No Signature, No Problem: How Conduct Can Bind an Employer to an Agreement

Tucker Arensberg, P.C.

Tucker Arensberg, P.C.

In a recent case involving the Steelworkers Pension Trust (the “SPT”) versus Republic Steel, a federal magistrate judge in the Western District of Pennsylvania ordered Republic Steel to pay the SPT nearly $1.4 million for unpaid contributions and damages under 29 U.S.C. § 1132(g)(2).  Steelworkers Pension Tr. v. Republic Steel, 2023 U.S. Dist. LEXIS 3046, at *8 (W.D. Pa. Jan. 4, 2023).

As a contributing employer to the SPT, Republic Steel is signatory to at least one collective bargaining agreement (CBA) between it and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union. The CBA requires Republic Steel to make pension contributions to the SPT for certain work.  The CBA does not, however, expressly set forth the rates of interest and liquidated damages to be applied for any late or unpaid contributions owed.  The SPT utilizes a separate agreement – the Pension Incorporation Agreement – which sets forth additional requirements relating to an employer’s contributions to the SPT, and, in addition, incorporates the SPT’s Declaration of Trust.  Of note, the Declaration of Trust provides for an interest rate of 1.25% per month on all late or unpaid contributions, along with 10% liquidated damages. 

Republic Steel argued that because it did not sign the Pension Incorporation Agreement, it is not bound to the Declaration of Trust and its terms.  Accordingly, Republic Steel argued that the interest rate and liquidated damages amount demanded by the SPT were punitive.  Thus, Republic Steel argued that a lower interest rate, such as the rate set forth by the PBGC, and a lower liquidated damages amount should apply.

The Court ruled in favor of the SPT, finding that the SPT met its burden to show that although Republic Steel did not sign the Pension Incorporation Agreement, it followed certain requirements set forth in that Agreement.  Thus, it was clear that through Republic Steel’s conduct, it intended to be bound by the Pension Incorporation Agreement, which, in turn, incorporates the SPT’s Declaration of Trust and the applicable interest rate and liquidated damages amount for delinquencies.  After the Court’s ruling and the parties’ joint stipulation as to additional amounts owed, the Court ordered Republic Steel to pay $1,198,580.75 in monthly contributions, $67,663.75 in interest, $133,499.23 in liquidated damages, and the SPT’s attorneys’ fees and costs.

Ian Grecco served as first-chair trial counsel. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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