During a recent conference at New York University, NLRB General Counsel, Peter Robb, hinted at the forthcoming restoration of more than fifty years of precedent allowing employers to cease withholding union dues after the expiration of the collective bargaining agreement containing the so-called “dues check-off” provision.
As reported by Law360, Robb referred to the 2015 Obama-era decision overturning that precedent as “misguided,” and stated further: “I think unless there’s clear language that the dues check-off should continue, it shouldn’t.” Prior to that 2015 decision, the Board had, since 1962, consistently held that dues check-off provisions, which implement union security provisions by providing for the automatic deduction of union dues, could be cancelled by employers upon contract expiration. See Bethlehem Steel Co., 136 NLRB 1500 (1962).
In December 2014, Congress passed and President Obama signed the Multiemployer Pension Reform Act of 2014 (“MPRA”). The objective of the MPRA was to shore up struggling multiemployer pension plans, many of which are severely underfunded and getting worse. Among other things, the MPRA provided employers an incentive to continue participation in “endangered” or “critical” status plans by mandating that any increases to the employer’s contribution rate after 2014 will not count against the employer for purposes of determining withdrawal liability.
Because the funded status of many of these plans is so low, this provision can mean significant savings for employers who withdraw from plans in critical or endangered status. The rehabilitation plans of typical critical status multiemployer plans have called for contribution rate increases anywhere from 4-8% or more annually so, in the five years since 2014, many employers have seen cumulative rate increases of from 20-25%, or more. But because Continue reading
An important decision issued by the Ninth Circuit Court of Appeals last month once again illustrates the one-sided nature of many withdrawal liability disputes and will likely have significant ramifications for many employers withdrawing from underfunded pension plans. The decision holds that the plan correctly applied a credit for a prior partial withdrawal against the employer’s subsequent complete withdrawal before calculating the twenty-year limitation on annual payments provided by ERISA.
By way of background, withdrawal liability is imposed upon an employer when it withdraws from a multiemployer pension fund, and a withdrawal may be either partial or complete. If an employer incurs a partial withdrawal and subsequently incurs either another partial or a complete withdrawal, ERISA directs that the employer be given a credit for the first partial withdrawal. ERISA also limits an employer’s obligation to twenty years of payments.
In GCIU-Employer Retirement Fund v. Quad Graphics, Inc., the employer incurred a partial withdrawal followed by a complete. In calculating the subsequent complete withdrawal liability, the plan applied Continue reading