Stevens Engineers & Constructors, Inc. v. Local 17 Iron Workers Pension Fund

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 17a0280p.06

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

STEVENS ENGINEERS & CONSTRUCTORS, INC., ┐
Plaintiff-Appellee, │
│
> Nos. 16-4098/4099
v. │
│
│
LOCAL 17 IRON WORKERS PENSION FUND; LOCAL 17 │
IRON WORKERS PENSION FUND BOARD OF TRUSTEES, │
Defendants-Appellants. │
┘

Appeal from the United States District Court
for the Northern District of Ohio at Cleveland.
Nos. 1:15-cv-01965; 1:15-cv-01967—Donald C. Nugent, District Judge.

Argued: October 3, 2017

Decided and Filed: December 13, 2017

Before: CLAY, ROGERS, and SUTTON, Circuit Judges.

_________________

COUNSEL

ARGUED: Richard L. Stoper, Jr., GOLDSTEIN GRAGEL LLC, Cleveland, Ohio, for
Appellants. Daniel A. Richards, WESTON HURD LLP, Cleveland, Ohio, for Appellee.
ON BRIEF: Richard L. Stoper, Jr., Susan L. Gragel, GOLDSTEIN GRAGEL LLC, Cleveland,
Ohio, for Appellants. Daniel A. Richards, Morris L. Hawk, WESTON HURD LLP, Cleveland,
Ohio, Jeanne V. Gordon, Amy M. Wojnarwsky, CAVITCH, FAMILO & DURKIN CO., L.P.A.,
Cleveland, Ohio, for Appellee.
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_________________

OPINION
_________________

ROGERS, Circuit Judge. Under the Multiemployer Pension Plan Amendments Act, part
of ERISA, a construction industry employer who withdraws from a multiemployer pension plan
owes liability to that plan if the employer conducts 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)(B)(i). In accordance with this provision, the Trustees of the Iron Workers Local 17
Pension Fund assessed pension liability against Stevens Engineers & Constructors, claiming that
Stevens’s activities on a certain construction project involved such work within the jurisdiction
of their previous collective bargaining agreement. As an arbitrator and the district court below
found, however, Stevens did not owe pension liability to the Local 17 Pension Fund, because the
work identified by Local 17 did not fall within the jurisdiction of the relevant collective
bargaining agreement, and did not otherwise require contributions by Stevens. The collective
bargaining agreement instead allowed Stevens to assign jobs like the ones at issue to other trade
unions, and a job did not trigger pension liability to the Local 17 Pension Fund if, as here, it was
properly assigned to a different union. Local 17 offers additional arguments as to why Stevens
owed withdrawal liability, but these are also unavailing.

I.

In 1980, Congress passed the Multiemployer Pension Plan Amendments Act (MPPAA),
which modified and extended the coverage of ERISA. Pub. L. 96–364, 94 Stat. 1208 (1980).
ERISA had allowed collective bargaining agreements for employers in large, fragmented
industries like construction to collect employer contributions for a single centralized
industrywide pension fund, rather than for individual plans for each employer. See 29 U.S.C.
§ 1301(a)(3). To avoid incentives for employers to flee when a multiemployer plan became
underfunded, the MPPAA imposed a provision for withdrawal liability, under which an
employer leaving an industry or a plan would be responsible for paying additional contributions
to that plan at the time of their exit. 29 U.S.C. § 1381. An employer subject to withdrawal
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liability owes a proportionate share of the unfunded amount of the plan, determined on the date
of exit from the plan. 29 U.S.C. § 1391.

