OPINION OF THE COURT

GARTH, Circuit Judge:

Defendant-Appellant Hartford Fire Insurance Company is the surety on a labor and material payment bond purchased by Mele Construction Co., Inc. ("Mele"). Hartford's bond required prospective claimants who were not in a "direct contract" with Mele to give written notice of their claims within 90 days after they ceased work. Plaintiffs-Appellees, tardy claimants on Hartford's bond, are the International Union of Operating Engineers, Local 542 and Michael J. Ragan as administrator of various "fringe benefit" funds associated with Local 542 (collectively, "Local 542").

Local 542 had a collective bargaining agreement with Tri-County Excavating, Inc., a corporation owned by the three daughters of John Mele, president of Mele. Hartford rejected Local 542's claim, made roughly 120 days after Local 542 ceased work, because Local 542 was not in a "direct contract" with Mele and so was required to give notice of its claim within 90 days of the last labor performed. Local 542 responded that Tri-County was the corporate "alter ego" of Mele, and that inasmuch as Local 542 had contracted with Tri-County it had, ipso facto, contracted with Mele.

Following a bench trial, the district court held that Tri-County was indeed the alter ego/instrumentality of Mele and entered judgment in favor of Local 542. The district court held that under the terms of the bond Hartford was liable to Local 542 for Tri-County's unpaid "fringe benefit" contributions, union dues, liquidated damages and attorney fees.

On appeal, Hartford advances three arguments: first, that the district court erred in its alter ego determination under Pennsylvania law; second, that the Employees Retirement Income Security Act, 29 U.S.C. §§ 1001-1461 ("ERISA"), preempts Local 542's state-law action on the bond; and third, that the bond does not obligate Hartford to pay liquidated damages and attorney fees.

We agree with all of the district court's holdings except its holding that Hartford was obliged to pay liquidated damages and attorney fees. Consequently, we will affirm the district court's award of unpaid fringe benefit contributions and union dues. However, because we conclude that Hartford cannot be held liable for attorney fees and liquidated damages, we will reverse so much of the district court's orders of March 2, 1994, and February 13, 1995, as granted judgment against Hartford for those damages. We will accordingly remand to the district court with directions that its judgment against Hartford and in favor of Local 542 on Count IV be modified to delete all awards of attorney fees and liquidated damages.

I.

Mele purchased the bond ("the Bond") from Hartford to cover Mele's wage and labor obligations in connection with earth work which Mele was hired to perform on Crown America Corporation's (Crown's) Viewmont Mall project in Lackawanna County, Pennsylvania. Crown is named as obligee on the bond.

For the past twenty years Mele, which owns heavy earth moving equipment, has sub-contracted with Tri-County on a job-by-job basis whereby Tri-County provided operating engineers to operate Mele's earth moving equipment. Tri-County is part of a group of at least five companies owned by the extended Mele family.

Under its contracts with with Mele, Tri-County would furnish Mele with Tri-County employees who were members of Local 542. Tri-County and its employees were subject to the terms of a Collective Bargaining Agreement ("CBA"), negotiated between Local 542 and Tri-County in 1988, and a Pension Fund Agreement ("PFA") entered into between Local 542 and the General Building Contractors Association and the Contractors Association of Eastern Pennsylvania and Delaware in 1974.

When Crown hired Mele for the Viewmont project in the summer of 1990, Mele looked to Tri-County for operating engineers and, as it had done in the past, Tri-County engaged members of Local 542 pursuant to the CBA and PFA. As is particularly relevant to the present dispute, the CBA obligated Tri-County to make regular "fringe benefit" contributions to Local 542's Pension, Health and Welfare, Apprenticeship, Training and Safety, Supplemental Unemployment Benefit, and Annuity funds (the "Funds") during the time that Local 542 members were in Tri-County's employ. The CBA also required Tri-County to pay "supplemental union dues" and provided for the payment of a specific monetary penalty should Tri-County become delinquent in its fringe benefit contributions. The PFA provided that in the event of a lawsuit against an employer to collect unpaid contributions, the employer was obliged to pay costs and reasonable attorney fees.

Work on the Viewmont project commenced some time in August of 1990, and Tri-County began making the required fringe benefit contributions to the Funds as required by the CBA.

The Viewmont project foundered in the spring of 1991, with disastrous results: Crown stopped paying Mele, Mele fell behind in progress payments to Tri-County, and Tri-County in turn failed to make the fringe benefit contributions to the Funds for the period March-June, 1991. Within months, Mele had filed for bankruptcy and Tri-County became insolvent. By this time the Funds were owed roughly $78,000.00 in unpaid contributions.

On or about November 1, 1991, Local 542, having been informed by Tri-County that it was unable to satisfy its obligations to the Funds, turned to Hartford for payment.

Hartford's Bond contained the following provision:

No suit or action shall be commenced hereunder by any claimant, (a) unless claimant, other than one having a direct contract with the principal, shall have given written notice to any two of the following: the principal, the owner or the surety . . ., within ninety days after such claimant did or performed the last of the work or labor . . . for which said claim is made.

