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Courts may be inclined in some withdrawal liability cases to narrowly apply the building and construction industry exemption based on the nature and location of the work performed, based on a recent decision.

It is commonly understood by union contractors that contribute to a multiemployer pension fund on behalf of their employees that the building and construction industry exemption will protect them and they will not owe withdrawal liability if they cease operations. Only if they “go non-union” do they potentially face withdrawal liability.

While that is correct as a general proposition, some employers may discover that the exemption may not apply to them depending on the nature of the work their union employees perform and where they perform it – and can cost them significantly.

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