Firestone Deference for Multiemployer Plan Trustees’ Contract Interpretation and Mandatory MPPAA Arbitration of Withdrawal-Date Disputes

I. Introduction

In Penske Truck Leasing, LP v. Central States Southeast and Southwest Areas Pension Plan (7th Cir. May 29, 2026), the Seventh Circuit resolved a high-stakes dispute between a participating employer, Penske Truck Leasing, L.P. (“Penske”), and a major multiemployer pension plan, the Central States, Southeast and Southwest Areas Pension Plan and its Trustees (“Central States”). The conflict arose from the financial incentives embedded in the Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA”): employers may seek to minimize withdrawal liability, while plans may seek to prevent “adverse selection” and protect funding.

The key flashpoint was Central States’ threat—and eventual decision—to expel a single Penske bargaining unit (Teamsters Local No. 745) from plan participation during bargaining, based on plan concerns that Penske was “lining up” collective-bargaining agreement expiration dates to avoid additional (partial) withdrawal liability. Penske sued to enjoin the expulsion and to obtain a declaration that the Trust Agreement did not authorize it. Central States counterclaimed, seeking a declaration fixing Local 745’s effective withdrawal date—a critical input to the withdrawal liability framework.

The Seventh Circuit’s opinion is notable not for rewriting withdrawal liability math, but for clarifying (1) the standard of judicial review when trustees interpret plan trust documents in an LMRA § 301 contract action, and (2) the breadth and timing of the MPPAA’s mandatory arbitration requirement for disputes “concerning a determination” under the withdrawal liability provisions—including withdrawal-date disputes presented as preemptive declaratory claims.

II. Summary of the Opinion

  • Authority to expel a single bargaining unit affirmed: The court held that Central States’ Trustees had authority under the Trust Agreement’s “Expulsion Provision” (Trust Agreement, art. IV, § 20) to terminate participation of a particular “group” (here, Local 745) without terminating Penske’s other bargaining units.
  • Deferential review applies to trustees’ interpretation: Because the Trust Agreement grants the Trustees “discretionary and final authority” to construe plan documents (Trust Agreement, art. IV, § 17), the court applied Firestone Tire & Rubber Co. v. Bruch-style deference and upheld the Trustees’ reasonable interpretation.
  • Expulsion decision not arbitrary or capricious: On the undisputed facts, Penske’s challenges to the Trustees’ investigation and explanation did not meet the demanding standard for overturning a discretionary plan decision.
  • Counterclaim dismissed for failure to arbitrate under 29 U.S.C. § 1401: The court affirmed dismissal (without prejudice) of Central States’ counterclaim seeking a judicial declaration of Local 745’s withdrawal date, holding that withdrawal-date disputes are quintessentially subject to mandatory MPPAA arbitration and cannot be litigated in federal court before arbitration—even if the plan styles the claim as relating to contributions or asserts that no “determination” has been finalized yet.

