Advocates for Labor and Progressive Institutions

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Bakery workers prevail in first appellate decision interpreting certain recent amendments to the federal Pension Protection Act

April 26, 2018

In the first Court of Appeals decision interpreting certain recent amendments to the federal Pension Protection Act, the United States Court of Appeals for the Fourth Circuit affirmed a ruling that candy maker Just Born II, Inc. (“Just Born”), is required to make pension contributions on behalf of newly hired employees at its Philadelphia manufacturing facility and that its defenses were properly dismissed.

Bakery & Confectionery Union & Indus. Int’l Pension Fund v. Just Born II, Inc., No. 17-1369, 2018 WL 1956009 (4th Cir. Apr. 26, 2018). In December 2014, Congress amended the Pension Protection Act to permit certain pension funds in critical status to compel participating employers to continue contributing to the fund after the expiration of a collective bargaining agreement. The Bakery and Confectionery Union and Industry International Pension Fund (“Pension Fund”) invoked that provision against Just Born, which had stopped contributing to the Pension Fund on behalf of newly hired employees at its Philadelphia factory after the expiration of its collective bargaining agreement and impasse in negotiations toward a successor agreement. The Court of Appeals affirmed the District Court’s ruling that the provision permitted the Pension Fund to demand continued payments and rejected Just Born’s contrary reading of the new law. The Court of Appeals also affirmed dismissal of Just Born’s defenses, ruling that plan sponsors and actuaries may make changes in the actuarial assumptions on which a certification of critical status is based, as long as the new assumptions are reasonable. Bredhoff & Kaiser represented the Pension Fund before the Court of Appeals and the District Court.