Central States Areas v. Schilli Corp ( 2005 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 04-4217
CENTRAL STATES, SOUTHEAST AND SOUTHWEST
AREAS PENSION FUND and HOWARD MCDOUGAL,
Plaintiffs-Appellants,
v.
SCHILLI CORPORATION,
Defendant-Appellee.
____________
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 03 C 8880—John W. Darrah, Judge.
____________
ARGUED JUNE 2, 2005—DECIDED AUGUST 23, 20051
____________
Before FLAUM, Chief Judge, and BAUER and EVANS, Circuit
Judges.
FLAUM, Chief Judge. The Multiemployer Pension Plan
Amendments Act (“MPPAA”), Pub. L. 96-364, 94 Stat. 1208(Sept. 26, 1980), imposes liability on employers who
1
This opinion has been circulated among all judges of this circuit
in regular active service pursuant to Circuit Rule 40(e). No judge
favored a rehearing en banc on the question of wheth-
er decertification provides a defense per se to liability in an action
brought under 29 U.S.C. § 1145.
2 No. 04-4217
withdraw from multiemployer plans governed by the
Employee Retirement Income Security Act (“ERISA”), 29
U.S.C. §§ 1001-1461. Central States, Southeast and South-
west Areas Pension Fund (“Central States”) is a
multiemployer plan governed by ERISA. Schilli Corporation
is an employer who participated in the plan until the late
1990s. Central States assessed Schilli liability for allegedly
withdrawing from the plan in part in 1997. Schilli paid
Central States the assessment under protest, and the
parties later submitted their dispute to arbitration. The
arbitrator concluded that Schilli had not withdrawn from
the plan in 1997 and ordered Central States to refund the
assessment. Central States then filed this action under 29
U.S.C. § 1401(b)(2) to vacate the arbitrator’s award. On
cross-motions for summary judgment, the district court
affirmed the arbitrator’s award. Central States appeals and,
for the reasons stated herein, we affirm.
I. Background
Schilli is the parent corporation of three wholly-owned
subsidiaries. One of those subsidiaries, Truck Transport, is
a motor carrier providing regulated, for-hire transportation
services. In 1997, it operated out of a terminal in Batesville,
Arkansas, where its employees were represented by the
International Brotherhood of Teamsters Local Union No.
878 (“Local 878”). Truck Transport and Local 878 had
negotiated a series of consecutive collective bargaining
agreements (“CBAs”) that obligated Truck Transport to
contribute specified amounts to Central States’ pension
fund on behalf of all employees in the Batesville bargaining
unit. The most recent of those CBAs extended from July 10,
1994 through January 10, 1998.
In addition to the CBAs, on May 31, 1987, Truck Trans-
port and Local 878 signed a separate document entitled
“Participation Agreement.” The Participation Agreement
No. 04-4217 3
obligates Truck Transport to contribute to Central States a
set amount per week “for its bargaining unit Employees
pursuant to the terms of the collective bargaining agree-
ment.” The parties to the document “agree to be bound
by . . . all of the terms of the Trust Agreement(s) creating”
Central States. It provides, moreover:
This Agreement shall continue in full force and effect
until such time as the Employer notifies the Fund(s) by
certified mail (with a copy to the Local Union) that the
Employer is no longer under a legal duty to
make contributions to the Fund(s). The Employer shall
set forth in the required written notice to the Fund(s)
the specific basis upon which the Employer is relying in
terminating his obligation to make contributions to the
Fund(s). The Employer expressly agrees and hereby
acknowledges by the signing of this Agreement that its
obligation to make contributions to the Fund(s) shall
continue until the above-mentioned written notice is
received by the Fund(s) and the Trustees acknowledge
the Employer’s termination in writing.
Central States bills participating employers on a monthly
basis for their contributions to the pension fund. It requires
that employers sign a form with the following language
when they submit their monthly contributions:
The employer hereby reaffirms his obligation to make
contributions required by the Collective Bargaining
Agreement and further represents that all employees
eligible to participate in the Fund, in accordance
with the rules of the Fund and the “Employee Retire-
ment Income Security Act of 1974”, are being reported
and only those eligible employees are being reported.
