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Seventh Circuit Denies Refund of Contributions to Multiemployer Plan for Mistakenly Covered Participant and Denies Arbitration Under the PBGC’s Default Rules for Withdrawal Liability

In Central States, Southeast and Southwest Areas Pension Fund v. Bulk Transport Corp., the U.S. Court of Appeals for the Seventh Circuit held that the employer could not seek a refund of contributions made to a multiemployer plan on behalf of an employee that the employer mistakenly believed was covered under the collective bargaining agreement because the employer had certified that the employee was eligible to participate in the plan and later explicitly covered the employee by name in subsequent collective bargaining agreements, and further, the pension fund had no duty to inquire as to the employee’s eligibility. The court also held that, in seeking arbitration for a dispute of withdrawal liability, the employer and the pension fund must use the American Arbitration Association’s (“AAA”) Multi-Employer Pension Plan Arbitration Rules that were approved by the PBGC instead of the PBGC’s default rules, notwithstanding the fact that the AAA had significantly… Continue Reading

May 2016
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