7th Circuit orders closer scrutiny in union pension fund suit


A federal judge in Indianapolis has been ordered to take a closer look at whether a successor company can be held liable for money allegedly taken from a union pension benefit fund.

The 7th Circuit Court of Appeals remanded for a second time a ruling in favor of Indianapolis-based ManWeb Services, Inc., the defendant in a suit brought by the Indiana Electrical Workers Pension Benefit Fund. The pension fund claims ManWeb’s predecessor, known as Freije, withdrew from the pension fund and owes a liability of $661,978.

The union sued ManWeb as a successor in interest, but District Senior Judge Sarah Evans Barker granted summary judgment in favor of ManWeb, concluding the fund had not shown sufficient continuity of service to support successor liability.

“We find ourselves in respectful disagreement with our colleague on the District Court,” the 7th Circuit panel wrote Monday in Indiana Electrical Workers Pension Benefit Fund, et al. v. ManWeb Services, Inc., 16-2840.

“In the totality of relevant circumstances, ManWeb’s purchase of and use of Freije’s intangible assets — its name, goodwill, trademarks, supplier and customer data, trade secrets, telephone numbers and websites — and its retention of Freije’s principals to promote ManWeb to existing and potential customers as carrying on the Freije business under ManWeb’s larger umbrella, weigh more heavily in favor of successor liability than the district court recognized. We vacate the district court’s decision and remand for further consideration of this equitable determination,” Judge David Hamilton wrote.

Senior Judge Daniel Manion concurred in a separate opinion.

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