Good et al v. Southern Steel & Construction, LLC et al
Filing
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ORDER AND MEMORANDUM OPINION: Pending before the Court is Third-Party Defendant, Quality Iron Fabricators, Inc.'s ("Quality") Motion to Dismiss the Third-Party Complaint of Iron Workers Tennessee Valley and Vicinity Welfare Fund, Iro n Workers Tennessee Valley and Vicinity Pension Fund, and Iron Workers Tennessee Valley and Vicinity Annuity Fund (hereinafter collectively "Iron Workers"). (Doc. No. 30 , 31 ). The Iron Workers have responded in opposition. (Doc. No. [ 37]). For the reasons discussed below, Quality's Motion to Dismiss 30 is hereby DENIED. Signed by District Judge William L. Campbell, Jr on 6/12/2018. (DOCKET TEXT SUMMARY ONLY-ATTORNEYS MUST OPEN THE PDF AND READ THE ORDER.)(mg)
IN THE UNITED STATES DISTRICT COURT FOR
MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION
RODNEY GOOD and IRON WORKERS
TENNESSEE VALLEY AND VICINITY
WELFARE FUND; IRON WORKERS
TENNESSEE VALLEY AND VICINITY
PENSION FUND, and IRON WORKERS
TENNESSEE VALLEY AND VICINITY
ANNUITY FUND
Plaintiffs,
v.
SOUTHERN STEEL AND
CONSTRUCTION, LLC; J. WARREN
“SKIP” BROCK; DEBBIE BROCK;
DENNY M. RUTLEDGE, JR.; and
SHARON RUTLEDGE
Defendants
and
SOUTHERN STEEL AND
CONSTRUCTION, LLC;
Third Party Plaintiff,
v.
QUALITY IRON FABRICATORS, INC.
Third Party Defendant.
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NO. 3:17-cv-1143
JUDGE CAMPBELL
MAGISTRATE JUDGE
HOLMES
ORDER AND MEMORANDUM OPINION
Pending before the Court is Third-Party Defendant, Quality Iron Fabricators, Inc.’s
(“Quality”) Motion to Dismiss the Third-Party Complaint of Iron Workers Tennessee Valley and
Vicinity Welfare Fund, Iron Workers Tennessee Valley and Vicinity Pension Fund, and Iron
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Workers Tennessee Valley and Vicinity Annuity Fund (hereinafter collectively “Iron Workers”).
(Doc. No. 30, 31). The Iron Workers have responded in opposition. (Doc. No. 37). For the reasons
discussed below, Quality’s Motion to Dismiss is hereby DENIED.
I.
FACTUAL AND PROCEDURAL BACKGROUND
The Iron Workers filed their Complaint on August 11, 2017, against Southern Steel &
Construction, LLC (“SSC”) under the Employment Retirement Income Security Act of 1974
(“ERISA”) seeking to recover employer contributions allegedly owed to the fund managed by Iron
Workers (hereinafter the “Plaintiffs Funds”). (Doc. No. 1). On November 2, 2017, SSC filed a
Third-Party Complaint against Quality alleging the Iron Workers’ claim arose out of a construction
project on which SSC provided labor, services, and materials as a subcontractor to Quality for
construction of a facility located on the Vanderbilt University campus. (Doc. No. 17). On January
5, 2018, the Iron Workers asserted a third-party claim directly against Quality. (Doc. No. 25). The
Iron Workers allege that Quality is liable to the Iron Workers for the same ERISA contributions
that the Iron Workers seek against SSC, asserting that Quality was a joint employer with SSC
starting in December 2015. (Id.). Iron Workers allege Quality is obligated to pay contributions to
the Plaintiffs Funds as required by the collective bargaining agreement. (Id.).
Quality filed their Motion to Dismiss alleging the claims asserted by Iron Workers fail to
set forth a cause of action upon which relief can be granted. (Doc. No. 31).
II.
STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b)(6) permits dismissal of a complaint for failure to
state a claim upon which relief can be granted. For purposes of a motion to dismiss, a court must
take all of the factual allegations in the complaint as true. Ashcroft v. Iqbal, 556 U.S. 662 (2009).
To survive a motion to dismiss, a complaint must contain sufficient factual allegations, accepted
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as true, to state a claim for relief that is plausible on its face. Id. A claim has facial plausibility
when the plaintiff pleads facts that allow the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged. Id. Threadbare recitals of the elements of a cause
of action, supported by mere conclusory statements, do not suffice. Id. When a complaint includes
well-pleaded factual allegations, a court should assume their veracity and then determine whether
they plausibly give rise to an entitlement of relief. Id. at 1.
III.
ANALYSIS
Quality asserts the Iron Workers Third-Party Complaint fails to meet the pleading
requirements of Rule 8 of the Federal Rules of Civil Procedure. Specifically, Quality argues the
Iron Workers fail to state an ERISA claim under a theory of joint employment based on the facts
in the Third-Party Complaint. (Doc. No. 31). The Iron Workers respond by pointing to specific
factual allegation related to joint employment liability and, based on the motion to dismiss pleading
standard, the Third-Party Complaint states a claim under ERISA. (Doc. No. 37).
