Rehabilitation Plan Default or Surcharge

[Guest Martin]

If, after the applicable time period, the plan sponsor implements the default schedule under the rehabilitation plan, does that mean the employer is bound by the default plan? Stated differently: if we are unable to reach an agreement regarding the rehabilitation plan, can we continue paying the 10% surcharge until the end of the rehabilitation period?

[Bill Ecklund]

If, after the applicable time period, the plan sponsor implements the default schedule under the rehabilitation plan, does that mean the employer is bound by the default plan? Stated differently: if we are unable to reach an agreement regarding the rehabilitation plan, can we continue paying the 10% surcharge until the end of the rehabilitation period?

If the parties fail to agree, the plan must implement the default schedule. The default schedule will be implemented on the earlier of the dare (1) which the Secretary of Labor certifies that the parties are at imnpasse, or (2) which is 180 days after the date on which the CBA expires.

[Guest Martin]

If the parties fail to agree, the plan must implement the default schedule. The default schedule will be implemented on the earlier of the dare (1) which the Secretary of Labor certifies that the parties are at imnpasse, or (2) which is 180 days after the date on which the CBA expires.

Bill, My basic question was whether the default option is binding on the employer when it is "implemented." I think your answer is "yes." In my facts, that doesn't give the employer much time. The crititcal status date was March 30, 2008. Assume the Rehabilitation Plan is adopted 240 days later on Nov. 15. The CBA expired Aug 31. Thus, the employer only has 2 1/2 months to negotiate the alternate schedule, or else it is bound by the default schedule. Does the employer have any other options? Of course it could be worse if the CBA expired on Oct. 31. Thanks for your help.