Truck Transport signed and submitted these monthly
certification clauses along with each payment it made to
Central States.
4 No. 04-4217
In November 1997, employees at the Batesville terminal
filed a petition with the National Labor Relations Board
(“NLRB”) under 29 U.S.C. § 159(c)(1)(A)(ii), asserting
that Local 878 no longer represented a majority of the
workers in the Batesville bargaining unit. The NLRB then
held an election, and a majority of the employees voted
to decertify the union as their representative. On November
21, 1997, the NLRB confirmed the election results
and announced that Local 878 no longer served as the
exclusive bargaining representative of the Batesville
employees.
Following the election, Truck Transport conducted
business as usual. Many of its employees kept their same
jobs fulfilling their same duties. In December 1997 and
January 1998, Truck Transport submitted its monthly
contributions accompanied by signed certification clauses on
behalf of its employees. At no time during 1997 did Truck
Transport notify Central States of the decertification or
contend that it had been relieved of its duty to contribute to
the fund.
In January 1998, Truck Transport lost its largest cus-
tomer to a competitor. The substantial drop in busi-
ness forced Truck Transport to close the Batesville terminal
on January 10, 1998. It ceased contributing to Central
States on that date. Although Central States was aware
of the terminal’s closing soon thereafter, it did not learn
of Local 878’s decertification until March 1998.
The MPPAA requires that, upon an employer’s with-
drawal from a multiemployer plan, the plan determine
the amount of withdrawal liability due under a statu-
tory formula, notify the employer of the amount of liability,
and collect that amount from the employer. 29 U.S.C.
§ 1382. After some initial confusion about the timing of
the events in question, Central States judged that Truck
Transport had withdrawn from the fund in 1997. It deter-
No. 04-4217 5
mined that Schilli’s other two subsidiaries, which also had
been contributing to the fund, withdrew in 1998. Because
all businesses under common control are treated as a single
entity when assessing withdrawal liability, see § 1301(b)(1),
Central States concluded that Schilli had partially with-
drawn in 1997 and completely withdrawn in 1998. It
demanded payment accordingly. § 1399(b)(1)(B).
Although Schilli contested Central States’ assessment, it
paid the demanded sum. See § 1399(c)(2) (requiring prompt
payment to the plan “notwithstanding any request for
review or appeal”). After the parties failed to resolve their
disagreement informally, they submitted the dispute to
arbitration as required by the Act. See § 1401(a). In deter-
mining the timing of Truck Transport’s withdrawal, the
arbitrator noted that, for present purposes, an employer
withdraws from a plan only when it ceases to have an
obligation to contribute. The arbitrator found that the
Participation Agreement bound Truck Transport to contrib-
ute to the fund until it complied with the agreement’s notice
provision, and that Truck Transport had not given the
prescribed notice in 1997. Thus, it held that Truck Trans-
port had not withdrawn in 1997 and that Schilli could not
be assessed partial withdrawal liability for that year.
Accordingly, the arbitrator ordered Central States to refund
Schilli the amount it had paid for allegedly withdrawing in
1997.
Central States then filed this action in the Northern
District of Illinois to vacate the arbitrator’s award. See
§ 1401(b)(2). On cross-motions for summary judgment,
the district court held that Schilli had not partially with-
drawn in 1997 and affirmed the arbitrator’s award. Central
States appeals.
6 No. 04-4217
II. Discussion
Because this case turns on a question of law, the dis-
trict court properly reviewed the arbitrator’s conclusions de
novo. See Central States, S.E. & S.W. Areas Pension Fund
v. Midwest Motor Express, Inc., 181 F.3d 799, 805 (7th Cir.
1999). We, in turn, review de novo the district court’s grant
of summary judgment. Id. at 804. Summary judgment is
appropriate only if our resolution of the legal issue shows
that the movant is entitled to judgment as a matter of law.
Fed. R. Civ. P. 56(c); O’Kane v. Apfel, 224 F.3d 686, 688 (7th
Cir. 2000).
