Filed: Jun. 29, 2015
Latest Update: Mar. 02, 2020
Summary: PUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 13-2403 THE TRUSTEES OF THE PLUMBERS AND PIPEFITTERS NATIONAL PENSION FUND, Plaintiff – Appellee, v. PLUMBING SERVICES, INC.; PSI MECHANICAL, INC., Defendants – Appellants. Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. T. S. Ellis, III, Senior District Judge. (1:13-cv-00118-TSE-JFA) Argued: January 27, 2015 Decided: June 29, 2015 Before MOTZ and DIAZ, Circuit Judges, and DAVIS,
Summary: PUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 13-2403 THE TRUSTEES OF THE PLUMBERS AND PIPEFITTERS NATIONAL PENSION FUND, Plaintiff – Appellee, v. PLUMBING SERVICES, INC.; PSI MECHANICAL, INC., Defendants – Appellants. Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. T. S. Ellis, III, Senior District Judge. (1:13-cv-00118-TSE-JFA) Argued: January 27, 2015 Decided: June 29, 2015 Before MOTZ and DIAZ, Circuit Judges, and DAVIS, ..
More
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-2403
THE TRUSTEES OF THE PLUMBERS AND PIPEFITTERS NATIONAL
PENSION FUND,
Plaintiff – Appellee,
v.
PLUMBING SERVICES, INC.; PSI MECHANICAL, INC.,
Defendants – Appellants.
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. T. S. Ellis, III, Senior
District Judge. (1:13-cv-00118-TSE-JFA)
Argued: January 27, 2015 Decided: June 29, 2015
Before MOTZ and DIAZ, Circuit Judges, and DAVIS, Senior Circuit
Judge.
Affirmed by published opinion. Judge Diaz wrote the opinion, in
which Judge Motz and Senior Judge Davis joined.
ARGUED: Gregory F. Yaghmai, RUTLEDGE & YAGHMAI, Birmingham,
Alabama, for Appellants. Dinah S. Leventhal, O'DONOGHUE &
O’DONOGHUE LLP, Washington, D.C., for Appellee. ON BRIEF: John
R. Harney, O’DONOGHUE & O’DONOGHUE LLP, Washington, D.C., for
Appellee.
DIAZ, Circuit Judge:
For nearly thirteen years, Plumbing Services, Inc. (“PSI”)
made contributions to the Plumbers and Pipefitters National
Pension Fund (the “Fund”), a multiemployer pension benefit plan
governed by the Employment Retirement Income Security Act of
1974 (“ERISA”), 29 U.S.C. § 1001 et seq. (2012). On March 10,
2011, however, PSI stopped contributing to the Fund. The Fund,
in turn, informed PSI that it (and its successor entity, PSI
Mechanical, Inc., collectively “Defendants”) owed “withdrawal
liability” pursuant to 29 U.S.C. § 1381. When Defendants failed
to pay the sum owed, the Fund filed suit.
Defendants moved to dismiss the action on the ground that
the district court did not have personal jurisdiction over them.
In the alternative, they sought a change in venue. The district
court denied both motions. On the merits, Defendants claimed
that PSI never agreed to be bound by an existing collective
bargaining agreement requiring participating employers to make
contributions to the Fund. The district court disagreed, and
granted the Fund’s motion for summary judgment. Because we find
that (1) the district court had personal and subject matter
jurisdiction, (2) venue was proper in Virginia, and (3) PSI
bound itself to make contributions to the Fund, we affirm.
2
I.
A.
We begin by briefly setting out the relevant statutory
framework. Congress enacted ERISA to promote the “soundness and
stability of [employee benefit] plans” in private industry. 29
U.S.C. § 1001(a). Specifically, ERISA protects “the interests
of employees and their beneficiaries” by establishing “minimum
standards . . . assuring the equitable character of such plans
and their financial soundness.” Id. To further that end,
Congress in 1980 passed the Multiemployer Pension Plan
Amendments Act (the “MPPAA”). In part, the MPPAA
requires that an employer withdrawing from a
multiemployer pension plan pay a fixed and certain
debt to the pension plan. This withdrawal liability
is the employer’s proportionate share of the plan’s
“unfunded vested benefits,” calculated as the
difference between the present value of vested
benefits and the current value of the plan’s assets.
Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717,
725 (1984) (citing 29 U.S.C. §§ 1381, 1391). The purpose of
assessing withdrawal liability is “to assign to the withdrawing
employer a portion of the plan’s unfunded obligations in rough
proportion to that employer’s relative participation in the plan
over the last 5 to 10 years.” Borden, Inc. v. Bakery &
Confectionary Union & Indus. Int’l Pension,
974 F.2d 528, 530
(4th Cir. 1992).
3
An employer owes withdrawal liability when it makes a
complete or partial withdrawal from a pension plan. 29 U.S.C.
§ 1381(a). In the building and construction industry, a
complete withdrawal occurs when: (1) “an employer ceases to have
an obligation to contribute under the plan, and” (2) the
employer “continues to perform work in the jurisdiction of the
collective bargaining agreement of the type for which
contributions were previously required.” 29 U.S.C.
§ 1383(b)(2). ERISA treats all trades or businesses that are
under common control as a single employer. 29 U.S.C. §
1301(b)(1). 1
An employer who disputes an assessment of withdrawal
liability may file an objection with the plan sponsor. 29
U.S.C. § 1399(b)(2)(A). “After a reasonable review of any
matter raised,” the plan sponsor must notify the employer of (1)
its decision, (2) the basis for its decision, and (3) “the
reason for any change in the determination of the employer’s
1The ERISA regulations define common control by reference
to the Treasury regulations prescribed under 26 U.S.C. § 414(c).
29 C.F.R. § 4001.3. According to those regulations, one
instance where two or more businesses are under common control
is where the same five or fewer persons own a controlling
interest in each corporation and, “taking into account the
ownership of each such person only to the extent such ownership
is identical with respect to each such [corporation], such
persons” own more than 50 percent of the total shares of each
corporation. 26 C.F.R. § 1.414(c)-2(c).
4
liability or schedule of liability payments.” Id.
§ 1399(b)(2)(B).
An employer dissatisfied with the plan sponsor’s response
must demand arbitration within a 60-day period after the earlier
of the date of the plan sponsor’s notification that it has
rejected the employer’s request for review, or 120 days after
the employer’s request for review. 29 U.S.C. § 1401(a).
“[U]nlike the Federal Arbitration Act, the MPPAA treats an award
issuing from such a § 1401 arbitration like an agency
determination--the arbitrator decides the issues in the first
instance but then the decision is subject to judicial
review.” Bd. of Trs., Sheet Metal Workers’ Nat’l Pension Fund
v. BES Servs., Inc., 469 F.3d 369, 375 (4th Cir. 2006).
If, however, the employer does not pursue arbitration, the
amount assessed by the plan sponsor as withdrawal liability
“shall be due and owing on the schedule set forth by the plan
sponsor,” which may then “bring an action in a State or Federal
court of competent jurisdiction for collection.” 29 U.S.C.
§ 1401(b)(1). In such a circumstance, an employer is deemed to
have waived review of all issues concerning the determination of
withdrawal liability. BES Servs., 469 F.3d at 375.
B.
The Fund is a multiemployer pension benefit plan maintained
pursuant to a collective bargaining agreement between the
5
Associated Plumbing, Heating and Cooling Contractors of
Jefferson County, Alabama (the “Multiemployer Association”) and
affiliated local unions of the United Association of Journeymen
and Apprentices of the Plumbing and Pipefitting Industry of the
United States and Canada (the “Union”). Defendants are Alabama
corporations engaged as plumbing and pipefitting contractors.
On April 8, 1998, Kenneth Julian--PSI’s sole shareholder--
agreed in writing (on behalf of PSI) “to be bound by provisions
of the current labor Agreement executed and presently existing
between” the Multiemployer Association and the Union. J.A. 448. 2
PSI further agreed to “make contributions to the . . . Plumbers
and Pipefitters National Pension Fund . . . . as provided for by
the [labor] Agreements now existing and as hereafter.” Id.
The collective bargaining agreement then in effect, as well
as all successor agreements, required participating employers to
make contributions to the Fund for each hour worked by their
employees. PSI began making contributions to the Fund in 1998,
and continued to do so until March 10, 2011. On that date, PSI
(through Julian) wrote to the Union stating that it wished “to
abolish its working relationship with” the Union. J.A. 139.