App. 97 (emphases added).

Under this provision, all claimants who had not contracted directly with Mele were required to give written notice to any two of Mele, Hartford or Crown within 90 days after ceasing work.

As shown by Tri-County records, the "last labor" provided by Local 542 on the Viewmont job was for the week ending June 28, 1991. Local 542 did not give notice of its claim until on or about November 1, 1991, more than 120 days after "last labor" was performed. Hartford rejected Local 542's request on the ground that Local 542 had failed to make timely notice of its claim.

On January 3, 1992, Local 542 commenced this action in the federal district court for the Eastern District of Pennsylvania on the basis of diversity of citizenship, seeking delinquent fringe benefit contributions, union dues, liquidated damages and attorney fees. Local 542 claimed that Tri-County was Mele's alter ego, and that Local 542 was therefore in a "direct contract" with Mele and so was not subject to the Bond's 90 day notice provision.

The district court agreed with Local 542. Following a bench trial, the district court, by order dated March 2, 1994, entered judgment against Hartford and awarded Local 542 $78,794.79 in unpaid fringe benefit contributions, $5,719.11 in unpaid union dues, and $42,190.21 in liquidated damages, less $480.00 in prepayment. The district court also awarded reasonable attorney fees to Local 542, but did not quantify those fees until it entered its order of February 13, 1995, which set attorney fees at $19,881.73.

Hartford appealed from the district court's March 2, 1994 order on March 29, 1994, and timely appealed the February 13, 1995 order.

II. Appellate Jurisdiction

As noted above, the district court's March 2, 1994 order entered judgment in favor of Local 542 and among other things awarded reasonable attorney fees but did not quantify the amount of those fees. Although Hartford appealed the March 2, 1994 order on March 29, 1994, it was not until February 13, 1995 that the district court entered an order setting attorney fees at $19,881.73. Neither party questioned the jurisdiction of this court to hear Hartford's appeal. However, we must consider our appellate jurisdiction as a threshold matter. See Trent Realty Associates v. First Fed. Sav. and Loan Ass'n of Philadelphia, 657 F.2d 29, 36 (3d Cir. 1981) ("A federal court is bound to consider its own jurisdiction preliminary to consideration of the merits.").

The district court's award of attorney fees was premised on a provision in the Pension Fund Agreement between Local 542 and Tri-County which provides that in the event of a lawsuit to collect delinquent contributions the employer "shall pay all costs and reasonable attorney's fees incurred." App. 133.

In Beckwith Machinery Co. v. Travelers Indem. Co., 815 F.2d 286 (3d Cir. 1987), we held that when an award of attorney fees is based on a contractual provision and is an "integral part of the contractual relief sought," the order does not become final and appealable until the attorney fees are quantified. Id. at 287. Accord Vargas v. Hudson County Bd. of Elections, 949 F.2d 665, 670 (3d Cir. 1991) (where attorney fees are sought as part of damages, and not as prevailing party, the rule of Budinich v. Becton Dickinson and Co., 486 U.S. 196, 108 S.Ct. 1717, 100 L.Ed.2d 178 (1988), does not apply and the district court's ruling is not final until the amount of fees is fixed); accord SPM Corp. v. M/V Ming Moon, 965 F.2d 1297, 1300 (3d Cir. 1992).

Because the attorney fees awarded in this case were part of the contractual damages sought by Local 542, the district court's delay in quantifying the amount of such fees until February 13, 1995 rendered the earlier order non-final for purposes of appeal.

This defect was not fatal to Hartford's appeal, however. Even though the March 2, 1994 order was not final when entered, it became final upon entry of the February 13, 1995 order fixing attorney fees and expenses at $19,881.73. We therefore exercise our jurisdiction pursuant to 28 U.S.C. § 1291 and the principle expressed in Cape May Greene, Inc. v. Warren, 698 F.2d 179, 184-85 (3d Cir. 1983), that this Court may entertain an appeal from a nonfinal order if an order which is final is subsequently entered before our adjudication on the merits.

III. Alter Ego

Hartford argues on appeal that the district court's alter ego determination is infected by clearly erroneous underlying factual findings, and that in any event the district court misapplied Pennsylvania law to the facts as found.

When considering a district court's state law alter ego determinations, we review the court's factual findings for clear error, but exercise plenary review over the legal conclusions it draws from those facts. Craig v. Lake Asbestos of Quebec, Ltd., 843 F.2d 145, 148-49 (3d Cir. 1988).

A.

After receiving evidence and taking testimony from Local 542 members Stanley Stracham and Edward Gilette, Tri-County's president Angela Scarantino, Hartford bond underwriter John Johnson and claims supervisor Dennis Powers, and Michael Ragan, administrator of the Funds, the district court found the following facts:

Tri-County has always maintained appropriate corporate formalities. Both Mele and Tri-County are duly authorized Pennsylvania corporations. Each filed articles of incorporation, held regular corporate meetings, kept their own corporate records, and took care not to intermingle funds.

