did not pay an exit contribution despite the Trust Documents’ conditions being satisfied as a result of the CBA‘s expiration. These allegations are sufficient to state a claim for relief under
Contrary to the district court‘s reasoning, this is the case even though the survival of the incorporation provision—and thereby the exit contribution obligation—was not specified in the evergreen clause. A CBA can explicitly provide that certain obligations contained within it may extend beyond the CBA‘s expiration—as the district court correctly recognized in Caddo. 2017 WL 4032037, at *2. And that is exactly what occurred here: the Trust Documents, which were expressly incorporated into the CBA, unambiguously provided that an employer‘s obligation to pay the exit contribution survived the expiration of the CBA.18
Furthermore, in attempting to distinguish between the terms of the CBA and the terms in the “secondary documents,” the district court ignored
2.
Ralph‘s Grocery—which the district court entirely ignored in its analysis—further underscores the error in the district court‘s reasoning. As discussed above, this Court has emphasized the need to provide for uniform enforcement of trust agreements by holding that where various trust and CBA terms conflict, § 515—as a statement of federal labor policy—mandates that the terms of the provision permitting for uniform enforcement of the trust documents govern.
In contrast to Ralph‘s Grocery, the provisions at issue in this case were not in conflict: had the Fund searched for a potentially conflicting clause undermining the mandate of the Trust Documents and the Amendment, it would have found none. The terms of the CBA clearly incorporated all Trust Documents, and the Trust Documents plainly provided that an exit contribution was required under certain circumstances—an obligation which survived the expiration of the CBA. The only potential conflict, as asserted by Four-C-Aire, was the evergreen clause‘s failure to include the incorporation provision. But for all of the reasons discussed above, the Fund was entitled to rely on and enforce the plain terms of the Trust Documents, including the Amendment.
Furthermore, even if the evergreen clause or another provision in the CBA plainly conflicted with the exit contribution requirement, the latter would prevail. First, “by virtue of section 515,” the Fund was entitled to “rely on and enforce the literal meaning of [Four-C-Aire‘s] representation” that it would agree to abide by the terms of the Trust Documents and any amendments thereto. Ralph‘s Grocery, 118 F.3d at 1023–24. Second, the Trust Documents and Amendment controlled because Four-C-Aire‘s acceptance of the terms set forth in those documents, as provided in the CBA, “form[ed] the basis for [its] relationship with the Fund.” Id. at 1024. And finally, as discussed below, congressional policy provides that multiemployer pension plans like the Fund are entitled to enforce the terms of their plans uniformly.
3.
We conclude by noting that the district court‘s analysis would also undermine the statutory protections Congress set in place for multiemployer pension plans. In providing a cause of action permitting plans to enforce contribution requirement according to the plain terms of the controlling documents, Congress created a statutory scheme that would allow plans to enforce their contribution obligations uniformly and thereby avoid discrepancies in the enforcement of such obligations. But that is precisely what the district court‘s holding permits: if the unique evergreen clause in Four-C-Aire‘s individual CBA indeed dictated the extent of its obligations to the Fund, the Fund would be prevented from uniformly enforcing exit contribution requirements because other withdrawing employers would be able to point to similar individual CBA terms to limit their particular obligations to the Fund. Instead, by enforcing the terms of the Trust Documents and Amendment according to their plain language, the Fund is able to ensure uniform application of the exit contribution requirements.
This also streamlines the collections process and ensures the Fund remains solvent based on the application of that plain language. Because the Fund provides mechanisms that spread the risks and costs of running a benefits plan amongst multiple employers, the cost of Four-C-Aire‘s withdrawal without the guarantee of exit contributions or withdrawal liability would be shouldered to a far greater extent by the remaining employers (as well as the employees)—a result § 515 was designed to avoid.
Finally, if the Fund were not able to bring such a suit under § 515, it would have instead been forced to rely on litigation between the employer and union to enforce the contribution requirement—which, as discussed above, would have more likely than not resulted in delayed or reduced contributions. Furthermore, the Fund‘s interest in avoiding such litigation is particularly important given that it does not have the same duties and interests as Local Union No. 58. Id. at 1021–22. For all of these reasons, the district court‘s analysis erroneously ignored the statutorily mandated protections afforded to multiemployer pension plans.
****
The district court thus erred in concluding the incorporation of the Trust Documents did not survive the termination of the CBA as a basis to grant Four-C-Aire‘s motion to dismiss. And for the reasons discussed above, the allegations of the complaint are sufficient to state a claim for relief under
IV.
