The Pennsylvania General Assembly has given us another
opportunity to expand our employee benefit plan boundaries discussion. This
time, the discussion applies to multiemployer plans in the construction
industry. It has been reported that Rep. William Keller, D-Philadelphia,
introduced a bill in the General Assembly to amend the state’s Mechanics’ Lien
Law to classify union benefit fund trustees as subcontractors allowed to pursue
claims for nonpayment against employers and property owners. This action followed
a Pennsylvania Supreme Court ruling that unions and benefit fund trustees do
not qualify as subcontractors as a result of collective bargaining agreements
with employers.
There is one small problem with this bill: the Employee
Retirement Income Security Act (ERISA). ERISA sets forth the procedure for fund
trustees to collect for nonpayment, and would seemingly preempt such a state
law. Federal courts have exclusive jurisdiction over these cases, and there are
many such cases filed every day. The law is very favorable to the fund
trustees, incidentally.
What happens if the Pennsylvania General Assembly amends its
state law to allow benefit fund trustees to pursue claims as subcontractors?
Pennsylvania employers get into a boundary dispute with fund trustees regarding
ERISA preemption, parties argue over whether the cases can be removed to
federal court, and Pennsylvania state courts potentially issue erroneous
rulings that fail to recognize ERISA preemption. In the last Pennsylvania state
court ERISA preemption case I blogged
about, it took 19 years to establish ERISA preemption. While I root for the
Cleveland Browns and Johnny Football, I don’t wish that hardship even on
Pittsburgh Steelers fans.
Source: Employee
Benefits Law Report
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