Tri-County is owned by the three daughters of John Mele, Mele's president and majority shareholder. The three Mele daughters, Angela Scarantino, Beverly Occulto, and Karen Darbenzio, each also own 11% of the shares of Mele. The remainder of the stockholdings in Mele is in the name of John Mele (53%) and his wife, Catherine (14%). The Mele corporation has filed in bankruptcy. Angela Scarantino is the president of Tri-County, and Karen Darbenzio was an officer and shareholder of both Mele and Tri-County.

In addition to Tri-County, there are at least four other family-owned corporations in the Mele "group": Eleven-7 Corporation, owned by Stephen Scarantino and Bert Occulto, husbands of Angela and Beverly, respectively; John Sal Inc., also owned by the three Mele daughters; Melback Corp., of which John Mele is the president, and West Mountain Sand Stone Aggregates, Inc., of which Bert Occulto is the president.

Tri-County, which operates from a trailer leased from Eleven-7 corporation on land owned by John Sal, Inc., owned no equipment of its own. For the past twenty years, its sole function has been to supply operating engineers to Mele. Tri-County has undertaken no projects since Mele's demise.

Tri-County has never paid a dividend and was grossly undercapitalized for the work it had contracted to perform. As a result, it became insolvent shortly after Mele stopped payments on the Viewmont job.

The district court found that Angela Scarantino, Tri-County's president, had little knowledge of the day-to-day business affairs of Tri-County. Although the facts are disputed by Hartford, Scarantino was unable, for instance, to state whether Tri-County's financial statements were audited or un-audited, or whether Tri-County could make a claim against Mele under the Bond, or how Tri-County billed Mele for the Viewmont Job.

The district court also found that Mele had treated Bert Occulto, Tri-County's project manager and husband of one of the three Mele daughters, as a Mele employee. More to the point, Mele enlisted him to participate in the negotiations between Mele and Hartford regarding the Bond.

Local 542 members solicited Tri-County jobs at Mele's offices. The court also found that John Mele had participated in Tri-County hiring, and greeted Stracham with the salutation, "glad to have you working for our company" when Stracham was seeking Tri-County employment. The district court concluded that the only contact Local 542 members had with Tri-County was that they were paid with Tri-County checks.

When Mele was negotiating the Bond with Hartford, Hartford requested and received from Tri-County and the other family-owned corporations indemnification for any payments Hartford would have to make on the Bond. The indemnity effectively precluded Tri-County itself from making a claim on the Bond. Moreover, it made Tri-County liable for all debts for labor and materials incurred by Mele on the Viewmont project, regardless of whether the debt was owed to Tri-County or another company. The district court described this agreement as a "financial albatross" which no "truly independent" corporation would assume. Dist.Ct.Op. 13.

The district court also observed that Mele had unilaterally proposed to subordinate its $75,000.00 debt to Tri-County to those of other creditors in its proposed plan of bankruptcy reorganization. Tri-County has not objected to the subordination, nor has it made a claim in the Mele bankruptcy.

Finally, the court found that Hartford itself considered Mele and Tri-County as one company. Dist.Ct.Op. 12. Hartford's internal correspondence referred to Tri-County as the "union arm of Mele," and Hartford issued credit to Mele on the basis of composite Mele/Tri-County financial statements.

Hartford challenges a number of these factual findings as clear error, calling our attention to evidence which it contends the district court ignored, did not fully take into account, or evaluated incorrectly. See Hartford's Brief at pp. 19 et seq.. Hartford also emphasizes that corporate formalities were scrupulously maintained throughout Tri-County's 23 year existence, and that there is no evidence of commingling or siphoning of funds or transfers without adequate consideration. Under its separate name, Tri-County had been dealing amicably with Local 542 for over twenty years. Further, Hartford notes that the two testifying union employees who supposedly had no contact with Tri-County beyond receiving their paychecks listed Tri-County, not Mele, as their employer on their unemployment claim forms. Hartford also represented at oral argument that indemnities like the one given by Tri-County are commonplace in the construction industry.

We will not find clear error of fact unless a review of the record leaves us with the "definite and firm conviction that a mistake has been committed." Anderson v. Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 618 (1985). Although we are troubled by some aspects of the record, we are not persuaded by Hartford's argument. Our independent review of the record does not convince us that the district court was mistaken or committed clear error in its factual determinations.

The dissent, although acknowledging the findings made by the district court, assesses the evidence differently than did the district court, and also reads the record differently than do we. The dissent concludes that, in its opinion, the district court was mistaken in its findings. See Dissent at 516-17, 519-20.

Despite the position taken by the dissent, we are bound to defer to the district court's factfinding if evidence supports those findings. Under the clearly erroneous standard, a finding of fact may be reversed on appeal only "if it is completely devoid of a credible evidentiary basis or bears no rational relationship to the supporting data." Haines v. Liggett Group, Inc., 975 F.2d 81, 92 (3d Cir. 1992). When findings are based on determinations regarding the credibility of witnesses, Rule 52(a) demands even greater deference to the trial court's findings. Anderson, 470 U.S. at 575, 105 S.Ct. at 1512. Thus, an appellate court may not substitute its findings for that of the district court, but is limited to making an assessment of whether there is enough evidence on record to support such findings. Cooper v. Tard, 855 F.2d 125, 126 (3d Cir. 1988). Here, there is more than sufficient credible evidence to sustain each and every finding made by the district court.

