No, you are being told the absolute truth. Whether you are or are not a union member, as long as you are employed by the company who sponsors the 401(k) you cannot take a distribution. That is the law, and it applies regardless of your membership in the union. If the plan document allows you to, you can cease making additional contributions - that is plan specific. You may also, if the plan allows, be able to take a loan (which you will have to repay, with interest) if your need is short term. But when you are told that you would have to leave your job to take a distribution of the whole amount, that is not giving you the run-around; that is telling you what the IRS regulations which control 401(k)s mandate.