United States District Court, N.D. Illinois
April 21, 2004.
TRANSPERSONNEL, INC., Plaintiff
ROADWAY EXPRESS, INC., Defendant
The opinion of the court was delivered by: AMY J. ST. EVE, District Judge
MEMORANDUM OPINION AND ORDER
Transpersonnel, Inc. ("Transpersonnel") filed a two-count complaint
against Roadway Express, Inc. ("Roadway"). In Count I, Transpersonnel
seeks a declaratory judgment that Roadway is an "employer" under the
Multiemployer Pension Plan Amendments Act ("MPPAA"), 29 U.S.C. § 1381-1453.
In the alternative, in Count II, Transpersonnel seeks a declaratory
judgment that Roadway is obligated under a written agreement with
Transpersonnel to reimburse Transpersonnel for any withdrawal liability
relating to the Local 705 International Brotherhood of Teamsters Pension
Fund ("Pension Fund").
The parties filed cross motions for summary judgment on both counts.
For the reasons stated herein, summary judgment is granted as to Count I
in favor of Transpersonnel. Given that Transpersonnel seeks the relief in
Count n as an alternative, the Court need not reach Count n. Accordingly,
Count II is dimissed without prejudice as moot.
Summary judgment is proper when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if
any, show that there is no genuine issue as to any material fact and that
the moving party is entitled to a judgment as a matter of law,"
Fed.R.Civ.P. 56(c). A genuine issue of triable fact exists only if "the
evidence is such that a reasonable jury could return a verdict for the
nonmoving party." Pugh v. City of Attica, 259 F.3d 619, 625 (7th Cir.
2001) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248,
106 S.Ct. 2505, 2510 (1986)). "Only disputes over facts that might affect
the outcome of the suit under the governing law will properly preclude
the entry of summary judgment." Anderson, 477 U.S. at 248, 106 S.Ct. at
2510. The party seeking summary judgment has the burden of establishing
the lack of any genuine issue of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552 (1986). A party will
successfully oppose summary judgment only if it presents "definite,
competent evidence to rebut the motion." Equal Employment Opportunity
Comm'n v. Roebuck & Co., 233 F.3d 432, 437 (7th Cir. 2000). The Court
"considers the evidentiary record in the light most favorable to the
nonmoving party, and draws all reasonable inferences in his favor." Lesch
v. Crown Cork & Seal Co., 282 F.3d 467, 471 (7th Cir. 2002).
On cross motions for summary judgment, each movant must individually
satisfy the requirements of Rule 56. Proviso Ass'n of Retarded Citizens
v. Village of Westchester, 914 F. Supp. 1555, 1560 (N.D. Ill. 1996).
Thus, the traditional standards for summary judgment still apply even
though both parties have moved for summary judgment. Blum v. Fisher and
Fisher, Attorneys at Law, 961 F. Supp. 1218, 1222 (N.D. Ill. 1997). The
Court considers the merits of each cross motion separately and draws all
reasonable inferences and resolves all factual uncertainties against the
party whose motion is under consideration. Chicago Truck Drivers, Helpers and Warehouse Workers Union (Ind.) Pension Fund v. Kelly, No. 95
C 0501, 1996 WL 507258, at *3 (N.D. Ill. Sept. 4, 1996).
On May 2, 1986, Roadway and Transpersonnel entered into a written
agreement ("Agreement") pursuant to which Transpersonnel agreed to lease
truck drivers to Roadway for Roadway to use in its operations as a common
carrier. (R. 18-1, Pl.'s Rule 56.1 Statement ¶ 9; R. 26-1, Def.'s Rule
56.1 Response ¶ 9; R. 20-1, Def.'s Rule 56.1 Statement ¶ 1; R. 28-1,
Pl.'s Rule 56.1 Response ¶ 1.) Transpersonnel executed successive
collective bargaining agreements ("CBAs") with the leased drivers'
union, the International Brotherhood of Teamsters, Chauffers,
Warehousemen, and Helpers of America ("Union"). (R. 20-1, Def.'s Rule
56.1 Statement ¶ 2; R. 28-1, Pl.'s Rule 56.1 Response ¶ 2.) The CBAs
obligated Transpersonnel to make contributions to the Pension Fund. (Id.
