Resilient Floor Covering Pension Trust Fund Board of Trustees v. Michael's Floor Covering, Inc.

We decide in this case two related issues: (1) whether a successor employer, both generally and in the construction industry in particular, can be subject to withdrawal liability under the Multiem-ployer Pension Plan Amendments Act (“MPPAA”), 29 U.S.C. § 1381-1453 , amendments to the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq.; and (2) if so, what factors are most relevant to determining whether a construction industry employer is a successor for purposes of imposing MPPAA withdrawal liability. We conclude that a construction industry successor employer can be subject to MPPAA withdrawal liability, so long as the successor took over the business with notice of the liability. We also hold that the most important factor in assessing whether an employer is a successor for purposes of imposing MPPAA withdrawal liability is whether there is substantial continuity in the business operations between the predecessor and the successor, as determined in large part by whether the new employer has taken over the economically critical bulk of the prior employer’s customer base.

The district court, after a bench trial, held Defendant-Appellee Michael’s…