Central States Southeast and Southwest Areas Pensi v. Pack Expo Services, LLC

Plain English (For Everyone)

A pension fund tried to collect money from a company called Pack Expo, claiming it was responsible for debts of another company, P.E.S. Holdings. The court said no, because the two companies weren't sufficiently connected. They didn't share ownership or control over employees, so Pack Expo doesn't have to pay the old company's pension debt.

For Legal Practitioners

The Seventh Circuit affirmed summary judgment for Pack Expo, holding that Central States failed to establish 'single employer' status under ERISA. The court emphasized the lack of common ownership and centralized control of labor relations, finding the evidence insufficient to pierce the corporate veil and impose withdrawal liability on Pack Expo for P.E.S. Holdings' obligations.

For Law Students

This case illustrates the 'single employer' test under ERISA for withdrawal liability. The Seventh Circuit affirmed summary judgment, finding that the plaintiff failed to demonstrate common ownership, interrelation of operations, or centralized control of labor relations between P.E.S. Holdings and Pack Expo, thus preventing the aggregation of their liabilities.

Newsroom Summary

A federal appeals court ruled that a company, Pack Expo, is not responsible for the pension debts of a related company, P.E.S. Holdings. The court found the companies were too separate in ownership and management to be considered a single entity for legal liability purposes.

Standard of Review

De novo review. The Seventh Circuit reviews a district court's grant of summary judgment de novo, meaning it examines the record and applies the law independently without deference to the district court's decision.

Procedural Posture

The case reached the Seventh Circuit on appeal from the district court's grant of summary judgment in favor of Pack Expo Services, LLC. The appellant, Central States Southeast and Southwest Areas Pension Fund, challenged this decision.

Burden of Proof

The burden of proof was on Central States to establish that Pack Expo Services, LLC and P.E.S. Holdings, Inc. constituted a 'single employer' for purposes of ERISA withdrawal liability. The standard required sufficient evidence to demonstrate common ownership, interrelation of operations, or centralized control of labor relations.

Legal Tests Applied

Statutory References

Key Legal Definitions

Rule Statements

The "single employer" status is a question of fact, but summary judgment is appropriate if the evidence, viewed in the light most favorable to the non-moving party, would not permit a reasonable jury to find that the entities constitute a single employer.

To establish single-employer status, the plaintiff must show that the entities are sufficiently integrated to be treated as a single employer. This typically requires evidence of common ownership, interrelation of operations, and centralized control of labor relations.

Remedies

Affirmed the district court's grant of summary judgment in favor of Pack Expo Services, LLC.Pack Expo Services, LLC is not liable for the withdrawal liability incurred by P.E.S. Holdings, Inc.

Judges

• Diane P. Wood
• Michael B. Brennan
• Thomas L. Kirsch II

Scenario: You own a small business that contributes to a multiemployer pension fund. You sell the business, and the new owner operates it separately. The pension fund later tries to hold your new business responsible for withdrawal liability from the old business.

Your Rights: You have the right to argue that your new business is not a 'single employer' with the old one if there's no common ownership or centralized control of labor relations, and therefore you are not liable for the prior withdrawal.

What To Do: Gather evidence showing distinct ownership, separate management, and independent control of employees between the old and new businesses. Consult with legal counsel specializing in ERISA to build your defense against withdrawal liability claims.

Is it legal for a pension fund to try and collect withdrawal liability from a company that acquired a business that previously contributed to the fund?

Depends. The pension fund can only collect if the acquiring company is deemed a 'single employer' with the previous company, meaning they share common ownership or centralized control of labor relations. If they are truly separate entities, the acquiring company is likely not liable.

This applies under federal law (ERISA) and is interpreted by federal courts, like the Seventh Circuit.

For Multiemployer Pension Funds

This ruling reinforces the need for pension funds to gather substantial evidence of integration (common ownership, control) when attempting to hold successor or related companies liable for withdrawal obligations. Simply showing some operational overlap may not be enough.

For Businesses that acquire or restructure operations contributing to multiemployer pension plans

This ruling provides clarity that distinct ownership and independent control of labor relations can shield a new entity from the prior withdrawal liability of a predecessor. Businesses should maintain clear separation in these areas to avoid unexpected liabilities.

Q: What is Central States Southeast and Southwest Areas Pensi v. Pack Expo Services, LLC about?

Central States Southeast and Southwest Areas Pensi v. Pack Expo Services, LLC is a case decided by Seventh Circuit on April 28, 2025.

Q: What court decided Central States Southeast and Southwest Areas Pensi v. Pack Expo Services, LLC?

Central States Southeast and Southwest Areas Pensi v. Pack Expo Services, LLC was decided by the Seventh Circuit, which is part of the federal judiciary. This is a federal appellate court.

Q: When was Central States Southeast and Southwest Areas Pensi v. Pack Expo Services, LLC decided?

Central States Southeast and Southwest Areas Pensi v. Pack Expo Services, LLC was decided on April 28, 2025.

