Indiana Electrical Workers Pension Benefit Fund v. ManWeb Services, Inc., No. 16-2840 (7th Cir. 2018)Annotate this Case
In 2009, ManWeb, an Indianapolis industrial construction company, paid $259,360 for the assets of Frieje, a smaller Indianapolis construction company specializing in cold‐storage facilities. Freije was a party to a collective bargaining agreement (CBA); ManWeb was non‐union. Freije contributed to a multi-employer pension fund and was required to pay withdrawal liability of $661,978 when it ceased operations (Employee Retirement Income Security Act (ERISA); Multiemployer Pension Plan Amendments Act (MPPAA), 29 U.S.C. 1381). ManWeb did not contribute to the Fund after its purchase of Freije nor did it challenge the assessment. The Fund sued Freije and added ManWeb as a defendant based on successor liability. The Seventh Circuit concluded that ManWeb had notice of Freije’s contingent withdrawal liability, which was included in the Asset Purchase Agreement. On remand, the district court again granted ManWeb summary judgment. The Seventh Circuit vacated. MPPAA successor liability can apply when the purchaser had notice of the liability and there is continuity of business operations. In the totality of relevant circumstances, ManWeb’s purchase and use of Freije’s intangible assets (name, goodwill, trademarks, supplier and customer data, trade secrets, telephone numbers and websites) and its retention of Freije’s principals to promote ManWeb to existing and potential customers as carrying on the Freije business, weigh more heavily in favor of successor liability than the district court recognized.