Anthony Gamble, the former President of the Gamble
Insulation Company, Inc. ("Gamble Insulation"), and the current President of NLG
Insulation, Inc. ("NLG Insulation"), signed a collective bargaining agreement in
2000, obligating Gamble Insulation to pay pension contributions to the Asbestos
Workers Local 24 Pension Fund.
In 2006, Gamble Insulation ceased doing business and
withdrew from the pension fund. In 2008, the company filed for bankruptcy.
At the same time that Gamble Insulation was failing as an entity, Anthony
Gamble was operating NLG Insulation. NLG Insulation operated out of the same
office, performed the same type of work, for some of the same clients, as
Gamble Insulation. The Plaintiffs sued NLG Insulation for withdraw penalties
resulting from the collective bargaining agreement that Anthony Gamble
signed in 2000, but NLG Insulation argued it had no duty to pay.
As a threshold issue, the Court ruled whether NLG
Insulation had forfeited its right to dispute the withdrawal penalty
assessment by failing to initiate arbitration within the statutory time
frame. Ultimately, the Court held that the arbitration rule only applied to
"employers," and because NLG Insulation was disputing its status as an
"employer," it did not forfeit its right to challenge the withdrawal penalty
assessment.
Next, the Court considered NLG Insulation's liability
to pay withdrawal penalties. This issue turned on whether Gamble Insulation
and NLG Insulation were under common control at the time Gamble Insulation
withdrew from the agreement. The Court applied the IRS's common control
regulations, finding that Mr. Gamble was the sole owner of both Gamble
Insulation and NLG Insulation, was the President of both, that he started
NGL Insulation with a loan from Gamble Insulation, and that the two
companies operated out of the same office, performed the same type of work,
for some of the same clients, and shared the same equipment. Consequently,
Gamble Insulation and NLG Insulation were indeed under common control at the
time Gamble Insulation withdrew from the agreement. Therefore, NLG
Insulation was liable, jointly and severably, with Gamble Insulation, to pay
the withdrawal penalty. As a result, the Court awarded Plaintiffs the
withdrawal liability assessment plus interest, liquidated damages, court
costs, and attorney's fees.
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