Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-88-02938/USCOURTS-ca10-88-02938-0/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 

---

ROBERT L. H_OECKER 

U.ERK 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

UNITED STATES COURTHOUSE 

DENVER, COLORADO 80294 

May 22, 1990 

To: ALL RECIPIENTS OF THE CAPTIONED OPINION 

Re: No. 88-2938; Trustees of Colorado Pipe Industry Pension Trust 

v. Howard Electrical 

Published opinion filed on May 18, 1990 by Honorable Bobby R. 

Baldock, United States Circuit Judge. 

Please make the following corrections in the opinion of this 

court filed on May 18, 1990: 

·Page 4, line 2: Change "December 1984" to December 1983" 

(303) 844-3167 

FIB 664.-3167 

Page 7, line 15: Change "errant employees" to "errant employers" 

By 

Very truly yours, 

rr.T L. 

/~~~~'- Patrick Fisher 

Chief Deputy Clerk 

CLERK 

Appellate Case: 88-2938 Document: 010110295879 Date Filed: 05/22/1990 Page: 1
PUBLISH 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

TRUSTEES OF THE COLORADO PIPE 

INDUSTRY PENSION TRUST, an express 

trust, 

Plaintiff-Appellant, 

and 

) 

) 

) 

) 

) 

) 

) 

) 

TRUSTEES OF COLORADO PIPE INDUSTRY ) 

INSURANCE TRUST, an express trust; ) 

PLUMBERS LOCAL UNION NO. 3, United ) 

Association of Journeymen and ) 

Apprentices of the Plumbing and ) 

Pipefitting Industry of the United ) 

States and Canada; and PIPEFITTERS ) 

LOCAL NO. 208, United Association of ) 

Journeymen and Apprentices of the ) 

Plumbing and Pipefittings Industry ) 

of the United States and Canada, ) 

Plaintiffs, 

vs. 

HOWARD ELECTRICAL & MECHANICAL INC., 

a Colorado Corporation; and HOWARD 

SYSTEMS, Inc., a Colorado 

Corporation, 

Defendants-Appellees, 

and 

JACORE, INC., a Colorado 

Corporation, 

Defendant. 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

FI LED 

Uoited States Court of Appeals 

Tenth Circuit 

[1~/4Y 1 8 1990 

ROBERT L HOECKER 

Clerk 

No. 88-2938 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLORADO 

(D.C. No. 86-M-2561) 

Appellate Case: 88-2938 Document: 010110295879 Date Filed: 05/22/1990 Page: 2
James C. Fatter, of Hornbein, MacDonald, Fatter & Hobbs, Denver, 

Colorado, for Plaintiff-Appellant. 

Earl K. Madsen, of Bradley, Campbell & Carney, Golden, Colorado, 

for Defendants-Appellees. 

Before*SEYMOUR and BALDOCK, Circuit Judges, and SEAY, District 

Judge. 

BALDOCK, Circuit Judge. 

Plaintiff-appellant trustees sought to collect withdrawal 

liability from defendant-appellee employer for the unions' 

multiemployer pension fund. The district court dismissed the 

action for lack of jurisdiction. We hold that the district court 

had jurisdiction to adjudicate the plaintiff's claim for 

withdrawal liability, and that the defendants waived their 

defenses to withdrawal liability by failing to arbitrate. Our 

jurisdiction over this appeal arises under 28 u.s.c. § 1291. We 

reverse with instructions to enter summary judgment for the 

plaintiff. 

I • 

The Colorado Pipe Industry Pension Fund (the fund) is an 

express trust established to provide retirement benefits for 

employees in the plumbing and pipefitting industry in the State of 

* The Honorable Frank H. Seay, Chief Judge, United States 

District Court for the Eastern District of Oklahoma, sitting by 

designation. 