¶ 3.) Roadway did not sign the CBAs. (Id. ¶ 4.)
The Agreement required Roadway to reimburse Transpersonnel for the
contributions that Transpersonnel made to the Pension Fund. (R. 18-1,
Pl.'s Rule 56.1 Statement ¶ 15; R. 26-1, Def.'s Rule 56.1 Response
¶ 15.) Schedule A of the Agreement provides in part:
[Roadway] agrees to reimburse [Transpersonnel], at
cost, for all applicable employee benefits, including
health, welfare and pension fund contributions, and
other similar items paid to or on behalf of
[Transpersonnel's] employees as a result of a union
agreement obligation, including benefits furnished,
paid, or accruing of any statute, regulation or rule
related to such agreement, benefit or payment.
[Roadway] agrees that [Transpersonnel's] right to
payment for the amounts specified survives any
cancellation of the main agreement.
(Id. ¶ 15) (emphasis added.)
If Roadway became displeased with a particular leased driver, Roadway
had the authority to instruct Transpersonnel not to send that driver back to Roadway. (Id.
¶ 34.) Further, Roadway had authority to dispatch the leased drivers,
direct the loading and unloading of vehicles, set the drivers' routes,
and direct the drivers as to pick-ups, deliveries, and other matters
related to the drivers' day-to-day operations. (Id. ¶ 11.)
Roadway terminated the Agreement in 1992, and Transpersonnel thereafter
stopped making contributions to the Pension Fund on behalf of the leased
drivers. (Id. ¶ 36.) On July 1, 2002, the Pension Fund issued a Notice
and Demand on Transpersonnel for partial withdrawal liability under the
MPPAA for the years 1995, 1997, and 1998, totaling $441,846.96.*fn1 (R.
18-1, Pl.'s Rule 56.1 Statement ¶ 38; R. 26-1, Def.'s Rule 56.1 Response
¶ 38; R. 20-1, Def.'s Rule 56.1 Statement ¶ 7; R. 28-1, Pl.'s Rule 56.1
Response ¶ 7.) The Pension Fund requested Transpersonnel to make interim
payments on this liability, and Transpersonnel requested review of the
Pension Fund's Notice and Demand. (Compl. ¶¶ 18-19.) Transpersonnel filed
a demand for arbitration on the issue of the amount of its withdrawal
liability. (Id. ¶ 21.) The Pension Fund has not pursued Roadway for
withdrawal liability. (R. 18-1, Pl.'s Rule 56.1 Statement ¶ 39; R.
26-1, Def.'s Rule 56.1 Response ¶ 39; R. 20-1, Def.'s Rule 56.1
Statement ¶ 8; R. 28-1, Pl.'s Rule 56.1 Response ¶ 8.)
I. The MPPAA Statutory Framework
Under the MPPAA, "[i]f an employer withdraws from a multi-employer plan
in a complete withdrawal or a partial withdrawal, then the employer is
liable to the plan in the amount determined under this part to be the withdrawal liability."
29 U.S.C. § 1381(a). "The primary purpose of the legislation is to
protect retirees and workers who are participants in such [multi-employer
pension] plans against the loss of their pensions. The Act is designated
to foster plan continuation and growth because plan continuation and
growth provide participants and beneficiaries [with the] greatest
security against benefit loss." H.Rep. 869, 96th Cong., 2d Sess., 51
(1980) reprinted in 1980 U.S.C.C.A.N. 2918, 2919.
The MPPAA requires that "[a]ny dispute between an employer and the plan
sponsor of a multi-employer plan concerning a determination made under
sections 1381 through 1399 of this title shall be resolved through
arbitration." 29 U.S.C. § 1401(a)(1). A federal district court, however,
can determine whether an entity is an "employer" under the MPPAA before
arbitration of any remaining issue. Banner Indus. v. Central States
Pension Fund, 875 F.2d 1285, 1293 (7th Cir. 1989). This exception to the
MPPAA's arbitration requirement "allows a company to bypass arbitration
for the limited purpose of determining whether it is an `employer' within
the meaning of section 1401(a)(1). . . . Since only an `employer' is
required to arbitrate, the district court may address this threshold
question before arbitration." Mason & Dixon Tank Lines, Inc. v. Central
States Pension Fund, 852 F.2d 156, 1167 (6th Cir. 1988).