The district court also articulated two alternative grounds for dismissing the Fund‘s claim for an exit contribution, which were based solely on its holding that the Fund could not bring its claim under the language of the Amendment. The first ground was that the complaint contained insufficient allegations to demonstrate that the Amendment had been “properly incorporated into the CBA.” Four-C-Aire, 2017 WL 1479425, at *11. The second was that
The district court erred in dismissing the Fund‘s claim based on perceived flaws in the Trust Documents’ amendment process. Specifically, the court held that applying an amendment that had beеn added without Four-C-Aire‘s “knowledge, awareness, or consent[] would result in surprise and hardship.” Id. at *11. It then noted that because the complaint lacked any allegations that Four-C-Aire had the opportunity “to acknowledge and assent to” the Amendment “or was even aware of this Amendment,” the corporation could not be bound by the Amendment. Id. Further, the district court observed that the Complaint did not allege “who amended the document or how it was amended,” or whether the Fund “had any specific process for amending” the Trust Documents. Id.
At the motion to dismiss stage, the court should not have considered the viability of a potential defense against enforcement of the Amendment due to an invalidity in its adoption; such a consideration requires factual development that is not before the court when considering a motion to dismiss. When considering the sufficiency of a complaint‘s allegations under a
The Fund‘s complaint states that the Trust Documents were “amended,” J.A. 16 ¶ 44, to add certain language that further supported its claim that Four-C-Aire owed an exit contribution. Under the above-stated principles, these allegations are sufficient to withstand dismissal: they give Four-C-Aire fair notice that the Fund will be relying on the Amendment to support the claim that it owes an exit contribution. Of course, after further factual development, Four-C-Aire is not barred from challenging the validity of the amendment process. However, at the motion to dismiss stage, it is premature and speculative to conclude that unknowns about the amendment process render the Amendment unenforceable against Four-C-Aire as a matter of law. See Goldfarb v. Mayor & City Council of Balt., 791 F.3d 500, 513 (4th Cir. 2015) (holding that the district court erred in granting a motion to dismiss where the complaint “provide[d] sufficient detail about [the] claim to show that [the plaintiff] has a more-than-conceivable chance of success on the merits” (second
In addition, the district court erred in determining that the CBA provision incorporating any future amendments to the Trust Documents bestowed a “complete lack of procedural or substantive limits on [the Fund‘s] unilatеral modification power (as pled),” “mean[ing] that the clause itself is illusory.” Four-C-Aire, 2017 WL 1479425, at *11. Under the principles governing a motion to dismiss set out above, the Fund wasn‘t required to allege such limits in order to allege facts plausibly stating a claim for relief. Again, the district court prematurely assumed certain flaws in the amendment process rather than recognizing that any defenses based on those points are beyond the proper scope of review on a motion to dismiss. The complaint alleged that the Amendment is binding on Four-C-Aire and that its language, coupled with the pre-Amendment language in the Trust Documents, shows Four-C-Aire‘s obligation to pay an exit contribution. Those allegations suffice to state a claim for relief and dismissal based on the assumed errors in the amendment process was therefore in error.
V.
For the reasons set forth above, we reverse the district court‘s order granting Four-C-Aire‘s motion to dismiss, vacate the judgment as to the exit contribution claim, and remand for further proceedings consistent with this opinion.
REVERSED, VACATED, AND REMANDED
Notes
As relevant to Four-C-Aire, a complete withdrawal occurs when: (1) “an employer ceases to have an obligation to contribute under the plan,” such as through the expiration of the CBA, and (2) the employer “continues to perform work in the jurisdiction of the [CBA] of the type for which contributions were previously required.”
But Four-C-Aire “was not required to pay statutory withdrawal liability under ERISA‘s de minimis rule,” which is intended to eliminate or reduce the withdrawal liability certain employers—generally smaller companies—would owe, to the extent that their calculated withdrawal liability is less than $150,000. Opening Br. 7 (citing
Rather, the Trust Documents provided that the Fund would instead assess a specific exit contribution based upon its own formula in the plan. Specifically, the Documents provided that the amount an employer would owe as an exit contribution upon an event of withdrawal would be equal “to the amount of the employer‘s contributions due for the 36-month period preceding the month in which the employer ceased to have an obligation to contribute.” J.A. 15 ¶ 41; see also
This Agreement and Addenda Numbers one (1) through thirty-two (32) attached hereto shall become effective on the 1st day of May, 2011 and remain in full force and effect until the 30th day of April 2016 and shall continue in force from year to year thereafter unless written notice of