The district court judge heard the witnesses, assessed their credibility, and, on the basis of the credible evidence, made detailed findings to which we are obliged to defer. Based on those historical findings, the district court found as ultimate facts that "the interrelationship between Mele and Tri-County was such that Mele controlled Tri-County," Dist.Ct.Op. 11, and that Tri-County was "merely an extension of Mele and not a truly independent corporation. . . ." Dist.Ct. Op. 17. The district court consequently held, relying on the same legal authorities as does the dissent, that Tri-County was the alter ego of Mele.

These findings and this conclusion were reached after full recognition of the arguments on the evidence made by Hartford. Giving the appropriate deference to the district court's findings mandates a holding that no mistake has been committed. Anderson, 470 U.S. at 573, 105 S.Ct. at 1511.

True, if we, rather than the district court, were assigned the task of fact finding, we arguably might have found the facts differently. But we are not charged with that task, and we are satisfied that there being no clear error of fact, and, as we explain below, no legal error, the district court's factual findings and its legal conclusion of alter ego should be upheld.

B.

We also do not find that the district court committed legal error in holding Tri-County to be Mele's alter ego under Pennsylvania law. In Ashley v. Ashley, 482 Pa. 228, 393 A.2d 637 (1978), the Pennsylvania Supreme Court set forth, in a formula familiar to the courts of that state, the following principles which are to be applied when a trial court disregards corporate forms and, "piercing the corporate veil," holds that one individual or corporation is the alter ego of another:

Th[e] legal fiction of a separate corporate entity was designed to serve convenience and justice . . . and will be disregarded whenever justice or public policy demand and where rights of innocent parties are not prejudiced nor the theory of the corporate entity rendered useless . . . . We have said that whenever one in control of a corporation uses that control, or uses the corporate assets, to further his or her own personal interests, the fiction of the separate corporate entity may properly be disregarded.

Id. 393 A.2d at 641 (citations omitted). Pennsylvania courts have largely embraced the flexible tenor of the Ashley standard, holding, for instance, that no finding of fraud or illegality is required before the corporate veil may be pierced, but rather, that the corporate entity may be disregarded "whenever it is necessary to avoid injustice." Rinck v. Rinck, 363 Pa. Super. 593, 526 A.2d 1221, 1223 (1987). Accord Lycoming County Nursing Home Ass'n, Inc. v. Com., Dept. of Labor and Industry, Prevailing Wage Appeal Bd., 156 Pa.Cmwlth. 280, 627 A.2d 238, 243-44 (1993). We have said that Pennsylvania alter ego law requires a showing that the subordinate company "acted robot- or puppet-like in mechanical response to the controller's tugs on its strings or pressure on its buttons." Culbreth v. Amosa (Pty) Ltd., 898 F.2d 13, 15 (3d Cir. 1990).

Despite the nominally separate formal existence of Tri-County, the record to which we have referred supports the district court's findings and conclusion that Tri-County was Mele's alter ego. We emphasize, as did the district court, that Tri-County was willing, at the request of John Mele and Hartford, to indemnify Hartford for any obligations of Mele which might trigger Hartford's liability under the Bond. This effectively merged the obligations of Tri-County and Mele, and prevented Tri-County from making any claim under the Bond. As a result, Tri-County has not done so, even though Mele is indebted to it for over $75,000.

Although it may be true that an indemnity agreement, standing alone, is insufficient to establish alter ego status, see United States ex Rel. Global Bldg. Supply, Inc. v. WNH Ltd. Partnership, 995 F.2d 515, 516-17 (4th Cir. 1993), this fact alone cannot blunt the impact of Tri-County's general willingness to sacrifice its own interests for those of Mele. This view is confirmed by Tri-County's failure to object to Mele's proposed plan in bankruptcy proceedings to subordinate Mele's debt to Tri-County to that of all other creditors.

We agree with the district court that the record reveals a family enterprise divided into formal "divisions" but nonetheless controlled by the same people — John Mele and his family — and that. Mele employed Tri-County to Mele's own business ends. Tri-County relied entirely on Mele for its existence, both financially and operationally. In function, Tri-County was nothing more than the "personnel" arm of Mele. In light of the district court's findings of undercapitalization, non-functioning of independent officers, non-payment of dividends, Tri-County's consequent insolvency, and the subordination of Tri-County's financial interests to those of Mele, all of which survive clear error scrutiny, we are satisfied that Local 542 met its burden under Pennsylvania law of showing that "[Mele] wholly ignored the separate status of [Tri-County] and so dominated and controlled its affairs that its separate existence was a mere sham." Wheeling-Pittsburgh Steel Corp. v. Intersteel, Inc., 758 F. Supp. 1054, 1057 (W.D.Pa. 1990); accord Lycoming County Nursing Home, 627 A.2d at 243-44.

