Trs. of Iron Workers Local Union No. 5 v. Facade Install Operating Co., D.C.
| Decision Date | 27 February 2020 |
| Docket Number | Case No.: GJH-18-1857 |
| Parties | TRUSTEES OF THE IRON WORKERS LOCAL UNION NO. 5 AND IRON WORKERS EMPLOYERS ASSOCIATION EMPLOYEE PENSION TRUST, et al., Plaintiffs, v. FACADE INSTALL OPERATING CO., D.C., INC., Defendant. |
| Court | U.S. District Court — District of Maryland |
The trustees of three employee benefit plans for iron workers, two iron worker industry labor-management funds, and an iron worker's union bring this action against Defendant Facade Install Operating Co., D.C., Inc. ("Defendant"), a District of Columbia corporation that performs iron work as a contractor or subcontractor, to collect unpaid contributions to the various funds, as well as unpaid wages owed to union member workers. Plaintiffs seek remedies under the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended by the Multiemployer Pension Plan Amendments Act of 1980, 29 U.S.C. §§ 1001 et seq., the Labor-Management Relations Act, 29 U.S.C. §§ 141 et seq. ("LMRA"), and the terms of a collective bargaining agreement. Following Defendant's failure to answer or otherwise defend in this action, the Clerk entered its default on September 24, 2019. Now pending is Plaintiffs' Motion for Default Judgment against Defendant pursuant to Federal Rule of Civil Procedure 55(b). ECF No. 8. No hearing is necessary. See Loc. R. 105.6 (D. Md.). For the following reasons, Plaintiff's Motion for Default Judgment will be granted in part and denied in part.
The following facts are established by the Complaint, ECF No. 1, and affidavits and accompanying exhibits filed in support of the Motion for Default Judgment, ECF Nos. 8-2, 8-3, 8-4, 8-5, 8-6, 8-7, 8-8, 8-9. Defendant is a corporation organized under the laws of the District of Columbia that transacts business there as an iron contractor or subcontractor in construction and related industries, and at all times relevant here was an "employer" operating in an "industry affecting commerce" as defined by ERISA, 29 U.S.C. §§ 1002(5), (11), (12), and LMRA, 29 U.S.C. §§ 142(1), (3), 152(2). ECF No. 1 ¶ 5.
Defendant entered into a Collective Bargaining Agreement ("CBA" or "Agreement") with Plaintiff Local Union No. 5 of the International Association of Bridge, Structural and Ornamental Iron Workers ("Local 5") on or about December 12, 2017. ECF No. 1 ¶¶ 4, 9; ECF No. 8-3 ¶ 3; ECF No. 8-2 ¶ 7; id. at 8.1 Local 5 is an unincorporated labor organization pursuant to section 2(5) of LMRA, 29 U.S.C. § 152(5). The CBA establishes terms and conditions of employment for covered ironworkers, including "journeymen" workers and "apprentice" workers paid at 85% or 80% of the journeymen hourly rate ("85% apprentices" and "80% apprentices"), who perform work for Defendant covered under the Agreement. ECF No. 1 ¶ 9; ECF No. 8-3 at 112. By agreeing to the CBA, Defendant agreed to pay its covered employees certain hourly wages. ECF No. 1 ¶ 11; ECF No. 8-2 at 16-17. The CBA also requires Defendant to deduct dues and other assessments for Local 5 from the pay of employees who have authorized the deductions. ECF No. 1 ¶ 9, 12; ECF No. 8-2 ¶¶ 3, 10; id. at 20.
Other provisions of the CBA incorporate the terms of trust agreements that establish three iron worker benefit trust funds, bind Defendant to those terms, and require Defendant to contribute to the funds. ECF No. 1 ¶¶ 1, 10-11; ECF No. 8-2 ¶ 7-8; id. at 19-21. These include: the Iron Workers Local Union No. 5 and Iron Workers Employers Association Employee Pension Trust ("Pension Fund"), see ECF No. 8-2 ¶ 2; id. at 19-20, 38; the Iron Workers Trust Fund Local No., 5, Washington, D.C. ("Welfare Fund"), see ECF No. 8-2 ¶ 2; id. at 19, 57; and the Ironworkers Local 5 Joint Training Program Trust Fund, Washington, D.C. ("Apprenticeship Fund"), also known as the Iron Workers Apprenticeship Training Trust Fund and the Iron Workers Apprenticeship and Training Fund, see ECF No. 1 ¶ 1; ECF No. 8-2 ¶ 2; id. at 21, 76. The three funds, which are administered in Oxon Hill, Maryland, are employee benefit plans, as that term is defined by ERISA, 29 U.S.C. § 1002(3), and are collectively referred to as the "Iron Workers Funds." ECF No. 1 ¶ 1; ECF No. 8-2 ¶ 2, 5. The trustees of the Iron Workers Funds are fiduciaries as defined by ERISA, 29 U.S.C. § 1002(21), and are three of the Plaintiffs in this action. ECF No. 1 ¶ 2.