III. Analysis

A. Precedents Cited

1. The statutory and policy architecture of withdrawal liability

  • Concrete Pipe & Products of California, Inc. v. Construction Laborers Pension Trust for Southern California, 508 U.S. 602 (1993): Used to explain how multiemployer plans function (portable credits; pooled contributions) and to situate withdrawal liability as Congress’s response to funding risk. The opinion also notes Concrete Pipe’s later role in abrogating other grounds in United Retail & Wholesale Employees Teamsters Union Local No. 115 Pension Plan v. Yahn & Mc Donnell, Inc..
  • Chicago Truck Drivers, Helpers & Warehouse Workers Union (Independent) Pension Fund v. CPC Logistics, Inc., 698 F.3d 346 (7th Cir. 2012): Cited for the economic logic of withdrawal liability and the “death spiral” risk when employers exit.
  • Supervalu, Inc. v. United Food & Commercial Workers Unions & Employers Midwest Pension Fund, 155 F.4th 913 (7th Cir. 2025): Cited for modern Seventh Circuit treatment of the incentives and mechanics of withdrawal liability.
  • Milwaukee Brewery Workers' Pension Plan v. Joseph Schlitz Brewing Co., 513 U.S. 414 (1995): Used for the “death spiral” history and the rule that liability is calculated as of the last day of the plan year preceding the year of withdrawal, not the day of withdrawal.
  • Artistic Carton Co. v. Paper Industry Union-Management Pension Fund, 971 F.2d 1346 (7th Cir. 1992): Cited for MPPAA background and for the post-arbitration standard of federal-court review (law de novo; fact deferential) under § 1401(b)(2).
  • M & K Employee Solutions, LLC v. Trustees of the IAM Nat'l Pension Fund, 608 U.S. —, 146 S. Ct. — (May 21, 2026): Cited to underscore the technical complexity of withdrawal liability calculations and that certain assumptions need not be locked to the measurement date.
  • Central States, Southeast & Southwest Areas Pension Fund v. Safeway, Inc., 229 F.3d 605 (7th Cir. 2000): Used for Central States’ background and the MPPAA “pay now, dispute later” principle during arbitration (also grounded in § 1401(d)).

2. Deference to trustees’ interpretations (Firestone/Trust-law line)

  • Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989), and Conkright v. Frommert, 559 U.S. 506 (2010): The core analytic engine: when plan documents grant discretionary authority to construe terms, courts defer to reasonable trustee interpretations. The Seventh Circuit applies this framework beyond benefits denials and treats it as rooted in trust law.
  • Manny v. Central States, Southeast & Southwest Areas Pension & Health & Welfare Funds, 388 F.3d 241 (7th Cir. 2004), and Exbom v. Central States, Southeast & Southwest Areas Health & Welfare Fund, 900 F.2d 1138 (7th Cir. 1990): Seventh Circuit examples recognizing that Central States trust documents require deference to reasonable trustee constructions.
  • Schneider Moving & Storage Co. v. Robbins, 466 U.S. 364 (1984), and Central States, Southeast & Southwest Areas Pension Fund v. Central Transport, Inc., 472 U.S. 559 (1985): Pre-Firestone Supreme Court cases giving “significant weight” to Central States trustees’ reasonable interpretations of the Trust Agreement (audit authority), supporting the Seventh Circuit’s conclusion that deference is not limited to benefits claims.
  • Oldenburger v. Central States Southeast & Southwest Areas Teamster Pension Fund, 934 F.2d 171 (8th Cir. 1991), and Bagsby v. Central States, Southeast & Southwest Areas Pension Fund, 162 F.3d 424 (6th Cir. 1998): Additional circuit authority treating the Central States documents as conferring interpretive discretion.
  • Borntrager v. Central States Southeast & Southwest Areas Pension Fund, 577 F.3d 913 (8th Cir. 2009), Borntrager v. Central States, Southeast & Southwest Areas Pension Fund, 425 F.3d 1087 (8th Cir. 2005), and Central Hardware Co. v. Central States, Southeast & Southwest Areas Pension Fund, 770 F.2d 106 (8th Cir. 1985): The Seventh Circuit treats Borntrager as a close analogue—Central States expelling an employer based on practices that threaten plan economics—reinforcing deference to trustees and broad construction of adverse-selection type provisions.
  • Trust-law sources (Bogert, The Law of Trusts and Trustees § 559 (2025 ed.); Restatement (Third) of Trusts § 71 cmt. f (A.L.I. 2007)): Not “precedents” in the strict sense, but used to buttress that settlors may grant interpretive discretion and that courts review discretionary exercises for abuse/reasonableness.

