Ohio Construction Company Cleared of $5M Pension Liability Claim

Stevens Engineers & Constructors, Inc. doesn’t owe withdrawal liability to the Iron Workers Local 17 Pension Fund because the work identified by the union did not fall with the jurisdiction of their previous collective bargaining agreement.

The decision is a blow for the distressed Iron Workers pension fund, which is severely underfunded with a deficit of over $170 million. The Cleveland-based pension plan was the first to receive approval from the Treasury Department to cut participant benefits.

An employer that participates in a multi-employer pension plan and withdraws from the plan is liable for its share of any underfunded benefits, a scheme also known as withdrawal liability. A special rule applies to employers in the construction industry. These employers are not subject to liability if they completely withdraw from work in the jurisdiction of the CBA of the type for which contributions were previously required.

The parties’ dispute started when the union assessed pension liability against Stevens, claiming that certain activities in a construction project that commenced after the company withdrew from the plan, involved work within the jurisdiction of their previous CBA.

The three-judge panel said the power rigging work, which the fund disputed, was not work within the jurisdiction of the CBA because the agreement allowed Stevens to assign this work to another union. The fund could not use the power rigging work as a basis for assessing liability because the job’s assignment to certain workers meant it was within their jurisdiction rather than the iron workers.

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can reach Matt by calling him at (614) 843-3041 or emailing him at Matt@MattAustinLaborLaw.com.

Construction Union Jurisdiction Disputes: Some Liken Them to Sibling Rivalries

Workers represented by the Laborers’ International union of North America had been getting job assignments involving forklifts through the Construction Employers Association. But, Operating Engineers Local 18 sought to get that work. The National Labor Relations Board twice said the Laborers should get the work and ultimately ordered the Operating Engineers – which had been striking, threatening to strike, and pursuing grievances against the contractor group – to stop those tactics.

The board allows such tactics when a union seeks merely to preserve work it has previously done, but the Operating Engineers here were trying to stake a claim on new work.

The contractor group has labor contracts covering the work in question with both the Operating Engineers and the Laborers and had assigned the work mostly to the Laborers for years. But in 2012, the Operating Engineers stepped up its pursuit of the work and picketed one site. The Operating Engineers also filed “pay-in-lieu” grievances against five contractors, demanding the money its members would have earned on the forklifts and skid steers.

The Operating Engineers asked the court to review the board’s order, arguing that this was a situation involving work preservation, not work expansion. But the court disagreed. Operating Engineers members have never done the work “to the exclusion of other unions – and certain not for the five companies involved here,” the court found.

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can reach Matt by calling him at (614) 843-3041 or emailing him at Matt@MattAustinLaborLaw.com.

 

Jurisdictional Disputes Drag Contractors into Fights between Unions

Jurisdictional disputes occur when two or more unions make conflicting claims over which group is entitled to perform certain work. For example, many different unions are represented on a construction project and there may be a dispute about who is responsible for cleaning up the scrap at the end of the day. Members of the carpenters union may think they are supposed to clean up after themselves in an effort to keep the worksite tidy and safe. But members of the laborers union believe they are supposed to clean up for the carpenters – after all, if the carpenters cleaned up after themselves then there would be reduced (or no) work for the laborers, the laborers would not be needed, and LIUNA (the laborers’ union and pension fund) would not get a cut of the laborers’ paycheck. So a jurisdictional dispute arises over who gets to clean up after the carpenters.

The National Labor Relations Board considers several factors before awarding the disputed work to one union over another:

  1. The existence of Board certification concerning the employees involved in the dispute;
  2. Evidence of the employer’s preference based upon past practice;
  3. Area and industry practices;
  4. Relative skills and training of the competing union’s members;
  5. Relative economy and efficiency of operations of the competing unions; and
  6. Past history of inter-union agreements and awards.

The Board generally rejects union arguments that the employer and another union are engaged in a “sham” effort to create a jurisdictional dispute unless the accusing union presents evidence showing that the other union’s demands for disputed work “were not made seriously” or that the other union and the employer “colluded” to create the jurisdictional dispute.

State law claims may accompany jurisdictional disputes and further aggravate companies. With the jurisdictional dispute resolved, a union could pursue a breach of contract claim against the employer for not assigning it the disputed work as required under a construction contract or project labor agreement.

This should go without saying, but if your company is put on notice about a jurisdictional dispute, get legal counsel involved immediately.

Matt Austin is a Columbus, Ohio employment lawyer who owns Austin Legal, LLC, a boutique law firm with offices in central and northeast Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can email Matt at Austin@LaborEmploymentOSHA.com or call him at 614.285.5342.