By: Derek Hawkins//November 25, 2019//
7th Circuit Court of Appeals
Case Name: Electrical Construction Industry Prefunding Credit Reimbursement Program, et al. v. Veterans Electric, LLC,
Case No.: 19-1051; 18-3703
Officials: WOOD, Chief Judge, and BAUER and HAMILTON, Circuit Judges.
Focus: ERISA – Collective Bargaining Agreement Violation
The International Brotherhood of Electrical Workers, AFL-CIO Local 494 and the Electrical Contractors Association Milwaukee Chapter, N.E.C.A., Inc. (“NECA”), entered into a collective bargaining agreement (“CBA”) providing health, welfare, and pension benefits for union workers. The Electrical Construction Industry Prefunding Credit Reimbursement Program, a/k/a Electrical Construction Industry Health & Welfare Plan, Electrical Construction Industry Annuity Plan, Electrical Construction Industry Pension Plan, Milwaukee Electrical Joint Apprenticeship & Training Trust Fund, and Electrical Construction Industry Vacation – Holiday Plan (the “Funds”) operate as trusts for these benefits. Veterans Electric, LLC (“Veterans”) participated in NECA, assented to the CBA, and contributed to the Funds for its union employees. The CBA makes multiple references to the Funds and details an audit policy.
The Employee Retirement Income Security Act of 1974 (“ERISA”) governs benefit plans between labor unions and multiemployer associations. As association members, employers agree to be bound by the CBA. Unions set up trust agreements, which set out the terms for benefit plans for union employees. Trustees may demand and examine pertinent employer records to effectively administer the trust. Signatory employers self-report benefit payments owed under the CBA.
On May 4, 2017, the Funds attempted to audit Veterans’ payroll records and Veterans only provided records for union employees. This payroll information accounted for about half of the total reported wages. Due to the discrepancy, the Funds requested payroll information for non-union employees. Veterans refused, contending that the records were outside the scope of a proper audit under the CBA. The Funds were unable to complete the audit and initiated litigation. During discovery, Veterans provided the additional payroll information.
The district court granted summary judgment in favor of Veterans, limiting the scope of the trustees’ audit authority. We reverse.
Reversed and remanded