On January 27, 2022, in New York State Teamsters Conference Pension and Retirement Fund v. C&S Wholesale Grocers, Inc., the Second Circuit joined the Third, Seventh, and Ninth Circuits in applying the doctrine of successor liability to claims for withdrawal liability under the Employee Retirement Income Security Act (ERISA). The court did not, however, find successor liability in this case because the acquiring company specifically did not acquire the facility or employees that triggered the liability. The court also held that C&S Grocers (C&S) was not liable for withdrawal liability under an “evade and avoid” theory, as an “employer,” or under a theory of “common control.”
C&S’s Acquisition of Penn Traffic
Penn Traffic Company (Penn Traffic), based in Syracuse, New York, operated a number of retail grocery stores as well as warehouses where it stored wholesale groceries for distribution. Penn Traffic contributed to the New York State Teamsters Conference Pension and Retirement Fund (the Fund) on behalf of its employees, who were members of Teamsters Local 317 at Penn Traffic’s Syracuse warehouse.
In 2008, C&S, a grocery wholesaler, acquired a number of Penn Traffic’s locations and employees. C&S specifically did not acquire the Syracuse warehouse or Penn Traffic’s Teamsters Local 317 unionized employees due to concerns over the potential for withdrawal liability owed to the Fund. Instead, C&S and Penn Traffic entered into an independent...
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