-2-

Appellate Case: 88-2938 Document: 010110295879 Date Filed: 05/22/1990 Page: 3
Colorado. The fund operates a multiemployer pension plan1 as 

defined under the Employment Retirement Income Security Act, 29 

U.S.C. §§ 1001-1462 (ERISA). Defendant-appellee Howard Systems, 

Inc. is the parent of wholly-owned subsidiary and defendantappellee Howard Electrical & Mechanical, Inc. (Howard), a Colorado 

corporation engaged in the construction business. This action 

between Howard and the trustees arises out of a labor dispute 

between Howard and Plumbers Local Union No. 3 and Pipefitters 

Local Union No. 208 (the unions). In our disposition of the 

instant case, we consider both the dispute between Howard and the 

unions and the dispute between Howard and the trustees. 

Unions' Unfair Labor Practices Action 

In May 1981, Howard executed collective bargaining agreements 

with the unions. Under this agreement, Howard was obligated to 

contribute to the fund at a specified rate for each hour worked by 

the unions' members. When the collective bargaining agreement 

expired in May 1983, Howard and the unions were unable to agree 

upon a new contract. Paramount among the parties' disagreements 

1 ERISA defines a multiemployer plan as follows: 

The term 'multiemployer plan' means a plan--

(i) to which more than one employer is 

required to contribute, 

(ii) which is maintained pursuant to one 

or more collective bargaining agreements 

between one or more employee 

organizations and more than one employer, 

and 

(iii) which satisfies such other 

requirements as the Secretary may 

prescribe for regulation. 

29 U.S.C. § 1002(37)(A). 

-3-

Appellate Case: 88-2938 Document: 010110295879 Date Filed: 05/22/1990 Page: 4
was Howard's insistence on hiring "pre-apprentice," non-union 

employees to perform unit work. In December 1984, Howard 

presented its "final" offer to the unions, asserted that an 

impasse existed, and informed the unions that it intended to 

implement its final offer at the beginning of the new year. 

Howatd hired its first pre-apprentice pipefitter in April 1984 and 

its first pre-apprentice plumber the following May. 

Based upon Howard's unilateral action, the unions brought an 

unfair labor practice action before the National Labor Relations 

Board (NLRB). An ALJ concluded that, at the time Howard 

instituted the unilateral act of hiring pre-apprentice employees, 

the parties had bargained to a valid impasse; 2 thus under 

applicable labor law, Howard was entitled to institute unilateral 

changes in the work place. Howard Elec. & Mechanical, Nos. 27--

CA--8889, 8889-2, 8924, unpub. order at 37 (NLRB Apr. 8, 1987). 

However, the NLRB reversed, declining to consider whether Howard 

and the unions had reached impasse. See Howard Elec. & 

Mechanical, 293 NLRB No. 51, slip op. at 9-11, NLRB Dec. (CCH) 

, 15,455 (March 29, 1989). Rather, the NLRB found that Howard's 

hiring of the pre-apprentice employees constituted an unfair labor 

practice because the unions had not agreed to exclude the preapprentice employees from the bargaining unit and NLRB proceedings 

2 Parties to labor negotiations reach an impasse at "that point 

at which [they] have exhausted the prospects of concluding an 

agreement and further discussions would be fruitless ...• 11 R. 

Gorman, Basic Text on Labor Law 448 (1976). Whether an impasse 

exists is a matter of judgment involving, among other things, the 

parties' good faith, their bargaining history and the importance 

of the issue over which disagreement exits. Id. 

-4-

Appellate Case: 88-2938 Document: 010110295879 Date Filed: 05/22/1990 Page: 5
were never instituted to change the scope of the unit. Id. The 

unions ''were not required to bargain about" the scope of the 

bargaining unit, id. at 12; thus, Howard's implementation of its 

pre-apprentice proposal constituted an unfair labor practice, id. 

at 12-13. The NLRB ordered Howard to: 1) restore the status quo 

existing at the time the collective bargaining agreement expired 

and 2) resume bargaining with the unions until a new contract was 

agreed upon or a valid impasse reached. 3 Id. at 13. 