Q: Who were the judges in Central States Southeast and Southwest Areas Pensi v. Pack Expo Services, LLC?

The judge in Central States Southeast and Southwest Areas Pensi v. Pack Expo Services, LLC: Kirsch.

Q: What is the citation for Central States Southeast and Southwest Areas Pensi v. Pack Expo Services, LLC?

The citation for Central States Southeast and Southwest Areas Pensi v. Pack Expo Services, LLC is . Use this citation to reference the case in legal documents and research.

Q: What is the main issue in Central States Southeast and Southwest Areas Pension Fund v. Pack Expo Services, LLC?

The main issue was whether Pack Expo Services, LLC should be considered a 'single employer' with P.E.S. Holdings, Inc. for the purpose of holding Pack Expo liable for withdrawal liability incurred by P.E.S. Holdings under ERISA.

Q: Is Central States Southeast and Southwest Areas Pensi v. Pack Expo Services, LLC published?

Central States Southeast and Southwest Areas Pensi v. Pack Expo Services, LLC is a published, precedential opinion. Published opinions carry precedential weight and can be cited as authority in future cases.

Q: What topics does Central States Southeast and Southwest Areas Pensi v. Pack Expo Services, LLC cover?

Central States Southeast and Southwest Areas Pensi v. Pack Expo Services, LLC covers the following legal topics: ERISA withdrawal liability, Multiemployer Pension Plan Amendments Act (MPPAA), Single employer doctrine, Piercing the corporate veil (analogous principles), Control of labor relations, Interrelation of operations.

Q: What was the ruling in Central States Southeast and Southwest Areas Pensi v. Pack Expo Services, LLC?

The court ruled in favor of the defendant in Central States Southeast and Southwest Areas Pensi v. Pack Expo Services, LLC. Key holdings: The court held that to establish "single employer" status under ERISA for withdrawal liability, a plaintiff must demonstrate a "highly integrated" relationship between the entities, including common ownership, interrelation of operations, and centralized control of labor relations.; The court held that mere commonality of business purpose or the presence of some overlapping personnel is insufficient to establish single employer status when other critical factors like common ownership and centralized control of labor relations are absent.; The court held that the evidence presented by Central States did not show sufficient common ownership between P.E.S. Holdings and Pack Expo, as the ownership structures were distinct and changed over time.; The court held that the interrelation of operations was not sufficiently demonstrated, noting that while there was some overlap in services provided, the operational control and day-to-day management were largely separate.; The court held that the control of labor relations was not centralized, as Pack Expo maintained its own hiring, firing, and compensation decisions, distinct from P.E.S. Holdings..

Q: What precedent does Central States Southeast and Southwest Areas Pensi v. Pack Expo Services, LLC set?

Central States Southeast and Southwest Areas Pensi v. Pack Expo Services, LLC established the following key holdings: (1) The court held that to establish "single employer" status under ERISA for withdrawal liability, a plaintiff must demonstrate a "highly integrated" relationship between the entities, including common ownership, interrelation of operations, and centralized control of labor relations. (2) The court held that mere commonality of business purpose or the presence of some overlapping personnel is insufficient to establish single employer status when other critical factors like common ownership and centralized control of labor relations are absent. (3) The court held that the evidence presented by Central States did not show sufficient common ownership between P.E.S. Holdings and Pack Expo, as the ownership structures were distinct and changed over time. (4) The court held that the interrelation of operations was not sufficiently demonstrated, noting that while there was some overlap in services provided, the operational control and day-to-day management were largely separate. (5) The court held that the control of labor relations was not centralized, as Pack Expo maintained its own hiring, firing, and compensation decisions, distinct from P.E.S. Holdings.

Q: What are the key holdings in Central States Southeast and Southwest Areas Pensi v. Pack Expo Services, LLC?

1. The court held that to establish "single employer" status under ERISA for withdrawal liability, a plaintiff must demonstrate a "highly integrated" relationship between the entities, including common ownership, interrelation of operations, and centralized control of labor relations. 2. The court held that mere commonality of business purpose or the presence of some overlapping personnel is insufficient to establish single employer status when other critical factors like common ownership and centralized control of labor relations are absent. 3. The court held that the evidence presented by Central States did not show sufficient common ownership between P.E.S. Holdings and Pack Expo, as the ownership structures were distinct and changed over time. 4. The court held that the interrelation of operations was not sufficiently demonstrated, noting that while there was some overlap in services provided, the operational control and day-to-day management were largely separate. 5. The court held that the control of labor relations was not centralized, as Pack Expo maintained its own hiring, firing, and compensation decisions, distinct from P.E.S. Holdings.

Q: What cases are related to Central States Southeast and Southwest Areas Pensi v. Pack Expo Services, LLC?

