The Power of Arbitrators in Construction Litigation Reaffirmed

Feb 26, 2018

The Seventh Circuit reaffirms an arbitrator’s power to rule on questions of fact.

A recent federal case in Illinois, Laborers’ Fund v. W.R. Weis Company, Inc., F.3d, 2018, WL 316555 (7th Cir. Jan. 8, 2018), has confirmed that the long-standing ability of arbitrators to rule on questions of fact applies in withdrawal liability disputes.

As reported by Meg Troy and Mark Casciari in ERISA & Employee Benefits Litigation Blog,the Seventh Circuit applied the clear error standard of review to a withdrawal liability arbitrator’s interpretation of the parties’ underlying collective bargaining agreement (CBA) that required contributions to a multiemployer pension fund.”

W.R. Weis Company, a masonry contractor, employed workers who were members of the Laborers’ Union and was therefore required to contribute to the Laborers’ Pension Fund. “In 2012, after several years of laborers performing no work for Weis and Weis remitting no contributions to the Fund, Weis formally terminated the CBA and the Fund issued a complete withdrawal assessment.”

The Fund maintained that Weis remained responsible for contributions to the pension fund. Weis claimed it had complied with the requirements of 29 U.S. C. section 1383(b), the “withdrawal liability building and construction industry exemption.”

Arbitration ensued in which the arbitrator found that, based upon the facts of the case, “Weis did not owe the Laborers’ Fund delinquent contributions for discontinued work.”

The Laborers’ Fund appealed to the Seventh Circuit. The Court explained “that the arbitrator’s findings of fact may be set aside only if clearly erroneous, while the arbitrator’s legal conclusions are subject to de novo review.”

The Court agreed with Weis that “the arbitrator’s review during the arbitration was limited to applying the facts to the language of the CBA rather than interpreting the statute itself” and ruled in Weis’s favor. This resulted in a reduction of the contractor’s liability “from over $600,000 to $0.”

Source—

SEVENTH CIRCUIT SAYS: CLEAR ERROR STANDARD APPLIES TO COURT REVIEW OF WITHDRAWAL LIABILITY ARBITRATOR’S CBA INTERPRETATION, Meg Troy and Mark Casciari, ERISA & Employee Benefits Litigation Blog, Jan. 15, 2018.