Under the terms of the collective bargaining agreement, PSI’s
obligation to contribute to the Fund ended sixty days after
2 We refer to this writing as the “Letter of Assent.”
6
tendering the March 10 letter. PSI went out of business
sometime in the summer of 2011. Shortly before then, PSI
Mechanical filed articles of incorporation.
Well over a year after PSI sent the March 10 letter, the
Fund notified Julian that because PSI was “continuing to perform
work of the type for which it was previously obligated to make
contributions to the Fund” in the jurisdiction of the collective
bargaining agreement, PSI had incurred withdrawal liability of
$188,685. J.A. 345. Specifically, the Fund suspected that PSI
and PSI Mechanical were trades or businesses under common
control. In fact, Julian was the sole shareholder of both
corporations.
The Fund gave PSI the option to pay the amount owed in one
lump sum or in monthly installments. PSI objected and sought
review of the imposition of withdrawal liability. The Fund in
turn asked PSI to respond to a questionnaire so as to better
enable the Fund to assess PSI’s objection. PSI, however,
refused to answer any questions related to PSI Mechanical,
stating that it was “not privy to information necessary to
answer” them. J.A. 368.
In the meantime, PSI was still required to make monthly
payments on its withdrawal liability. See 29 U.S.C.
§ 1399(c)(2). Yet, PSI did not comply with its obligation. The
Fund sent two late-payment notices to PSI and received no
7
response to either. The Fund subsequently rejected PSI’s
objection to the imposition of withdrawal liability, declared
PSI in default, and demanded payment of the entire sum of its
withdrawal liability plus accrued interest. Defendants made no
payments, nor did they demand arbitration.
C.
The Fund filed suit in the United States District Court for
the Eastern District of Virginia against both PSI and PSI
Mechanical, seeking to collect PSI’s unpaid monthly withdrawal
liability payments, along with interest, liquidated damages, and
attorney’s fees and costs. 3 It also sought to compel Defendants
to make future monthly payments when due. The Fund later
amended its complaint to ask for the entire outstanding
withdrawal liability. 4
Defendants moved to dismiss the lawsuit for lack of
personal jurisdiction, or alternatively, on forum non conveniens
grounds. They argued that because PSI and PSI Mechanical are
3
ERISA provides that a plan suing to recover withdrawal
liability may also recover interest, liquidated damages, and
attorney’s fees and costs. 29 U.S.C. § 1132(g)(2). Pursuant to
the terms of the Fund’s Plan document, liquidated damages are
equal to “the greater of: (i) the amount of interest charged on
the unpaid balance, or (ii) 20 percent of the unpaid amount
awarded.” J.A. 343.
4
The amended complaint also alleges that the Fund had
reviewed and rejected in writing PSI’s arguments raised in its
request for review and that PSI never demanded arbitration.
8
Alabama corporations engaged in business exclusively in Alabama,
they do not have sufficient minimum contacts with Virginia for
the exercise of personal jurisdiction. In the alternative,
Defendants urged that the lawsuit be dismissed because there is
an adequate alternative forum in the Northern District of
Alabama.
The district court denied the motions. The court found it
“pelucidly [sic] clear that there is personal jurisdiction.”
J.A. 316. It noted that ERISA provides for nationwide service
of process and permits lawsuits to be brought in the district
where the plan is administered. As a result, the court’s
exercise of personal jurisdiction over Defendants comported with
Fifth Amendment due process principles.
The district court construed Defendants’ forum non
conveniens claim as one seeking a change of venue under 28
U.S.C. § 1404(a). It declined to grant relief, however, because
the Eastern District of Virginia was the Plaintiff’s forum of
choice and only moderately inconvenient for Defendants. The
court further observed that witnesses were unlikely to be
needed, and that the interest of justice weighed in favor of
keeping the case in Virginia.
The Fund then moved for summary judgment on the sole count
of its amended complaint, which the district court granted.
Thereafter, the Fund sought liquidated damages, interest, and
9
attorney’s fees and costs. Defendants opposed the request,
claiming that the contract that the Fund was seeking to enforce
was not sufficiently definite. To assess this claim, the
district court reviewed the collective bargaining agreement in
effect when Julian signed the Letter of Assent, as well as a
successor agreement.