3. Rejecting Penske’s attempt to narrow deference via an “ambiguity-first” rule

  • Central States, Southeast & Southwest Areas Pension Fund v. Waste Management of Michigan, Inc., 674 F.3d 630 (7th Cir. 2012), and Neuma, Inc. v. AMP, Inc., 259 F.3d 864 (7th Cir. 2001) (with citations to Grun v. Pneumo Abex Corp., 163 F.3d 411 (7th Cir. 1998) and Ryan v. Chromalloy American Corp., 877 F.2d 598 (7th Cir. 1989)): Penske cited these to argue courts must first decide ambiguity de novo. The Seventh Circuit distinguished them as not addressing a document that confers discretionary interpretive authority.
  • Michels Corp. v. Central States, Southeast, & Southwest Areas Pension Fund, 800 F.3d 411 (7th Cir. 2015), quoting Cottillion v. United Refining Co., 781 F.3d 47 (3d Cir. 2015): Reinforces a limit even under deference: trustee interpretations cannot “controvert the plain language” of the document.
  • Turkiye Halk Bankasi A.S. v. United States, 598 U.S. 264 (2023), quoting Illinois v. Lidster, 540 U.S. 419 (2004): Used as a methodological caution against overreading generalized language in prior opinions beyond their context.

4. Arbitration as mandatory exhaustion under the MPPAA (including withdrawal date)

  • Banner Industries, Inc. v. Central States, Southeast & Southwest Areas Pension Fund, 875 F.2d 1285 (7th Cir. 1989), and Robbins v. Admiral Merchants Motor Freight, Inc., 846 F.2d 1054 (7th Cir. 1988): Establish § 1401 as a mandatory exhaustion requirement (not jurisdictional), requiring parties to arbitrate withdrawal-liability disputes first.
  • Ross v. Blake, 578 U.S. 632 (2016): Supplies the modern rule: courts may not create extra-statutory exceptions to statutory exhaustion requirements unless Congress permits them. The Seventh Circuit uses Ross to resist equitable/workaround exceptions.
  • Exception-line cases (discussed but effectively constrained post-Ross): Central States, Southeast & Southwest Areas Pension Fund v. Slotky, 956 F.2d 1369 (7th Cir. 1992); I.A.M. Nat'l Pension Fund Benefit Plan C v. Stockton Tri Industries, 727 F.2d 1204 (D.C. Cir. 1984); Republic Industries, Inc. v. Central Pennsylvania Teamsters Pension Fund, 693 F.2d 290 (3d Cir. 1982); with later narrowing language in Flying Tiger Line v. Teamsters Pension Trust Fund of Philadelphia, 830 F.2d 1241 (3d Cir. 1987), quoting Grand Union Co. v. Food Employers Labor Relations Ass'n, 808 F.2d 66 (D.C. Cir. 1987); and the recent reaffirmation of rarity in RTI Restoration Technologies, Inc. v. Int'l Painters & Allied Trades Industry Pension Fund, 169 F.4th 140 (3d Cir. 2026). The Seventh Circuit signals that whatever exceptions once existed are, at most, “rare” and not present here.
  • Withdrawal-date disputes specifically require arbitration: Central States, Southeast & Southwest Areas Pension Fund v. Bomar Nat'l, Inc., 253 F.3d 1011 (7th Cir. 2001); Robbins v. Lady Baltimore Foods, Inc., 868 F.2d 258 (7th Cir. 1989); Warner-Lambert Co. v. United Retail & Wholesale Employee's Teamster Local No. 115 Pension Plan, 791 F.2d 283 (3d Cir. 1986). These cases are central: the Seventh Circuit treats the withdrawal date as paradigmatically “concerning a determination” under §§ 1381–1399.
  • Anti-circumvention by relabeling: The court approved the district court’s reliance on Central States, Southeast & Southwest Areas Pension Fund v. Rail Terminal Services LLC, No.18-cv-2372, 2019 WL 2326002 (N.D. Ill. May 31, 2019), which similarly looked through labels to the substance (a withdrawal-date determination).