Trustees' Withdrawal Liability Action 

In May 1986, during the pendency of the unions' unfair labor 

practices action, the trustees informed Howard that it was subject 

to withdrawal liability under the Multiemployer Pension Plan 

Amendments Act of 1980, 29 U.S.C. §§ 1381-1462 (MPPAA). The 

trustees calculated Howard's withdrawal liability at $555,852 and 

demanded payment. Howard did not arbitrate the disputed 

liability, a prerequisite to maintaining a defense to withdrawal 

liability under§ 1401 of the MPPAA. The trustees then brought 

the present action against Howard seeking: 1) postcontract 

contributions under§ 1132(g)(2) of ERISA for contributions 

accrued after expiration of the collective bargaining agreement 

and 2) withdrawal liability of $255,032 under§ 1381 of the MPPAA. 

The trustees moved for summary judgment on the withdrawal 

liability claim, contending that Howard had waived all defenses to 

3 The NLRB's decision currently is on appeal. NLRB v. Howard, 

appeal docketed, No. 89-9532 (10th Cir. May 24, 1989). 

-5-

Appellate Case: 88-2938 Document: 010110295879 Date Filed: 05/22/1990 Page: 6
its withdrawal liability by failing to arbitrate, 29 u.s.c. 

§ 140l(b). Howard also moved for summary judgment arguing that, 

according to the Supreme Court's recent holding in Laborers Health 

& Welfare Fund for N. Cal. v. Advanced Lightweight Concrete Co., 

484 U.S. 539 (1988), the district court lacked jurisdiction over 

the trustees' action. The trustees conceded that Advanced 

Lightweight Concrete was dispositive of their§ 1132(g)(2) claim 

for postcontract contributions, but contended that the case did 

not bar federal jurisdiction over the withdrawal liability claim 

brought under§ 1381. The district court, however, dismissed the 

entire action for lack of jurisdiction holding that "the unfair 

labor practice charges brought by the unions and still pending 

before the NLRB are matters for which the NLRB has exclusive 

jurisdiction and precludes this court from proceeding in this 

matter." Trustees of Colo. Pipe Indus. Pension Trust v. Howard 

Elec. & Mechanical, Inc., No. 86-M-2561, unpub. order at 4 (D. 

Colo. Nov. 28, 1988). 

II. 

This case requires us to construe the respective 

jurisdictional bases of two statutory remedies available to 

multiemployer pension plans: ERISA and the MPPAA. This circuit 

has not considered whether a federal court which lacks 

jurisdiction over an action brought under§ 1132(g)(2) of ERISA 

can nevertheless maintain jurisdiction over an§ 1381 action 

brought under the MPPAA. This jurisdictional issue presents a 

-6-

Appellate Case: 88-2938 Document: 010110295879 Date Filed: 05/22/1990 Page: 7
question of law subject to de novo review. Williams Natural Gas 

Co. v. Oklahoma City, 890 F.2d 260 n.7 (10th Cir. 1989). 

A. 

Congress enacted ERISA, "to ensure that employees and their 

beneficiaries would not be deprived of anticipated retirement 

benefits by the termination of pension plans before sufficient 

funds have been accumulated in the plans." Pension Benefit Guar. 

Corp. v. R. A. Gray & Co., 467 U.S. 717, 720 (1984). Toward that 

end, ERISA creates a statutory obligation requiring that employers 

contribute to multiemployer plans in accordance with their 

contractual obligations. 4 29 u.s.c. § 1145. ERISA also provides 

trustees of multiemployer plans with a remedy to collect 

delinquent contributions, plus interest and attorney's fees, from 

errant employees. 5 29 U.S.C. § 1132(g)(2). 

4 

5 

The statute provides: 

S 1145 Delinquent contributions 

Every employer who is obligated to make 

contributions to a multiemployer plan under 

the terms of the plan or under terms of a 

collectively bargained agreement shall, to the 

extent not inconsistent with law, make such 

contributions in accordance with the terms and 

conditions of such plan or such agreement. 