The district court held that the collective bargaining
agreement was “neither fatally vague nor unclear; the Agreement
makes clear that a breaching party will be liable for unpaid
contributions upon complete withdrawal, interest on those unpaid
contributions, liquidated damages, and attorney’s fees and
costs.” J.A. 600. The court found immaterial and unpersuasive
Defendants’ allegation that “Julian never read nor understood
the Agreement” because he nevertheless “agreed to be bound” by
it. Id. The court entered judgment in favor of the Fund in the
amount of $247,013.21.
From the district court’s judgment, Defendants appeal.
II.
We first consider the district court’s order denying
Defendants’ motions to dismiss for lack of personal jurisdiction
and to transfer venue. We review the district court’s decision
as to personal jurisdiction de novo, although the underlying
factual findings are reviewed for clear error. Carefirst of
10
Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396
(4th Cir. 2003). We review decisions on whether to transfer
venue under 28 U.S.C. § 1404 for abuse of discretion. Brock v.
Entre Computer Ctrs., Inc.,
933 F.2d 1253, 1257 (4th Cir. 1991).
Defendants say that the district court lacked personal
jurisdiction over them because they are Alabama corporations
that do business exclusively in Alabama and have no contacts
with Virginia. The district court correctly rejected this
contention.
As the district court noted, any action brought under ERISA
“may be brought in the district where the plan is administered.”
29 U.S.C. § 1132(e)(2). Furthermore, ERISA provides for
nationwide service of process. Id. The Fund is administered in
Alexandria, Virginia, which is within the Eastern District of
Virginia, and Defendants were properly served. Where a
defendant has been validly served pursuant to a federal
statute’s nationwide service of process provision, a district
court has personal jurisdiction over the defendant so long as
jurisdiction comports with the Fifth Amendment. ESAB Grp., Inc.
v. Centricut, Inc.,
126 F.3d 617, 626-27 (4th Cir. 1997).
To make out a Fifth Amendment challenge to personal
jurisdiction, Defendants had to show that “the district court’s
assertion of personal jurisdiction over [them] would result in
‘such extreme inconvenience or unfairness as would outweigh the
11
congressionally articulated policy’ evidenced by a nationwide
service of process provision.” Denny’s, Inc. v. Cake, 364 F.3d
521, 524 n.2 (4th Cir. 2004) (quoting
ESAB, 126 F.3d at 627).
Normally, when a defendant is a United States resident, it is
“highly unusual . . . that inconvenience will rise to a level of
constitutional concern.”
ESAB, 126 F.3d at 627 (internal
quotation marks omitted).
Defendants have not satisfied this heavy burden. Indeed,
in their brief, Defendants fail to apply the correct rule of
law, citing the “minimum contacts” standard we consider when
assessing whether personal jurisdiction is consistent with the
Due Process Clause of the Fourteenth Amendment. See Int’l Shoe
Co. v. Washington, 326 U.S. 310, 316 (1945); ALS Scan, Inc. v.
Digital Serv. Consultants, Inc.,
293 F.3d 707, 711 (4th Cir.
2002). That standard, however, is not relevant when the basis
for jurisdiction is found in a federal statute containing a
nationwide service of process provision. Given Defendants’
failure to show that the district court’s exercise of personal
jurisdiction raises a Fifth Amendment concern, they “must look
primarily to federal venue requirements for protection from
onerous litigation.”
ESAB, 126 F.3d at 627 (quoting Hogue v.
Milodon Eng’g, Inc.,
736 F.2d 989, 991 (4th Cir. 1984)).
On that score, Defendants contend that because they are
Alabama corporations with no business ties to Virginia, the
12
district court was obligated to transfer this case to the
Northern District of Alabama. 5 We do not agree.
Under 28 U.S.C. § 1404(a), “[f]or the convenience of
parties and witnesses, in the interest of justice, a district
court may transfer any civil action to any other district or
division where it might have been brought or to any district or
division to which all parties have consented.” District courts
within this circuit consider four factors when deciding whether
to transfer venue: (1) the weight accorded to plaintiff’s choice
of venue; (2) witness convenience and access; (3) convenience of
the parties; and (4) the interest of justice. E.g., Lynch v.
