Laborers' Pension Fund and James S. Jorgensen, Plaintiffs-Appellants/Cross-Appellees,
W.R. Weis Company, Inc., Defendant-Appellee/Cross-Appellant.
January 12, 2017
from the United States District Court for the Northern
District of Illinois, Eastern Division. No. 15 C 07867 -
Edmond E. Chang, Judge.
Bauer, Sykes, and Hamilton, Circuit Judges.
Laborers' Pension Fund administers the pension fund for
the Laborers' International Union of North America. W.R.
Weis Company, a Chicago-area stonework firm, was required by
a collective-bargaining agreement to contribute to the Fund
for each hour worked by members of the Laborers' Union.
The company complied with this obligation for many years.
Over time, however, the firm transitioned to using more
highly skilled marble setters and finishers on its jobs, so
it gradually stopped hiring members of the Laborers'
Union and ceased paying into the Fund. In 2012 the Weis
Company terminated its collective-bargaining agreement with
the Laborers' Union.
Fund, a multiemployer pension plan governed by ERISA and the
Multiemployer Pension Plan Amendment Act ("MPPAA"),
served notice that the Weis Company owed more than $600, 000
in withdrawal liability for ceasing to contribute to the
Fund. The company paid the assessment but challenged it via
arbitration, invoking an exemption for the building and
construction industry. See 29 U.S.C. § 1383(b).
The arbitrator agreed with the company, and a district judge
confirmed the award but denied the Weis Company's motion
for attorney's fees.
sides appealed. The Fund seeks de novo review of the
arbitrator's award, raising a legal argument about the
language and purpose of the § 1383(b) exemption. The
Weis Company responds that the deferential clear-error
standard applies because the parties treated their dispute as
entirely factual, as did the arbitrator. The Weis Company is
right: the Fund waived its statutory-interpretation argument
by failing to raise it in the arbitration. And because the
Fund has not meaningfully challenged the arbitrator's
factual determinations, which easily survive clear-error
review in any event, we affirm the judgment. Finally, we
reject the cross-appeal because the judge did not abuse his
discretion in denying the Weis Company's motion for
Weis Company does stone work in public, commercial, and
private buildings in the Chicago area and is involved in all
stages of the construction process. The company is a union
employer and has been since its founding in 1991. As relevant
here, it was party to two collective-bargaining agreements,
one with the International Union of Bricklayers and Allied
Craftsmen and one with the Laborers' Union. By
longstanding trade custom and practice, laborers assist
bricklayers at construction sites. They mix mortar, unload
the building material, erect scaffolding, work fork-lifts,
handle the stone before the bricklayers install it, and clear
debris. The Weis Company exclusively employed bricklayers and
laborers on a one-to-one basis for more than a decade.
the bricklayers' union merged with the marble masons'
union, which meant that the Weis Company could now hire
marble masons, also known as setters, if it wished. Just as
laborers assist bricklayers, marble finishers assist marble
setters. The duties of a marble finisher overlap in part with
those of a laborer-both can unload trucks, shake out stone,
prepare marble pieces, and clear debris. But finishers can
also cut, polish, grout, caulk, drill holes, apply epoxy, and
patch stones. In other words, finishers are more versatile
and more highly skilled than laborers. And the marble
masons' collective-bargaining agreement-binding on the
Weis Company after the unions merged-required that an
employer hire one finisher for each setter on a job.
the Weis Company won a contract to install an intricate
marble interior in a Chicago building. In accordance with its
practice at the time, the company employed brick- layers and
laborers to do the job. The customer rejected the work,
however, and the Weis Company had to hire marble setters and
finishers to redo it. Thereafter the company began hiring
marble setters and finishers in addition to bricklayers and
laborers. In 2009 the company completely stopped hiring
bricklayers (and their attendant laborers) and began relying
solely on marble setters (and their attendant finishers). In
2012 the Weis Company formally terminated its
collective-bargaining agreement with the Laborers' Union.
the terms of that agreement, the Weis Company made pension
contributions to the Fund of $8.57 per hour "for each
hour worked by all Employees covered by this Agreement."
While the agreement was in effect, the Weis Company
consistently made these payments to the Fund for the hours
worked by laborers in its employ. The company made similar
payments to the bricklayers' pension fund for the hours
worked by bricklayers, marble setters, and marble finishers
in accordance with the terms of its collective-bargaining
agreement with that union. When the company stopped hiring
laborers in 2009, however, it stopped making payments to the
Laborers' Fund. The Fund continued to send the Weis
Company monthly contribution reminders, but the company
returned them without payment with an explanatory "No
Work" notation written across the face of the document.
this period, the Fund twice audited the company to confirm
its compliance with any required contributions. The
Fund's 2011 audit covered the years 2007-2011. The
company provided the auditor copies of all its contributions
to the Fund as well as its contributions to other union
pension funds. The audit concluded that the company had
"complied with its fringe benefit contribution
requirements/' acknowledging that it hadn't paid a
penny to the Fund since 2009 when it stopped hiring laborers
and transitioned to using setters and finishers exclusively.
The Fund later completed a second audit of the company for
the years 2011-2012. Again the audit determined that the
company "complied with its obligations to the Union and
its related Funds/' even though the company hadn't
contributed anything during the relevant period.
Weis Company formally terminated its collective-bargaining
agreement with the Laborers' Union in 2012. In December
of that year, the Fund informed the company that it owed
additional contributions under ERISA and the MPPAA for
withdrawing from the multiemployer plan. The Fund initially
assessed an estimated withdrawal liability of $488, 780.33,
calculated from the time the company terminated its
collective-bargaining agreement with the Laborers' Union.
The Weis Company submitted a request for review under ERISA,
arguing that it was entitled to an exemption from withdrawal
liability under the MPPAA for employers in the building and
construction industry. The exemption provides that for
employers in these trades, withdrawal liability occurs
only if the employer "ceases to have an
obligation to contribute under the plan" but
"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). In its request for review, the Weis