The MPPAA also provides that a plan’s sponsor, often an entity supported by the local
union, is normally responsible for calculating withdrawal liability, pursuant to the collective
bargaining agreement’s terms. 29 U.S.C. § 1382. Where an employer and a plan disagree about
the existence or extent of such withdrawal liability, the MPPAA also imposes a scheme for
resolution of disputes, primarily through arbitration. 29 U.S.C. § 1401. The MPPAA states that,
in civil actions to enforce an assessment of withdrawal liability, “there shall be a presumption,
rebuttable only by a clear preponderance of the evidence, that the findings of fact made by the
arbitrator were correct.” Id. § 1401(c).1

Although withdrawal liability attaches to most types of employers, a special withdrawal
scheme— the one at issue in this case—covers the construction industry. 29 U.S.C. § 1383(b).
Under this arrangement, construction industry employers are not subject to withdrawal liability if
they completely withdraw from “work in the jurisdiction of the collective bargaining agreement
of the type for which contributions were previously required.” Id. § 1383(b)(2)(B)(i). The Ninth
Circuit has explained that this provision exists because “the construction industry as a whole
does not necessarily shrink when a contributing contractor leaves the industry; employees are
often dispatched to another contributing contractor.” H.C. Elliott, Inc. v. Carpenters Pension Tr.
Fund for N. California, 859 F.2d 808, 811 (9th Cir. 1988). On these premises, the withdrawal of
an employer from work within the jurisdiction of a collective bargaining agreement “do[es] not
pose an undue threat to a plan as long as contributions are made for whatever work is done in the
area.” Id. at 812 (quoting H.R. Rep. No. 96–869, 96th Cong., 2d Sess, pt. 1, at 75). At the same
time, “[t]he withdrawal of any employer from the plan does decrease the base, however, if the
employer stays in the industry but goes non-union and ceases making payments to the plan.” Id.
In those latter circumstances, the MPPAA provides that an employer must pay a proportional
share of the unfunded amount in the plan, determined based on the employer’s share of

1
The MPPAA does not contain any provision establishing the standard of review for conclusions of law.
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contributions for work prior to withdrawal, rather than after withdrawal. 29 U.S.C.
§ 1391(b)(1)(A).

The Iron Workers Local 17 Pension Fund (Fund) is a multiemployer pension plan subject
to the MPPAA. It provides pensions for members of the International Association of Bridge,
Structural, Ornamental and Reinforcing Iron Workers Local Union No. 17 (Local 17). The
Board of Trustees of the Iron Workers Local 17 Pension Fund oversees and administers the
Fund. The Fund is severely underfunded, with a deficit of over $170 million. An employer that
withdraws from the Fund and cannot avail itself of the construction industry exception thus faces
significant liability.

Stevens Engineers & Constructors (Stevens) is a company in the building and
construction industry. Stevens specializes in heavy industrial construction, and at any given time
generally employs several hundred union workers in a variety of trades. Between 1985 and April
2013, Stevens was a party to a series of collective bargaining agreements (CBAs) with Local 17,
pursuant to which Stevens paid into the Fund. Like all previous CBAs, the final CBA between
Stevens and Local 17 contained a statement of the jurisdiction establishing where the CBA
applied. Article I of the CBA defined “craft jurisdiction,” the ironworker work covered by the
CBA, as the “unloading, handling, fabrication, re-fabrication, erection, and dismantling of
structural, ornamental, reinforcing steel, metals, plastic, [and] composite and engineered
materials.” Article II of the CBA defined the “territory” of the CBA as a geographic range
covering various counties in Northern Ohio. Jobs within the craft jurisdiction and the geographic
jurisdiction of the CBA required payment by Stevens into the Fund, and Stevens made payments
when so required.

The CBA between Stevens and Local 17 contained an additional qualifier. The craft
jurisdiction section stated that the jurisdiction of the CBA was “subject to . . . Agreements,
national in scope between the International and other International Unions covering work
jurisdiction and [the] allocation and division of work.” The CBA included this section because
the jurisdiction claimed by craft unions in the construction industry can often overlap, and so
unions have enacted various agreements allowing work divisions among crafts. Where work is
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assigned to one union through an assignment agreement, it is not within the domain of another
union, and thus not subject to employer pension liability to that other union.

One work assignment agreement incorporated into the CBA was the National
Maintenance Agreement (NMA). The NMA is a longstanding arrangement covering various
craft unions, including ironworkers and millwrights, in construction projects, and directing which
unions receive which work. The NMA provides that, where multiple unions can claim the same
work, employers must conduct a pre-job conference to assign work on a project. Once a job is
assigned through a pre-job conference, it belongs to the assigned craft union. Where a dispute
continues following a pre-job conference, the NMA provides for a neutral umpire to resolve the
dispute. If not challenged under the NMA, a task stands as assigned, and does not fall within the
purview of any other union.

