Combs v. King

• Decision Date: 02 July 1985
• Docket Number: No. 84-7131,84-7131
• Parties: Harrison COMBS, et al., Plaintiffs-Appellants, v. Mrs. Bob KING, individually and d/b/a King Trucking, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 818

764 F.2d 818

Harrison COMBS, et al., Plaintiffs-Appellants, v. Mrs. Bob KING, individually and d/b/a King Trucking,

Defendant-Appellee.

No. 84-7131.

United States Court of Appeals, Eleventh Circuit.

July 2, 1985.

Robert H. Stroop, Jr., Patrick K. Nakamura, Birmingham, Ala., William F. Hanrahan, David C. Bernabucci, Asst. Gen. Counsel, Washington, D.C., for plaintiffs-appellants.

Sydney F. Frazier, Jr., Birmingham, Ala., for defendant-appellee.

Appeal from the United States District Court for the Northern District of Alabama.

Before JOHNSON and CLARK, Circuit Judges, and LYNNE ^*, District Judge.

CLARK, Circuit Judge:

This case involves the Employee Retirement and Income Security Act of 1974, which is commonly referred to as ERISA. The plaintiffs-appellants are the Trustees of several health and retirement trust funds under the United Mine Workers of America (UMWA) union contract which the defendant, Mrs. Bob King d/b/a King Trucking, as employer, has signed. The Trustees instituted this action to recover alleged deficiencies in payments to the funds. They sought an injunction requiring the defendant to perform all of the obligations imposed by ERISA, the Wage Agreements, and the Trusts. In addition, the Trustees demanded the defendant to "present for inspection and/or copying all records pertaining to hours worked by defendant's classified employees necessary to verify the accuracy of the amounts paid and/or due and owing to the Funds....." Record at 6.

Both parties filed motions for summary judgment and the district court granted judgment in favor of the defendant. Because the district court erred in granting summary judgment, we REVERSE and REMAND for further proceedings.

I. FACTS

Mrs. King operated King Trucking, which was a sole proprietorship engaged in the business of hauling coal. Mrs. King, as the owner of King Trucking, signed two contracts with the United Mine Workers of America (UMWA). Article XX of these agreements pertained to the UMWA pension and benefit plans and specified the amount of contributions that were to be made by the employer to the plans. Two sections of Article XX are relevant to this case.

Section d(vii) of Article XX provided:

Hours of work for purposes of Employer contributions to the plans and trusts described in this Article shall include all hours worked, or fractions thereof, by Employees in a classified job covered by this Agreement. Hours actually worked for which a premium pay of any type is provided shall be treated for purposes of Employer contributions to the Trusts as though worked on a straight-time basis. Reporting pay for hours not actually worked shall not be included for the purpose of making Employer contributions to the Trust.

Record at 17, 39.

Section f(2) of Article XX provided:

If the Trustees determine that there is reasonable cause to question the accuracy of the sums paid under section (d) of this Article, or of any verification thereof made by an Employer for a given monthly or annual period, the Employer shall, upon written request by the Trustees, make available for inspection ... those records which are necessary to verify the accuracy of the sums paid.

Id. at 18, 39.

There were several other documents considered by the district court when it ruled on the motions for summary judgment. The Trustees submitted three relevant affidavits. One of the affiants was a certified public accountant, who had provided accounting and auditing services to the UMWA health and retirement funds. His duty was to audit and inspect the books and records of coal operators who had signed UMWA agreements in order to determine the amount of coal produced and hours worked and the amount owed to the Trustees of UMWA health and retirement funds. The accountant indicated that he had examined and analyzed a report of the audit of Mrs. Bob King individually and d/b/a King Trucking to determine whether the company was in compliance with provisions of the UMWA agreements providing for payments to the health and retirement funds. The accountant concluded:

5. The audit of the defendant company's records covered the period from March 27, 1978 through December 31, 1980.

6. During said period the audit disclosed that 53,387.75 hours had been worked by the defendant company's classified employees. The comany [sic] had reported and remitted contributions for 35,115.12 hours, resulting in an unreporting of 18,272.63 hours.

