Opinion
CASE NO. 2:06-CV-345.
January 29, 2009
OPINION AND ORDER
In its Opinion and Order on summary judgment this Court held, in part:
Judgment shall be entered in favor of Plaintiffs and Intervenor Plaintiffs and against AirTab as to all claims for contributions for the period December 2005 through May 2006.
(Doc. # 137 at 19.) The Court further ordered the parties to submit proposed orders containing calculations as to the amount of the judgment to be entered in favor of Plaintiffs and Intervenor Plaintiffs, and to inform the Court of how to distribute the $30,000.00 bond on deposit with the Court. Id. The parties complied with that order and submitted their proposed orders. (Docs. # 159, 160.) On January 23, 2009 the Court held an oral hearing on the matter. ( See Docs. # 161, 172.)
The parties dispute two issues. First, the parties disagree as to the individuals upon whom the contributions should be paid and for which months the contributions are due. Second, the parties disagree as to the amount of interest and liquidated damages due. The Court will address both issues.
Pursuant to the collective bargaining agreement ("CBA") between Defendant AirTab and Sheet Metal Workers' Local Union 24, if the employer fails to make the required Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq. contributions, the employer shall be liable for:
1) the unpaid contributions;
2) interest on the unpaid contributions;
3) an amount equal to the greater of:
a) interest on the unpaid contributions,
b) liquidated damages in the amount of 20% of the unpaid contributions;
4) reasonable attorney's fees and costs of any legal action brought against the Employer to collect contributions or other amounts due hereunder or to enforce the payment of such contributions or other amounts required to be paid hereunder;
5) punitive damages in the event of persistent or willful failure or refusal to timely pay contributions required hereunder.
The CBA sets the interest rate at 20%, and sets the liquidated damages at 20%. The Trustees of the Welfare Fund and the Pension Fund in October, 2005, changed the first time delinquency interest rate to 10%, the second time rate to 15%, and 20% thereafter, effective January 1, 2006.
ERISA also authorizes the imposition of (1) delinquency assessments and (2) interest penalties against an employer delinquent in its contributions. Specifically, 29 U.S.C. § 1132(g) mandates that courts award the following damages upon a finding of liability:
In any action under this title by a fiduciary or on behalf of a plan to enforce Section 515 in which a judgment in favor of the Plaintiff is awarded, the court shall award the plan —
(A) the unpaid contributions,
(B) interest on the unpaid contributions,
(C) an amount equal to the greater of —
(i) interest on the unpaid contributions, or
(ii) liquidated damages provided for under the plan in an amount not in excess of 20 percent (or such higher percentage as may be permitted under Federal or State law) of the amount determined by the court under subparagraph (A),
(D) reasonable attorneys' fees and costs of the action, to be paid by the Defendant, and
(E) such other legal or equitable relief as the court deems appropriate.
For purposes of this paragraph, interest on unpaid contributions shall be determined by using the rate provided under the plan, or, if none, the rate prescribed under Section 6621 of the Internal Revenue Code of 1986.29 U.S.C. § 1132(g).
In the instant action, AirTab first argues that the individuals upon whom contributions are due resigned from the union on February 13, 2006. AirTab concludes that it only owes contributions through that date. AirTab's argument is not well taken.
AirTab also claims that its pay records were not correct with regard to holiday hours and with regard to a few employees who allegedly falsified time records. However, these issues are between AirTab and the Sheet Metal Workers' Local Union 24, not between AirTab and the Plaintiff Funds and/or the Intervenor Funds. These funds must rely on the time records submitted by the employer.
In this circuit, "defendants were obliged to make contributions to funds for covered work performed by [employees] irrespective of their status under the plan." Iron Workers' Local No. 25 Pension Fund v. MCS General Contrs., Inc., 229 F.3d 1152, 2000 WL 1276830 (6th Cir. Aug. 30, 2000) (unpublished disposition). Indeed, "[a]s a matter of law, collective bargaining agreements may require employers to contribute to funds for all employees, not just employees who are members of the union." Trustees of B.A.C. Local Ins. Fund v. Fantin Enterprises, Inc., 163 F.3d 965 (6th Cir. 1998). AirTab is, accordingly, responsible for contributions on all work at issue here, whether or not those performing the work were members of the union when the work was performed.
AirTab next argues that the CBA should be read to require AirTab to pay either interest or liquidated damages but not both. AirTab requests that if the Court interprets the CBA to include both interest and liquidated damages the Court find that the damages constitute a penalty, thereby relieving AirTab from its obligation to pay that penalty. Again, AirTab's argument is not well taken.
The CBA clearly provides for both interest and liquidated damages and ERISA actually requires this award. See 29 U.S.C. § 1132(g). See also M.L. Noe v. R.D. Jones, Excavating, Inc., 787 F. Supp. 759, 765 (S.D. Ohio 1992) (applying 29 U.S.C. § 1132(g) to permit recovery of delinquent contributions, interest, liquidated damages, costs and attorney's fees); New York State Teamsters Conf. Pension Retirement Fund by Bush v Fratto Curbing Co., 875 F. Supp 129 (N.D. N.Y. 1995) (same). Further, ERISA authorizes the award of "liquidated damages provided under the plan in an amount not in excess of 20 percent" of the delinquent contributions. 29 U.S.C. § 1132(g)(2)(C)(ii). See also Dugan v. R. J. Corman Co./Material, 32 Employee Benefits Cas. (BNA) 2959, 2004 U.S. Dist. LEXIS 3807, at *9 (N.D. Ill. March 9, 2004) (application of twenty percent liquidated damages); Sheet Metal Workers Local 19 v. Keystone Heating Air Conditioning, 14 Employee Benefits Cas. 2686, 139 BNA LRRM 2481 (E.D. Pa. Fef. 10, 1992) (same).
Accordingly, the interest on AirTab's delinquent contributions is calculated so that for December 2005, March 2006, April 2006, and May 2006 the amount is figured at 20% compounded daily, for January 2006 the amount is figured at 10% compounded daily, and for February 2006 the amount is figured at 15% compounded daily. The total amounts due as of January 23, 2009 are as follows: to the Sheet Metal Workers Local 98 Welfare Fund $35,885.13, to the Sheetmetal Workers Local 98 Pension Fund $26,629.44, to the Sheet Metal Workers' Local 24 Columbus Area Retirement Savings Plan $6,012.60, and to the Sheet Metal Workers' Local 24 Joint Apprenticeship and Training Fund $2,163.63. The total amount of contributions due is $70,690.80 minus $30,000.00 that is on deposit with this Court leaving a total of $40,690.80. AirTab is hereby ORDERED to pay forthwith $40,690.80, to Plaintiffs and Intervenor Plaintiffs. That amount will continue to increase pursuant to the formulae set out above until such time as the amount in full is paid.
The monthly breakdowns of these amounts can be found on Exhibit P1 from the January 23, 2009 in court hearing.
The Clerk of this Court is DIRECTED to remit forthwith to Plaintiffs' attorney Leonard S. Sigall, the $30,000.00 on deposit with this Court in this case. Mr. Sigall is ORDERED to distribute forthwith the funds as proposed by Plaintiffs and Intervenor Plaintiffs in their proposed order on damages. (Doc. # 160.)