May 22, 2022

Volume XII, Number 142

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Delinquent Contributing Employer May Be Fiduciary

The Second Circuit held that the owner of a contributing employer to multiemployer benefit plans breached his fiduciary duties by failing to make required contributions and was thus personally liable for the delinquencies, interest, and attorneys’ fees.  In so holding, the Court determined that the owner was a plan fiduciary because:  (a) the plan’s trust document designated required contributions as plan assets, (b) the owner was responsible for determining the order in which the company’s creditors would be paid, and (c) the owner had authority and control over management of the contributing employer.

As a fiduciary wrongly in possession of plan assets, the Court held that the owner was “personally liable to make good to such plan any losses to the plan.”  Notably, the Court also ruled that the owner was not obligated to pay liquidated damages because the owner was liable under a fiduciary breach claim, not a claim for delinquent contributions.  The case is Bricklayers & Allied Craftworkers Local 2, Albany, N.Y. Pension Fund v. Moulton Masonry & Const., LLC, No. 14-295, 2015 WL 795290 (2d Cir. Feb. 26, 2015).

© 2022 Proskauer Rose LLP. National Law Review, Volume V, Number 69
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About this Author

Anthony S Cacace, Labor and Employment attorney, Proskauer Rose law firm
Associate

Anthony S. Cacace is an Associate in the Labor and Employment Department and a member of the Employee Benefits, Executive Compensation & ERISA Litigation Practice Center. Anthony focuses on ERISA litigation and counsels plans and plan sponsors on a full spectrum of employee benefit issues.

Anthony represents employers, plan sponsors, plan trustees and other plan fiduciaries in lawsuits brought pursuant to ERISA, alleging claims for breaches of fiduciary duty, benefit claim denials, plan investment losses and improper plan amendments. He also represents plan clients during...

212-969-3307
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