Multiemployer plans are defined-benefit plans, meaning
that they must pay beneficiaries a set level of benefits “even
if the contributions they expected to receive do not material-
ize.” Central States, S.E. & S.W. Areas Pension Fund v.
Gerber Truck Serv., Inc., 870 F.2d 1148, 1151 (7th Cir.
1989) (en banc). Accordingly, when an employer withdraws
from a multiemployer plan and stops contributing, there is
a risk that the burden of funding its employees’ benefits will
be shifted to the other employers in the plan or to the
Pension Benefit Guaranty Corporation, which ensures these
benefits. Central States, S.E. & S.W. Areas Pension Fund v.
Slotky, 956 F.2d 1369, 1371 (7th Cir. 1992). The MPPAA
guards against this risk by imposing withdrawal liability on
employers who pull out of multiemployer plans. 29 U.S.C.
§ 1381(a). The statute sets this liability at an amount equal
to a proportionate share of the withdrawing employer’s
unfunded vested benefits. Connolly v. Pension Benefit Guar.
Corp., 475 U.S. 211, 217 (1986). Liability is imposed both
for partial and complete withdrawals from a plan. 29 U.S.C.
§ 1381(a).
The parties agree that in 1998, two of Schilli’s subsidiar-
ies that previously had been contributing to Central States
withdrew from the plan. The principal issue in this appeal
is whether its third subsidiary, Truck Transport, withdrew
No. 04-4217 7
in 1997 or 1998. If Truck Transport withdrew in 1998, then
Schilli may be assessed withdrawal liability for that year
only, when all of its subsidiaries withdrew. If, however,
Truck Transport withdrew in 1997, Schilli may be assessed
liability for a partial withdrawal in 1997 in addition to its
complete withdrawal in 1998. See § 1301(b)(1) (treating all
businesses under common control as a single entity).
Subject to exceptions not relevant here, an employer
partially withdraws in a given year “if for such plan
year . . . there is a partial cessation of the employer’s
contribution obligation.” 29 U.S.C. § 1385(a)(2).
There is a partial cessation of the employer’s contribu-
tion obligation for the plan year if, during such year . . .
the employer permanently ceases to have an obligation
to contribute under one or more but fewer than all
collective bargaining agreements under which the
employer has been obligated 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 . . . .
§ 1385(b)(2)(A)(i). Thus, to assess Schilli for a partial
withdrawal in 1997, Central States must show that Truck
Transport: (i) ceased having an obligation to contribute
to the fund in 1997; and (ii) continued to perform work
at the Batesville terminal after its contribution obliga-
tion ended. Schilli admits that Truck Transport “continue[d]
to perform work in the jurisdiction of the collective bargain-
ing agreement” through 1998. The only dispute, therefore,
is whether Truck Transport’s obligation to contribute ceased
in 1997.
Central States contends that the decertification of the
union in 1997 automatically extinguished Truck Transport’s
obligation to contribute. Schilli agrees that decertification
terminated Truck Transport’s obligations under the 1994
CBA. It argues, however, that Truck Transport remained
8 No. 04-4217
bound to contribute to the fund under the Participation
Agreement until it complied with that document’s notice
provision. Because it did not give the prescribed notice in
1997, Schilli asserts that Truck Transport remained
obligated to contribute until 1998.2
Central States rejoins that even if the decertification
did not void the Participation Agreement by operation of
law, the terms of that document condition Truck Trans-
port’s obligation to contribute upon Local 878’s status as the
exclusive bargaining representative of the Bates-
ville employees. Central States also argues that it waived
its contractual right to receive the prescribed notice,
thereby releasing Truck Transport from its obligations
and triggering a partial withdrawal in 1997. Finally, it
asserts that the implied duty of good faith and fair deal-
ing precludes Truck Transport from relying on its failure to
give notice to avoid withdrawal liability. We address these
arguments in turn.
