United States District Court, D. New Jersey
TEAMSTERS HEALTH AND WELFARE FUND OF PHILADELPHIA AND VICINITY, Plaintiffs,
v.
MECO TRUCKING COMPANY, Defendant.
MEMORANDUM OPINION WITH FINDINGS OF FACT AND
CONCLUSIONS OF LAW AND ORDER [1]
JOEL
SCHNEIDER United State Magistrate Judge.
This
Memorandum Opinion with Findings of Fact and Conclusions of
Law serves as the Court's decision with regard to the
non-jury trial of this matter. The Court has jurisdiction
over this matter pursuant to 29 U.S.C. §§ 185(a),
1132 and 1145, and 28 U.S.C. § 1367. Pursuant to 28
U.S.C. § 636(c), the parties consented to the
jurisdiction of this Court to hear this matter. For the
reasons to be discussed, the Court will enter Judgment in
plaintiffs' favor.[2]
FINDINGS
OF FACT
The
plaintiffs are Teamsters Health and Welfare Fund of
Philadelphia and Vicinity (“Welfare Fund”),
Teamsters Pension Trust Fund of Philadelphia and Vicinity
(“Pension Fund”), and Adam H. Garner,
Administrator.[3] (Hereinafter the two Funds will be
collectively referred to as the “Funds”).
Plaintiffs filed this ERISA collection action on December 18,
2014. In brief summary, the Funds are multi-employer Trust
Funds that provide pension benefits and medical insurance,
among other benefits, to eligible participants who work for
contributing employers. Plaintiffs seek to recover from
defendant Meco Constructors, Inc. d/b/a Meco Trucking Company
(“Meco”) alleged delinquent payments due the
Funds for the calendar years 2006-2014, plus interest,
liquidated damages and attorney's fees and costs.
Meco is
an employer that provides hauling and construction services
in Southeastern Pennsylvania and New Jersey. Meco employs
members of Teamsters Local 384. Meco contracted to pay its
union employees wages and benefits pursuant to two sets of
Collective Bargaining Agreements. The location and type of
work an employee performed determined which Agreement
applied. First, Meco is a party to a series of Collective
Bargaining Agreements with Teamsters Local 384, which is
affiliated with the International Brotherhood of Teamsters,
Chauffeurs, Warehouseman and Helpers of America. In
particular, Meco was a party to the “Material Hauling
Agreement” (“MHA”) with Teamsters Local 384
for all time periods relevant to this action. A worker was
paid pursuant to the MHA when he/she hauled to or from a work
site. These workers did not have to be union members and were
not required to be paid prevailing wages. There is no
geographic limitation under the MHA. Second, Meco was also a
signatory to the FHA with Teamsters Local 384 for all
relevant periods to this action.[4] See JFPTO at
&7. The FCA covers work performed in Bucks, Chester,
Delaware, Montgomery and Philadelphia Counties. Id.
The wage rates in the FCA were designed to be in compliance
with prevailing wage requirements.
Pursuant
to the FCA, all work performed in the five-county area was
subject to its terms. However, Teamsters Local 384 and Meco
agreed on a compromise to permit Meco to compete with
nonunion employers. Pursuant to their agreement, Meco only
had to pay its workers pursuant to the FCA when he/she worked
“exclusively on a construction job site” in the
five-county area. See MHA at Article 30. The amount
Meco contracted to pay for wages and benefits under the FCA
was higher than what was due for work done pursuant to the
MHA.
Under
the MHA and the FCA, Meco is obligated to submit monthly
contributions to the Funds. The amount of contributions due
is determined by the terms of the applicable MHA and FCA, but
is generally calculated by multiplying the hours worked by
the rate in the Agreements. Meco is obligated to submit
contribution reports and payments to the Funds the month
following the month in which the work was performed. The
contribution reports contain Meco's employees' names,
social security numbers, hours worked and the total
contributions paid. The Funds provide employee benefits to
Meco's employees covered under the Agreements, including
but not limited to retirement benefits by the Pension Fund
and medical, life and disability benefits by the Welfare
Fund. Article VI, Section 6 of the Amended and Restated
Agreement and Declaration of Trust of the Teamsters Pension
Trust Fund of Philadelphia and Vicinity permits the Pension
Fund to conduct payroll audits of contributing employers,
including Meco. Section 9(e) of the Agreement and Declaration
of Trust of the Teamsters Health and Welfare Fund of
Philadelphia and Vicinity permits the Welfare Fund to conduct
payroll audits of contributing employers, including Meco.
Plaintiffs'
audits for the year 2006-2014 are at issue in the case. On
September 28, 2007, Meco was sent a copy of the audit for
2006. Meco disputed the audit which noted a deficiency. On
March 12, 2010, Meco was sent a copy of the audit for 2006 to
2009. The audit noted another deficiency which Meco disputes.
On December 18, 2014, plaintiffs filed their complaint
against Meco seeking payment of contributions based upon the
audit results for the period from January 1, 2006 to December
31, 2009. As part of discovery, an audit was conducted for
the period from January 1, 2010 to December 31, 2014. The
audit reflected another deficiency that Meco
disputed.[5] The parties' primary dispute for the
time period of January 1, 2006 to December 31, 2014, relates
to whether the “cap” on hours to be paid under
the MHA applies to work performed under the FCA. The
parties' second dispute involves the trigger date for the
statute of limitations that applies to plaintiffs' claim.
The
first main issue to be decided involves the interpretation of
the parties' Agreements. As to the MHA, Article 28,
Section A (effective 8/1/2003 to 7/31/2006) states:
The Employer will contribute to the Teamsters Health &
Welfare fund the sum of Four dollars, fifty four and three
quarters ($4.5475) dollars for each hour worked by a covered
Employee up to the maximum of eight (8) hours per calendar
day, or ten (10) hours per calendar day for employees
assigned to work a ten hour day, forty (40) hours per
calendar week and one hundred sixty (160) hours per calendar
month.
Each
successive MHA has similar language in Article 28, with the
exception of the hourly rate. Article 29 of the MHA
(effective 8/1/2003 to 7/31/2006) states:
The Employer will contribute to the Teamsters Pension Fund
the sum of Three dollars and three quarters of a cent
($3.075) for each hour worked by a covered Employee up to the
maximum of eight (8) hours per calendar day, or ten (10)
hours per calendar day for employees assigned to work a ten
hour day, forty (40) hours per calendar week and one hundred
sixty (160) hours per calendar month[.]
Each
successive MHA has similar language in Article 29, with the
exception of the hourly rate. As is apparent, the MHA has a
cap on the contributions to be paid to the Funds.
As to
the FCA, Article VII (effective May 1, 2004 to April 30,
2007) states:
Section 7.1 For the period beginning May 1, 2004 to April 30,
2005, each Employer shall pay weekly into the Teamsters'
Health, Welfare and Insurance Fund, the sum of Four Dollars
and Ninety Cents ($4.90) per hour for each hour for which
payment has been made to each chauffeur or helper employed by
such Employer, including overtime hours. Effective May 1,
2005 ($1.35) to be apportioned among Wages, Welfare and
Pension. Effective May 1, 2006 ($1.35) to be apportioned
among Wages, Welfare and Pension.
Each
successive FCA has similar language in Article VII, with the
exception of the hourly rate. Article VIII of the FCA
...