Labor & Employment Law Daily Wrap Up, PENSION AND BENEFIT PLANS—7th Cir.: Employer gave clear notice of its desire to terminate CBA; successor agreement ended pension contributions, (Aug 1, 2025)

By Ronald Miller, J.D.

The appeals court agreed with the employer that it provided the required termination notice with its January 2021 letter, ending an evergreen clause.

An employer’s letter was sufficient to modify or terminate a collective bargaining agreement, including an evergreen clause, such that a successor agreement ended the employer’s obligation to continue to make contributions to a pension fund, ruled the Seventh Circuit. The appeals court agreed with the employer that the letter gave clear notice of its desire to terminate the CBA. Thereafter, the employer entered a successor agreement that allowed it to withdraw from the fund and cease contributing. Accordingly, the appeals court reversed the judgment of the district court, and ruled that summary judgment should be granted in favor of the employer (Central States, Southeast and Southwest Areas Pension Fund v. Univar Solutions USA Inc., No. 24-1348 (7th Cir. July 31, 2025)).

The pension fund is an employee benefit plan and trust governed by ERISA. Participating employers contribute to the fund on behalf of their employees. These contributions are subject to collective bargaining agreements between the employers and local unions affiliated with the Teamsters union.

Pension contributions. The employer in this dispute, Univar Solutions, entered into a CBA with a Teamsters local in 2016. According to the terms of the 2016 CBA, the employer was required to contribute a certain amount to the fund for each covered employee.

This case hinges on two provisions of the 2016 CBA concerning its termination and revision. By participating in the fund, the employer was also bound by a trust agreement that constrained its ability to limit contributions provided in a CBA. The employer could not eliminate or reduce its contributions through a subsequent agreement while the 2016 CBA remained in effect, including through an extension agreement or by operation of the Evergreen Clause.

When the March 28, 2020, expiration date was approaching, the employer and the union extended the 2016 CBA by contract for an additional year (the 2020 Extension).

Contract revisions. In January 2021, the union notified the employer in writing that it “desire[d] to continue its existing Agreement, but also desire[d] to negotiate changes or revisions in such Agreement.” On January 27, the employer sent a letter in response (the January 2021 Letter), also proposing modification or termination of the 2016 CBA.

The parties eventually executed a successor CBA in effect from March 29, 2021, through March 28, 2025 (the Successor CBA). According to the Successor CBA, “[e]ffective July 3, 2021 [Univar] will withdraw from and cease making contributions to the [Fund].” Consistent with these terms, the employer stopped contributing to the fund after July 3, 2021.

Cessation of contributions. Internal emails suggest that the fund knew in February 2021 that the employer intended to end its participation later that year. The fund received a copy of the Successor CBA in June 2021, and a written confirmation that the employer had finalized withdrawal in November. In July 2022, over a year after contributions ended, the fund complained to the employer for the first time about its non-payment of contributions.

The fund sued the employer under ERISA to recover unpaid contributions from July 3, 2021, through March 28, 2022. Upon cross motions for summary judgment, the district court ruled in favor of the fund. It reasoned that the 2020 Extension did not prevent the 2016 CBA from automatically renewing under the Evergreen Clause. It further found the January 2021 Letter insufficient to terminate the agreement because it did not unequivocally convey the employer’s desire to do so. This appeal followed.

Evergreen clause. On appeal, the Seventh Circuit determined that it must strictly interpret the 2016 CBA and its evergreen clause to evaluate whether it had been validly terminated—and with it, the employer’s contribution obligations—before the parties entered the successor agreement.

In the 2020 Extension, the employer and the union mutually agreed to extend the 2016 CBA until March 28, 2021, in light of the COVID-19 pandemic. The employer argued that this agreement set March 28, 2021, as the certain termination date, replacing the 2016 CBA’s open-ended evergreen clause. The appeals court disagreed.

Viewed in isolation, one could find that the 2020 Extension supplied a new, settled termination date for the 2016 CBA. But the extension specified that it must “immediately be made a part of, and attached to, the collective bargaining agreement which has been extended.” This unambiguous language compelled the court to incorporate the extension into the 2016 CBA, including its evergreen clause. Thus, the 2020 Extension read together with the evergreen clause simply extended the CBA’s expiration date to March 28, 2021. Because CBAs can expire without terminating the evergreen clause, this expiration date merely became “the first date on which the agreement could terminate if timely notice was given.”

Notice of termination With the evergreen clause intact, the 2016 CBA would automatically renew if neither party provided timely, explicit notice of termination before the new expiration date as set by the 2020 Extension. Here, the appeals court agreed with the employer that it provided the required termination notice with its January 2021 Letter.

To effectuate termination, the evergreen clause requires a party to provide written notice that it desires “to cancel or terminate” the agreement at least 60 days before it expires. In the January 2021 Letter, the employer proposed “the modification or termination” of the 2016 CBA and sought to open negotiations for a “successor Agreement.”

The fund argued that this notice failed to convey a clear and unmistakable intent to terminate because it also mentioned modification. According to the fund, the employer’s request for the “modification or termination” of the 2016 CBA was too ambiguous to properly terminate.

Reading the evergreen clause and modifications clause alongside each other, the appeals court found the January 2021 Letter sufficiently terminated the 2016 CBA. It proposed “the modification or termination” of the 2016 CBA “for the purpose of negotiating a successor Agreement,” without taking the steps necessary to keep the 2016 CBA in force.

Accordingly, summary judgment should be granted in favor of the employer, rather than the fund.

The case is No. 24-1348.

Judge: Kirsch, T.

Attorneys: Andrew J. Herink, Office of the General Counsel, for Central States Southeast and Southwest Areas Pension Fund. Craig C. Martin (Willkie Farr & Gallagher) for Univar Solutions USA Inc.

Companies: Central States, Southeast and Southwest Areas Pension Fund; Univar Solutions USA Inc.

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