“In determining whether two companies can be considered a joint employer for purposes
of liability under ERISA and a collective bargaining agreement, the court must consider the
following four factors: (1) interrelation of operations, (2) common management, (3) centralized
control of labor relations, and (4) common ownership.” Distillery, Wine & Allied Workers Int'l
Union v. National Distillers & Chemical Corp., 894 F.2d 850, 852 (6th Cir.), see
also International Longshoremen's Ass'n v. Norfolk Southern Corp., 927 F.2d 900, 902 (6th
Cir.), Metropolitan Detroit Bricklayers Dist. Council v. J.E. Hoetger & Co., 672 F.2d 580, 584
(6th Cir.1982). “In applying the factors, no individual factor is outcome determinative; instead,
‘all the relevant factors must be considered together.’” Trustees of the Detroit Carpenters Fringe
Benefit Funds v. Industrial Contracting, LLC, 581 F.3d 313, 318 (6th Cir. 2009). The resolution
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of determining joint employment is essentially a factual issue. Michigan State Painters Ins. Fund
v. Ron Simmons Painting, Inc., 875 F.Supp. 417, 421 (E.D. Mich. Feb. 6, 1995) (citing Boire v.
Greyhound Corp., 376 U.S. 473 (1964)).
Quality asserts the Third-Party Complaint merely alleges that Quality agreed to pay for
certain financial obligations of SSC and this is the sole basis for the Iron Workers joint employer
theory. (Doc. No. 31 at 6). Quality argues the Third-Party Complaint does not allege that Quality
and SSC have any interrelation of operations, common management, centralized control of labor
relations, or a common ownership, nor does the Third-party Complaint set forth any factual basis
which would amount to, or support, any such claims. (Doc. No. 31 at 8). Quality argues the ThirdParty Complaint only alleges “parallel conduct” that arises “to no more than suspicion of improper
conduct,” which is fails to meet the plausibility pleading requirements set forth in Rule 8. (Id. at
8-10)(citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Quality asserts that paying
some of SSC’s obligations is permissible business conduct and does not create a joint enterprise
or joint employment for purposes of ERISA; they had a business interest in preventing a default
by its subcontractor, SSC. (Id. at 9). Quality further argues the Iron Workers claim fails because
the Third-Party Complaint pleads no more than a suspicion of improper conduct. (Id. at 10).
The Iron Workers responds that the Third-Party Complaint includes factual assertions
supporting at least three of the four factors for determining joint employer liability, and therefore
states a plausible claim for relief. (Doc. No. 37 at 4-5). The Iron Workers cite to Paragraph 9 of
the Third-Party Complaint, which includes allegations that Quality agreed to pay wages to SSC
under the collective bargaining agreement, were responsible for paying the contributions, and, with
Quality’s assumption of these responsibilities, it had control over labor relations. (Doc. No. 37 at
5; Doc. No. 25 at ¶ 8-10). Quality also made two substantial payments towards Plaintiffs Funds
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and began the process of paying wages to employees covered by the collective bargaining
agreement, and to vendors of structural steel. (Doc. No. 25 at ¶ 11). The Iron Workers argue, as a
whole, the allegations establish a basis to conclude Quality and SSC “shared or co-determined
matters governing the essential terms and conditions of employment”, and ultimate success on the
claims can only be determined through discovery. (Doc. No. 37 at 6)(citing Trustees of Detroit
Carpenters Fringe Benefit Funds v. Andrus Acoustical, Inc., 2014 WL 1746399, at *16 (E.D.
Mich. Apr. 30, 2014)). Finally, the Iron Workers assert the policy behind ERISA prevents Quality
from assuming responsibility for contributing to the funds, then disclaiming liability. (Doc. No. 37
at 8-9)(citing Irigaray Dairy v. Dairy Employees Union Local No. 17 Christian Labor Ass’n of
U.S. Pension Tr., 43 F. Supp. 3d 1080,1088 (E.D. Cal. 2014)).
Here, the Court must determine whether the Third-Part Complaint pleads sufficient facts
to place Quality on notice of the claims against them. “The major factors in [joint employment]
determination are the ability to hire, fire, and discipline, affect compensation and benefits, and
direct and supervise performance.” Sanford v. Main St. Baptist Church Manor, Inc., 449 Fed.
Appx. 488, 492 (6th Cir. 2011). Construing the facts in favor of the Iron Workers, the Court finds
they have alleged facts to establish at the initial pleading stage that Quality and SSC were joint
employers. From the facts alleged, as discussed above, the Court finds on its face that the ThirdParty Complaint sufficiently alleges Quality could have had control, at a minimum, over
compensation or related benefits. See Bracken v. DASCO Home Medical Equipment, Inc., 954 F.
Supp. 2d 686, 699 (S.D. Ohio Jun. 27, 2013). The extent of Quality’s control is fact-specific and
can be better addressed after discovery.
Accordingly, Defendant’s Motion to Dismiss for failure to state a claim is DENIED.
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It is so ORDERED.
____________________________________
WILLIAM L. CAMPBELL, JR.
UNITED STATES DISTRICT JUDGE
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