According to the statute: 

In any action under this title by a fiduciary 

for or on behalf of a plan to enforce[§ 1145] 

in which a judgment in favor of the plan is 

awarded, the court shall award the plan--

(A) the unpaid contributions, 

(B) interest on the unpaid contributions, 

(footnote continued to next page) 

-7-

Appellate Case: 88-2938 Document: 010110295879 Date Filed: 05/22/1990 Page: 8
In 1980, Congress amended ERISA to establish special rules 

governing multiemployer pension plans. These amendments were 

necessary because, under ERISA, employers could withdraw from a 

multiemployer pension plans without paying their share of the 

unfunded vested benefit liability, thereby threatening the 

solvency of such plans. Advanced Lightweight Concrete, 484 U.S. 

at 545; Joyce v. Clyde Sandoz Masonry, 871 F.2d 1119, 1120 (D.C. 

Cir.), cert. denied, 110 s. Ct. 280 (1989); Woodward Sand Co. v. 

Western Conference of Teamsters Pension Trust Fund, 789 F.2d 691, 

694 (9th Cir. 1986). 

As enacted, the [MPPAA] requires that an 

employer withdrawing from a multiemployer 

pension plan pay a fixed and certain debt to 

the pension plan. This withdrawal liability 

is the employer's proportionate share of the 

plan's 'unfunded vested benefits' calculated 

as the difference between the present value of 

vested benefits and the current value of the 

plan's assets. 29 u.s.c. § 1381, 1391. 

(footnote continued from previous page) 

(C) an amount equal to the greater of--

(i) interest on the unpaid 

contributions, or 

(ii) liquidated damages provided for 

under the plan in an amount not in 

excess of 20 percent (or such higher 

percentage as may be permitted under 

Federal or State law) of the amount 

determined by the court under 

subparagraph (A), 

(D) reasonable attorney's fees and costs of 

the action, to be paid by the defendant, 

and 

(E) such other legal or equitable relief as 

the court deems appropriate ••.• 

29 u.s.c. § 1132(g)(2). 

-8-

Appellate Case: 88-2938 Document: 010110295879 Date Filed: 05/22/1990 Page: 9
Gray, 467 U.S. at 725. The MPPAA empowers trustees of 

multiemployer plans to maintain actions for withdrawal liability 

and vests federal courts with jurisdiction over such disputes. 6 

29 U.S.C. § 145l(a) & (c). 

Under the MPPAA, an employer becomes subject to withdrawal 

liability once it "permanently ceases to have an obligation to 

contribute" to a multiemployer pension fund. 7 29 u.s.c. 

§ 1383(a)(l). ''[T]he term 'obligation to contribute' means an 

obligation arising--(1) under one or more collective bargaining 

(or related) agreements, or (2) as a result of a duty under 

applicable labor-management relations law. " 29 u.s.c. 

6 The statute provides in pertinent part: 

S 1451 Civil Actions 

(a) Persons entitled to maintain actions. (1) 

A plan fiduciary ••• who is adversely 

affected by the act or omission of any party 

under this subtitle [29 u.s.c. §§ 1381 et 

seq.] with respect to a multiemployer plan •• 

• may bring an action for appropriate legal or 

equitable relief, or both. 

. . . (c) Jurisdiction of Federal and State Courts. 

The district courts of the United States shall 

have exclusive jurisdiction of an action under 

this section without regard to the amount in 

controversy, except that State courts of 

competent jurisdiction shall have concurrent 

jurisdiction over an action brought by a plan 

fiduciary to collect withdrawal liability. 

7 An employer may, however, suspend contributions to a 

multiemployer plan during a labor dispute without incurring 

withdrawal liability under the MPPAA. 29 U.S.C. § 1398(2). 

Moreover, if an employer rejoins a multiemployer plan after 

previously withdrawing, its liability is subject to abatement. 

u.s.c. §§ 1387, 1388. 