C.

Hartford next argues that even if Tri-County and Mele are alter egos in the traditional sense, it was inequitable for the district court to hold Hartford liable to Local 542 under the Bond. Hartford argues, in essence, that as it is a "third party" guarantor of Tri-County's obligations to Local 542, Hartford's Bond cannot be reached. We disagree.

This particular issue has arisen a number of times in connection with the Miller Act, 40 U.S.C. § 270a et seq., and Pennsylvania courts have relied upon these Miller Act decisions in determining whether to pierce the corporate veil in non-Miller Act payment bond cases. See Lezzer Cash Carry, Inc. v. Aetna Ins. Co., 371 Pa. Super. 137, 537 A.2d 857, appeal denied, 519 Pa. 666, 548 A.2d 256 (1988).

The Miller Act (the "Act") requires prime contractors on any construction contract with the United States exceeding $25,000 to execute a bond "for the protection of all persons supplying labor and materials." 40 U.S.C. § 270a(a)(2) (1986). The Act contains two important restrictions mirrored in many private payment bonds. First, like Hartford's Bond, a Miller Act bond's coverage is limited to "first-tier" subcontractors (such as Tri-County) and those who contract with them (such as Local 542). J.W. Bateson Co., Inc. v. United States ex rel. Board of Trustees of Nat. Automatic Sprinkler Industry Pension Fund, 434 U.S. 586, 594, 98 S.Ct. 873, 877-78, 55 L.Ed.2d 50 (1978).

Second, § 270b(a) of the Act imposes a timely notice requirement essentially identical to that in Hartford's Bond, which requires those who contract with first-tier subcontractors, but not the first-tier subcontractors themselves, to give notice of their claims within 90 days after they last provided labor or materials.

These limitations have given rise to cases in which claimants on a payment bond seek to characterize the party with whom they contracted as the alter ego of a Miller Act contractor or subcontractor in order to avoid either the 90 day notice requirement or the coverage limitation of the Act. See, e.g., Continental Casualty Co. v. United States ex rel. Conroe Creosoting Co., 308 F.2d 846, 848 (5th Cir. 1962) (claim on Miller Act bond permitted by supplier of subcontractor when sub-subcontractor was merely a "shadow" of the subcontractor); Glens Falls Ins. Co. v. Newton Lumber Mfg. Co., 388 F.2d 66 (10th Cir. 1967), cert. denied, 390 U.S. 905, 88 S.Ct. 821, 19 L.Ed.2d 873 (1968) (when claimants had negotiated primarily with subcontractor but contracted with a sub-subcontractor, the sub-subcontractor, whose principal was a relative of the president of the contractor, was held to be a "sham" and surety was therefore liable to them on the bond); National Surety Corporation v. United States ex rel. Way Panama, S.A., 378 F.2d 294, (5th Cir.), cert. denied, 389 U.S. 1004, 88 S.Ct. 561, 19 L.Ed.2d 598 (1967) (90 day notice provision not binding on plaintiff when contractor and subcontractor "operated essentially as one entity"); United States ex rel. Gilarde Environmental Management v. Federal Ins. Co., No. 89-1473, 1990 U.S.Dist. LEXIS 17929 (M.D.Pa. 1990) (same).

The Fourth Circuit has held that Miller Act sureties may be reached "where ordinary principles of corporate law permit the courts to disregard corporate forms." Global Building Supply, Inc. v. WNH Ltd. Partnership, 995 F.2d 515, 519 (4th Cir. 1993). The findings that we have upheld, and the conclusion to which they lead, have obliged us to hold that Mele and Tri-County were alter egos under ordinary principles of Pennsylvania law. It follows that Hartford may be held liable on the bond and, despite Hartford's argument, we are satisfied that the equities do not suggest a contrary result.

Further, Tri-County's indemnity obviated the very purpose of the notice provision, which is to remove the risk that the surety would end up "double-compensating" both subcontractors, such as Tri-County, and their suppliers, such as Local 542. See United States ex rel. Blue Circle West, Inc. v. Tucson Mechanical Contracting Inc., 921 F.2d 911 (9th Cir. 1990). As the United States Supreme Court explained in J. W. Bateson Co., Inc. v. United States ex rel. Board of Trustees, 434 U.S. 586, 98 S.Ct. 873, 55 L.Ed.2d 50 (1978), bond notice provisions function much like a statute of repose, "permit[ting] [the surety], after waiting ninety days, safely to pay [the] subcontractors without fear of additional liability to sub-subcontractors . . . . The notice provision thus prevents both `double payments' by [sureties] and the alternative of interminable delay in settlements between contractors and subcontractors." Id. at 590-91 n. 4, 98 S.Ct. at 876 n. 4 (citations omitted). See also Lezzer, 537 A.2d at 862. Because Tri-County itself could make no claim against Hartford, this risk was absent from the outset.

