Einhorn v. M.L. Ruberton Const. Co., 632 F.3d 89 (3d Cir. 2011). When two firms merge, the successor firm may be liable for delinquent ERISA fund contributions of the predecessor. But where one entity buys the assets of another, liability “is not well settled,” as Judge Sloviter wrote in the Third Circuit’s opinion in this case. The Third Circuit vacated a summary judgment in favor of the successor, laid out the applicable law, and remanded for a determination of whether there should be successor liability.
The court observed that Congress had “adopted a policy of protecting ERISA funds against delinquent contributors to a degree that is greater than that afforded by the common law of contracts.” Following a number of other federal courts, the Third Circuit held that “a purchaser of assets may be liable for a seller’s delinquent ERISA fund contributions to vindicate important federal statutory policy where the buyer had notice of the liability prior to the sale and there exists sufficient evidence of continuity of operations between the buyer and seller.” That inquiry, Judge Sloviter stated, must occur on a case by case basis, balancing the equities.