-9-

29 

Appellate Case: 88-2938 Document: 010110295879 Date Filed: 05/22/1990 Page: 10
§ 1392(a). Under§ 1392(a)(l), the employer's obligation to 

contribute arises from contractual agreements requiring the 

employer to contribute to a multiemployer fund. Once such a 

contact expires, the employer no longer has an obligation to 

contribute under§ 1392(a}(l). See Woodward Sand, 789 F.2d at 

695. An employer's obligation to contribute under§ 1392(a}(2) 

derives from the employer's statutory duty to maintain the status 

quo after the expiration of a collective bargaining agreement to 

"promote[] industrial peace by fostering a non-coercive atmosphere 

that is conducive to serious negotiations of a new contract." 

Advanced Lightweight Concrete, 484 U.S. at 544 n.6 (quotations 

omitted). 

Pursuant to the National Labor Relations Act, 29 u.s.c. §§ 

141-197 (NLRA), an employer's abrogation of terms and conditions 

of an expired collective bargaining agreement during negotiation 

of new agreement may constitute an unfair labor practice. See, 

~' NLRB v. Katz, 369 U.S. 736, 743 (1962). Thus, where an 

employer has an obligation to contribute to a pension plan under a 

collective bargaining agreement, the NLRA may obligate the 

employer to continue contributing to the fund after the contract 

has expired. See Advanced Lightweight Concrete, 484 U.S. at 543-

44 n.5 & 6; Woodward Sand, 789 F.2d at 695. So long as an 

employer is required to contribute to a multiemployer pension plan 

by the NLRA, it maintains an obligation to contribute under 

§ 1392(a)(2) of the MPPAA. Consequently, absent a procedural 

default, the employer cannot be assessed for withdrawal liability. 

-10-

Appellate Case: 88-2938 Document: 010110295879 Date Filed: 05/22/1990 Page: 11
An employer ceases to have an obligation to contribute under 

§ 1392(a)(2) of the MPPAA once it bargains to impasse with its 

employees' unions. Once impasse is reached between the parties, 

an employer's NLRA-imposed duty to maintain the status quo during 

postcontract negotiations is extinguished, Advanced Lightweight 

Concrete, 484 U.S. at 543 n.5 (citing American Ship Bldg. Co. v. 

NLRB, 380 U.S. 300, 318 (1960)), and the employer may take 

reasonable unilateral action without violating the NLRA, Newspaper 

Printing Corp. v. NLRB, 625 F.2d 956, 966 (10th Cir. 1980), cert. 

denied, 450 U.S. 911 (1981); Rozay's Transfer v. Local Freight 

Drivers, Local 208, 850 F.2d 1321, 1332 (9th Cir. 1988), cert. 

denied, 109 s. ct. 1768 (1989). 8 

B. 

The district court held that Advanced Lightweight Concrete 

posed a jurisdictional bar both to adjudication of the trustees' 

action for postcontract contributions and their claim for 

withdrawal liability. In Advanced Lightweight Concrete, a pension 

fund sought postcontract contributions under§ 1132(g)(2) of 

ERISA, based upon an employer's failure to maintain the status 

8 Even upon reaching impasse, an employer's obligation to 

contribute is not extinguished under the MPPAA where the employer 

is otherwise contractually bound. See~, Cuyamaca Meats v. San 

Diego & Imperial Counties Butchers' & Food Employers' Pension 

Trust Fund, 827 F.2d 491, 497-99 (9th Cir. 1987) (where employer 

expressly contracted to continue contributing to pension fund 

through August, the fact that the parties reached impasse in May 

did not extinguish employer's obligation to contribute triggering 

employer withdrawal liability before August), cert. denied, 485 

U.S. 1008 (1988). --

-11-

Appellate Case: 88-2938 Document: 010110295879 Date Filed: 05/22/1990 Page: 12
quo. 484 U.S. at 542. The Supreme Court noted that the 

employer's postcontract obligation to contribute was derived, not 

from ERISA, but from the NLRA. Id. at 545-46. The Supreme Court 

therefore held that, under§ 1132(g)(2) of ERISA, original federal 

jurisdiction was limited to actions for contractual contributions; 

contributions owed solely as a result of a noncontractual 

statutory duty to maintain the status quo properly are sought 

initially in an action before the NLRB. Id. at 548-49. See, 

~, Central States Pension Fund v. Behnke, Inc., 883 F.2d 454, 

464 (6th Cir. 1989) (where pension plan trustees' § 1132(g)(2) 

action against employer for postcontract contributions arose from 

independent contractual promise in interim agreement, the district 

court properly exercised jurisdiction under Advanced Lightweight 

Concrete). 