A. Decertification
Central States argues that the decertification of Local 878
terminated Truck Transport’s obligation to contribute under
both the 1994 CBA and the Participation Agreement by
operation of law. Because the NLRB confirmed the results
of the election on November 21, 1997, Central States
contends that Truck Transport withdrew from the plan that
year. Schilli suggests, without stating explicitly, that
Central States is judicially estopped from making this
2
Schilli also contends that Truck Transport remained obligated
to contribute until 1998 by virtue of the monthly certification
clauses it signed in December 1997 and January 1998. Because we
conclude that Truck Transport remained bound by the Participa-
tion Agreement, we do not reach the effect of the certification
clauses.
No. 04-4217 9
argument because it took the opposite position in a prior
case. Schilli’s brief neither uses the term “judicial estoppel”
nor cites any authority on that doctrine. “[A] litigant who
fails to press a point by supporting it with pertinent
authority, or by showing why it is sound despite a lack of
supporting authority, forfeits the point.” Smith v. North-
eastern Ill. Univ., 388 F.3d 559, 569 (7th Cir. 2004) (quoting
Tyler v. Runyon, 70 F.3d 458, 464 (7th Cir. 1995)). Accord-
ingly, Schilli has forfeited any claim of judicial estoppel.
Turning to the merits, Schilli contends that although the
decertification voided the 1994 CBA, the terms of the
Participation Agreement make clear that Truck Transport’s
obligations survive that event. Schilli highlights the
language of the notice clause, which provides that the
agreement “shall continue in full force and effect until such
time as” Truck Transport notifies Central States that it “is
no longer under a legal duty to make contributions to the
Fund(s).” That clause emphasizes that Truck Transport’s
“obligation to make contributions to the Fund(s) shall
continue until the above-mentioned written notice is re-
ceived” and acknowledged by Central States. Because Truck
Transport did not give this notice in 1997, Schilli argues
that its subsidiary remained obligated to contribute until
1998 despite the decertification of the union.
We analyze Truck Transport’s obligation to contribute
by considering who might enforce the Participation Agree-
ment. At the outset, we conclude that decertifica-
tion terminated the union’s right to enforce the agree-
ment. Local 878 negotiated the Participation Agreement
on behalf of all of the members of the Batesville collec-
tive bargaining unit—whether members of the union or
not. The union enjoyed the authority to act as the exclu-
sive representative of the bargaining unit, speaking for
its supporters and detractors alike, only because federal law
vested it with that power. See 29 U.S.C. § 159(a); Brooks v.
NLRB, 348 U.S. 96, 103 (1954). But federal law’s grant of
10 No. 04-4217
that authority is conditioned upon Local 878 being “desig-
nated or selected . . . by the majority of the employees in
[the bargaining] unit.” 29 U.S.C. § 159(a). The employees’
vote to decertify the union and the NLRB’s confirmation of
that election established conclusively that Local 878 no
longer enjoyed the support of a majority of the employees in
the unit. See 29 U.S.C. § 159(a), (c). Accordingly, Local 878’s
authority to represent all bargaining unit employees and to
enforce any contractual rights it had negotiated on behalf
of those employees as a class dissolved at that point. See
Pioneer Natural Res. USA, Inc. v. Paper, Allied Indus.,
Chem. & Energy Workers Int’l Union Local 4-487, 338 F.3d
440, 441-42 (5th Cir. 2003); Local Union No. 666, Int’l. Bhd.
of Elec. Workers v. Stokes Elec. Serv., Inc., 225 F.3d 415, 424
(4th Cir. 2000); Sheet Metal Workers’ Int’l Ass’n, Local 206
v. W. Coast Sheet Metal Co., 954 F.2d 1506, 1509 (9th Cir.
1992); N. Peter Lareau, Labor & Employment Law §
12.04[3][b][ii] (2003). Cf. Retail Clerks Int’l Ass’n AFL-CIO
v. Montgomery Ward & Co., 316 F.2d 754, 757 (7th Cir.
1963). Because Local 878 negotiated the Participation
Agreement in its capacity as the exclusive bargaining
representative of all employees in the Batesville unit, its
right to enforce that agreement ended at decertification.
