issue of controlled group membership." Id. However, the court found "that the issue of membership in a controlled group cannot be within exclusive arbitral jurisdiction," but clarified that "it does not follow that a person can always sit back and wait to be sued for withdrawal liability and take his chances on the court's deciding the issue in his favor." Id. Finally, the Slotky court made clear that if a court endeavors to determine the issue of controlled group membership (i.e., employer status) and finds that the defendant is an employer then the employer will "have waived the issues that are reserved for arbitration." Id.
In explaining that the employer status issue is not within the arbitrator's exclusive jurisdiction, the Seventh Circuit relied upon Banner Industries, Inc. v. Central States, Southeast & Southwest Areas Pension Fund, 875 F.2d 1285 (7th Cir. 1989), cert. denied, 493 U.S. 1003, 107 L. Ed. 2d 558, 110 S. Ct. 563 (1989). In Banner, the court distinguished the issue of "whether one ever became an employer for MPPAA purposes" from "the question of whether one [who concedes to have once been an employer] remains an employer as of a withdrawal date." Id. at 1291, 1293. The latter issue, the court held, is for the arbitrator to decide, as it arises under Section 1392(c) and Section 1401 provides that all disputes concerning determinations under Sections 1381-1399 shall be resolved via arbitration. Id. at 1292-93. In reaching this conclusion, the court emphasized the distinction and remarked: "Courts that have resolved employer status questions before arbitration have confronted entities which, unlike [the putative employer in Banner], never had been employers subject to the MPPAA, and which therefore legitimately challenged application of the MPPAA dispute resolution process to them. " Id. at 1293 (emphasis added).
The Second, Third, Fourth, Sixth, and Eighth Circuits have held that because Section 1401 only requires arbitration for disputes between an "employer" and a plan, whether a defendant is an employer for purposes of withdrawal liability "is properly for the courts, not an arbitrator, to determine." Bowers v. Transportacion Maritima Mexicana, S.A., 901 F.2d 258, 261 (2d Cir. 1990); see also Rheem Mfg. Co. v. Central States, Southeast & Southwest Areas Pension Fund, 63 F.3d 703 (8th Cir.), cert. denied, 134 L. Ed. 2d 96, 116 S. Ct. 1016 (1995); Board of Trustees of Trucking Employees of North Jersey Welfare Fund, Inc. - Pension Fund v. Centra, 983 F.2d 495, 501 (3d Cir. 1992); Teamsters Joint Council No. 83 v. CenTra, Inc., 947 F.2d 115, 122 (4th Cir. 1991); Korea Shipping Corp. v. New York Shipping Ass'n-Int'l Longshoremen's Ass'n Pension Trust Fund, 880 F.2d 1531, 1536 (2d Cir. 1989); Mason & Dixon Tank Lines, Inc. v. Central States, Southeast & Southwest Areas Pension Fund, 852 F.2d 156, 167 (6th Cir. 1988).
In light of the Banner dicta this Court follows these Circuits and holds that the issue of whether Progressive was ever an employer is properly before it to decide, because, as the district court found in Banner, "its resolution decides the arbitrator's authority over a dispute." Banner, 875 F.2d at 1291. The Court does not deem the equivocal language of Slotky to require otherwise, namely, "we may assume" and "it can be argued," particularly in light of its reliance upon Banner. 956 F.2d at 1373. Indeed, in Rheem, the Eighth Circuit cited Banner as "stating that the determination of whether an entity ever became an employer under the MPPAA is an issue properly addressed by a district court prior to arbitration of any remaining issues." 63 F.3d at 705. Moreover, the MPPAA does not define "employer," such that a dispute of employer status is not one concerning a determination made under Sections 1381-1399. However, as Slotky illustrates, a putative employer who, like Progressive, sits back and waits to be sued takes its chances; if the court finds that it is an employer it has "waived the issues that are reserved for arbitration." 956 F.2d at 1373. Rather, a putative employer who seeks to dispute that status in court must file a declaratory judgment action within the time for arbitration in order to preserve the arbitration issues. Rheem, 63 F.3d at 705-06; Banner, 875 F.2d at 1293-94; IUE AFL-CIO Pension Fund v. Barker & Williamson, Inc., 788 F.2d 118, 128-29 (3d Cir. 1986).
Consequently, the Court must determine whether a genuine issue of material fact exists as to Progressive's employer status. The Seventh Circuit has explained that several circuits "define an employer for purposes of MPPAA as a person who is obligated to contribute to a plan either as a direct employer or in the interest of an employer of the plan's participants. Therefore, the appropriate inquiry is whether the alleged employer had an obligation to contribute as well as the nature of that obligation." Central States, Southeast & Southwest Areas Pension Fund v. Central Transport, Inc., 85 F.3d 1282, 1287 (7th Cir. 1996) (internal quotation marks and citations omitted). Further, in Central Transport the Seventh Circuit stated "that the obligation to contribute [is] contractual, and therefore the party 'who is signatory to a contract creating the obligation to contribute is the "employer" for purposes of establishing withdrawal liability.'" Id. (quoting with approval Rheem, 63 F.3d at 707).
In the present case, it is undisputed that Progressive was the signatory to a collective bargaining agreement ("CBA") with Teamsters Local 402, which required contributions to the Central States, Southeast and Southwest Areas Pension Fund. (Aff. of Robert Lee P 4; Answer P 7). Progressive was the only employer referred to in the Master Agreement with the Union and the Participation agreement with the Pension Fund. Nevertheless, Progressive contends that it has created a genuine issue of material fact by proffering the following evidence: Pursuant to Progressive's contract with Reynolds "and as the agent of Reynolds, Progressive became a signatory." Further,
Pursuant to the agreement, Reynolds exercised complete dominion and control over drivers supplied by Progressive, directed and maintained ultimate authority with regard to all matters relating to the Union including negotiation and execution of the collective bargaining agreement and approved and paid all wages, fringe benefits and other benefits to or for the benefit of the drivers including, without limitation, all payments made to the Pension Fund.
Pursuant to the Agreement, Reynolds further controlled the hiring of drivers and determined their schedules, points of origin, routes, destinations, assignments and work and safety rules.