5. Labor-law and “status quo/impasse” framing

  • General Service Employees Union, Local No. 73 v. NLRB, 230 F.3d 909 (7th Cir. 2000), quoting NLRB v. Emsing's Supermarket, Inc., 872 F.2d 1279 (7th Cir. 1989), and relying on 29 U.S.C. § 158(a)(5) and NLRB v. Katz, 369 U.S. 736 (1962): Penske argued expulsion would force an NLRA violation by preventing “status quo” maintenance. The court rejected the premise in the circumstances presented.
  • RiverStone Group v. Midwest Operating Engineers Fringe Benefit Funds, 33 F.4th 424 (7th Cir. 2022), quoting Laborers Health & Welfare Trust Fund for Northern Calif. v. Advanced Lightweight Concrete Co., 484 U.S. 539 (1988): Used to define “impasse” and to explain why expulsion here effectively indicated bargaining had reached a point where continuation was fruitless.
  • Staffco of Brooklyn, LLC & New York State Nurses Ass'n, 364 NLRB 1500 (2016), pet. denied & pet. granted, 888 F.3d 1297 (D.C. Cir. 2018): Addressed in a footnote and distinguished as factually different (there, the Board assumed the plan would no longer accept contributions and found no impasse).

6. “Arbitrary and capricious” review, but with limits on importing benefits-denial doctrine

  • Van Boxel v. Journal Co. Employees' Pension Trust, 836 F.2d 1048 (7th Cir. 1987): Cited for the general idea that deferential review upholds reasonable decisions even if a court might decide differently.
  • Benefits-denial framework cases cited but carefully cabined: Cerentano v. UMWA Health & Retirement Funds, 735 F.3d 976 (7th Cir. 2013); Speciale v. Blue Cross & Blue Shield Ass'n, 538 F.3d 615 (7th Cir. 2008); Halpin v. W.W. Grainger, Inc., 962 F.2d 685 (7th Cir. 1992); and regulatory/statutory references (29 U.S.C. § 1133; 29 C.F.R. § 2560.503-1(g)); plus Tompkins v. Central Laborers' Pension Fund, 712 F.3d 995 (7th Cir. 2013). The Seventh Circuit’s key move is to refuse to import ERISA claims-procedure rigor into a trustees’ expulsion decision.

7. Contract vs fiduciary framing and litigation conduct cautions

  • Board of Trustees of Watsonville Frozen Food Welfare Trust Fund v. California Cooperative Creamery, 877 F.2d 1415 (9th Cir. 1989), and In re Marchiando, 13 F.3d 1111 (7th Cir. 1994): Support that plan sponsors do not owe fiduciary duties to contributing employers (fiduciary duties run to participants/beneficiaries), weakening Penske’s fairness-based attacks.
  • Original Great American Chocolate Chip Cookie Co. v. River Valley Cookies, Ltd., 970 F.2d 273 (7th Cir. 1992): Used for the blunt contract principle: parties are not each other’s fiduciaries; contract law does not require altruism.
  • Malin v. Hospira, Inc., 762 F.3d 552 (7th Cir. 2014): Cited as a warning against mischaracterizing the record on summary judgment—paired with the panel’s admonition about unsupported accusations of attorney dishonesty.

8. Jurisdictional/appealability scaffolding

  • Samuel C. Johnson 1988 Trust v. Bayfield County, 520 F.3d 822 (7th Cir. 2008), and GNB Battery Technologies, Inc. v. Gould, Inc., 65 F.3d 615 (7th Cir. 1995): Used to explain declaratory-judgment federal-question jurisdiction framing under LMRA § 301.
  • Vesey v. Envoy Air, Inc., 999 F.3d 456 (7th Cir. 2021): Standard summary judgment review.
  • Calumet River Fleeting, Inc. v. Int'l Union of Operating Engineers, Local 150, AFL-CIO, 824 F.3d 645 (7th Cir. 2016): Used to confirm appellate jurisdiction where the district court made clear it was “finished with the case.”

B. Legal Reasoning

1. The opinion’s principal doctrinal move: Firestone deference applies in this LMRA § 301 trust-agreement dispute

The court framed the interpretive dispute as logically prior to the merits: before deciding what the Expulsion Provision means, it had to decide how to review the Trustees’ construction. Because the Trust Agreement expressly grants the Trustees authority to construe the agreement (art. IV, § 17) and makes good-faith constructions binding, the court applied the Firestone/Conkright trust-law approach: the Trustees’ interpretation stands if reasonable.

