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Lance Broadnax, et al v. Lvi Demolition Services Inc.

May 31, 2012


The opinion of the court was delivered by: William J. Martini, U.S.D.J.:


This is an action for unpaid benefits contributions. The question at the heart of this dispute is whether unpaid benefits contributions may be paid directly to the Plaintiff employees or whether they must be contributed to a fringe benefit fund. For the reasons set forth below, the Court finds that payment must be made to the fringe benefit fund.

Plaintiffs Lance Broadnax, Rayshawn Moore, Mathias Greene, Lance Stovall, Alvin Reeves, and Salim Muhammed are asbestos abatement workers. Plaintiffs filed this action against a general contractor, LVI Demolition Services ("LVI"), in New Jersey Superior Court, asserting claims for unpaid benefits contributions under the New Jersey Prevailing Wage Act ("PWA"). LVI removed the action to this Court and interpleaded the New Jersey Building Laborers' Statewide Benefit Funds (the "Funds") and several other third-party defendants. This matter comes before the Court on the Funds' motion to confirm an arbitration award that was entered in favor of the Funds and against LVI. The Funds also move to dismiss the Complaint on the basis of preemption. For the reasons set forth below, the Funds' motion to confirm the arbitration award is GRANTED, the Funds' motion to dismiss is GRANTED, and that the Complaint is DISMISSED WITH PREJUDICE.


LVI was engaged by the City of Newark to complete construction work at a public works project referred to as the Douglas-Harrison homes project ("the project"). LVI subcontracted the asbestos abatement and demolition work to Prime Environmental Services, Inc. ("Prime"). Prime employed Plaintiffs to work on the project.

Prime was a signatory to a collective bargaining agreement ("CBA") which, among other things, obligated Prime to make fringe benefits contributions on behalf of all of its employees who performed covered work:

Article 10.70 Wage and Fringe Benefit Package . . .

(k) Fringe Benefit Payments. Fringe benefit contributions shall be due on all hours paid. . . . Benefits shall be paid on behalf of all persons performing work covered by this Agreement, regardless of union membership. The Employer may not at any time pay benefits in the envelope to any employee performing work covered by this Agreement.

Certification of Michael G. McNally Ex. C ("CBA") at 42, ECF No. 16-3.

LVI was also a signatory to a CBA which, among other things, provided that LVI would be liable for any of its subcontractors' unpaid benefits contributions:

Article 16.10 Contractor Liability for Delinquency of Sub-Contractor If the Employer subcontracts any work covered by this Agreement to any subcontractor or other person, the Employer shall be liable for all contributions owing to the funds established or to be established hereunder in the event the subcontractor or person fails to pay contributions to said funds for employees covered by this Agreement employed by the said subcontractor or person.

CBA at 59.

For a period of several months beginning in April 2010, Prime failed to make benefits contributions to the Funds for work performed by its employees on the project. Prime's unpaid contributions for the project totaled $278,697.62. In response to Prime's failure to make contributions, the Funds initiated an arbitration proceeding against Prime. The arbitrator issued an award in favor of the Funds, which was confirmed by the District Court of New Jersey. New Jersey Building Laborers Statewide Benefit Funds and the Trustees Thereof v. Prime Environmental Inc., No. 2:11-cv-03425 (D.N.J. July 18, 2011) (order and judgment in favor of Funds). Despite the award, Prime still failed to make the delinquent benefits contributions.

Plaintiffs, independently of the actions taken by the Funds, filed the instant Complaint in New Jersey Superior Court against LVI, the general contractor. Plaintiffs assert that LVI failed to compensate them at the prevailing wage rate set forth in the PWA. The prevailing wage rate includes two components: a wage component and a fringe benefit component. Plaintiffs seek to recover the fringe benefit component. The benefits payments sought by Plaintiffs in this action are the same benefits payments that the Funds sought to recover in the arbitration against Prime. Shortly ...

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