Local 144 Nursing Home Pension Fund v. Demisay
Headline: Limits courts from ordering transfers of employer pension fund assets; Court blocks federal power to force multiemployer trust transfers and narrows who can supervise pension plans
Holding: The Court held that §302(e) does not let federal courts issue injunctions forcing a multiemployer trust or its trustees to transfer assets or supervise plan administration to satisfy §302(c)(5).
- Prevents federal courts from ordering asset transfers under §302(e).
- Leaves ERISA and state law remedies available on remand.
- Sends the appeals court decision back for ERISA-based review.
Summary
Background
A group of employers left a larger employer association and set up their own bargaining deals with the union. The original multiemployer pension and welfare funds (the Greater Funds) continued to hold reserves that the departing employers had formerly contributed to. The departing employers, some employees, and trustees of the new Southern Funds asked a federal court to order the Greater Funds to transfer a fair share of the reserves to the Southern Funds.
Reasoning
The Court addressed whether a federal judge can use §302(e) of the Labor Management Relations Act to force a trust or its trustees to transfer assets or otherwise run the trust to satisfy §302(c)(5)’s requirements. The majority said §302(e) allows courts to stop prohibited payments or receipts, but it does not authorize courts to supervise trust administration or order asset transfers to make a fund comply with §302(c)(5). The Court reversed the appeals court, concluding that breaches of trustees’ duties are not themselves violations of §302 that federal courts may cure by directing transfers under that provision.
Real world impact
As a result, federal courts cannot, under §302(e) alone, order multiemployer trusts to restructure or turn over reserves to other funds. Trustees and funds remain subject to ERISA and state trust or contract remedies, and the appeals court may consider those ERISA claims on remand. The ruling rejects the use of §302(e) as a broad tool for supervising pension-plan administration.
Dissents or concurrances
A separate opinion agreed the transfer was not required under §302(c)(5) but argued federal courts have long enforced ongoing §302(c)(5) standards and criticized the majority for narrowing injunctive remedies.
Opinions in this case:
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