This is true despite Truck Transport’s failure to comply
with the notice clause of the Participation Agreement.
Decertification terminates a union’s rights by operation
of law without regard to the language of the contract. Just
as decertification nullified the 1994 CBA before it would
have expired by its terms, the Participation Agreement
dissolved despite language purporting to continue it “in full
force and effect” until the described notice was given.
The union is not the only party with standing to en-
force that agreement, however. The MPPAA authorizes
multiemployer plans to sue for delinquent contributions
owed “under the terms of the plan or under the terms of
a collectively bargained agreement.” 29 U.S.C. § 1145;
No. 04-4217 11
see also § 1132(d)(1). Moreover, § 1145 gives a multi-
employer plan greater rights under these documents than
the union itself, entitling a plan “to enforce the writing
without regard to understandings or defenses applicable
to the original parties.” Central States, S.E. & S.W.
Areas Pension Fund v. Gerber Truck Serv., Inc., 870 F.2d
1148, 1149 (7th Cir. 1989) (en banc). Thus, many of the
defenses that Truck Transport might raise in an action
brought by Local 878 would not be viable in an action
brought by Central States.
Schilli argues that if Truck Transport would have
been liable in a § 1145 action for contributions through
1998, it remained “obligated to contribute” for withdrawal
liability purposes until then. We assume without deciding
that this is true.3 On this assumption, the question becomes
whether decertification is a defense in a § 1145 action. If so,
Central States could not have prevailed against Truck
Transport for contributions after the union’s decertification,
and Truck Transport ceased having an “obligation to
contribute” for withdrawal liability purposes at that point.
Central States urges us to recognize decertification as
a defense to § 1145 liability. We conclude, however, that our
precedents foreclose this course. In Gerber Truck, we ruled
that “the lack of majority support for the union and the
consequent ineffectiveness of [a contract] under labor law”
is not a valid defense in a § 1145 action. 870 F.2d at 1153(en banc). We took a similarly narrow view of the available
3
Section 1392(a) of Title 29 provides that, for purposes of
withdrawal liability, an employer’s “ ‘obligation to contribute’ . . .
does not include an obligation . . . to pay delinquent contribu-
tions.” Neither party addresses whether this language might
mean that an employer does not have an “obligation to contribute”
for withdrawal liability purposes merely because it faces exposure
in a § 1145 action. We leave for another day the effect of this
provision.
12 No. 04-4217
defenses in Moriarty v. Svec, 164 F.3d 323 (7th Cir. 1998).
In that case, a pension fund sued an employer under § 1145
for delinquent contributions due under a CBA between the
employer and a local union. While the case was pending in
the district court, the NLRB ruled that some of the defen-
dant’s employees were not members of the collective
bargaining unit represented by the union that had negoti-
ated the CBA. The defendant argued that because the union
did not represent the employees in question, “it could not
collectively bargain on their behalf, and consequently, the
CBAs [were] invalid with respect to” those employees. Id. at
335. Citing Gerber Truck, we rejected this argument.
Moriarty, 164 F.3d at 335 (“nothing in ERISA makes the
obligation to contribute depend on the existence of a valid
collective bargaining agreement”) (internal quotation and
citation omitted).
Moreover, in Martin v. Garman Construction Co., 945
F.2d 1000 (7th Cir. 1991), the employer had signed a
“prehire agreement” under § 8(f) of the National Labor
Relations Act, 29 U.S.C. § 158(f), which obligated it to
contribute to pension and trust funds on behalf of its
employees. Throughout the term of the agreement, the
employer, Garman, employed only one person in the
relevant bargaining unit. Garman sought to repudiate the
agreement and end its contributions long before the agree-
ment would have expired by its terms. The union filed an
unfair labor practice charge with the NLRB and the funds
sued for delinquent contributions under § 1145.
Relying on the “one-person unit rule,” the NLRB found
that Garman had not committed an unfair labor practice.