After having treated Mele and Tri-County as essentially the same company, Hartford cannot now assert Tri-County's independence as a means of avoiding liability. The district court determined that the facts and the equities in this case required piercing the corporate veil and holding Mele to be Tri-County's alter ego. We agree.

IV. ERISA Preemption

Hartford next contends that Local 542's action under the Bond is preempted by the Employees Retirement Income Security Act, 29 U.S.C. §§ 1001-1461 ("ERISA"). We must also reject this argument.

A.

With several exceptions not relevant here, § 514(a) of ERISA, 29 U.S.C. § 1144(a), "preempts `any and all State laws insofar as they may now or hereafter relate to any employee benefits plan' covered by the statute." Mackey v. Lanier Collection Agency Service, Inc., 486 U.S. 825, 829, 108 S.Ct. 2182, 2185, 100 L.Ed.2d 836 (1988) (quoting § 514(a)).

We recently stated that a rule of law "relates to" an ERISA plan "if it is specifically designed to affect employee benefits plans, if it singles out such plans for special treatment, or if the rights or restrictions it creates are predicated on the existence of such a plan." United Wire, Metal and Machine Health and Welfare Fund v. Morristown Memorial Hospital, 995 F.2d 1179, 1192 (3d Cir.), cert. denied, ___ U.S. ___, 114 S.Ct. 382, 126 L.Ed.2d 332 (1993) (footnotes omitted).

In addition, state causes of action which conflict with ERISA § 502(a) (ERISA's civil enforcement mechanism) are also preempted. Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 54, 107 S.Ct. 1549, 1556-57, 95 L.Ed.2d 39 (1987); see also Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 142, 111 S.Ct. 478, 484-85, 112 L.Ed.2d 474 (1990).

Although neither party has briefed the issue, we assume that Local 542 is proceeding at common law as third-party beneficiary of the surety bond. See Philadelphia v. Smith Roofing, 410 Pa. Super. 95, 599 A.2d 222, 229 (1991).

At the outset, it is clear that the cause of action relied upon by Local 542 is neither "specifically designed to affect employee benefits plans" nor "singles out" such plans for special treatment. United Wire, 995 F.2d at 1192. Rather, such common law causes of action are "generally applicable" laws that "make no reference to, [and] indeed function irrespective of, the existence of an ERISA plan." Ingersoll-Rand, 498 U.S. at 139, 111 S.Ct. at 483.

Nor is the cause of action "predicated on the existence of" an ERISA plan. United Wire, 995 F.2d at 1192. In Ingersoll-Rand the Supreme Court held that ERISA preempted Texas' common law action against an employer for terminating an employee in order to avoid paying pension fund benefits. One of the two reasons given by the Court for why the Texas action was preempted was that "in order to prevail [in the cause of action], a plaintiff [must] plead, and the court [must] find, that an ERISA plan exists and the employer had a pension-defeating motive in terminating the employment." Id. at 140, 111 S.Ct. at 483. Such a cause of action "relates not merely to pension benefits, but to the essence of the pension plan itself" Id. (emphasis in the original). The Court concluded that "[b]ecause the court's inquiry must be directed to the plan, this judicially created cause of action `relate[s] to' an ERISA plan." Id. No such inquiry is necessary in the present action.

Here, the district court need only determine Hartford's obligations under the Bond. It need make no inquiry into the validity or status of the funds (or indeed whether they are ERISA funds), nor need it explore Hartford's motives regarding employee benefits. The fact that the claimant under the bond happens to be an ERISA fund is not the kind of "critical factor in establishing liability" that prompted preemption in Ingersoll-Rand. Id. at 139-40, 111 S.Ct. at 482-84.

Our recent decision in Haberern v. Kaupp Vascular Surgeons Pension Plan, 24 F.3d 1491, 1497 (3d Cir. 1994) is instructive on this point. Ms. Haberern's employer made contributions to her pension plan based on the size of her salary excluding bonus. By recharacterizing a portion of her compensation as a "bonus," the employer effectively reduced the amount it paid into her pension plan. Ms. Haberern claimed that this constituted a violation of ERISA. The defendant argued that Ms. Haberern's status as an at-will employee under Pennsylvania law allowed it to change her compensation at any time. Ms. Haberern responded that ERISA preempted Pennsylvania law on at-will employment in this regard. On appeal, we held that Pennsylvania's common law presumption of at-will employment relationships was not preempted by ERISA because the presumption was "unrelated to the existence vel non of any pension plan." Id. at 1497. The very same may be said of Local 542's cause of action. Simply because the sums collected may ultimately feed into an ERISA-governed fund does not in itself mean that the cause sued upon creates rights or restrictions which are "predicated on" the existence of an ERISA plan.

B.

Nor is the cause of action asserted here subject to what we have termed "conflict preemption" under ERISA. See PAS v. Travelers Insurance Company 7 F.3d 349, 356 (3d Cir. 1993). ERISA's civil enforcement remedies were meant to be exclusive. Pilot Life, 481 U.S. at 51, 107 S.Ct. at 1554-55. Thus, even a common law cause of action is preempted by ERISA if it conflicts directly with an ERISA cause of action. See Ingersoll-Rand, 498 U.S. at 142, 111 S.Ct. at 484-85.