II. Count I: Roadway Is An "Employer" Under The MPPAA
At issue in this case is whether Roadway is an "employer" for purposes
of the MPPAA, and whether there can be multiple "employers" under the
MPPAA with respect to the same employees. The Court finds that both
Roadway and Transpersonnel are "employers."
The Seventh Circuit has defined an "employer" for purposes of the 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." Central
States, Southeast and Southwest Areas Pension Fund v. Central Tramp.,
Inc., 85 F.3d 1282, 1287 (7th Cir. 1996); see also Rheem Mfg. Co. v.
Central States Southeast and Southwest Areas Pension Fund, 63 F.3d 703,
706 (8th Cir. 1995); Korea Shipping Corp. v. NYSA-lnt'l Longshoremen's
Ass'n Pension Trust Fund, 880 F.2d 1531, 1537 (2nd Cir. 1989). Under this
definition, "the appropriate inquiry is whether the alleged employer had
an obligation to contribute as well as the nature of that obligation."
Central Transp., 85 F.3d at 1287.
Roadway contends that it is not an "employer" because it had no
obligation to contribute to the Pension Fund. Specifically, Roadway
points out that it did not sign the CBAs and argues that Transpersonnel
the sole party to sign the CBAs is accordingly the sole "employer"
under the MPPAA with respect to the leased drivers.
Transpersonnel argues that the MPPAA allows for joint "employers."
Transpersonnel contends that Roadway incorrectly assumes that there can
be only one "employer" under the MPPAA and that the only means by which
an entity could be an MPPAA "employer" is if the entity were
contractually obligated to contribute directly to a pension fund rather
than through another entity.
The Seventh Circuit has not directly addressed the question of whether
more than one entity may qualify as an "employer" under the MPPAA.*fn2
Courts in this district and other jurisdictions have held that both the lessor and lessee of employees may
be "employers" under the MPPAA where the lessor contracts with the union
and makes direct contributions to the pension fund and the lessee is
obligated to reimburse the lessor for those pension fund contributions.
These courts have reasoned that the lessee is the true source of the
funds that are paid into the pension plan, and the fact that the lessor
acts as a conduit for the money does not insulate the lessee from
withdrawal liability. While the following cases are not binding on the
Court, the Court finds their reasoning persuasive.
In American Stevedoring Corp. v. Burlington Indus., Inc., No. 85 C
4180, 1985 WL 5057 (N.D. Ill. Dec. 19, 1985), the Court determined that
two companies, a lessor and lessee, were both "employers" for MPPAA
purposes. American Stevedoring Corp. ("ASC") leased truck drivers to
Burlington and was the sole signatory to the CBA with the leased drivers*
union. The CBA obligated ASC to make payments to the union's pension
fund. A separate contract between ASC and Burlington obligated
Burlington, the lessee, to reimburse ASC, the lessor, for the payments
that ASC made to the pension fund on behalf of the leased drivers. The
Court ruled that ASC was a classic MPPAA "employer" because the CBA
obligated ASC to make payments to the pension fund. The Court further
ruled that Burlington also was an "employer" because it "was obligated to
reimburse ASC for the payments ASC made to the Pension Fund on behalf of
the employees Burlington `leased.'" Id. at *1.
In Central Pennsylvania Teamster's Pension Fund v. Service Group,
Inc., 645 F. Supp. 996 (E.D. Pa. 1985), the Court held that two
companies, a lessor and a lessee, were both "employers" for MPPAA
purposes. Service Group, the lessor, was the sole signatory to a CBA with
the drivers' union. The CBA obligated Service Group to make contributions
to the union's pension fund, Harley Davidson York, the lessee, was obligated to reimburse
Service Group for the pension fund payments. The Court determined that
"it would be manifestly unjust to one or the other of them to impose
liability on just one party," and disagreed that "only one [party] can by
an employer for the purpose of the determination of withdrawal
liability." Id. at 998. The Court evaluated the objectives of the MPPAA
and concluded that "the purpose of the MPPAA is best served by exposing
all parties that are `employers' to their legitimate withdrawal
liability," and ordered the parties to arbitrate the issue of the amount
of withdrawal liability. Id.
