Introduction

The Seventh Circuit’s decision in Central States, Southeast & Southwest Areas Pension Fund v. Univar Solutions USA Inc. (No. 24-1348, decided 31 July 2025) resolves a deceptively narrow but recurring issue in labor-benefit litigation: What language is sufficient to terminate a collective bargaining agreement (CBA) that contains an evergreen (automatic-renewal) clause when the CBA also contains a separate “modifications” clause?

The Fund, representing Teamsters-affiliated workers, sued Univar after the company stopped contributing to a multiemployer pension fund in July 2021. The district court—focusing on the evergreen clause—held that the CBA automatically renewed because Univar’s January 2021 letter was “ambiguous.” The Seventh Circuit reversed, holding that the same letter unambiguously terminated the CBA because it did not echo the language required by the modifications clause to keep the contract alive.

The ruling establishes a new, clarifying precedent for the Seventh Circuit: a written notice that proposes “modification or termination” of a CBA is an effective termination notice—despite the presence of the word “modification”—if the CBA itself prescribes a different, more specific formula for modifications that the notice does not follow.

Summary of the Judgment

• The 2016 Univar–Teamsters CBA contained:
  • Section 1: an evergreen clause (automatic one-year renewals unless 60-day written notice of “desire to cancel or terminate” is given);
  • Section 2: a modifications clause requiring notice that the party “desires to continue” the CBA but negotiate “revisions or changes.”
• The CBA was extended once (to 28 Mar 2021) via a 2020 Extension Agreement.
• On 27 Jan 2021 Univar sent a letter stating it “proposes the modification or termination of the [CBA]” and wished to negotiate a successor agreement.
• The company and union later executed a successor CBA that eliminated pension-fund contributions after 3 Jul 2021.
• The Fund sued for unpaid contributions through 28 Mar 2022; the district court sided with the Fund.
• The Seventh Circuit reversed:
  • The 2020 Extension did not displace the evergreen clause.
  • The January 2021 letter satisfied the evergreen clause’s termination requirement because it failed to invoke the modifications-clause language that would have kept the agreement alive.
  • Therefore, the CBA terminated on 28 Mar 2021; Univar owed no contributions after 3 Jul 2021; the fee award to the Fund was vacated.

Analysis

1. Precedents Cited

Aluminum Co. of America v. NLRB, 159 F.2d 523 (7th Cir. 1946)

• Addendum “part of” original CBA cannot override evergreen clause.
• The court analogized the 2020 Extension to Alcoa’s addendum, holding that the evergreen clause remained intact.

Central States Pension Fund v. Transervice Logistics, 56 F.4th 516 (7th Cir 2022)

• Strict enforcement of evergreen clauses for the benefit of ERISA plans.
• Explained that a mere negotiation request does not equal termination.
• Used here to distinguish Univar’s letter, which, although mentioning “modification,” carried termination language absent a desire to “continue” the agreement.

Oil, Chemical & Atomic Workers v. American Maize Products, 492 F.2d 409 (7th Cir 1974)

• CBA provided separate notice regimes for termination and amendment.
• Union’s “modify” letter held sufficient to terminate because it did not limit itself to specified sections.
• The controlling analogy: Univar’s notice mirrored American Maize; absence of modifications-clause language signified termination of the entire CBA.

Gerber Truck Service, 870 F.2d 1148 (7th Cir 1989)

• Emphasized strict, text-based enforcement of CBAs under ERISA §§ 502 & 515.

Office & Professional Employees Local 95 v. Wood County Tel., 408 F.3d 314 (7th Cir 2005)

• Reaffirmed that notice must comply with specific contractual language to be effective.
• Cited to reinforce the need to compare notice with the CBA’s express terms.

2. Legal Reasoning

1. Evergreen Clause Survives a Date-Certain Extension.
   The extension incorporated itself “into” the 2016 CBA, so it merely shifted the renewal’s trigger date to 28 Mar 2021 rather than extinguish the clause.
2. Dual-Notice Structure Controls Interpretation.
   Because the CBA provided two distinct pathways—termination notice (Section 1) vs. revision notice (Section 2)—the court read Univar’s letter against both clauses. The absence of a statement that Univar “desired to continue” the CBA (the linchpin of Section 2) was dispositive.
3. Strict-Yet-Contextual Standard.
   While the court espoused “strict compliance,” it employed a contextual reading: the letter’s words had to be measured against each clause’s purpose. The result is a refined standard: where a CBA expressly distinguishes between “continue-and-revise” and “terminate,” any notice omitting the “continue” language but invoking termination is presumptively a termination notice—even if it also uses the word “modify.”
4. Effect on ERISA Contribution Liability.
   Once termination was recognized, Univar’s subsequent successor CBA (permitted under the NLRA) eliminated its ERISA contribution duty; therefore, the Fund’s claim under §§ 502 & 515 failed.

3. Impact of the Decision

• Clarity for Employers and Unions. Parties in the Seventh Circuit now have a clearer template for drafting and responding to notices around evergreen clauses.
• Higher Drafting Stakes for Funds. Multiemployer plans can no longer assume that any letter referencing “modification” is benign; they must scrutinize notices for the critical “desire to continue” language.
• Potential Forum Split. Other circuits (e.g., D.C., Ninth) have occasionally required more explicit “terminate” wording. If those courts disagree with the Seventh Circuit’s contextual approach, Supreme Court review could be invited.
• CBA Negotiation Strategy. Unions may insist on more elaborate modification clauses and explicit boilerplate for termination to avoid inadvertent cessation of contributions.
• ERISA Collection Litigation. Funds litigating in the Seventh Circuit will need to plead detailed allegations about notice language and comply with the new standard at the motion-to-dismiss stage.

Complex Concepts Simplified

• Evergreen Clause. A contractual provision that automatically renews a CBA for successive periods unless one party gives timely written notice of termination.
• Modifications Clause. A separate clause allowing parties to keep the CBA alive while negotiating changes. Typically requires language expressing the party’s desire to “continue” the agreement.
• ERISA §§ 502 & 515. Federal statutes allowing pension funds to sue employers to collect promised contributions and requiring employers to pay as the CBA dictates.
• Successor CBA. A new collective bargaining agreement that supersedes the old one; may contain drastically different terms (here, an exit from the Fund).
• Standard of Review (de novo). The appellate court re-examines the legal questions from scratch, giving no deference to the district court’s conclusions.

Conclusion

Central States v. Univar crystallizes an important clarification in labor-benefit law: a letter that combines the words “modify or terminate” can validly terminate a CBA if the contract itself sets out a more exacting formula for mere modifications and the letter does not employ that formula.

By harmonizing older precedents (Alcoa, American Maize) with the modern ERISA-centric demands of Transervice Logistics, the decision supplies a bright—yet context-sensitive—rule for parties navigating evergreen clauses. Going forward, employers, unions, and pension funds in the Seventh Circuit must pay careful attention to every verb and clause in termination or negotiation letters; the cost of imprecision—be it unexpected liability for contributions or loss of anticipated funding—can be substantial.