ROOFERS LOCAL 30 COMBINED WELFARE FUND et al v. BOURQUE

Filing 26

MEMORANDUM AND ORDER THAT JUDGMENT IN FAVOR OF PLAINTIFFS WILL BE ENTERED FOR THE FOLLOWING: CONTRIBUTIONS OF $11,137.67. INTEREST TO DATE, TO BE CALCULATED ACCORDING TO THE COLLECTIVE BARGAINING AGREEMENT. LIQUIDATED DAMAGES TO BE CALCULATED ACCORDING TO THE COLLECTIVE BARGAINING AGREEMENT.; ETC.. SIGNED BY HONORABLE EDMUND V. LUDWIG ON 9/25/09. 9/28/09 ENTERED AND COPIES MAILED TO UNREP, E-MAILED.(jl, )

IN THE UNITED STATES DISTRICT COURT F O R THE EASTERN DISTRICT OF PENNSYLVANIA R O O F E R S LOCAL 30 COMBINED W E L F A R E FUND, et al. v. W I L L IA M J. BOURQUE : : : : : : D E C IS IO N L u d w ig , J. S e p te m b e r 25, 2009 C IV IL ACTION

N o . 06-3787

P la in tif f s1 sue defendant2 for payments alleged to be due under a collective bargaining a g r e e m e n t . Upon hearing, judgment will be entered in favor of plaintiffs and against d e f en d a n t in the amount of $11,137.67, plus interest, liquidated damages, attorneys' fees and c o s t s .3 I. Findings of Fact 1 . On May 24, 2005, defendant William J. Bourque signed a Memorandum of

Plaintiffs are Roofers Local 30 Combined Welfare Fund, Roofers Local No. 30 Combined Pension Fund, Roofers Local No. 30 Combined Vacation Fund, Roofers Local 30 Combined Annuity Fund, and Composition Roofers Union Local No. 30 Apprenticeship Fund (all trust funds established under 29 U.S.C. § 185(c)(5) and "multiemployer plans" and "employee benefit plans" within the meaning of 29 U.S.C. § 1002(37)(1), (2) and (3)) ("the Funds"); Roofers Local 30 Political Action and Education Fund (a political action committee), Roofing Contractors Association Industry Fund (a fund established to foster the interests of the Philadelphia area roofing industry), and Local Union No. 30 of the United Union of Roofers, Waterproofers and Allied Workers, AFL-CIO ("the Union"). Defendant is William J. Bourque a/k/a William J. Bourque, Jr. d/b/a McGiver Spray Systems also d/b/a MacGyver Services, Inc. Defendant operates a commercial coating business. Hearing transcript, 13. Under the relevant ERISA statute, upon a finding in favor of an ERISA plaintiff, awards of interest, liquidated damages, attorneys' fees and costs are mandatory. 29 U.S.C. § 1132(g)(2).
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A g re e m e n t with the Union related to his company's work on a roofing project at the BristolM ye rs -S q u ib b plant in New Jersey. A g re e m e n t, Plaintiffs' Exhibit 1. 2 . The "Collective Bargaining Agreement by and Between Roofers Local 30 and R o o f in g Contractors' Association Covering Commercial Roofing and Commercial R e ro o f in g " for the period May 1, 2001 through April 30, 2009 was in effect on May 24, 2 0 0 5 . Collective Bargaining Agreement, Plaintiffs' Exhibit 2. 3 . The MOA required defendant to "abide by all of the terms and conditions of the c o lle c tiv e bargaining agreement in effect as of 5-24-05 through completion between United U n i o n of Roofers, Waterproofers and Allied Workers Local Union #30 and the Roofing C o n tra c to rs Association." Plaintiffs' Exhibit 1. 4 . The Collective Bargaining Agreement requires the payment of contributions and w a g e deductions to the Funds for time worked by employees covered by the terms and c o n d itio n s of the agreement. Plaintiffs' Exhibit 2, at 51-64. 5 . From June 2005 through September 2005, defendant worked on the Bristol-MyersS q u ib b project. Transcript, 17; Pay stubs, Plaintiffs' Exhibits 4-7. Defendant was required to hire Roofers Union employees to work on the project. Transcript, 15. 6. The Union employees were John Swayze (shop steward), Kenney Alley (foreman), J o h n Wim, and Edward Tittermary. Transcript, 19; pay stubs, Plaintiffs' Exhibits 4-7; R e m itta n c e reports, Plaintiffs' Exhibit 8. Transcript of hearing, 14-15; Memorandum of