Vanderhoef Builders, 237 F. Supp. 2d 615, 617 (D. Md. 2002); Bd.
of Trs., Sheet Metal Workers Nat’l Fund v. Baylor Heating & Air
Conditioning, Inc.,
702 F. Supp. 1253, 1255-56 (E.D. Va. 1988)
(citing Gulf Oil Corp. v. Gilbert,
330 U.S. 501 (1947)).
As a general rule, a plaintiff’s “choice of venue is
entitled to substantial weight in determining whether transfer
is appropriate.” Bd. of Trs. v. Sullivant Ave. Props., LLC, 508
F. Supp. 2d 473, 477 (E.D. Va. 2007). Moreover, Congress
intended in ERISA cases to give a “plaintiff’s choice of forum
somewhat greater weight than would typically be the case,” as
5Like the district court, we will treat Defendants’ motion
to dismiss for forum non conveniens as a request for transfer of
venue under 28 U.S.C. § 1404.
13
evidenced by ERISA’s “liberal venue provision.” Cross v. Fleet
Reserve Ass’n Pension Plan, 383 F. Supp. 2d 852, 856-57 (D. Md.
2005) (internal quotation marks omitted). Given the substantial
weight accorded to this first factor, Defendants need to make a
compelling showing on the remaining factors to persuade us that
the district court abused its discretion by refusing to transfer
venue. This they fail to do.
The salience of the witness convenience and access factor
is obviated by PSI’s failure to demand arbitration. By failing
to arbitrate, PSI waived its right to raise any defenses to the
assessment of withdrawal liability. Thus, the district court
properly concluded that there would be little, if any, need for
witnesses.
As to the third factor, Defendants have not persuaded us
that defending this case in Virginia was so inconvenient to them
as to warrant transfer. On this point, Defendants emphasize
that Alabama is “where all events relative to the litigation
took place.” Appellant’s Br. at 35. However, it is not unusual
for some or all of the relevant acts in an ERISA lawsuit to have
taken place outside the district where the plan is administered.
Congress nonetheless saw fit to lay venue there, and we see no
reason why that legislative intent should yield in this case.
Defendants also make no argument as to why the interest of
justice favors hearing this case in Alabama. Consequently, we
14
hold that the district court did not abuse its discretion in
refusing to transfer venue.
III.
Defendants also urge that the district court lacked subject
matter jurisdiction over the Fund’s claim. Their first
contention--that there was no enforceable contract requiring PSI
to make contributions to the Fund--is a merits argument that we
address later. Here, we consider only Defendants’ claim that
the Fund’s action for withdrawal liability is actually a claim
for postcontract contributions and therefore arises under § 8 of
the National Labor Relations Act, 29 U.S.C. § 158(a), rather
than ERISA. In essence, Defendants argue that the district
court did not have subject matter jurisdiction because the
Fund’s claim involves an unfair labor practice that should have
been brought before the National Labor Relations Board. That is
not correct.
Under ERISA, an employer that is contractually obligated to
make contributions to a retirement fund must do so in accordance
with the operative collective bargaining agreement. 29 U.S.C.
§ 1145. Section 1145 thereby creates a federal right of action
allowing a multiemployer pension plan to collect delinquent
contributions. Bakery & Confectionary Union and Indus. Int’l
15
Pension Fund v. Ralph’s Grocery Co., 118 F.3d 1018, 1020-21 (4th
Cir. 1997).
An action to compel an employer to pay overdue withdrawal
liability is treated the same as an action to collect delinquent
contributions. 29 U.S.C. § 1451(b). And federal district
courts have jurisdiction to hear actions compelling an employer
to pay withdrawal liability. Id. § 1451(c). This being an
action to collect overdue withdrawal liability payments, the
district court plainly had subject matter jurisdiction.
In support of its contention otherwise, Defendants draw our
attention to Laborers Health & Welfare Trust Fund for Northern
California v. Advanced Lightweight Concrete Co., 484 U.S. 539
(1988). There, the Supreme Court held that the right of action
created by § 1145 “is limited to the collection of ‘promised
contributions’ and does not confer jurisdiction on district
courts to determine whether an employer’s unilateral decision to
refuse to make postcontract contributions constitutes a
violation of the [National Labor Relations Act].”
Id. at 549.
However, an action to collect withdrawal liability is far
different from one seeking to require an employer “to make
postcontract contributions while negotiations for a new contract
are being conducted.”
Id. at 548. As we have explained,
§ 1451(b)--in conjunction with § 1145--expressly creates a right
of action to collect overdue withdrawal liability. We therefore
16
reject Defendants’ contention that the district court lacked
subject matter jurisdiction.
