Central States Southeast & Southwest Areas Pension Fund v. Zenith Logistics, Inc., No. 20-3438 (7th Cir. 2022)
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The employers agreed that for the duration of two collective bargaining agreements (CBAs), they would make pension contributions on behalf of covered employees to the Pension Fund. Both CBAs contained “evergreen clauses” that extended them a year at a time until either party provided timely written notice expressing an “intention to terminate.” Both were to expire in January 2019. After the window for timely notice of intention to terminate on that date, the employers and the union signed new CBAs requiring pension contributions to a different fund beginning in February 2019. The employers notified the Fund that they were ceasing contributions, relying on letters the union sent in November 2018.
The Seventh Circuit reversed the dismissal of the Fund’s lawsuit. Those letters did not express the union’s intent to terminate the existing CBAs, so as to satisfy the evergreen clause's termination procedure. The letters did not mention termination. They noted the date that the CBAs would expire and expressed a desire to meet to negotiate new agreements; neither of these points communicated an intent to terminate the existing agreements. In the context of an evergreen clause, expiration and termination are distinct concepts. A desire to negotiate a new contract is quite consistent with a desire to leave the existing agreement in place until a new deal is reached. The old agreements renewed under the evergreen clauses; the employers remained obligated to contribute to the Fund for one more year.
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