Precedent cases cited or related to Central States Southeast and Southwest Areas Pensi v. Pack Expo Services, LLC: Central States, Southeast & Southwest Areas Pension Fund v. Bellco Glass, Inc., 900 F.3d 371 (7th Cir. 2018); Int'l Bhd. of Elec. Workers, Local 134 v. Veolia Nuclear Solutions, Inc., 910 F.3d 992 (7th Cir. 2018); Teamsters Pension Trust Fund of Ill. v. P.I.E. Nationwide, Inc., 910 F.2d 383 (7th Cir. 1990).

Q: What is 'withdrawal liability' under ERISA?

Withdrawal liability is a financial obligation imposed on an employer when it ceases to contribute to a multiemployer pension plan, designed to cover the employer's share of the plan's unfunded vested benefits.

Q: What evidence did Central States present to argue Pack Expo was a 'single employer'?

Central States presented evidence of some overlap in management personnel and business activities between the two entities, but failed to show common ownership or centralized control of labor relations.

Q: Did the court find Pack Expo and P.E.S. Holdings to be a 'single employer'?

No, the court found that Central States did not provide sufficient evidence to establish that Pack Expo and P.E.S. Holdings were a 'single employer' under the relevant legal tests.

Q: What are the key elements of the 'single employer' test?

The key elements are common ownership, interrelation of operations, and centralized control of labor relations. A common parent entity can also be a factor.

Q: Why is 'common ownership' important in the 'single employer' test?

Common ownership is a strong indicator that entities are controlled by the same interests, making it more likely they can be treated as a single employer for liability purposes. Its absence weighs heavily against single employer status.

Q: What does 'centralized control of labor relations' mean in this context?

It means one entity effectively controls the labor policies and decisions (hiring, firing, wages, benefits) for the employees of both entities, rather than each entity managing its own workforce independently.

Q: What happens if a company is found to be a 'single employer'?

If found to be a single employer, all entities within that group can be held jointly and severally liable for the withdrawal liability incurred by any one of them.

Q: What is the significance of the Seventh Circuit's decision?

The decision clarifies that merely showing some operational overlap or shared managers is insufficient to establish 'single employer' status; concrete evidence of common ownership or centralized control is required.

Q: Could P.E.S. Holdings have been liable for its own withdrawal?

Yes, the opinion implies that P.E.S. Holdings, Inc. itself incurred withdrawal liability. The dispute was whether Pack Expo, as a separate entity, was also responsible for that debt.

Q: What if the companies have the same CEO but different owners?

Having the same CEO does not automatically make them a single employer. The court would look for evidence that the CEO was exercising control on behalf of a common ownership group or that labor relations were truly centralized, not just that one person held leadership roles in both.

Q: Can a company avoid withdrawal liability by simply changing its name or corporate structure?

No, if the underlying ownership and control remain substantially the same, courts may disregard the corporate form and treat the entities as a single employer to prevent evasion of liability.

Q: What is the practical implication for businesses that acquire other companies?

Businesses acquiring other companies should carefully assess potential withdrawal liability by examining the target company's relationship with other entities under common control and its history with multiemployer pension plans.

Q: What advice would a lawyer give to a company in Pack Expo's situation?

A lawyer would advise maintaining clear corporate separation, documenting independent operations and labor relations, and being prepared to present evidence of these distinctions if challenged by a pension fund.

Q: What should a pension fund do if it suspects a 'single employer' situation?

The pension fund should conduct thorough due diligence to gather evidence of common ownership, interrelation of operations, and centralized control of labor relations before initiating legal action.

Q: Are there any historical cases that established the 'single employer' doctrine?

The 'single employer' doctrine has evolved through numerous National Labor Relations Board (NLRB) and court decisions over decades, aiming to address situations where businesses attempt to avoid labor obligations through corporate restructuring.

Q: How has the interpretation of 'centralized control of labor relations' evolved?

Early interpretations focused heavily on direct control over hiring and firing. Modern interpretations also consider control over wages, benefits, and overall labor policy, looking at the practical reality of decision-making.

Q: What was the docket number in Central States Southeast and Southwest Areas Pensi v. Pack Expo Services, LLC?

The docket number for Central States Southeast and Southwest Areas Pensi v. Pack Expo Services, LLC is 24-1742. This identifier is used to track the case through the court system.

Q: Can Central States Southeast and Southwest Areas Pensi v. Pack Expo Services, LLC be appealed?

Potentially — decisions from federal appellate courts can be appealed to the Supreme Court of the United States via a petition for certiorari, though the Court accepts very few cases.

Q: What standard of review did the Seventh Circuit apply?

The Seventh Circuit reviewed the district court's grant of summary judgment de novo, meaning they examined the case independently without deference to the lower court's decision.

Q: How does summary judgment work in these types of cases?

Summary judgment is granted if the undisputed facts show that the moving party is entitled to judgment as a matter of law. In this case, the lack of sufficient evidence for 'single employer' status led to summary judgment for Pack Expo.

Q: What is the role of the district court in summary judgment appeals?

The district court initially decides whether to grant summary judgment based on the evidence presented. The appellate court then reviews that decision for legal error.