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7 . Defendant paid the employees based on "summer hours," as described to him by S w a yz e and Alley. Under "summer hours," instead of working from 7:00 a.m. until 3:30 p .m ., the employees were permitted to begin work at 6:30 a.m. and leave at 1:00 p.m., with o n ly a 15-minute break during the day. They were to be paid for a full eight-hour day, even th o u g h they worked only six hours. Transcript, 20. 8 . Defendant requested written proof of "summer hours," but no proof was given to h im , and Bourque learned only after the project was completed that "summer hours" did not e x is t. Transcript, 20121. 9 . Defendant paid the Union employees for 40-hour work weeks based on a wage rate p ro v id e d by Swayze. Transcript, 17, 29-30; Plaintiff's Exhibits 4-7. 1 0 . During the course of the project, defendant made contributions to plaintiffs by g iv in g checks made payable to "Local 30 Roofers Union" to Swayze at Swayze's request. D e f en d a n t gave Swayze two $800 checks and one for $3,640. The $800 checks were cashed; th e $3,640 check was not. Transcript, 22. 1 1 . Defendant made no other contribution payments. 1 2 . Defendant was not provided with a copy of the collective bargaining agreement o r the wage sheet in effect during the course of the project until October 19, 2006, more than a year after the completion of defendant's work. Transcript, 16, 17. 1 3 . Defendant was not provided with reporting forms or remittance forms for c a lcu latin g contributions to be paid to the Funds during the course of the project. Transcript,

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2 1 -2 2 . 1 4 . Defendant completed and submitted remittance forms in January, 2007. Plaintiffs' E x h ib it 8. 1 5 . The remittance forms reflect the hours actually worked by the Union employees. D e f e n d a n t used the actual hours worked to calculate the contributions owed to plaintiffs. T ra n sc rip t, 29-31, 33. 1 6 . Defendant paid no further contributions. II. Discussion S e c tio n 515 of ERISA: "Every employer who is obligated to make contributions to a multiemployer plan under the terms of the plan or under the terms of a collective bargaining a g r e e m e n t shall, to the extent not inconsistent with law, make such contributions in a cc o rda n ce with the terms and conditions of such plan or such agreement." 29 U.S.C. § 1 1 4 5 . By signing the MOA, defendant bound himslef to the terms and conditions of the c o lle c tiv e bargaining agreement. The collective bargaining agreement obligated defendant to pay wages to Union employees and contributions to the Funds at the rates in effect during th e period they worked on the Bristol-Myers-Squibb project. This is so although defendant w a s not provided with the wage sheet until long after the completion of the project. The pay stubs submitted for the Union employees reflect a total of 762 hours worked. H o w ev er, defendant Bourque's testimony, which is credited, is that Union employees were p a i d as if they had worked eight-hour days, based on their insistence that "summer hours"

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w e r e in effect. Actually, they worked only six-hour days, for a total of 593 hours, as r e f l e c te d in the remittance sheets prepared by defendant. The hourly contribution rate ap p lica b le to journeymen roofers at the time the project was ongoing was $21.48 per hour.4 M u ltip lyin g the 593 hours worked by the Union employees times the required contribution ra te of $21.48 per hour results in a contribution obligation of $12,737.67. Defendant gave a cash bond of $1,600 (Transcript, at 22), which reduces the delinquent contribution amount o w e d to $11,137.67. Defendant says he is entitled to a set-off against the delinquent amount because Union e m p lo yee s were overpaid as a result of the "summer hours" misinformation from Swayze and A l l e y. However, the Union and the Funds are separate entities, and statements made by U n i o n representatives are not attributable to the Funds. Chambless v. Masters, Mates & P ilo t's Pension Plan, 772 F.2d 1032, 1041 (2d Cir. 1985), cert. denied, 475 U.S. 1012 (1986); D u d o v. Schaffer, 551 F. Supp. 1330, 1342 (E.D. Pa. 1982), aff'd, 720 F.2d 661 (3d Cir. 1 9 8 3 ). Even if the statements were attributable to the Funds and a set-off appropriate,

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That amount breaks down as follows: $ 8.23 $ 5.24 $ 4.00 $ .40 $ .08 $ 1.80 $ 1.61 $ .07 $ .05 5

