Strict Construction: Seventh Circuit Affirms Written Pension Obligations

On March 22, 2024, the United States Court of Appeals for the Seventh Circuit issued a ruling in Bulk Transp. Corp. v. Teamsters Union No. 142 Pension Fund, ordering the Teamsters Union No. 142 Pension Fund (the “Fund”) to repay Bulk Transp. Corp. (“Bulk Transport”) $2.3 million in withdrawal liability it had erroneously assessed upon Bulk Transport. 

Bulk Transport and the Fund had a collective bargaining agreement (“CBA”) from 2003 to 2006. The CBA included a Construction Agreement and a Steel Mill Addendum. In 2004, Bulk Transport signed a contract for LISCO work – a term used by the parties to describe work hauling commodities. The LISCO work was not explicitly covered by the CBA, but Bulk Transport made contributions for the work using the wage rated and pension terms of the Addendum because the Union threatened to strike otherwise. In 2005, Bulk Transport stopped performing the LISCO work and subsequently stopped making contributions to the Fund for the employees who were performing that type of work. The Fund assessed withdrawal liability on Bulk Transport. Bulk Transport paid the withdrawal liability but requested arbitration.