aimed to shield them from when it enacted the MPPAA.
880 F.2d at 1537. The Court thus ruled that the purposes of the MPPAA required a definition of "employer" that was broader than the common law definition. Bank Line and Safmarine concede that they would be considered employers under the Second Circuit's analysis in Korea Shipping.
In Darden, the Supreme Court rejected the Fourth Circuit's suggestion that the common law definition of the term "employee" was too narrow to effectuate the purposes of ERISA. 112 S. Ct. at 1348-50. Critical to the Court's determination was the fact that the ERISA definition was vexatiously circular: "any individual employed by an employer" is considered an employee under ERISA. 29 U.S.C. § 1002(6). Thus, the statute's language was singularly unhelpful. Justice Souter, writing for a unanimous Court, lamented the recurring difficulties the courts have encountered in attempting to define the term "employee" in various federal statutes, noting that Congress has repeatedly amended a statute to prescribe the use of a common law definition of "employee" after a Supreme Court decision broadened the scope of that term. Compare NLRB v. Hearst Pubs., Inc., 322 U.S. 111, 120-29, 88 L. Ed. 1170, 64 S. Ct. 851 (1944) (using broad definition of "employee" for NLRA) with NLRB v. United Ins. Co., 390 U.S. 254, 256, 19 L. Ed. 2d 1083, 88 S. Ct. 988 (1968) (discussing amendment of NLRA after Hearst Pubs.); and compare United States v. Silk, 331 U.S. 704, 91 L. Ed. 1757, 67 S. Ct. 1463 (1947) (broad definition for purposes of Social Security Act) with United States v. W.M. Webb, Inc., 397 U.S. 179, 183-88, 25 L. Ed. 2d 207, 90 S. Ct. 850 (1970) (discussing Congressional reaction to Silk).
The Court explicitly distinguished the Darden case from Rutherford Food Corp. v. McComb, 331 U.S. 722, 91 L. Ed. 1772, 67 S. Ct. 1473 (1947), where the Court applied a broad definition of "employee" because the language of the Fair Labor Standards Act indicated that Congress intended to include within the definition certain persons who would not be defined as employees under the common law. 112 S. Ct. at 1350. Additionally, the flexibility and indeterminacy of the test fashioned by the Fourth Circuit to determine when a person is an employee clearly informed the Supreme Court's decision. In determining whether a person was an employee, the Fourth Circuit would consider the expectation of the employee regarding his entitlement to benefits, reliance on that expectation, and disparity of bargaining power. See Darden v. Nationwide Mutual Ins. Co., 922 F.2d 203, 205 (4th Cir. 1991). The Supreme Court complained that
Any such approach would severely compromise the capacity of companies like Nationwide to figure out who their "employees" are and what, by extension, their pension-fund obligations will be.
112 S. Ct. at 1350.
Darden clearly does not affect the vitality of Korea Shipping. First, the definition of "employer" in ERISA, unlike the definition of "employee," clearly indicates legislative intent to extend the definition beyond the traditional common law definition. By including within the definition of employer any person who acts "indirectly in the interest of an employer, in relation to an employee benefit plan," 29 U.S.C. § 1002 (5), the statute on its face extends beyond the common law definition.
Further, Bank Line and Safmarine can hardly argue that this definition of employer impedes their ability to calculate their ERISA obligations. Under Korea Shipping, persons who are contractually obligated to pay an assessment to another organization, in the instant case NYSA, which acts as a conduit to channel part of the assessments to a pension fund, are considered "employers" and are subject to withdrawal liability. The purposes of the MPPAA properly are served by adhering to the Second Circuit's definition of employer in Korea Shipping. The Court therefore finds that Bank Line and Safmarine are employers within the meaning of the MPPAA and are liable for withdrawal obligations pursuant to 29 U.S.C. § 1381(a).
For all the foregoing reasons, the motion to confirm the arbitration is granted. Judgment in Bowers v. Andrew Weir Shipping, Ltd., 92 Civ. 3728 (PKL), shall be awarded to plaintiffs. Defendant South African Marine Corp., Ltd., is liable to the NYSA-ILA Pension Trust Fund for withdrawal liability in the amount of $ 1,404,752. Defendant Andrew Weir Shipping, Inc., is liable to the NYSA-ILA Pension Trust Fund for withdrawal liability in the amount of $ 252,181. With respect to Andrew Weir Shipping, Ltd. v. NYSA-ILA, 92 Civ. 3781 (PKL), the motion to vacate the arbitration is denied and the motion of plaintiffs for summary judgment is denied.
Dated: December 7, 1992
New York, New York
Peter K. Leisure