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Electrical Contractor Union Funds Run Only by Management Class Action

At issue in this case is the representation of workers in union-sponsored benefit funds. The defendants are the funds for the union members’ welfare, apprenticeship, and retirement. The complaint for this class action alleges that all administrators of the funds are from the employers’ side, with none from the employee side. The laws in question are the Employee Retirement Income Security Act of 1974 (ERISA) and the Labor Management Relations Act of 1947 (LMRA or Taft-Hartley).

Among the defendants are Building Industry Electrical Contractors Association; United Electrical Contractors Association (also known as United Construction Contractors Association); the International Union of Journeymen & Allied Trades (IUJAT); and United Service Workers, Local Union No. 363 (also known as United Electrical Workers of America, IUJAT Local 363).

The funds include the Building Trades Welfare Benefit Fund, Building Trades Annuity Benefit Fund, Electrician’s Retirement Fund (the Pension Fund), and Building Trades Educational Benefit Fund (Apprenticeship Fund).

The complaint quotes the law as requiring that “employees and employers are equally represented in the administration of such fund.” This is to ensure that the funds are legitimately operated for the benefit of the employees. But according to the complaint, all of them are from the employers’ side.

The complaint alleges, “This plainly illegal fund structure (and total dereliction by Local 363 of its duty to fairly represent its members) has resulted in exactly that which Congress set out to prevent [in the LMRA and ERISA]: the trustees paying themselves approximately $1 Million in compensation since 2013 as well as paying Apprenticeship Fund assets to participating employers, in breach of trustees’ fiduciary obligations under both the LMRA … and ERISA.”

The complaint claims that this is “self-dealing” with the plan assets is a “prohibited transaction” ERISA. The complaint says that “these prohibited transactions could not have taken place without the arbitrary or bad faith of Local 363.” It claims that “a labor union continuously permitting its[] members[’] welfare and retirement benefits to be solely overseen and administered by management is completely unheard of in the American labor-management context…”

In addition, the complaint claims that Local 363 negotiates wages and benefits for its members that “are far below the wages and benefits that are required to be paid to electricians on publicly funded jobs, i.e., projects where employees … must be paid the locally prevailing minimum wage for the classification and type of work performed … as determined by the Secretary of Labor.”

It compares the prevailing wage and benefit rate for electricians on publicly-funded projects in New York City at around $115.22 with the highest classification of employee in Local 363 at $47.12.

The main class for this action is all individuals who were partiipants in the Electrician’s Retirement Fund, the Building Trades Annuity Benefit Fund, the Building Trades Welfare Benefit Fund, or the Building Trades Educational Benefit Fund, from March 1, 2013 through the present.

Pension, Annuity, and Welfare Subclasses have also been defined for the respective participants.

Article Type: Lawsuit
Topic: Employment

Most Recent Case Event

Electrical Contractor Union Funds Run Only by Management Complaint

September 13, 2021

At issue in this case is the representation of workers in union-sponsored benefit funds. The defendants are the funds for the union members’ welfare, apprenticeship, and retirement. The complaint for this class action alleges that all administrators of the funds are from the employers’ side, with none from the employee side. The laws in question are the Employee Retirement Income Security Act of 1974 (ERISA) and the Labor Management Relations Act of 1947 (LMRA or Taft-Hartley).

Electrical Contractor Union Funds Run Only by Management Complaint

Case Event History

Electrical Contractor Union Funds Run Only by Management Complaint

September 13, 2021

At issue in this case is the representation of workers in union-sponsored benefit funds. The defendants are the funds for the union members’ welfare, apprenticeship, and retirement. The complaint for this class action alleges that all administrators of the funds are from the employers’ side, with none from the employee side. The laws in question are the Employee Retirement Income Security Act of 1974 (ERISA) and the Labor Management Relations Act of 1947 (LMRA or Taft-Hartley).

Electrical Contractor Union Funds Run Only by Management Complaint
Tags: ERISA Violations, Employment Violations, Taft-Hartley LMRA, Union or Worker Representation