7. The indebtedness, as disclosed by the audits for the period set forth above, was as follows:

Amount due for unreported

hours worked 14,194.95

Interest due on the above

amount through August 1,

1982 5,032.66

TOTAL AMOUNT DUE $19,227.61

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8. Interest on the amount of $14,194.95 will accrue at the rate of $7.78 per day after August 1, 1982.

Record at 61.

The other affiants were King Trucking employees. They stated that although their "starting and quitting" time varied, they generally worked at least eight hours a day. The employees also acknowledged that it would have been impossible for them to have worked the same hours each month and that they would have been paid more had they been paid by the number of hours worked rather than the percentage of coal hauled. ¹ Record at 123-27

Mrs. King submitted two affidavits that conflicted with the affidavits of the accountant and the employees. She declared that the figures submitted by the Trustees were not accurate because they were computed by dividing the gross pay of the employees by the standard wage rate called for in the UMWA contract. Mrs King stated that the Trustees' calculation did not reflect the correct number of hours worked because her employees were paid on the basis of the number of tons hauled and not on an hourly rate. According to Mrs. King, this method of compensation resulted in her employees receiving more than they would have received under the hourly rate called for in the contract. In addition, Mrs. King stated that pension contributions were not required for hours spent by employees who were performing non-classified work. Record at 65-67.

Mrs. King further declared that the hours shown on the reports submitted to the Trustees represented the number of hours worked by her employees. Mrs. King admitted she did not have other records of hours worked by her employees.

Several of the reports submitted by Mrs. King were identical with respect to the number of hours worked by her employees. For example, from May, 1978 until June, 1979, her monthly reports indicated that her employees worked a total of 600 hours. ²

Because many of the reports contained exactly the same number of hours worked by Mrs. King's employees, the Trustees argued that the reports were unreliable and that they were entitled to divide the gross earnings of the covered employees by the contractual wage rate. Conceding that this calculation might be inaccurate, the Trustees asserted that it was proper because of Mrs. King's failure to maintain adequate records of the hours worked by her employees. In summary, the Trustees urged the district court to place upon Mrs. King the burden of proving that their calculations were incorrect.

Although the district court observed that Mrs. King's assertions were incredible, it found the Trustees had not produced evidence of the number of hours actually worked by Mrs. King's employees. The court reasoned:

Although plaintiffs would have this court analogize from cases in the Fair Labor Standards Act that place the burden on an employer to prove the actual number of hours worked in the absence of clear records, plaintiffs offer no like authority directly applicable to this case. Absent clear direction by statute or even contract provision this court sees no reason to relieve plaintiffs of the burden of proving a number of hours actually worked different fromthat [sic] asserted by defendant. The court finds the cases dealing with the Fair Labor Standards Act distinguishable because of the statutory duty placed on employers to keep the pertinent records. Neither the UMWA contract nor any statute requires defendant to keep the type records that plaintiffs desire in this case.

Record at 140-141. The district court denied the Trustees motion for summary judgment and granted Mrs. King's motion for summary judgment.

II. DISCUSSION

This appeal raises a question of first impression in this circuit. We must first decide whether an employer has a statutory duty under ERISA to maintain adequate records regarding the number of hours worked by its employees. Second, if such a duty exists, does an employer, who fails to produce adequate records, assume the burden of disproving the accuracy of the plaintiff's figures regarding the number of hours worked. The third issue we address is whether the district court erred in granting summary judgment.

A. Employers Duty to Maintain Records

The question of whether an employer has a statutory duty to maintain records can only be answered after an analysis of the pertinent provisions of ERISA. "In determining the scope of a statute, we look first to its language. If the statutory language is unambiguous, in the absence of 'a clearly expressed legislative intent to the contrary, that language must ordinarily be regarded as conclusive.' " United States v. Turkette, 452 U.S. 576, 580, 101 S.Ct. 2524, 2527, 69 L.Ed.2d 246 (1981).

Section 1059(a)(1) of title 29 sets forth general recordkeeping and reporting requirements. It provides:

Except as provided by paragraph (2) every employer shall, in accordance with regulations prescribed by the Secretary, maintain records with respect to each of his employees sufficient to determine the benefits due or which may become due to such employees. The plan administrator shall make a report, in such manner and at such time as may be provided in regulations prescribed by the Secretary, to each employee who is a participant under the plan and who--

(A) requests such report, in such manner...