The Third Circuit dealt with the Multiemployer Pension Plan Amendments Act of 1980 (the MPPAA), which amended part of ERISA (the Employee Retirement Income Security Act of 1974). The MPPAA was designed to penalize employers who back out of multiemployer pension plans early, thereby “sticking remaining employers with a much higher bill.” Here, a contractor hired a construction and trucking company to work on a project, which stalled. The contractor backed out, though it had agreed to contribute to the union truck drivers’ multiemployer pension fund. When the contractor withdrew, the pension fund sent a letter demanding more than twice what the company had earned on the project as its penalty under the MPPAA. The contractor filed suit to contest the fee, and the fund demanded arbitration, noting that the MPPAA mandates that “employers” must arbitrate any claims. However, the MPPAA does not define “employer”. The District Court held that the company was an employer and ordered the parties to arbitrate the dispute. The Third Circuit joined seven sister circuits in defining “employer” as “an entity obligated to contribute to a plan either as a direct employer or in the interest of an employer of the plan’s participants.” Under that definition, the company was an employer.
