ST. LOUIS (LN) — The Eighth Circuit on Tuesday affirmed a lower court’s ruling that General Electric qualified for the building-and-construction industry exemption from pension withdrawal liability, adopting GE’s preferred method for counting employees under a provision of the Multiemployer Pension Plan Amendments Act.
The Boilermaker-Blacksmith National Pension Trust had assessed roughly $205 million in partial withdrawal liability against GE under the 70% contribution-decline test, plus an additional $22 million tied to closure of a Chattanooga manufacturing facility. GE disputed both assessments, asserting it qualified for the BCI exemption, and an arbitrator agreed. The district court upheld the arbitrator’s decision, and the Eighth Circuit affirmed.
At issue was how to determine whether substantially all of GE’s employees at three relevant entities—APCom Power, Alstom Power, Inc., and Atlantic Plant Maintenance—performed work and construction industry under 29 U.S.C. § 1383(b)(1)(A). The parties stipulated that substantially all means 85 percent of covered workers. But the statute is silent on whether to calculate that threshold using a monthly snapshot or a cumulative count over the relevant lookback period.
Under the monthly headcount method, a snapshot is taken each month, and GE qualifies only if field workers exceed 85 percent of total workers in most months. Under the cumulative headcount method, all workers over the entire lookback period are added together, and GE qualifies if field workers account for more than 85 percent of that total. The parties agreed: under the monthly method, GE does not qualify for the exemption; under the cumulative method, it does.
The court held the statute ambiguous on the counting question. Neither method is a precise fit, but the panel concluded the cumulative method better reflects congressional intent. The court noted that Congress recognized construction work is tied to an area rather than a particular employer, and that the intermittent nature of construction employment means an employer’s ceasing work in an area normally does not remove jobs from the plan’s contribution base.
The monthly headcount method is linked to the parties’ collective bargaining agreement, which requires contributions on a monthly basis. The Fund argued this scheduling choice should guide the headcount calculation. The court rejected that reasoning, holding the employer’s obligation to contribute runs to all hours worked, regardless of how the parties schedule their payments.
The arbitrator had found that GE clearly and consistently engaged in the construction industry and did not deviate from its substantial construction operations during the relevant period—unlike the employer in Robinson Cartage Co., which had shifted away from covered work. Because GE remained, the cumulative method better accommodates natural fluctuations in construction employment, the court said.
The Chattanooga Claim rises and falls with the 70% Decline Claim, so the panel did not separately address it.
The Fund was represented by the National Coordinating Committee for Multiemployer Plans as amicus. Employer Associations appeared as amicus for GE.