In April 2013, Stevens terminated its collective bargaining agreement with Local 17 and
announced its intention not to directly employ any ironworkers on any future projects. Instead,
where a Stevens project required ironworkers, Stevens would hire subcontractors to complete
that work. As a result, Stevens ceased making contributions to the Fund. Stevens has not
directly hired ironworkers since the termination of the CBA.

In September 2013, Stevens won a contract to renovate and install new equipment at the
U.S. Steel No. 4 Seamless plant in Lorain County, Ohio, an area within the geographic
jurisdiction of the previous Local 17 CBA. In accordance with the NMA, Stevens held a pre-job
conference, at which Stevens announced that millwrights and not ironworkers would perform
demolition and power rigging tasks for the No. 4 Seamless project. Power rigging involves the
movement, handling, and removal of certain mechanical devices on construction sites. In
previous jobs, Stevens had often assigned power rigging tasks to ironworkers, but in others,
Stevens had chosen millwrights to do that work. Other employers subject to the NMA also
assign rigging work to craft unions other than ironworkers.

Three days after the pre-job conference, a representative of Local 17 contacted Stevens to
object to the job assignments. Local 17 protested Stevens’s assignments as inconsistent with
another inter-union agreement, the 1971 Ironworker Millwright Rigging Agreement, stating that
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ironworkers would have priority in power rigging work. The 1971 rigging agreement had been
abrogated by the millwrights in 2005 and was no longer in force, but some construction
employers continued to make assignments consistent with that agreement’s terms. Stevens
responded that it would not change the assignments on the No. 4 seamless site. The next step in
the NMA process required Local 17 to submit its claims for dispute resolution; however, the
union did not pursue the dispute further. The Trustees of the Fund did not participate in this
process.

During Stevens’s work at No. 4 Seamless, two irregularities occurred. One night in
November 2013, laborers working for Stevens installed a three- to four-square-foot area of rebar
on the site. In the pre-job conference, Stevens had assigned rebar installation exclusively to
ironworkers. The next morning, when a Stevens manager discovered that the laborers had
installed this rebar, the Stevens manager stated that the laborers had not been authorized to
complete the task, apologized to the ironworkers, and stated that only ironworkers were
permitted to do that work. Similarly, in January 2014, a subcontractor informed Stevens that
millwrights were installing iron grating and handrails, despite Stevens’s assignment of that work
to ironworkers. Stevens immediately ordered the millwrights to cease that work. The total
amount of ironworker activities wrongly performed by other crafts amounted to twenty hours, or
less than two-tenths of one percent of all ironworker work.

On November 13, 2013, about two weeks after the pre-job conference, the Fund Board of
Trustees passed a resolution holding that Stevens was performing work for which Stevens had
previously used ironworkers, namely the demolition and power rigging work. In consequence,
the Trustees voted to impose withdrawal liability on Stevens. The Fund used the abrogated
1971 Rigging Agreement as the basis for its assessment that it was entitled to payment for the
work done by Stevens. The Fund presented Stevens with a demand for $5,056,017, the amount
of the withdrawal liability it calculated Stevens owed. Stevens requested that the Trustees
review their own determination, pursuant to an ERISA provision allowing employers the right to
such reviews. See 29 U.S.C. § 1399(b)(2)(A). After hearing evidence from Stevens, the
Trustees reconfirmed their own jurisdiction over Stevens.
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Stevens moved to submit the claims to arbitration, pursuant to ERISA’s mandatory-
arbitration clause. See 29 U.S.C. § 1401(a)(1). During the discovery phase of the arbitration, the
Fund learned of two additional activities by Stevens that it counted as irregularities. Prior to the
pre-job conference, millwrights employed by Stevens had moved machinery at the No. 4
Seamless site. Likewise, laborers employed by Stevens had drilled a few holes for rebar on the
site. The Fund had not known about these activities when it imposed withdrawal liability on
Stevens, and the activities did not serve as a basis for its determination that Stevens had
performed work subjecting Stevens to withdrawal liability.

