District Court Holds Unenforceable Trust Provision Requiring Attorneys’ Fees for Arbitration

Employers may be bound by multiemployer pension plans’ trust agreements and collections policies, but the force of these governing documents may have its limits. In Nevada Resorts Ass’n–Int’l All. of Theatrical Stage Emps. and Moving Picture Mach. Operators of the U.S. and Canada Local 720 Pension Trust v. JB Viva Vegas, L.P., No. 2:19-cv-00499, 2024 WL 1345288 (D. Nev. Mar. 29, 2024), a district court held unenforceable a provision in the plan’s trust agreement that would have required an employer to pay the attorneys’ fees the plan incurred in connection with the arbitration the employer filed to challenge the plan’s withdrawal liability assessment. The court held that the provision was preempted by 29 C.F.R. §§ 4221.10 and 4221.14(b)(5), which the PBGC promulgated pursuant to 29 U.S.C. § 1401(a)(2) to govern how withdrawal liability arbitrations are to be conducted. The court held that those regulations only allow an arbitrator to award attorneys’ fees if a party is…