Enforcing Benefit Fund Contribution Obligations on Behalf of Multiemployer Plans
Friedman & Anspach leads the field in successfully pursuing employers for unpaid benefit fund contributions. We have a long history of establishing precedents enabling benefit fund trustees to collect contributions from employers who seek to avoid their benefit fund contribution obligations by establishing alter ego companies or other related entities, and have also succeeded in holding the principals of these companies individually liable for benefit fund contributions. In addition, we have effectively struck down counterclaims and defenses raised by employers in ERISA collection matters.
Benson v. Brower's Moving & Storage, Inc.: In the leading case cited frequently to this day by ERISA plans to counter employer defenses to benefit fund collection cases, we successfully convinced the Second Circuit to adopt an interpretation of Section 515 of ERISA that severely limited the defenses available to an employer in actions for delinquent benefit fund contributions. Benson v. Brower's Moving & Storage, Inc., 907 F.2d 310 (2d Cir. 1990).
Brown v. C. Volante Corp.: In this case, we established the precedent that an employer can "adopt" the provisions of a collective bargaining agreement that it has not signed if its conduct, including complying with the terms of the unsigned collective bargaining agreement, shows an intention to be bound by the agreement. This precedent is used by benefit funds to this day to collect delinquent contributions. In this case, the Second Circuit found that the employer in this case was liable for benefit fund contributions, interest, and statutory ERISA damages based upon an unsigned contract because its conduct showed adoption of the contract. Brown v. C. Volante Corp., 194 F.3d 351 (2d Cir. 1999).
La Barbera v. A. Morrison Trucking: The Second Circuit awarded multiemployer pension, health, welfare, job training and annuity funds contributions, interest, and statutory ERISA damages, and accepted the funds' method of calculating the amount due and the interest rate on delinquent contributions. The court also rejected the employer's claims that it had a separate settlement with the funds as a result of its interactions with union officers, including the settlement of a labor dispute. La Barbera v. A. Morrison Trucking, 197 Fed. Appx. 18, 2006 WL 2091227 (2d Cir. July 20, 2006).
Gesualdi v. Juda Constr. Ltd.: A federal court awarded the trustees of a multiemployer benefit fund $12 million in unpaid contributions, interest, and statutory ERISA damages. The court found that multiple corporate entities shared common operations and employees and were alter egos of each other. As a result, the court ruled that the alter ego companies were legally bound to the collective bargaining agreement signed by the signatory, even if they had not signed the agreement, and were responsible for the benefit contributions due under the collective bargaining agreement. The court rejected the defendants’ arguments pertaining to the statute of limitations, admissibility of the audit reports, subject matter jurisdiction, accord and satisfaction, whether defendants were bound to the CBAs, and factual challenges to liability and the amount of damages. Gesualdi v. Juda Constr. Ltd, No. 10 Civ. 1799 (RMB), 2011 WL 5075438 (S.D.N.Y. Oct. 25, 2011). To read more about this case, click here.
Keane v. Zitomer Pharmacy, Inc.: The court rejected an employer's argument that he had made an oral side agreement with the signatory union that only certain employees in the store would receive benefits, the court found that the language of the collective bargaining agreement unambiguously required contributions for all store employees and awarded trustees of a multiemployer pension fund contributions, interest and statutory ERISA damages. Keane v. Zitomer Pharmacy, Inc., No. 06 Civ. 5981 (RJS), 2010 WL 624285 (S.D.N.Y. Feb. 23, 2010).
Durso v. 130-10 Food Corp. d/b/a Trade Fair Supermarkets: The court found an employer liable to multiemployer pension and health and welfare funds for delinquent contributions, interest, and ERISA damages. In the decision, the court denied the employer's claim that, because they nominally worked for a payroll company also owned by the employer, certain of its employees were "leased" and not covered by the collective bargaining agreement. The court held that the alleged leased employees met the definition of employees under ERISA for whom contributions were required under the collective bargaining agreement. Durso v. 130-10 Food Corp. d/b/a Trade Fair Supermarkets, No. 05 Civ. 6065 (NG), 2009 WL 3084268 (E.D.N.Y. Sept. 23, 2009).