After hearing four days of testimony, the arbitrator found that Stevens was not subject to
withdrawal liability. The arbitrator concluded that Stevens had not conducted “work in the
jurisdiction of the collective bargaining agreement” because Stevens had assigned power rigging
and demolition tasks to the millwrights through the NMA. Although recognizing that the Fund’s
assessment of liability enjoyed a presumption of correctness, the arbitrator found that this
presumption did not require liability against Stevens here, because the Fund’s conclusion was
clearly erroneous. The arbitrator also found that Stevens was not liable for the rebar installation
and the millwrights’ installation of iron grating, but did not discuss the laborers’ drilling holes
for rebar and unloading equipment, although it had heard evidence on these latter issues.

Following the arbitrator’s award, Stevens brought a civil action against the Fund and the
Trustees to enforce the arbitrator’s award, and that same day the Fund and Trustees brought an
action against Stevens seeking to vacate the award. The district court consolidated both actions
into the current case. After motions, the district court granted Stevens’s request to enforce the
arbitrator’s award, concluding like the arbitrator that Stevens had assigned the challenged tasks
through the NMA, and so they were not within the Fund’s jurisdiction. The district court further
rejected the Fund’s argument that the Fund should not be bound by Local 17’s failure to object to
the NMA-provided assignment, and found that the Fund could not independently assess
withdrawal liability on Stevens outside of the context of the CBA.

The Fund now appeals.
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II.

Stevens did not owe withdrawal liability to the Fund because the power rigging work it
assigned to the millwrights through the NMA was not work within the jurisdiction of the Local
17 CBA, and did not otherwise require contributions by Stevens. Under the MPPAA, a
construction industry employer owes withdrawal liability only when it either “continues to
perform work in the jurisdiction of the collective bargaining agreement of the type for which
contributions were previously required” or “resumes such work within 5 years . . . .” 29 U.S.C.
§ 1383(b)(2). Here, however, the power rigging work was not work within the jurisdiction of the
CBA because the CBA permitted Stevens to assign this work to another union. The previous
CBA between Stevens and Local 17 incorporated “[a]greements, national in scope between the
International and other International Unions covering work jurisdiction and allocation and
division of work,” and it is not contested that the NMA is one such incorporated agreement. The
NMA, in turn, provided that where a job is assigned through a pre-job conference, it belongs
exclusively to the union to which it is assigned. The Fund therefore could not use the power
rigging work as a basis for assessing withdrawal liability here, because the job’s assignment to
the millwrights in the pre-job conference meant it was within the jurisdiction of the millwrights
rather than the ironworkers. The work thus did not trigger the “perform[ance] . . . in the
jurisdiction of the collective bargaining agreement” requirement for 29 U.S.C. § 1383(b)(2) to
apply.

This court has never addressed the precise meaning of “jurisdiction” under 29 U.S.C.
§ 1383(b)(2). The conclusion that withdrawal liability is defined by the jurisdictional provisions
of the relevant collective bargaining agreement is, however, consistent with other courts’
approaches to this issue. For example, the Ninth Circuit has held that an employer who
withdrew from the construction industry but continued to own a part of a joint venture of a
construction project did not owe withdrawal liability under Section 1383(b)(2) for that
ownership, because the employer’s CBA when in force would not have required contributions
for that ownership. Carpenters Pension Tr. Fund for N. California v. Underground Constr. Co.,
31 F.3d 776, 780 (9th Cir. 1994). Similarly, the Seventh Circuit has stated in a general analysis
of pension liability that, where no other legal duty exists, an employer’s “obligation to contribute
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is tied exclusively to the . . . CBA.” Michels Corp. v. Cent. States, Se., & Sw. Areas Pension
Fund, 800 F.3d 411, 418 (7th Cir. 2015). Other circuits have also confirmed that a work-
assignment process can direct pension contributions to the union to whom the work was
assigned. For example, the Eighth Circuit held that a jurisdictional provision like the one here,
where work could be assigned to multiple unions, meant that a pension fund of a non-assigned
union was “not entitled to contributions for work assigned to members of a competing union
within the jurisdiction of that union.” Carpenters Fringe Benefit Funds of Ill. v. McKenzie
Eng’g, 217 F.3d 578, 585 (8th Cir. 2000).

