D.C. Circuit Trims $13 Million Multiemployer Judgment, Rejecting Retroactive Interest Hike and Individual Owner Liability on Withdrawal Liability

Trs. of the IAM Nat’l Pension Fund v. M&K Emp. Sols., LLC, No. 23-7146, — F.4th —-, 2026 WL 1958520 (D.C. Cir. July 7, 2026)

This consolidated appeal arose from a dispute between the Trustees of the IAM National Pension Fund and a family of affiliated truck dealerships operating as M&K Truck Centers. The dealerships were structured through separate “Sales” companies, which operated each location, and “Employee Solutions” (“ES”) companies, which hired and leased employees. Three ES entities signed collective-bargaining agreements requiring contributions to the Fund. When ES Alsip withdrew at the end of 2018, it triggered liability under the Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA”). The district court granted the Fund summary judgment across the board, entering a $13 million judgment and holding a web of entities and two individual owners jointly and severally liable. The D.C. Circuit affirmed in part, reversed in part, and remanded.

The court first addressed the delinquent-contribution claim seeking to hold ES Summit liable for work performed by employees of ES Northern Illinois, a formally separate company that signed no collective-bargaining agreement. Both parties invoked the National Labor Relations Board’s single-employer test, which examines interrelated operations, common management, centralized control of labor relations, and common ownership. The court expressed doubt that the relaxed NLRB standard, rather than the more demanding common-law standard, governs delinquent-contribution claims under ERISA, noting that the statutory control-group rule of 29 U.S.C. § 1301(b)(1) applies only to withdrawal liability under MPPAA. Invoking party-presentation principles, however, the court assumed without deciding that the NLRB test applied. Applying it, the court held that the Fund’s complaint alleged only one of the four factors, common ownership, and therefore failed to plead facts supporting a plausible inference of single-employer status under Federal Rule of Civil Procedure 8(a)(2). The court reversed summary judgment for the Fund and directed entry of summary judgment for the defendants on this claim.

Turning to ES Alsip’s withdrawal liability, the court affirmed the allocation of a partial payment to interest. After defaulting on installment payments, the M&K entities paid roughly $1.8 million, which the Fund credited to accrued interest rather than principal. Applying the common-law “United States Rule,” under which a creditor may allocate a partial payment to outstanding interest first, the court held that ERISA’s interest provisions did not displace that background rule with the requisite clarity, and that the Fund’s demand letter did not constitute an agreement to allocate the payment to principal.

The court reversed, however, on the applicable interest rate. The incorporated Trust Agreement pegged interest to the IRS rate for delinquent taxes. After ES Alsip terminated and withdrew, the trustees amended the Trust Agreement to impose an 18-percent annual rate retroactive to before the withdrawal. Applying the principle that contractual obligations ordinarily cease upon termination unless the terms expressly provide otherwise, the court held that the fixed IRS-rate obligation survived but that the amended 18-percent rate was a new liability the Fund could not impose on an employer that had already withdrawn. The court remanded for recalculation of interest and liquidated damages.

The court then rejected the Fund’s mootness argument, holding it failed to carry its heavy burden where the record did not show which defendant paid the judgment. On the merits, the court affirmed that each ES entity was a single employer with its corresponding Sales entity, and affirmed successor liability on two later-formed entities, Laborforce, LLC and Employee Services, Inc., holding that successor liability is not an independent cause of action but a means of extending liability on the underlying ERISA and MPPAA claims, such that Peacock v. Thomas did not defeat federal-question jurisdiction.

Finally, the court reversed summary judgment holding the individual owners, Chad and Jodi Boucher, personally liable. Rejecting the Fund’s forfeiture argument, the court held that genuine disputes of material fact remained as to whether the Bouchers’ house-flipping operation was a trade or business under common control with ES Alsip under 29 U.S.C. § 1301(b)(1), and whether it had wound down before the withdrawal liability attached.