Welfare Fund Annuity Fund Pension Fund RCAIF Fund Apprenticeship Fund Vacation/Holiday Fund & Credit Union Union Fund Political Action Fund Home Association Fund

b e c au s e this is an action to recover delinquencies, the defense would be negated. Central S ta te s, S.E. and S.W. Areas Pension Fund v. Gerber Truck Service, Inc., 870 F.2d 1148, 1 1 5 3 (7 th Cir. 1989) (en banc)(employer must pay contributions to pension plans n o tw ith s ta n d in g defenses to formation of contract); Abbate v. Browning-Ferris Industries, In c ., 767 F.2d 52, 55-56 (3d Cir. 1985) (oral modification by union of terms of written ag ree m en t to pay into employee benefit funds ineffective in modifying pension obligations). A c c o rd in g ly, defendant is not entitled to a set-off, and an award of $11,137.67 must be e n te re d against him. U p o n finding in an ERISA plaintiff's favor, a court must award the following under th e ERISA statute: ( 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 o f 20 percent . . . of the amount determined by the court under subparagraph (A ); (D ) reasonable attorneys' fees and costs of the action; and (E ) such other legal or equitable relief as the court deems appropriate. S e c tio n 502(g)(2) of ERISA, 29 U.S.C. § 1132(g)(2). Interest under ERISA is calculated

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f r o m the date the contributions became due until the date of actual payment and is a m a n d a to r y award under ERISA. 29 U.S.C. § 1132(a)(2); Laborers Health and Welfare Trust F u n d v. Advanced Lightweight Concrete Co., 484 U.S. 539, 547 (1988). An award of liq u id a te d damages is also mandatory under ERISA. 5 T h ro u g h September 25, 2009, defendant owes interest "equal to one percent (1%) of th e gross amount of the contributions due to the Fund for each month (or part of a month) the c o n trib u tio n s remain unpaid." Collective Bargaining Agreement, Article XXIII, Section 2 (b ). Defendant also owes liquidated damages of up to 15% of the amount of the delinquent c o n trib u tio n s . Id. Additionally, defendant is required to pay reasonable attorneys' fees and co sts. 29 U.S.C. § 1132(g)(2)(D). III. Conclusions of Law 1 . This court has subject matter jurisdiction over this action and over the parties. 29 U .S .C . §§ 185(a), 1132 and 1145. Venue lies in the Eastern District of Pennsylvania under 2 9 U.S.C. §§ 185(a) or 1132(e)(2).

Moreover, the collective bargaining agreement requires an award of interest on late payments, and an award of counsel fees and liquidated damages where the funds are required to resort to litigation to recover delinquent payments. "An Employer who has not paid its required contributions for a month by the twenty-fifth (25th) day of the month following the month in which the contribution obligation was incurred shall be required to pay, in addition to the unpaid contributions, interest equal to one percent (1%) of the gross amount of the contributions due to the Fund for each month (or part of a month) the contributions remain unpaid. The Employer who is delinquent in such fashion shall pay counsel fees and liquidated damages up to fifteen percent (15%) of the amount of delinquent contributions t the various benefit funds in the event such finds find it necessary to initiate legal action to recover the delinquency."Collective Bargaining Agreement, Article XXXIII, Section 2(b). 7

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2 . The Union employees should be classified as journeymen and paid as such a c co rd in g to the wage rate sheet, Plaintiffs' Exhibit 3. 3 . The Union employees should not have been paid for eight-hour days, because they w o rk e d only six-hour days. 4. Though the Union employees were overpaid, defendant may not set off the o v e r p a ym e n t against contributions due plaintiffs. 5 . Contributions must be calculated based on six-hour workdays. 6 . Plaintiffs are entitled to an award of interest and liquidated damages, and r e a so n a b l e attorneys' fees and costs. 7 . Judgment in favor of plaintiffs will be entered for the following: a . Contributions of $11,137.67; b . Interest to date, to be calculated according to the collective bargaining agreement; c . Liquidated damages to be calculated according to the collective bargaining a g re e m e n t. 8 . Plaintiffs will submit an updated petition for attorneys' fees, with interest and liq u id a te d damages calculations by October 23, 2009. Defendant will have until November 2 0 , 2009, in which to submit objections. B Y THE COURT:

/s/ Edmund V. Ludwig Edmund V. Ludwig, J.

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