The conclusion that withdrawal liability does not accrue from a task outside the
jurisdiction of a collective bargaining agreement is also consistent with this circuit’s more
general precedents on the MPPAA. We have stated that the MPPAA should be constructed
strictly according to its text rather than through definitions “constructed in the dim light of
common-law inference.” Cent. States, Se. & Sw. Areas Pension Fund v. Int’l Comfort Prods.,
LLC, 585 F.3d 281, 286 (6th Cir. 2009). Applying that principle here means applying the
construction industry exception to withdrawal liability as it exists in the MPPAA, and the
MPPAA provides that withdrawal liability only attaches to work “in the jurisdiction of the
collective bargaining agreement of the type for which contributions were previously required.”
29 U.S.C. § 1383(b). The straightforward interpretation of that text offers no grounds on which
the Fund can assess withdrawal liability, because the Fund does not show that the CBA required
contributions for work within the jurisdiction of another union.

To be sure, we have also acknowledged that the MPPAA expresses a general policy in
favor of making employers who withdraw from an underfunded fund pay into it. See Findlay
Truck Line, Inc. v. Cent. States, Se. & Sw. Areas Pension Fund, 726 F.3d 738, 743 (6th Cir.
2013). We did not say, however, that this policy extends to finding liability where it would not
otherwise exist. Where, as here, the MPPAA expressly limits the situations in which
contributions are required, the specific provisions of the text control over the looser general
principles also embodied in the MPPAA.
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Indeed, interpreting the “jurisdiction” triggering withdrawal liability under 29 U.S.C.
§ 1383(b)(2)(B)(i) to be the jurisdiction established by a collective bargaining agreement is more
consistent with the specific policy behind withdrawal liability, and the particular rationale for the
construction industry exception. As the Ninth Circuit has explained, the MPPAA imposes
withdrawal liability to avert the scenario in which “the employer stays in the industry but goes
non-union and ceases making payments to the plan.” H.C. Elliott, Inc., 859 F.2d at 811. That
incentive to gain the benefit of work without the detriment of pension liability does not exist,
however, where an employer takes on a job that would not have required pension payments.
Before its withdrawal from the CBA, Stevens would not have owed contribution liability to
Local 17 for work properly assigned to another union through the NMA. It therefore causes no
imbalance for Stevens to owe no liability for such work properly assigned after withdrawal
either.

The Fund raises a series of objections to reading Section 1383(b) as not permitting
withdrawal liability where a previous CBA would not have imposed it, but the Fund’s
contentions all fail. First, the Fund proposes an alternative interpretation of Section 1383(b) in
which “jurisdiction” means only “geographic jurisdiction,” but this argument is meritless. An
opinion of the Second Circuit confirms that the jurisdictional clause of a CBA like the one at
issue here covers both “the Union’s defined trade and geographical jurisdiction.” Cleveland
Wrecking Co. v. Iron Workers Local 40, 136 F.3d 884, 886 (2d Cir. 1997). The Fund points out
that another portion of the MPPAA uses the term “craft and area jurisdiction” as opposed to just
“jurisdiction,” see 29 U.S.C. § 1388(d)(1), but the principle that the greater includes the lesser
means that the broad term “jurisdiction” can and does include the narrower variation “craft and
area jurisdiction.”

The Fund likewise states that interpreting “jurisdiction” to mean craft rather than
geographic jurisdiction produces an apparently absurd result of imposing liability where an
employer works in a different state. But nothing says “jurisdiction” must apply to only one of
craft or geography, and the natural reading is that it applies to both. In other words, the
MPPAA’s provisions for withdrawal liability mean exactly what they say: an employer owes
withdrawal liability for work that would have mandated contributions pursuant to ERISA if the
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CBA were still in force. 29 U.S.C. § 1383(b). This clarity means that, notwithstanding the
Fund’s suggestion, resort to the MPPAA’s legislative history is unnecessary because the text is
clear. See Mohamad v. Palestinian Auth., 566 U.S. 449, 458 (2012).

