Opinion ID: 445295
Heading Depth: 2
Heading Rank: 2

Heading: Involuntary Withdrawal Because of Union Action

Text: 40 Thompson strongly argues that withdrawal liability is unfair because Thompson's withdrawal was involuntary, and was prompted by the union's unilateral disclaimer of representation. The record is silent on why the union withdrew, but Thompson does not allege that the withdrawal was improperly motivated. This court is not faced, therefore, with the question whether a union legitimately could withdraw as a deliberate tactic to impose withdrawal liability on an employer. 41 Thompson also claims that the assessment of withdrawal liability of $103,156.52 constitutes a taking of property without compensation. Withdrawal liabilities under the MPPAA, however, cannot be deemed a taking because such interference arises from [a] public program adjusting the benefits and burdens of economic life to promote the common good, Penn Central Transp. Co. v. New York City, 438 U.S. 104, 124, 98 S.Ct. 2646, 2659, 57 L.Ed.2d 631 (1978). The employer's liability is assessed in rough proportion to the shortfall of the employer's contributions to the vested benefits of the employer's employees. This liability is not so onerous or unfair as to constitute an unconstitutional taking. 42 Thompson concedes that Congress considered whether to adopt special liability rules for involuntary employer withdrawals caused by union action, but deferred decision pending a special study by the PBGC. See MPPAA, Pub.L. No. 96-364, Sec. 412(a)(1)(B), 94 Stat. 1208, 1309 (1980). 7 This deferral indicates that Congress intended to allow withdrawal liability to attach in the interim. We therefore must consider whether Congress' inaction pending the study was rational. 43 At the outset we note that many, if not most, employer withdrawals are involuntary to some degree, but no appellate court has found that factor relevant. See, e.g., Keith Fulton, 741 F.2d at 458 (logical for Congress not to distinguish between withdrawals on the basis of voluntariness); The Washington Star, 729 F.2d at 1506 (employer ceased publication because of financial difficulties); Standard Dye, 725 F.2d at 846 (liquidation due to rising costs). Withdrawal liability attaches, not as a punishment for the employer's malice or willfulness in withdrawing from the plan, but to protect the vested pension interests of the employees. See 29 U.S.C. Sec. 1001a(c)(3). In effect, the statute shifts to the employer the risks of business hazards that might cause withdrawal, presumably because the employer is in a better position to anticipate and insure against them. If employers escaped liability merely because their withdrawals were involuntary, a major protective feature of the MPPAA would be undercut. 44 Thompson suggests that union-forced withdrawals are qualitatively different. The union ought not to be allowed to bargain for a pension plan, then hold the sword of withdrawal liability over the employer's head. Congress, however, reasonably might have assumed union-forced withdrawals would be rare and should be treated no differently from other business risks. Further, as we noted above, Thompson itself has obtained benefits from offering the pension and must bear responsibility for meeting its employees' legitimate expectations. Even if Thompson escapes liability, the Fund's shortfall will not become the union's responsibility; it will be made up, if at all, by increasing contributions of other participating employers or by reducing benefits of the employees. Either alternative endangers the Fund, and defeats the policies of the Act. 45 In light of the difficult questions surrounding the union action exception, Congress' decision to study the problem before legislating appears reasonable. We decline to read an exception into the statute.