In the instant case, the trustees sought noncontractual 

contributions under§ 1132(g)(2) of ERISA for the period after the 

expiration of the collective bargaining agreement between Howard 

and the unions. The only source of Howard's obligation to make 

these payments was the NLRA requirement that it maintain the 

status quo during the period of negotiation before impasse. 

Therefore, as conceded by the trustees, Advanced Lightweight 

Concrete poses a jurisdictional bar to adjudication of their 

§ 1132(g)(2) action in district court. 

The district court also held that Advanced Lightweight 

Concrete precluded federal jurisdiction over the trustees' action 

for MPPAA withdrawal liability. We disagree. Advanced 

-12-

Appellate Case: 88-2938 Document: 010110295879 Date Filed: 05/22/1990 Page: 13
Lightweight Concrete involved the "narrow category of suits 

seeking recovery of unpaid [noncontractual] contributions accrued 

during the period between contract expiration and [bargaining] 

impasse." Laborers Health & Welfare Trust Fund v. Advance 

Lightweight Concrete Co., 779 F.2d 497, 505 (9th Cir. 1985), 

aff'd, 484 U.S. 539 (1988). The employer's liability in Advanced 

Lightweight Concrete for postcontract contributions was predicated 

upon a generalized duty imposed by the NLRA to maintain the status 

quo. In contrast, Howard's withdrawal liability rests upon a 

separate cause of action specially created by Congress, 29 u.s.c. 

§ 1381. In Advanced Lightweight Concrete, by relying entirely 

upon ERISA to support federal jurisdiction, 484 U.S. at 543 n.4, 

plaintiffs essentially were attempting to hitch a remedial ERISA 

wagon to a NLRA horse. Here, Congress has created a distinct 

federal remedy--withdrawal liability-- and explicitly vested 

federal courts with jurisdiction to adjudicate such claims. 29 

u.s.c. § 145l(c). See Central States Southeast & Southwest Areas 

Pension Fund v. Houston Pipe Line Co., 713 F. Supp. 1257, 1253 n.9 

(N.D. Ill. 1989) (claim for withdrawal liability "cannot remotely 

be deemed an unfair labor charge" bared under Advanced Lightweight 

Concrete). 

Although impasse usually is an issue determined by the NLRB 

in an unfair labor practices charge, district courts may "find it 

necessary to decide whether an impasse occurred in withdrawal 

liability cases in which there is a dispute over the date of 

withdrawal." Advanced Lightweight Concrete, 484 U.S. at 552 n.19. 

-13-

Appellate Case: 88-2938 Document: 010110295879 Date Filed: 05/22/1990 Page: 14
See,~, Woodward Sand, 789 F.2d at 695 (remanding MPPAA action 

to district court for determination of whether an impasse had been 

reached); I.A.M. Nat. Pension Fund Benefit Plan C v. Schulze Tool 

& Die Co., 564 F. Supp. 1285, 1296-98 (N.D. Cal. 1983) (granting 

summary judgment in MPPAA action on question of impasse). 

Although this determination technically presents a labor law 

question, impasse is an issue collateral to the independent 

federal remedy of withdrawal liability and does not therefore 

defeat federal jurisdiction. See Advanced Lightweight Concrete, 

484 U.S. at 543 n.4; Connell Constr. Co. v. Plumbers & 

Steamfitters Local Union No. 100, 421 U.S. 616, 626 (1975) 

("federal courts may decide labor law questions that emerge as 

collateral issues in suits brought under independent federal 

remedies."). 

III. 

