The Pennsylvania General Assembly has given us another opportunity to expand our employee benefit plan boundaries discussion. This time, the discussion applies to multiemployer plans in the construction industry. It has been reported that Rep. William Keller, D-Philadelphia, introduced a bill in the General Assembly to amend the state’s Mechanics’ Lien Law to classify union benefit fund trustees as subcontractors allowed to pursue claims for nonpayment against employers and property owners. This action followed a Pennsylvania Supreme Court ruling that unions and benefit fund trustees do not qualify as subcontractors as a result of collective bargaining agreements with employers.
There is one small problem with this bill: the Employee Retirement Income Security Act (ERISA). ERISA sets forth the procedure for fund trustees to collect for nonpayment, and would seemingly preempt such a state law. Federal courts have exclusive jurisdiction over these cases, and there are many such cases filed every day. The law is very favorable to the fund trustees, incidentally.
What happens if the Pennsylvania General Assembly amends its state law to allow benefit fund trustees to pursue claims as subcontractors? Pennsylvania employers get into a boundary dispute with fund trustees regarding ERISA preemption, parties argue over whether the cases can be removed to federal court, and Pennsylvania state courts potentially issue erroneous rulings that fail to recognize ERISA preemption. In the last Pennsylvania state court ERISA preemption case I blogged about, it took 19 years to establish ERISA preemption. While I root for the Cleveland Browns and Johnny Football, I don’t wish that hardship even on Pittsburgh Steelers fans.