Together, ERISA §§ 502 and 515 (29 U.S.C. §§ 1132 and 1145, respectively) "provide a cause of action and remedies for an employer's failure to fulfill its obligations to make pension or welfare fund contributions pursuant to a plan or collective bargaining agreement." Bricklayers and Allied Craftsmen International Union Local 33 Benefits Funds v. America's Marble Source, Inc., 950 F.2d 114, 117 (3d Cir. 1991) (emphasis added).

Section 3 of ERISA, 29 U.S.C. § 1002(5), defines "employer" as "any person acting directly as an employer, or indirectly in the interest of an employer, in relation to an employee benefit plan." Courts that have considered the matter have all but unanimously held that sureties do not fall within this definition. See, e.g., Carpenters So. Cal. Admin. Corp. v. D L Camp Construction Co., Inc., 738 F.2d 999, 1000 (9th Cir. 1984) (legislative history of ERISA revealed no Congressional intent to "expand the concept of employer . . . to include sureties, whose obligations are fixed by contract and regulated by state law for the protection of the public").

The Eleventh Circuit has emphasized that sureties who are not signatories to the collective bargaining agreement between the employer and the claimants do not fall within the ERISA definition of "employer," stating as follows:

The phrase, "in the interests of the employer" is the operative one here. The surety does not act indirectly in the interests of the employer, but rather acts directly in the interests of employees damaged by the employer's failure to pay.

Xaros v. U.S. Fidelity and Guaranty Co., 820 F.2d 1176, 1180 (11th Cir. 1987); cf. Laborers Local 938 Joint Health Welfare Trust Fund v. B.R. Starnes Co., 827 F.2d 1454, 1457 (11th Cir. 1987); Giardiello v. Balboa Ins. Co., 837 F.2d 1566 (11th Cir. 1988). But see Greenblatt v. Delta Plumbing Heating Corp., 818 F. Supp. 623, 629 (S.D.N Y 1993) (rejecting the reasoning of the Eleventh and Ninth Circuits and holding that a surety qualified as an employer under ERISA).

We agree with the Ninth and Eleventh Circuits that a surety does not act "in the interest of an employer." Although it is true that the surety's services are often purchased by the employer in order that it may proceed with its business, the ultimate beneficiaries of that contract are the claimants on the bond. The surety does not stand in an employer relationship to the claimants, nor is it the agent of the employer. Thus, Hartford, which is neither the employer of Local 542's operating engineers nor acting "in the interests of" their employer, cannot claim ERISA preemption.

V. Damages

Hartford's final argument on appeal concerns the extent of its liability under the Bond. The district court awarded Local 542 a total of $126,224.11, including $78,794.79 in unpaid contributions, $5,719.11 in union dues and $42,190.21 in liquidated damages, all derived from the provisions of the CBA (Collective Bargaining Agreement) less $480.00 in prepayment. The court also awarded reasonable attorney fees and costs of $19,881.73 according to the terms of the PFA (Pension Fund Agreement). Hartford contends that under Pennsylvania law its obligations do not extend to payment of liquidated damages and attorney fees in the absence of a specific bond provision to the contrary. We agree.

Pennsylvania law, at least as announced by that State's intermediate courts, limits a surety's obligations to those detailed in the bond itself, Reliance Universal, Inc. v. Ernest Renda Contracting Co., Inc., 308 Pa. Super. 98, 454 A.2d 39, 45 (1982), and not those contained in the agreement between the contractor and the claimant. J.C. Snavely Sons, Inc. v. Web M E, Inc., 406 Pa. Super. 271, 594 A.2d 333, 336 (1991). Local 542's claims against Hartford are predicated, at least in part, on Tri-County's obligations to it under the CBA and the PFA. Because the Bond makes no reference to liquidated damages or attorney fees, Hartford has disavowed any responsibility for these items. Hartford's bond provides as follows:

[Hartford agrees] that every claimant . . . who has not been paid in full before the expiration of a period of ninety (90) days after the date on which the last of such claimant's work or labor was done or performed . . . may sue on this bond for . . . such sum or sums as may be justly due claimant . . . .

App. 97. Hartford is thus obliged to render to Local 542 all sums which Local 542 is "justly due" for labor. The district court reasoned that as Local 542 members would not be "paid in full" for their labor until all of Tri-County's obligations under the CBA and PFA (including liquidated damages and attorney fees) had been satisfied, Hartford must be liable for these items. Although the parties have pointed us to no decisions of the Pennsylvania Supreme Court treating the issues presented here, we believe that the law of Pennsylvania is otherwise.