IV.
A.
We turn now to the district court’s grant of summary
judgment to the Fund. As a threshold matter, we address
Defendants’ claim that the district court “flouted the well-
known and time-tested summary judgment standard.” Appellant’s
Br. at 46 (quoting Greater Balt. Ctr. for Pregnancy Concerns,
Inc. v. Mayor & City Council of Balt., 721 F.3d 264, 283 (4th
Cir. 2013)). Essentially, Defendants say that the Fund failed
to produce evidence supporting its motion for summary judgment.
Defendants are wrong.
A party moving for summary judgment “always bears the
initial responsibility of informing the district court of the
basis for its motion, and identifying those portions of the
pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits . . . which it
believes demonstrates the absence of a genuine issue of material
fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)
(internal quotation marks omitted). In this case, the Fund
supported its motion with an affidavit from the administrator of
the pension fund, correspondence between the Fund and PSI
17
documenting the assessment of withdrawal liability and PSI’s
request for review, PSI’s admissions, and a number of other
documents. We find this evidence more than sufficient to shift
the burden to Defendants to “come forward with specific facts
showing that there is a genuine issue for trial.” Matsushita
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)
(internal quotation marks omitted).
Defendants also argue that the district court erred in
granting summary judgment on the basis of the Fund’s original
complaint, rather than the amended version. This error,
however, furnishes no ground for relief. In the first place,
the factual allegations in the two complaints are substantially
similar. Moreover, we review summary judgment orders de novo,
based on our independent review of the entire record. See
Turner v. Dammon, 848 F.2d 440, 444 (4th Cir. 1988), abrogated
on other grounds by Johnson v. Jones,
515 U.S. 304 (1995). The
amended complaint is part of the record, and thus the district
court’s error poses no obstacle to our review of its decision.
B.
It is undisputed that neither PSI nor PSI Mechanical ever
demanded arbitration. While this normally means judicial review
of all issues relating to the imposition of withdrawal liability
is waived, we have recognized a limited exception to ERISA’s
arbitration requirement where a party asserts that it is not an
18
“employer” subject to the arbitration requirement. Teamsters
Joint Council No. 83 v. Centra, Inc., 947 F.2d 115, 122 (4th
Cir. 1991); see also Flying Tiger Line v. Teamsters Pension
Trust Fund of Phila.,
830 F.2d 1241, 1250 (3d Cir. 1987)
(holding that the issue of whether an organization is an
employer for ERISA purposes is one for the court).
As a result, the sole issue before the district court was
whether PSI is an employer subject to ERISA’s arbitration
requirement. We hold that it is.
ERISA defines an employer as “any person acting directly as
an employer, or indirectly in the interest of an employer, in
relation to an employee benefit plan.” 29 U.S.C. § 1002(5).
Defendants argue that PSI is not an employer because there is no
valid collective bargaining agreement between PSI and the Fund
that bound PSI to make contributions. Specifically, Defendants
say that the Letter of Assent is insufficient to bind PSI to its
promise to contribute to the Fund in accordance with the
referenced collective bargaining agreement and its successor
agreements. As a result, because there is no valid agreement,
PSI was never acting as an employer “in relation to an employee
benefit plan.”
The parties disagree as to what law applies to the
resolution of this issue. Defendants contend that we should
19
consult Alabama law for this purpose, while the Fund says we
should look to federal common law. We agree with the Fund.
We have been clear that “ERISA preempts state law,
including state common law.” Phx. Mut. Life Ins. Co. v. Adams,
30 F.3d 554, 563 (4th Cir. 1994). ERISA preemption is construed
broadly, and displaces any state law that “has a connection with
or reference to” an employee benefit program. Shaw v. Delta Air
Lines, Inc.,
463 U.S. 85, 97 (1983). Similarly, in the labor
law context, the Supreme Court has emphasized the importance of
national uniformity when deciding issues involving the
“consensual processes that federal labor law is chiefly designed
to promote--the formation of the collective agreement and the
private settlement of disputes under it.” DelCostello v. Int’l
Bhd. of Teamsters,
462 U.S. 151, 162-63 (1983) (emphasis added).
Consulting state law to determine when a collective
bargaining agreement is formed would undermine uniformity and
“exert a disruptive influence upon . . . the negotiation . . .
of collective agreements.” Int’l Union, United Auto., Aerospace
& Agric. Implement Workers of Am., AFL-CIO v. Hoosier Cardinal
Corp., 383 U.S. 696, 701-02 (1966). Thus, when determining
whether an obligation to contribute to an employee benefit plan
exists, state contract law must give way.