This rule provides that where an employer employs one
or fewer employees on a permanent basis in the relevant
bargaining unit, the employer may, without violating
§ 8(a)(5) of the NLRA, “withdraw recognition from a
union, repudiate its contract with the union, or unilaterally
change employees’ terms and conditions of employment
No. 04-4217 13
without affording a union an opportunity to bargain.” J.W.
Peters, Inc. v. Bridge, Structural & Reinforcing Iron Work-
ers, Local Union 1, 398 F.3d 967, 973 (7th Cir. 2005)
(quoting Stack Electric, Inc., 290 N.L.R.B. 575, 577 (1988)).
The rule is based on the principle that “collective bargain-
ing presupposes that there is more than one eligible person
who desires to bargain.” Id. at 973-74 (quoting Foreign Car
Ctr., Inc., 129 N.L.R.B. 319, 320 (1960)). Without others to
represent, collective bargaining is meaningless.
Garman then moved for summary judgment in the ERISA
proceeding, contending among other things that the NLRB’s
order was res judicata and collaterally estopped it from
being held liable under § 1145. We held that the NLRB’s
order did not have preclusive effect. Martin, 945 F.2d at
1003-06. Relying on Gerber Truck, moreover, we went on to
reject the one-person unit rule as a defense to § 1145
liability. Id. at 1004 (“The district court properly refused to
permit the one-man rule to impair the contract’s validity
under 29 U.S.C. § 1145.”).
Neither Gerber Truck, Moriarty, nor Martin squarely
addressed the decertification of a union. Nevertheless, these
cases reveal that a union’s lack of majority support or
authority to collectively bargain, standing alone, will not
preclude liability under § 1145. As explained above, a union
loses its rights upon decertification because it no longer
enjoys majority support or the authority to represent the
bargaining unit. Because the decertification defense rests
on these rationales, we hold that it does not serve as a
categorical bar to § 1145 liability.4
4
Our opinion in Midwest Motor Express does not compel the
opposite conclusion. 181 F.3d 799. There, we mentioned in passing
that the decertification of a union had ended the employer’s
obligation to contribute to a pension fund. Id. at 803. The effect of
(continued...)
14 No. 04-4217
We note that several of our sister circuits have sug-
gested or held that decertification is a defense in § 1145
actions. See La. Bricklayers & Trowel Trades Pension Fund
& Welfare Fund v. Alfred Miller Gen. Masonry Contracting
Co., 157 F.3d 404, 408 (5th Cir. 1998) (dicta); Agathos v.
Starlite Motel, 977 F.2d 1500, 1505 (3d Cir. 1992) (dicta); W.
Coast Sheet Metal Co., 954 F.2d at 1509-10 (holding). These
cases give only a cursory explanation of the rationales
underpinning the decertification defense. As explained, we
have previously rejected those rationales as bases for
defenses against § 1145 liability. Moreover, recognizing
decertification as a defense per se would not accord with §
1145’s language, which authorizes plans to sue for contribu-
tions due “under the terms of the plan or under the terms
of a collectively bargained agreement.” We therefore decline
to adopt the position of our sister circuits.
That is not to say, however, that decertification is irrele-
vant in this context. Both the text of § 1145 and Gerber
Truck make clear that an employer is not bound by a
contract that is unlawful. See 29 U.S.C. § 1145 (requiring
that employers contribute according to the terms of plans
only “to the extent not inconsistent with law”); Gerber
Truck, 870 F.2d at 1153 (“If the contract provides for the
commission of unlawful acts, it will not be enforced.”). If it
would have been unlawful for Truck Transport to continue
to make contributions under the Participation Agreement
following the union’s decertification, it would have a valid
defense. Central States does not develop an argument on
this point, however. It makes the related assertion that an
employer commits an unfair labor practice by bargaining
4
(...continued)
decertification, however, was not contested in that appeal. Nor did
either party address the interplay between § 1145 and withdrawal
liability, a consideration central to our holding. Thus, Midwest
Motor Express does not bind us here.