Critically, the Seventh Circuit rejected Penske’s attempt to impose an “ambiguity-first” de novo step before deference applies. The court treated that approach as context-bound language from cases that did not involve a discretionary interpretive grant, and it warned against lifting generalized language from prior decisions out of context (invoking Turkiye Halk Bankasi A.S. v. United States and Illinois v. Lidster).

2. Scope of expulsion authority: reasonableness, not best reading

Applying deferential review, the court did not need to find the Trustees’ interpretation was the only or even the best reading—only that it was reasonable. It found reasonableness in textual signals that the Trust Agreement contemplates “groups” and expressly states that termination of “one or more” groups does not affect other groups’ continued participation. While acknowledging the provision’s lack of “model” clarity and that some text could be read to favor Penske, the court treated those competing cues as insufficient to defeat a reasonable trustee construction under the contractually delegated interpretive regime.

3. Limits arguments rejected: (i) § 1394(b) uniformity; (ii) NLRA “status quo”

Penske invoked 29 U.S.C. § 1394(b) to argue non-uniform application. The court narrowed § 1394(b) to “plan rules and amendments” tied to withdrawal-liability calculation methods (§§ 1381–1405), not plan governance decisions about expulsion authority. It also emphasized that “uniform operation” does not require identical effects across employers; a rule can be uniform yet have different consequences depending on an employer’s structure.

On the NLRA theory, the court rejected the premise that expulsion necessarily forces an unlawful unilateral change, reasoning that the circumstances strongly indicated an “impasse,” and noting the NLRB’s exclusive authority on the ultimate unfair labor practice question while still finding Penske’s asserted inevitability unpersuasive.

4. “Arbitrary and capricious” review: high-level deference without importing ERISA claims procedures

Even assuming arbitrary-and-capricious review applied, the Seventh Circuit held Penske’s objections—insufficient follow-up questions, incomplete investigation, thin explanation— failed under deference. The court’s important refinement was methodological: it cautioned that the “hard-edged” procedural requirements from ERISA benefit-denial cases (e.g., “full and fair review” under 29 U.S.C. § 1133 and related regulations) do not map neatly onto a trustees’ plan-participation expulsion decision in a dispute with an employer.

A second pillar of the reasoning was relational: Central States owes no fiduciary duty to Penske as an employer. The court used fiduciary-law cases and contract-law principles (Board of Trustees of Watsonville Frozen Food Welfare Trust Fund v. California Cooperative Creamery, In re Marchiando, and Original Great American Chocolate Chip Cookie Co. v. River Valley Cookies, Ltd.) to frame the parties as contractual counter-parties entitled to pursue self-interest, not as principal and fiduciary requiring employer-protective diligence.

The opinion also singled out and rebuked Penske’s insinuation that Central States’ counsel lied to the court, underscoring that such accusations require evidentiary support and invoking professional-conduct concerns (while citing Malin v. Hospira, Inc. as a cautionary comparator on misrepresenting the record).

5. Mandatory arbitration: substance over label, timing over tactics

The most practical holding for future litigation is the court’s firm application of § 1401(a) exhaustion. Central States’ counterclaim sought a judicial declaration that Local 745’s effective withdrawal date should be 2021 (partly to mitigate effects of an intervening TRO). The Seventh Circuit acknowledged the efficiency appeal and the unusual posture, but held that Congress prescribed a “winding path”: plan assessment and demand, employer review request, then arbitration, then judicial review.

The court rejected two attempted workarounds:

  • “No determination made” yet: Central States argued § 1401 did not apply because no final withdrawal-liability “determination” existed. The court refused, warning that such a reading would “hollow out” arbitration and create perverse incentives for both employers and plans to manipulate timing to reach federal court first.
  • “This is about contributions/credits, not withdrawal liability”: The court looked to substance: the plan wanted to know when the obligation to contribute ended, which is a withdrawal question (including under the partial-withdrawal concept in § 1385(a)(2)).