As previously noted, the bond is silent as to attorney fees and liquidated damages, and it is the language of the bond that is controlling under Pennsylvania law. Thus, the central question necessarily becomes: What obligations are "sums justly due" for labor? One answer is that the surety's obligations to the claimant are co-extensive with those of the employer. But this is simply to say that Hartford's obligations are fully determined by the agreements between Tri-County and Local 542. As already noted, this has been expressly (and recently) rejected by Pennsylvania's lower courts. Such decisions are persuasive precedent, National Surety Corp. v. Midland Bank, 551 F.2d 21, 29 (3d Cir. 1977), and are "not to be disregarded by a federal court unless it is convinced by other persuasive data that the highest court of the state would decide otherwise." West v. American Telephone Telegraph Co., 311 U.S. 223, 237, 61 S.Ct. 179, 183, 85 L.Ed. 139 (1940).

Nevertheless, it is clear that what Local 542 is "justly due" turns at least in part on what Tri-County promised Local 542. And this will inevitably be determined by reference to the agreements between them. Indeed, Hartford does not contest that Local 542 is "justly due" the fringe benefit contributions and union dues which are specified in detail in the CBA. The question thus becomes what of Tri-County's obligations to Local 542 are "sums justly due" for labor.

In regard to attorney fees, we have already held that they are not "sums justly due." In doing so, we rejected an argument very much like that proffered by Local 542 and accepted by the district court. In Knecht, Inc. v. United Pacific Insurance Company, 860 F.2d 74 (3d Cir. 1988), a supplier brought suit on a surety bond covering "sums justly due," seeking, inter alia attorney fees. We stated as follows:

The district judge noted that unless the [attorney] fees were paid, [the claimant] would not be made whole. This undoubtedly is correct but the judge's holding proved too much, as it is always true that when a plaintiff must make expenditures for attorney's fees to recover a debt it will not be made whole unless its fees are also recovered. Further, whenever a person is indebted to another the sum owed may be regarded as justly due . . . . In fact, we can hardly conceive of how a bond could be written to authorize a claimant to sue for anything less than a sum justly due. We also observe that in some contracts express provision is made for recovery of attorney's fees in the event of an action for breach. Yet in [the bond] no reference was made to attorney's fees. In the circumstances, we conclude that attorney's fees are not recoverable in this action.

Id. at 80-81. Since Knecht, the Pennsylvania Superior Court has held that attorney fees are not sums "justly due." Snavely, 594 A.2d at 334-37. As we are unable to discern a meaningful difference between the present action and the cause of action asserted in Knecht, we are constrained to reverse the district court's award of attorney fees.

We must similarly reverse the district court's award of "liquidated damages," a sum which the CBA refers to as a "penalty" to be assessed against Tri-County in the event of late payment of the fringe benefit contributions. On at least three occasions Pennsylvania courts (or courts applying Pennsylvania law) have rejected the liability of a surety for default obligations which add some percentage accretion to the underlying debt. See Reliance Universal, Inc. of Ohio v. Ernest Renda Contracting Co., 308 Pa. Super. 98, 454 A.2d 39, 44-46 (1982) (surety on bond covering cost of "all labor and material used" not liable for a 1 1/2% "service charge" for late accounts provided for in contract between contractor and supplier because not part of the "cost" of labor and materials); Lite-Air Products, Inc. v. Fidelity Deposit Co. of Maryland, 437 F. Supp. 801, 804 (E.D.Pa. 1977) (surety on bond covering "amount due the claimant for such labor or material" not liable for "finance charges" on late payments for materials because such charges are more akin to penalties or damages than they are related to the value of the materials); J.C. Snavely Sons, 594 A.2d at 335-37 (surety on bond covering "sums as may be justly due" not liable for attorney fees and finance charges accrued under agreement between claimant and contractor because not detailed in the payment bond). See also Salvino Steel Iron Works, Inc. v. Fletcher Sons, Inc., 398 Pa. Super. 86, 580 A.2d 853, 856 (1990) (surety on bond covering payment to those who have "furnished material or performed or supplied labor" not liable for delay damages attributable to contractor because not within the express language of the bond).

These cases reveal a clear reluctance on the part of Pennsylvania courts to expand the liability of a surety beyond the base or essential obligations of the contractor. Indeed, in Lite-Air the court declined to hold a surety liable for "finance charges" for delinquent payments as they were in the nature of a penalty — and "penalty" is precisely how the "liquidated damages" are described in the CBA. In the absence of an express provision in the Bond, we conclude that such additional contractual "charges," "fees" or "penalties" cannot be considered "sums justly due" and hence are not recoverable from a surety under Pennsylvania law. Accordingly, we will reverse the district court on this ground as well.

VI.

Having considered the record and the arguments of the parties, we will affirm the district court's March 2, 1994 and February 13, 1995 orders insofar as they entered judgment on Count IV against Hartford and in favor of Local 542 for unpaid contributions and union dues, less prepayments.

We will, however, reverse the district court's orders insofar as they grant liquidated damages and attorney fees to Local 542, and we will remand to the district court with directions that the March 2, 1994 order and the February 13, 1995 judgment be modified to delete all amounts awarded to Local 542 for liquidated damages and attorney fees, consistent with the foregoing opinion.