Having held that the district court had jurisdiction to 

adjudicate the trustees' MPPAA action against Howard for 

withdrawal liability, we now must consider the effect of Howard's 

failure to ,arbitrate. Federal courts presented with the question 

of whether arbitration is required under the MPPAA uniformly have 

addressed the question as an issue of exhaustion of administrative 

remedies, not as an absolute jurisdictional bar. See Mason & 

Dixon Tank Lines v. Central States, Southeast & Southwest Areas 

Pension Fund, 852 F.2d 156, 163 (6th Cir. 1988); Robbins v. 

Admiral Merchants Motor Freight, 846 F.2d 1054, 1056 (7th Cir. 

-14-

Appellate Case: 88-2938 Document: 010110295879 Date Filed: 05/22/1990 Page: 15
1988); Central States Southeast & Southwest Areas Pension Fund v. 

T.I.M.E.-DC, 826 F.2d 320, 325-28 (5th Cir. 1987); I.A.M. Nat. 

Pension Fund v. Clinton Engines, 825 F.2d 415, 417 & n.4 (D.C. 

Cir. 1987). 

"[A]rbitration reigns supreme under the MPPAA." Id. at 422. 

The MPPAA provides: "Any dispute between an employer and the plan 

sponsor of a multiemployer plan concerning a determination made 

under [29 u.s.c. §§ 1381-1399] shall be resolved through 

arbitration." 29 u.s.c. § 140l(a)(l) (emphasis supplied). An 

employer's withdrawal liability first is determined by the plan 

sponsor, 29 u.s.c. §§ 1382, 1399(b)(l), whereupon the employer has 

ninety days to request a recalculation, 29 u.s.c. § 1399(b)(2). 

Once the employer has responded to this request, or upon the 

elapse of 120 days, the employer has sixty days to request 

arbitration. 29 u.s.c. § 140l(a)(l). Failure to initiate 

arbitration within this statutory period has a harsh result--the 

amount demanded by the pension plan sponsor becomes due and owing. 

If no arbitration proceeding has been 

initiated ••• the amounts demanded by the 

plan sponsor under [29 u.s.c. § 1399(b)(l)] 

shall be due and owing on the schedule set 

forth by the plan sponsor. The plan sponsor 

may bring an action in a State of Federal 

court of competent jurisdiction for 

collection. 

29 U.S.C. § 140l(b)(l). By failing to arbitrate, an employer thus 

waives any defenses to collection actions that could properly have 

been heard before the arbitrator. See In re Centric Corp., No. 

-15-

Appellate Case: 88-2938 Document: 010110295879 Date Filed: 05/22/1990 Page: 16
89-1080, slip op. at 8-9 (10th Cir. Apr. 23, 1990); McNicholas, 

848 F.2d at 23-24; Clinton, 825 F.2d at 429. 

In enacting the MPPAA, Congress sought to channel disputes 

over withdrawal liability into the informal and expeditious 

procedure of arbitration. Teamsters Pension Trust Fund v. Allyn 

Transp. Co., 832 F.2d 502, 504 (9th Cir. 1987). Thus, in addition 

to performing the technical function of calculating an employer's 

withdrawal liability, MPPAA arbitrators may determine whether an 

employer has completely withdrawn from a plan, id. at 506, resolve 

labor issues to the extent necessary to determine whether an 

employer has withdrawn, see New York Teamsters Conference Pension 

& Retirement Fund v. McNicholas Transp., 848 F.2d 20, 23 (2d Cir. 