Finally, the court leaned on Ross v. Blake to limit judge-made exceptions to statutory exhaustion. Whatever exceptions might have been recognized historically, the court treated them as at most “rare” and not applicable, especially given that withdrawal-date disputes are repeatedly held arbitrable in Robbins v. Lady Baltimore Foods, Inc., Robbins v. Admiral Merchants Motor Freight, Inc., and Central States, Southeast & Southwest Areas Pension Fund v. Bomar Nat'l, Inc..

C. Impact

1. Litigation posture and plan governance: deference extends beyond benefits denials

This decision reinforces that where a multiemployer plan’s governing documents expressly delegate interpretive power to trustees, courts in the Seventh Circuit will apply deferential review to trustee interpretations even in LMRA § 301 contract litigation over plan participation and employer-plan disputes—not just in participant benefit claims. The holding reduces the payoff of “rebranding” trustee-interpretation disputes as pure contract interpretation subject to de novo review.

2. Employer strategy around bargaining-unit segmentation and withdrawal planning

Substantively, the ruling supports plan sponsors’ ability—when authorized by governing documents—to target particular “groups” for termination to address perceived adverse selection. That matters for employers with multiple bargaining units and staggered CBAs: the plan may have tools short of expelling the employer entirely, and courts may defer to trustees’ reasonable view that the trust agreement permits bargaining-unit-specific action.

3. Tightening the courthouse door on pre-arbitration withdrawal-date declaratory claims

On procedure, the opinion strengthens the practical primacy of MPPAA arbitration by rejecting timing-based avoidance theories. Both employers and plans are put on notice: if the real dispute is the withdrawal date (or other determinations under §§ 1381–1399), federal courts are unavailable until arbitration occurs, even if the claim is packaged as a request about contributions, credits, or the effect of an injunction.

4. Professionalism signal: accusations of attorney dishonesty

Although dicta, the court’s admonition may have downstream effects in briefing norms: unsupported claims that opposing counsel lied in open court can backfire and may invite sanctions or reputational consequences. The message is that merits arguments should not be inflated into ethics charges without proof.

IV. Complex Concepts Simplified

  • Multiemployer pension plan: A single pension fund to which many employers contribute under collective bargaining, allowing employees to change employers without losing pension accrual.
  • Withdrawal liability: A departing employer’s statutory bill for its share of unfunded vested benefits, designed to prevent remaining employers from bearing the cost.
  • Complete vs. partial withdrawal: “Complete” generally means the employer permanently stops having an obligation to contribute; “partial” can be triggered by a partial cessation of that obligation.
  • Effective withdrawal date: The legally operative date of withdrawal, which can matter to whether a withdrawal is partial or complete and to the measurement periods used in the statutory formula.
  • Firestone deference: If plan documents give trustees discretionary authority to interpret the plan, courts uphold trustee interpretations if reasonable, rather than substituting their own best reading.
  • Arbitrary and capricious (as used here): A very deferential standard; a decision stands if it is within the bounds of reasonableness, not whether the court would have decided differently.
  • MPPAA mandatory arbitration (29 U.S.C. § 1401): Disputes about withdrawal liability determinations must be arbitrated first; courts generally cannot hear them until arbitration has occurred.
  • “Pay now, dispute later”: Even while disputing the bill in arbitration, the employer must generally make interim payments as demanded, subject to adjustment later.

V. Conclusion

The Seventh Circuit’s decision delivers two durable rules. First, where a multiemployer plan’s trust documents grant trustees discretionary and final interpretive authority, courts will apply Firestone-style deference to trustees’ reasonable interpretations even in LMRA § 301 litigation over plan participation and expulsion authority. Second, disputes that are substantively about withdrawal liability determinations—especially the withdrawal date—must proceed through § 1401 arbitration before reaching federal court, and neither timing arguments (“no determination yet”) nor relabeling (“this is about contributions/credits”) will unlock premature judicial declarations.