In the Letter of Assent, PSI agreed to be bound by the
collective bargaining agreement in effect between the Union and
20
the Multiemployer Association. It further agreed to contribute
to the Fund as required by the then-existing collective
bargaining agreement and any successors. We have previously
held that an employer can execute a letter of assent allowing “a
multi-employer bargaining association to represent it in § 8(f)
negotiations.[ 6] In such an arrangement, the individual employer
agrees to be bound by the § 8(f) agreement reached between the
multi-employer bargaining association and the union.” Indus.
TurnAround Corp. v. NLRB, 115 F.3d 248, 252 (4th Cir. 1997).
We believe that this principle is equally applicable in the
present context, and thus hold that the Letter of Assent is
sufficient to bind PSI to make contributions to the Fund in
accordance with the terms of the collective bargaining
agreement. Defendants insist, nonetheless, that the Letter of
Assent is invalid because it “leaves open the unbridled
obligation of Defendants to accept future changes to the
contract.” Appellant’s Br. at 39. The gist of their argument
is that even if the Letter of Assent is valid as to the
collective bargaining agreement in effect in 1998 when the
6 Under § 8(f) of the National Labor Relations Act,
“employers or multi-employer associations in the [building and]
construction industry [may] enter into collective-bargaining
agreements, commonly called ‘pre-hire agreements,’ with unions
that have not formally established majority status.” Industrial
TurnAround, 115 F.3d at 252; see also 29 U.S.C. § 158(f).
21
Letter was signed, it does not bind them to successor
agreements. However, in Industrial TurnAround, we approved a
similar letter of assent that bound the employer to successor
contracts. 115 F.3d at 252 (“[Employer] executed . . . a letter
of assent . . . binding [employer] to the then current . . .
agreement and to all successor agreements.”). We see no reason
to depart from that holding here.
Finally, even if the Letter of Assent alone did not bind
PSI to make future contributions to the Fund, its conduct
certainly did. While we have not previously addressed this
issue, today we join several of our sister circuits in holding
that a collective bargaining agreement can be adopted by conduct
manifesting an intention to be bound by its terms. Bricklayers
Local 21 of Ill. Apprenticeship & Training Program v. Banner
Restoration, Inc., 385 F.3d 761, 766 (7th Cir. 2004); Carpenters
Amended & Restated Health Benefit Fund v. Holleman Constr. Co.,
751 F.2d 763, 770 (5th Cir. 1985); Trs. of Atl. Iron Workers,
Local 387 Pension Fund v. S. Stress Wire Corp.,
724 F.2d 1458,
1459-60 (11th Cir. 1983).
The most obvious manifestation of PSI’s intent to be bound,
of course, was its decision to sign the Letter of Assent.
However, that it intended to be bound is also made unmistakably
clear by the fact that PSI made contributions to the Fund in
accordance with the governing collective bargaining agreements
22
for thirteen years before its complete withdrawal. The district
court was therefore correct to reject PSI’s belated effort to
avoid withdrawal liability.
The record also shows that shortly after PSI went out of
business, PSI Mechanical was incorporated and began performing
the same work. Because Julian is the sole shareholder of both
corporations, ERISA treats them as a single employer. 29 U.S.C.
§ 1301(b)(1). Consequently, PSI Mechanical’s work in the
jurisdiction of the type for which contributions were previously
required is attributed to PSI. This also means that the Fund
may look to PSI Mechanical to satisfy the withdrawal liability
owed by PSI.
In sum, given the existence of a valid contract requiring
PSI to contribute to the Fund, PSI is an employer under ERISA.
And because PSI failed to timely demand arbitration, all the
Fund had to prove to win summary judgment was that it gave PSI
proper notice of the assessed withdrawal liability. Chi. Truck
Drivers v. El Paso Co., 525 F.3d 591, 597 (7th Cir. 2008). The
record shows that the Fund did this. The district court
therefore correctly granted the Fund’s motion for summary
judgment, and its judgment is
AFFIRMED.
23