1988), and engage in statutory interpretation of the MPPAA, Allyn, 

832 F.2d at 506; Flying Tiger Lines v. Teamster Pension Trust Fund 

of Philadelphia, 830 F.2d 1241, 1247 (3d Cir. 1987). On the other 

hand, arbitration may be bypassed in cases involving 

constitutional questions, Marvin Hayes Lines v. Central States, 

Southeast & Southwest Areas Pension Fund, 814 F.2d 297, 300 (6th 

Cir. 1987); Republic Indus. v. Teamsters Council No. 83 of 

Virginia Pension Fund, 718 F.2d 628, 635 (4th Cir. 1983), 

questions of statutory interpretation outside the MPPAA, Flying 

Tiger, 830 F.2d at 1253-55, and allegations of fraud, Carl 

Colteryahn Dairy Inc. v. Western Pa. Teamsters & Employers Pension 

Fund, 847 F.2d 113, 118-19 (3d Cir. 1988). Moreover, because "a 

failure to arbitrate does not waive a defense that the employer 

does not yet have," an employer who fails to arbitrate may still 

-16-

Appellate Case: 88-2938 Document: 010110295879 Date Filed: 05/22/1990 Page: 17
assert a laches defense in a subsequent collection action. 

Centric, slip op. at 10. Under the MPPAA, the arbitrator's 

factual findings are presumed correct, 29 u.s.c. § 140l(b); 

however, district courts review the arbitrator's legal conclusions 

de novo. Trustees of Amalgamated Ins. Fund v. Geltman Indus. 784 

F.2d 926, 929 (9th Cir. 1986). 

Howard does not dispute the Draconian result produced by an 

employer's failure to arbitrate. However, Howard contends that, 

because its withdrawal liability hinges upon labor law questions 

adjudicated before the NLRB, i.e., the existance of an impasse, 

the arbitrator lacked jurisdiction to determine whether Howard had 

a duty to contribute to the fund. In advancing this argument, 

Howard has confused jurisdiction with preclusion. Under settled 

principles of preclusion, relitigation of issues adjudicated 

before the NLRB in a subsequent MPPAA action is barred by 

collateral estoppel, to the extent that the issues are identical 

and their resolution was essential to the NLRB's determination. 

See United States v. Utah Constr. Co., 384 U.S. 394, 422 (1966); 4 

K. Davis, Administrative Law Treatise§ 21:3 at 51-52 (1983); 

Restatement (Second) Judgments§ 83. Thus, in determining whether 

Howard had a continuing duty to contribute to the fund under 29 

u.s.c. § 1392(a), both the arbitrator and the district court on 

review would be obligated to accord collateral estoppel effect to 

the NLRB's findings. Indeed, a MPPAA arbitrator may, in his 

discretion, elect to stay proceedings pending resolution of a 

prior NLRB action. Nevertheless, this preclusionary obligation 

-17-

Appellate Case: 88-2938 Document: 010110295879 Date Filed: 05/22/1990 Page: 18
does not divest arbitrators of jurisdiction over MPPAA claims 

involving labor law issues nor obviate the consequences of an 

employer's failure to arbitrate. Even if Howard would have 

prevailed in arbitration, by failing to take this statutorily 

required procedural step, Howard waived its defenses to withdrawal 

liability. See 29 U.S.C. § 140l(b)(2). The trustees therefore 

are entitled to judgment as a matter of law. See McNicholas, 848 

F.2d at 23-24: Robbins, 846 F.2d at 1057: Allyn, 832 F.2d at 506. 

We recognize the severity of this result and note the criticism to 

which§ 1401 of the MPPAA has been subjected. See,~, Woodrum 

& McBride, Controlled Group Liability Under the Multiemployer 

Pension Plan Amendments Act: Liability Without a Limit, 90 w. va. 

L. Rev. 731, 735 (1988) ("a federal court collection action by a 

plan against an employer who has failed to navigate the shoals of 

arbitration is tantamount to obtaining a default judgment."): 

Comment, MPPAA Withdrawal Liability Assessment: Letting the Fox 

Guard the Henhouse, 14 Fordham Urb. L. J. 211, 236 (1986) 

(criticizing MPPAA arbitration procedure). Nevertheless, Congress 

deemed that this harsh remedy was appropriate when it enacted the 

MPPAA and we decline to second-guess its judgment here. 

The district court shall enter judgment for the trustees. 

REVERSED and REMANDED. 

-18-

Appellate Case: 88-2938 Document: 010110295879 Date Filed: 05/22/1990 Page: 19