Finally, in Schaffer v. Eagle Indus., Inc., 726 F. Supp. 113 (E.D. Pa.
1989), a case remarkably similar to this case, the Court determined that
Eagle, a lessee, was an "employer" for MPPAA purposes where the lessee
leased drivers from Transpersonnel and reimbursed Transpersonnel for the
contributions that Transpersonnel made to the pension fund on behalf of
the leased drivers.*fn3 The lessee argued that because it never had an
obligation under a collective bargaining agreement to contribute to the
Fund on behalf of the leased drivers and because it had no control over
labor relations or negotiations with those workers, it was never an
"employer" for purposes of the MPPAA. Id. at 116. The Court disagreed and
concluded that the lessee was an "employer."*fn4 Roadway argues that these cases are irrelevant because the courts
applied the definition of "employer" found in Title I of ERISA*fn5 rather
than the "contributing obligor" definition of Central Transport. Although
the cited cases are not dispositive, they nonetheless provide guidance.
The Supreme Court has noted that although Title I definitions are not
necessarily applicable to Title IV, they "may otherwise reflect the
meaning of the terms defined as used in other Titles." Nachman v. Pension
Benefit Guar. Corp., 446 U.S. 359, 371 n.14, 100 S.Ct. 1723, 1731 n.14
(1980). Moreover, the fact that the "contributing obligor" test is "drawn
from Title I of ERISA" suggests that cases decided under the Title I
definition are not irrelevant after Central Transport.*fn6 Carriers
Container Council, Inc. v. Mobile Steamship Ass'n-Int'l Longshoremen's
Ass'n, 896 F.2d 1330, 1343 (11th Cir. 1990).
In this case, the relevant facts are undisputed. Transpersonnel is the
sole signatory to the CBAs. The CBAs obligate Transpersonnel to make
contributions to the Pension Fund. Transpersornnel does not dispute that it is an "employer" under the
MPPAA.*fn7 The Agreement between Transpersonnel and Roadway obligates
Roadway to reimburse Transpersonnel for Pension Fund contributions that
Transpersonnel made on behalf of the leased drivers. The Court finds that
Roadway is an "employer" under the MPPAA because Roadway was
contractually obligated to reimburse Transpersonnel for the Pension Fund
contributions that Transpersonnel made on behalf of the leased drivers.
Accordingly, summary judgment is granted in favor of Transpersonnel as to
Count I, and Roadway's motion for summary judgment is denied as to Count
III. Count II: The Court Need Not Interpret The Agreement In Light Of Its
Ruling That Roadway Is An "Employer"
In Count n, Transpersonnel seeks a declaratory judgment that the
Agreement obligates Roadway to reimburse Transpersonnel for any
withdrawal liability that Transpersonnel might incur in connection with
the leased drivers. Transpersonnel essentially asks the Court to opine as
to whether the Agreement requires Roadway to reimburse Transpersonnel in
the event that an arbitrator might someday rule that Transpersonnel is
liable for withdrawal liability. This claim, however, is premature,*fn8
and will not ripen until the arbitrator determines whether a withdrawal
has occurred and the amount, if any, of withdrawal liability. American
Stevedoring, 1985 WL 5057 at *2. In any event, the Court need not address the merits of Count II because
Transpersonnel brings it as an alternative basis to obtain the relief
that it seeks, namely, to compel Roadway to participate in the
arbitration proceedings. Sethness-Greenleaf, Inc. v. Green River Corp.,
89 C 9203, 1995 WL 127786, at *10 (N.D. Ill. Mar. 22, 1995). Further,
counsel for Transpersonnel unequivocally represented to the Court on
April 20, 2004 that if the Court granted summary judgment in
Transpersonnel's favor on Count I, then the Court need not determine
Count n. Accordingly, Count n is dismissed without prejudice as moot.
The Court grants summary judgment in favor of Transpersonnel as to
Count I and declares that Roadway is an "employer" for purposes of the
MPPAA. Roadway's motion for summary judgment is denied as to Count I.
Because Count n is an alternative, independent basis for the same relief,
the Court dismisses Count II without prejudice as moot. This order closes
the case because the Court has granted the full scope of requested relief
in Count I and has dismissed Count n as moot.