The Fund also expresses concern that a reading of “in the jurisdiction of the collective
bargaining agreement” as covering whatever area a CBA establishes as its own jurisdiction
makes redundant the second part of Section 1383(b)’s requirement: “of the type for which
contributions were previously required.” In fact, these two parts work in conjunction. The
limitation “of the type for which contributions were previously required” establishes that an
employer does not owe withdrawal liability for actions previously covered by a CBA but not
generative of pension liability. Cf. Carpenters Pension Tr. Fund, 31 F.3d at 780 (demonstrating
such a scenario). Reading both parts in conjunction fulfills, rather than frustrates, the MPPAA’s
scheme. It ensures that employers will not owe liability for actions after withdrawal that would
not have generated liability before.

The Fund also identifies the fact that Stevens, while subject to the CBA, had previously
employed ironworkers to do rigging work, as purportedly showing that this rigging work was
within the ironworkers’ jurisdiction. This argument ignores the point that under the CBA and the
NMA, Stevens had the right to assign a job to various unions, and only incurred pension liability
to a craft union when a task was so assigned. Knowing that, in the past, Stevens had exercised
an option it possessed does not rebut the point that Stevens was not prohibited from assigning
jobs to other unions in the future. The Fund finally objects that, even after the abrogation of the
rigging agreement, area practice favored the assignment of rigging work to ironworkers, and
thus Stevens would have owed liability for rigging work when the CBA was in force. Extrinsic
evidence like area practice does not overcome clear contract language, however. Tackett v.
M & G Polymers USA, LLC, 811 F.3d 204, 208 (6th Cir. 2016). Because this CBA through the
incorporated NMA expressly provides flexibility for Stevens to make rigging assignments, a
survey of area practice is unnecessary to determine that Stevens could exercise a right that it
possessed by the terms of the contract.
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III.

Although only Local 17 and not the Fund was a party to the CBA and capable of
challenging work assignments under the NMA, that assignment is binding on the Fund, because
the Fund did not have an independent right to assess liability based on a task assigned to another
union through the NMA.2 The Fund points out that, in some ERISA areas, pension funds are not
necessarily bound by the failures of relevant unions to assert a fund’s claims, and argues that it
should be permitted to pursue claims against Stevens. Here, however, Local 17’s action through
the NMA was a necessary prerequisite to create obligation to contribute to the Fund, and so the
Fund could not assess liability based on work never falling within its jurisdiction. The Fund’s
arguments that there was no forfeiture of its independent powers to assess liability thus fail,
because no such independent powers existed in this context.

Under the MPPAA’s standards for withdrawal liability, a plan sponsor may only assess
withdrawal liability on a construction employer who resumes or “perform[s] 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)(B)(i). As discussed above, the jurisdiction of the
collective bargaining agreement in this case incorporated the NMA, under which a craft union
lacks jurisdiction over jobs properly assigned to another union pursuant to that agreement. Here,
as both the arbitrator and the district court found, Local 17 did not have jurisdiction over rigging
work because Stevens assigned that work to millwrights rather than ironworkers. The NMA
process was exclusive and final. As a result, both the arbitrator and district court correctly
concluded that the Fund did not have the power to retroactively determine that Stevens’s work
was within the jurisdiction of Local 17 based only on the Fund’s own authority, because that
decision was precluded by the NMA.

The Fund nevertheless seeks the right to decide what tasks belonged to Local 17,
regardless of NMA assignment, but the Fund lacks any such power to overturn the NMA’s
2
To be clear: the Fund does not raise the issue of whether it did or should have possessed an independent
standing, separate from that of Local 17, to challenge work assignment through the NMA process. Rather, the Fund
argues that it has the independent authority to subsequently assess liability on Stevens, regardless of rights
established via NMA assignment. We thus leave for another day the question of a pension fund’s independent
standing to intervene in a process like the NMA.
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outcomes. An inter-union dispute process like the NMA establishes the jurisdiction for pension
contribution claims, and must be challenged through its own procedures. The Eighth Circuit has
held, for instance, that a union pension fund was not entitled to collect contributions from a
project assigned to another union, since the assignment of that project had placed it outside the
bounds of the relevant union’s CBA. McKenzie, 217 F.3d at 585. On relatively similarly facts to
those here, the McKenzie court held that, unless challenged through the inter-union dispute
resolution process, “the Funds are not entitled to contributions for work assigned to members of
a competing union within the jurisdiction of that union.” Id. We have in turn cited McKenzie for
the proposition that a pension fund “should not be able to establish an entitlement to
contributions for work assigned to another union claiming jurisdiction over the work without
invoking procedures for resolving the jurisdictional work assignment issue.” Trs. of B.A.C.
Local 32 Ins. Fund v. Ohio Ceiling & Partition Co., No. 01–1396, 2002 WL 35018235, at *9
(6th Cir. Oct. 4, 2002). That conclusion is equally valid in this case.