No. 04-4217 15
with a union after it has been decertified. But it fails to
argue or cite authority for the proposition that continuing
to make contributions is equivalent to bargaining with a
minority union. Because Central States has forfeited this
argument, see Northeastern Ill. Univ., 388 F.3d at 569, we
cannot conclude that decertification affords a defense to §
1145 liability under the facts of this case. Accordingly, the
decertification of Local 878 did not terminate Truck Trans-
port’s obligation to contribute, for withdrawal liability
purposes, by operation of law.
B. Terms of the Participation Agreement
Central States argues in the alternative that even if
decertification does not give rise to a defense by operation
of law, the terms of the Participation Agreement themselves
condition Truck Transport’s duty to contribute upon
Local 878’s status as the exclusive bargaining representa-
tive of the Batesville employees. It contends, therefore, that
Truck Transport’s obligations terminated once Local 878
lost that status. As support for this argument, Central
States relies on the following language: “the Union and
the Employer have entered into a collective bargaining
agreement which provides for participation in [Central
States’ pension fund] in order to obtain . . . benefits for em-
ployees . . . represented by the Union and employed by the
Employer.” Central States reads this to mean that the
agreement is effective only as long as the employees are
“represented by the Union,” i.e., Local 878.
Central States’ reading cannot be squared with the notice
clause of the Participation Agreement. That clause explic-
itly provides that Truck Transport’s contribution duties will
continue until it gives the prescribed notice. While decertifi-
cation terminated Local 878’s right to enforce the agree-
ment notwithstanding this language, liability in a § 1145
action turns on “the terms of the plan or the terms of the
16 No. 04-4217
collectively bargained agreement.” Because Central States’
interpretation contradicts those terms, we reject this
argument.
C. Waiver
As a fallback position, Central States contends that it
waived the notice requirements of the Participation Agree-
ment in 1997, thereby relieving Truck Transport of its
obligation to contribute and triggering withdrawal liability
for that year. As evidence of its claim of waiver, Central
States points out that it has never demanded that Truck
Transport comply with the notice provision. In general, a
party may waive its contractual rights impliedly by taking
“actions inconsistent with the assertion of those rights.”
Bank v. Truck Ins. Exch., 51 F.3d 736, 739 (7th Cir. 1995).
We cannot agree, however, that Central States’ actions in
1997 were inconsistent with its right to receive notice as
required by the agreement. Central States did not learn of
the union’s decertification until March 1998. Accordingly, it
would have had no occasion to demand compliance with the
notice provision in late 1997. We can draw no inferences
from its silence during that span. To the extent that Central
States’ later behavior waived its rights, that waiver did not
release Truck Transport from its obligations until 1998. We
therefore reject this argument.
D. Duty of Good Faith and Fair Dealing
Finally, Central States argues that the duty of good faith
and fair dealing obligates a party to take reasonable efforts
to bring about conditions precedent within its control. It
characterizes the notice provision as a condition precedent
to withdrawal liability, and asserts that, because Truck
Transport controlled whether to give notice, it was required
to do so immediately upon decertification. Central States
No. 04-4217 17
argues that because Truck Transport breached this duty, it
cannot rely on the lack of notice to avoid withdrawal
liability.
This argument does not withstand scrutiny. Central
States’ position implies that the duty of good faith obligates
employers to take actions necessary to ensure that they are
subject to withdrawal liability. An employer incurs with-
drawal liability only when it withdraws partially or com-
pletely from a multiemployer plan. 29 U.S.C. § 1381(a).
Congress imposed withdrawal liability, however, to give
employers an incentive not to withdraw from multiemployer
plans. Midwest Motor Express, Inc., 181 F.3d at 806; see also
29 U.S.C. § 1001a(c). Whatever the duty of good faith may
require in this context, it cannot obligate employers to take
the very action that Congress enacted the MPPAA to
prevent.
III. Conclusion
For the reasons stated herein, we hold that Truck Trans-
port remained obligated to contribute to Central States’
plan until it complied with the notice provision of the
Participation Agreement. Because Truck Transport did not
give Central States the prescribed notice in 1997, its
parent—Schilli—did not partially withdraw from the plan
that year. Accordingly, we AFFIRM the judgment of the
district court.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—8-23-05