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November 7, 1984

T.I.M.E.-DC, INC., Plaintiff,

The opinion of the court was delivered by: HOGAN

 The plaintiff in this action, T.I.M.E.-DC, Inc. ("TIME-DC""TIME"), is a nationwide trucking firm. The defendant, I.A.M. National Pension Fund (the "Machinists' Fund"/the "Fund"), is a multiemployer pension plan fund within the meaning of the Multiemployer Pension Plans Amendment Act of 1980 (the "Multiemployer Act"/the "MPPAA"), 29 U.S.C. §§ 1002(37)(A), 1301(a)(3)(1983). TIME-DC filed the complaint in this action for declaratory and injunctive relief against the Machinists' Fund as the result of the Fund's assertion of "withdrawal liability" against TIME-DC under the provisions of the Multiemployer Act. Ultimately, the plaintiff seeks a declaration that it is involved in an on-going labor dispute with the International Association of Machinists and Aerospace Workers (the "Machinists"/the "Union"), excepting it from withdrawal liability, and an injunction enjoining the Fund from prosecuting, enforcing or collecting any claim for withdrawal liability against TIME.

 This case is presently before the Court on plaintiff's motion for a preliminary injunction. Upon consideration of the plaintiff's motion, the defendant's opposition thereto, the stipulated factual record submitted by the parties, *fn1" counsel's oral argument on the motion, and the Court's discussion in open court, the Court concludes that plaintiff's motion for a preliminary injunction should be granted insofar as enjoining defendants from pursuing its withdrawal liability assessment of September 14, 1984 against TIME.

 Background: The Multiemployer Act

 The first comprehensive framework for federal regulation of private pension plans was the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001-1381. Under ERISA those plans must exist under written instruments, with plan assets held in trust under the direction and control of one or more fiduciaries. Id. §§ 1002-03.

 In 1980 Congress enacted the Multiemployer Act to amend ERISA with respect to multiemployer pension plans. Multi-employer plans, as distinguished from single employer plans, are those maintained pursuant to one or more collective bargaining agreements, covering the employees of two or more employers. Employers participating in multiemployer plans normally contribute to the fund at rates specified in the collective bargaining agreement. See The Washington Star Company v. International Typographical Union Negotiated Pension Plan, 235 U.S. App. D.C. 1, 729 F.2d 1502, 1504 (D.C. Cir. 1984).

 Under the Multiemployer Act, the trustees of a multiemployer plan are charged with the duty of quantifying and collecting "withdrawal liability" from an employer who partially or completely withdraws from the plan. See 29 U.S.C. §§ 1382, 1399 (1983). These withdrawal liability provisions were enacted by Congress to protect the security of workers covered by multiemployer plans from the deprivation of anticipated retirement benefits. Washington Star, 729 F.2d at 1504-05. Under the MPPAA an employer who withdraws from a multiemployer plan incurs a noncontractual liability to the fund, constituting the withdrawing employer's share of the plan's total vested unfunded benefits. Id. at 1505. Thus, withdrawal liability in effect serves as a penalty for withdrawing from the plan, exacted because the remaining participants may incur liability for the withdrawing employer's workers. T.I.M.E.-DC, Inc. v. Trucking Employees of North Jersey Welfare Fund, 560 F. Supp. 294, 297 (E.D.N.Y. 1983).

 Under the terms of the MPPAA, an employer may be deemed to have completely withdrawn from participation in the plan, thereby incurring withdrawal liability, when the employer

(1) permanently ceases to have an obligation to contribute under the plan, or
(2) permanently ceases all covered operations under the plan.

 29 U.S.C. § 1383(a).

 However, the MPPAA also sets forth an exception to withdrawal liability where an employer is engaged in a labor dispute with its employees. Specifically, the Act provides:

Notwithstanding any other provision of this part, an employer shall not be considered to have withdrawn from a plan solely because --
(2) an employer suspends contributions under the plan during a labor dispute involving its employees.

 29 U.S.C. § 1398.

 The present action involves a determination of the applicability of this labor disputes exception to withdrawal liability to the operations of the plaintiff, TIME-DC.

 Statement of Facts

 A. The TIME-DC/Machinists Labor Dispute

 For decades TIME-DC has operated its interstate trucking business under union contracts. Prior to April 1, 1982, TIME's employees were principally covered by successive nationwide collective bargaining agreements with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (the Teamsters). Its mechanics, however, were covered prior to April 1, 1982 by separate regional collective bargaining agreements with local Machinists organizations.

 In 1979 and 1980 TIME-DC began experiencing a severe business decline, attributable primarily to the 1978 federal deregulation of the trucking industry and the resulting competition with non-union carriers. Consequently, in 1981 TIME withdrew from multiemployer bargaining with both the Teamsters and the Machinists and endeavored to bargain directly with the Unions for economic relief.

 TIME-DC's efforts at individual negotiations with the Teamsters proved unsuccessful. At midnight on March 31, 1982, the date of the expiration of the existing collective bargaining agreement, the Teamsters struck TIME upon the company's failure to sign the new nationwide agreement.

 Prior to the Teamsters' strike TIME-DC was also making efforts to negotiate economic relief with the Machinists. However, in March 1982, Machinists working in the company's western states operations, the "Western Machinists," whose collective bargaining agreement also expired on March 31, 1982, rejected the company's initial contract proposal. *fn2" Thereafter, before subsequent negotiations on another proposal could begin, the ...

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