The Fund tries to distinguish McKenzie on the basis that “McKenzie involved delinquent
contributions, not withdrawal liability.” If anything, this fact would appear to make McKenzie
more rather than less persuasive in this case. Under ERISA, delinquent contributions mean that
some liability has already accrued, and thus some entity has an entitlement to money, see
29 U.S.C. § 1145. By contrast, no entity has any right to withdrawal liability if no such liability
actually exists. McKenzie is thus applicable to the issues in this case.

In addition, the Fund cites precedents expressing the general point that a plan sponsor is
usually not bound by union conduct, but these cases are not relevant to this dispute. These
precedents show only that plan sponsors can exercise already-extant rights, but they do not
demonstrate any independent power to assess liability by a fund. For example, the Fund points
to the fact that the Supreme Court has held that a coal company could not withhold plan
contributions because the beneficiary union had gone on strike. Lewis v. Benedict Coal Corp.,
361 U.S. 459, 466 (1960). In that case, however, the coal company had pledged to pay the fund
a specific royalty per ton of coal produced, and had produced that amount of coal. Id. at 461–62,
466. Here, by contrast, the Fund’s claim did not involve an amount certainly accrued, but rather
a liability that never existed in the first place. Likewise, the Fund’s observation that ERISA
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requires payment from “[e]very employer who is obligated to make contributions to a
multiemployer plan under the terms of the plan” without reference to others’ defenses, see
29 U.S.C. §1145, only begs the question of whether Stevens was so obliged to make those
contributions here. If Stevens was not otherwise obliged to contribute, then Stevens did not
violate this prohibition against not paying required contributions by not contributing sums that
Stevens did not owe.

The Fund also identifies various precedents holding that plan sponsors are not subject to
estoppel or waiver based on union action, but those cases’ procedural rules do not answer the
point that substantive liability does not exist here. The Fund contends that Stevens should not
avoid withdrawal liability just because Local 17 did not challenge the assignment of work to
millwrights through the NMA. It is true that we have held in a deficient-contribution case that a
union’s failure to comply with terms in a CBA “cannot affect the [pension] Funds’ right to
collect contributions that are due and owing to the Funds.” Operating Eng’rs Local 324 Health
Care Plan v. G & W Const. Co., 783 F.3d 1045, 1053 (6th Cir. 2015). As G&W Construction
also states, however, this prohibition only applies to contributions that are “due and owing to the
Funds.” Id. The Fund identifies no precedent stating that a union’s failure to challenge work
assignments can allow a fund to collect contributions not otherwise owed to that fund.

Indeed, our precedents strongly emphasize the primacy of parties’ prior arrangements in
assessing when liability accrues, since “[f]unds are entitled to rely on the written terms of an
existing ERISA plan document or collective bargaining agreement.” Id. (citing Cent. States, Se.
& Sw. Areas Pension Fund v. Gerber Truck Serv., Inc., 870 F.2d 1148, 1153 (7th Cir. 1989)). In
this case, that prior arrangement stated that work assignments would stand as assigned through
the job-assignment process, and pension liability follow accordingly, unless challenged at the
time of assignment. Because the Fund did not accrue any rights to contribution from work
assigned to another craft through the NMA, or otherwise enjoy a right to challenge those
assignments, permitting re-assessment now would prove inconsistent with that obligation.
 Nos. 16-4098/ Stevens Eng’rs & Constr. v. Local 17 Iron Workers, et al. Page 15
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IV.

