674 F.3d 608 (6th Cir. 2012), 11-5450, Shelter Distribution, Inc. v. General Drivers, Warehousemen & Helpers Local Union No. 89
|Citation:||674 F.3d 608|
|Opinion Judge:||BOYCE F. MARTIN, JR., Circuit Judge.|
|Party Name:||SHELTER DISTRIBUTION, INC., Plaintiff-Appellee, v. GENERAL DRIVERS, WAREHOUSEMEN & HELPERS LOCAL UNION NO. 89, Defendant-Appellant.|
|Attorney:||Scott D. Soldon, Kyle A. McCoy, Soldon Law Firm, LLC, Shorewood, Wisconsin, for Appellant. Griffin Terry Sumner, C. Laurence Woods, Frost Brown Todd LLC, Louisville, Kentucky, for Appellee.|
|Judge Panel:||Before: KEITH, MARTIN, and GIBBONS, Circuit Judges.|
|Case Date:||March 16, 2012|
|Court:||United States Courts of Appeals, Court of Appeals for the Sixth Circuit|
Shelter Distribution, Inc. filed this action with the district court seeking to enforce a provision of the collective bargaining agreement between Shelter and General Drivers, Warehousemen and Helpers Local Union No. 89. The provision in question obligates the Union to indemnify Shelter for any contingent liability Shelter may incur as a result of its participation in the pension plan. Under this provision, Shelter claims that the Union is obligated to indemnify Shelter for " withdrawal liability," a liability imposed upon Shelter by 29 U.S.C. § 1399(b). The Union argues that it is a violation of public policy for a union to indemnify an employer for any contingent liability to a pension plan established under the Employee Retirement Income Security Act of 1974, commonly referred to as ERISA, as amended by the Multiemployer Pension Plan Amendments Act of 1980, 29 U.S.C. §§ 1381-1461. The district court determined that the provision did not violate public policy and enforced the provision. This is an issue
of first impression. We hold that such a provision does not violate public policy and we AFFIRM the decision of the district court.
The facts are undisputed. The collective bargaining agreement between Shelter and the Union was scheduled to expire in November 2001. Pursuant to the agreement, the Union notified Shelter that it intended to negotiate the agreement. During negotiations, and prior to agreeing to a new contract, the Union disclaimed its representation of Shelter's employees and terminated the collective bargaining process with Shelter.
Because of the termination of the collective bargaining process, Shelter withdrew from the multiemployer plan. The Central States, Southeast and Southwest Areas Health and Welfare and Pension Fund imposed withdrawal liability against Shelter, and assessed Shelter $57,291.50 for withdrawing from the plan. See 29 U.S.C. §§ 1383, 1399(b). Shelter demanded indemnification for this amount from the Union pursuant to Section 8(m) of the collective bargaining agreement. The Union refused and Shelter filed this action in the district court seeking to enforce the indemnification provision.
Section 8(m) of the agreement provides:
The Employer shall continue to contribute to the Central States, Southeast and Southwest Areas Teamsters Pension Fund, the sum of $49.00 per week per covered employee for the year beginning December 1, 1998, $55.00 per week for the year beginning December 1, 1999, and $61.00 per week for the year beginning December 1, 2000. The Union and the members of the Bargaining Unit have agreed that only the liability of the Company to the Pension Benefit Plan of the Central States, Southeast and Southwest areas [sic] Pension Fund are, have been and shall be limited to the actual contributions it makes during the course of the past, present and future Contracts, and the Company shall not be liable for any other obligation or contingent obligation of any kind or nature...
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