The CBA also requires Defendant to contribute to two other funds, referred to as the "Industry Funds," which provide benefits to employees and employers in the unionized iron working industry: the Iron Worker Industry Advancement Fund ("Advancement Fund"), ECF No. 1 ¶ 3; ECF No. 8-2 ¶ 2; id. at 20; and the Iron Worker-Management Progressive Action Cooperative Fund ("IMPACT"), ECF No. 1 ¶ 3; ECF No. 8-2 ¶ 2; id. at 21-22. The Industry Funds are also Plaintiffs in this action. ECF No. 1 ¶ 3. Non-party Zenith American Solutions ("Zenith") is the third-party administrator for the Iron Workers Funds and collects contributions owed to those funds, as well as to the Industry Funds, pursuant to the CBA. ECF No. 8-2 ¶ 2.Zenith also collects the dues and other assessments deducted by Defendant from the paychecks of authorizing employees and owed to Local 5. Id. ¶ 3.
The sums Defendant owes to the Iron Workers Funds, the Industry Funds, and the dues and assessments owed to Local 5 are collectively referred to as "contributions," which must be calculated and submitted to Zenith on a monthly basis. ECF No. 1 ¶ 13; ECF No. 8-2 ¶ 3. The amount owed to each of the funds each month is calculated by multiplying the number of hours that covered employees worked in that month by a contribution rate set for each fund in the CBA and subsequent amendments. ECF No. 1 ¶ 13; ECF No. 8-2 ¶ 9. The total amount of dues and other assessments that Defendant owes to Local 5 each month is calculated in the same manner. ECF No. 8-2 at 20, 111. By the 15th day of each month, Defendant must submit to Zenith the payments that it owes to the funds and to Local 5 with a "remittance report" that shows the number of hours worked by each covered worker. ECF No. 1 ¶¶ 13-14; ECF No. 8-2 ¶¶ 9, 11.
Pursuant to the CBA, from June 1, 2017 to June 1, 2018, for each hour worked by covered employees in the role of journeyman, Defendant owed a total of $21.40 in contributions to the Iron Workers Funds, the Industry Funds, and Local 5. ECF No. 8-2 ¶ 15; id. at 111-12. That rate is the sum of a $9.59 contribution per hour worked to the Pension Fund, $8.675 per hour to the Welfare Fund, $0.85 to the Apprenticeship Fund, $0.115 to the Advancement Fund, $0.20 to IMPACT, and $1.97 in Local 5 dues and assessments. See id. at 111-12. Defendant owed $19.96 per hour worked by 85% apprentices and $19.48 for 80% apprentices. ECF No. 8-2 ¶ 15; id. at 112. The Pension Fund contribution is the only component of the total contribution that differs based on the seniority of the worker. ECF No. 8-2 ¶ 15; id. at 112. The Pension Fund contribution during this period was $8.15 per hour worked by 85% apprentices and $7.67 for 80% apprentices. Id. at 111-12.
The trust agreements establishing the Iron Workers Funds, which are incorporated by the CBA, provide that an employer who fails to timely pay its contributions is liable for liquidated damages of 10% of the contributions owed, plus interest at the rate of 12% per annum. ECF No. 1 ¶ 21; ECF No. 8-2 ¶¶ 12-13; id. at 48-49, 68-69, 97. The CBA further provides that dues and assessments for Local 5 "are due at the same time as amounts due to the [Iron Workers Funds] and late payments shall be subject to the same provisions for liquidated damages, interest and expenses of collection as are amounts due to the other Funds." Id. at 20. For the Pension Fund and the Welfare Fund, interest is calculated from the fifth day following the due date until the date paid. Id. at 49, 69. The Apprenticeship Fund trust agreement, however, includes no grace period and mandates that interest will be calculated from the date due until the date paid. Id. at 97. Each of the three trust agreements also provides that Local 5, the trustees, or their designated agent may audit an employer's records whenever the trustees find it necessary. ECF No. 1 ¶ 16; ECF No. 8-2 ¶ 20; id. at 49, 69, 95. The agreements further authorize the trustees to initiate legal action to obtain orders compelling audits and collect delinquent contributions, interest, and liquidated damages. ECF No. 8-2 at 50, 70, 97. Delinquent employers are also liable for attorneys' fees and audit costs. ECF No. 8-2 ¶ 21; id. at 50, 70, 97.
Plaintiffs have not provided the trust agreements or other documents establishing or governing the Industry Funds, although a declaration by Zenith account executive Kathy Cole (the "Cole declaration") states that the "Industry Funds are governed by the terms of their Restated Agreements and Declarations of Trust, among other things." ECF No. 8-2 ¶ 6. With respect to the Advancement Fund, the CBA provides a contribution rate and states that contributions ECF No. 8-2 at 20. For IMPACT, the CBA provides a contribution rate, but contains no provisions concerning interest, liquidated damages, or other penalties for unpaid contributions. ECF No. 8-2 at 21. It states simply that "[t]he reporting, payment, frequency of payment and administration of such contributions shall be governed by the terms of the IMPACT trust agreement, policies and resolutions," which Plaintiff has not provided. Id.
Plaintiffs' Complaint alleges, and the Cole declaration substantiates, that Defendant did not submit remittance reports or contributions for the months of January, February, and March 2018. ECF No. 1...
To continue reading
Request your trial