In addition to its main argument on power rigging, the Fund points to tasks—drilling
holes for rebar and unloading machinery—completed by Stevens workers but not discovered by
the Fund before it assessed withdrawal liability on Stevens, and the Fund argues that these tasks
permit its assessment of withdrawal liability. The district court ruled questionably that the Fund
could not use after-acquired information to justify its imposition of withdrawal liability,3 but in
any event this information does not subject Stevens to liability to the Fund.

The Fund first points to the fact that it discovered that laborers employed by Stevens
drilled holes for rebar installation, but drilling holes in preparation for rebar installation was not
within the mandatory jurisdiction of the Local 17 CBA. The craft jurisdiction section of that
CBA claimed for the ironworkers the “unloading, handling, fabrication, re-fabrication, erection,
and dismantling of structural, ornamental, reinforcing steel, metals, plastic, composite and
engineered materials.” This list does not include the preparation of a site for metal installation
(as opposed to the installation itself), and there was evidence from the arbitration hearing that
drilling holes for rebar installation did not fall within the mandatory jurisdiction of the
ironworkers. The Fund objects that Stevens had assigned drilling work to ironworkers in the
past; however, prior practice does not suffice to form withdrawal liability unless the CBA
required the work to be assigned to the ironworkers, see 29 U.S.C. § 1383(b). The Fund thus
does not offer evidence that this drilling constituted work per se requiring contributions from
Stevens, as opposed to only requiring contributions if assigned to the ironworkers.

The Fund also identifies the fact that millwrights unloaded machinery from trucks as
work conducted within Local 17’s jurisdiction. The NMA, however, permitted assigning this
work to non-ironworkers. Because the unloading was assignable work through the NMA, it did

3
The relevant section of the MPPAA creates a presumption that “any determination made by a plan sponsor
under [the MPPAA] is presumed correct unless the party contesting the determination shows by a preponderance of
the evidence that the determination was unreasonable or clearly erroneous.” 29 U.S.C. § 1401(b)(3)(A). The
Supreme Court has held that this provision means that an arbitrator “is not only obliged to enquire into the
soundness of the sponsor’s determinations when they are challenged, but may receive new evidence in the course of
his review and adopt his own conclusions of fact.” Concrete Pipe & Prod. of Cal., Inc. v. Constr. Laborers Pension
Tr. for S. Cal., 508 U.S. 602, 623 (1993).
 Nos. 16-4098/ Stevens Eng’rs & Constr. v. Local 17 Iron Workers, et al. Page 16
16-4099

not fall within Local 17’s jurisdiction unless granted to Local 17 through the NMA, which did
not happen here. It is true that this occurred before formal assignments at the pre-job conference.
Under the NMA, however, a craft union does not have any right to work assignable to another
union until after the union is assigned the work through a pre-job conference. Here, the
unloading was assignable, and the pre-job conference assigned this work to non-ironworkers.
Because Local 17 thus never had an exclusive claim to this work, it does not constitute work
imposing liability on Stevens, and the Fund could not use that work to justify withdrawal
liability.

V.

Finally, the various irregularities during the construction process do not lead to
withdrawal liability because Stevens was not responsible for them. The Fund identified two
instances in which Stevens employees or agents conducted work unquestionably within the duty
of ironworkers. In the first case, some carpenters or laborers installed a small portion of rebar on
the site. In the second, millwrights installed grating and handrails around a machine. In both
instances, however, Stevens did not order this work, was not aware of this work, and ordered it
terminated as soon as Stevens learned of it. Under Ohio law, the governing law here, an
employer is not responsible for those acts outside the scope of employment, and work is only in
the scope of a worker’s employment if it is conduct of the kind which he is employed to perform.
Groob v. KeyBank, 843 N.E.2d 1170, 1177 (Ohio 2006). Here, Stevens assigned ironworker
work exclusively to the ironworkers, and neither authorized nor condoned the non-ironworkers
performing that work. The district court thus did not err in finding that Stevens was not
responsible for work done outside Stevens’s control.

VI.

The judgment of the district court is affirmed.