The opinion
IN THE UNITED STATES DISTRICT COURT FOR THE
MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION
LARRY PEACOCK, MIKE WILSON, and )
the TENNESSEE VALLEY PAINTERS’ )
HEALTH FUND, )
)
Plaintiffs, ) NO. 3:24-cv-01369
)
v. ) JUDGE CAMPBELL
) MAGISTRATE JUDGE FRENSLEY
C3 INDUSTRIAL BLASTING AND )
COATINGS, INC., and KELLY BAKER )
HENDERSON, )
)
Defendants. )
MEMORANDUM AND ORDER
For the reasons stated herein, Plaintiffs’ pending motion for summary judgment (Doc. No.
53) is GRANTED as to Defendant C3 Industrial Blasting and Coatings, Inc.’s liability and
DENIED in all other respects.
I. FACTUAL BACKGROUND
Plaintiffs bring the present enforcement action under the Employee Retirement Income
Security Act of 1974 (“ERISA”) against Defendant C3 Industrial Blasting and Coatings, Inc.
(“C3”), an industrial blasting and coatings company based in Knoxville, Tennessee. (Pl. SOF ¶ 1).
Defendant Kelly Baker Henderson (“Henderson”) and her husband are the owners of C3, and
Henderson is personally involved in the day-to-day operations and financial management of the
company. (Pl. SOF ¶ 19; Henderson’s Second Declaration, Doc. No. 49 ¶ 4).
C3 hires union painters referred for employment by Local 437 the International Union of
Painters and Allied Trades (“Local 437”) as well as non-union painters and subcontractors as
sources of labor for painting jobs. (Pl. SOF ¶ 5). At all relevant times, C3 has been signatory to
two collective bargaining agreements, the Collective Bargaining Agreement with Local 437
(“CBA”) (Doc. No. 55-3), and the Construction Labor Agreement (“CLA”) (Doc. No. 55-2)
(collectively the “CBAs”) with the Knoxville Building and Construction Trades Counsil, of which
Local 437 is a member. (Pl. SOF ¶ 2).
The CLA covers painting and other construction trade work performed on U.S. Department
of Energy sites in Oak Ridge, Tennessee:
Section 1. This Agreement shall apply and be limited to construction and
construction-like work (dismantling, demolition and decontamination for
continued or future use) and nothing contained herein shall be construed to
prohibit, restrict or interfere with the performance of any other operations,
work or function which may occur at the project site or be associated with the
development of the project. The scope of the work covered by this Agreement
is restricted to work performed on the projects and shall consist of two
Divisions[.]
Section 2. This agreement shall apply to all signatory Employers, their
Subcontractors and their lower tier Subcontractors when they are performing
work within the scope described in this Article on the DOE Oak Ridge
facilities, except where specifically excluded by DOE.
(CLA, Article II, Doc. No. 55-2 at 3; see also Pl. SOF ¶ 3).
The CBA covers painting and other trade work performed both inside and outside of the
geographic jurisdiction of Local 437:
The geographic jurisdiction of the Union party to this Agreement is
Knoxville, Tennessee and surrounding areas:
Tennessee
Anderson, Blount, Campbell, Carter, Claiborne, Cocke, Cumberland,
Fentress, Grainger, Greene, Hamblen, Hancock, Hawkins, Jefferson,
Johnson, Knox, Loudon, Monroe, Morgan, Roane, Scott, Sevier, Sullivan,
Unicoi, Union, and Washington
Virginia
Lee, Scott, Washington
Kentucky
Bell, Clay, Clinton, Harlan, Knox, Laurel, Leslie, Letcher, McCreary, Perry,
Wayne, and Whitley
Section 1. The Contractor or the Employer party to this agreement, when
engaged in work outside the geographical jurisdiction of the Union party to
this agreement, shall employ not less than fifty percent (50%) of the workers
employed on such work from among the residents of the area where the work
is performed, or from among persons who are employed the greater
percentage of their time in such area; provided that the first employee on any
such job or project shall be selected by the Employer from any geographic
jurisdiction.
Section 2. The Employer party hereto shall, when engaged in work outside
the geographic jurisdiction of the Union party to the Agreement, comply with
all of the lawful clauses of the Collective Bargaining Agreement in effect in
said other geographic jurisdiction and executed by the Employers of the
industry and the IUPAT affiliated Local Unions in that jurisdiction, including,
but not limited to, the wages, hours, working conditions, fringe benefits, and
procedure for settlement of grievances set forth therein; provided, however,
that where no affiliated Union has a current effective Agreement covering
such out-of-area work, the Employer shall perform such work in accordance
with this Agreement; and provided, further, that as to employees employed by
such Employer from within the geographic jurisdiction of the Union party to
this Agreement and who are brought into an outside jurisdiction, such
employees shall be entitled to receive the wages and conditions including
fringe benefits effective in either the home or outside jurisdiction, whichever
are more favorable to such employees. In situations covered by the last
proviso, fringe benefit contributions on behalf of such employees shall be
made solely to their home funds in accordance with their governing
documents, and the difference between the wages and benefit contributions
required by the away funds and the home funds, if any, shall be paid to the
employees as additional wages. This provision is enforceable by the District
Council or Local Union in whose jurisdiction the work is being performed,
both through the procedure for settlement of grievances set forth in its
applicable Collective Bargaining Agreement and after exhaustion of those
procedures, through the Courts, and is also enforceable by the Union party to
this Agreement, both through the procedure for settlement of grievances set
forth in this Agreement and after exhaustion of those procedures, through the
Courts.
(CBA, Doc. No. 55-3 at 3-4) (emphasis added).
Article 2 of the CBA – Scope of Bargaining Unit and Work Jurisdiction – provides:
This Agreement shall apply to all employees performing the work of
journeypersons or apprentices in the classification of "painter" for the
Employer. In addition, whether or not specifically referenced herein, this
Agreement also applies to all employees performing any trade jurisdiction
work identified and described in this Article.
Within the meaning of this provision, the work of the "painter" will include,
but not be limited to: (1) preparation, application and removal of all types of
coatings and coating systems in relation to all painting, decorating, protective
coatings, coating and staining of concrete floors and toppings, waterproofing,
masonry restoration, fireproofing, fire retarding, metal polishing, refinishing,
ceiling, lining, fiber glassing, E-glass fiberglass, carbon fiber, encapsulating,
insulating, metalizing, flame spray, the application of exterior insulating
finishing systems; (2) each and all such applications, and similar or substitute
applications, on all surfaces, interior and exterior, to include, but not be
limited to: residences, buildings, structures, industrial, power, chemical and
manufacturing plants, bridges, tanks, vats, pipes, stacks, light and high
tension poles, parking, traffic and air strip lines, trucks, automobile and
railroad cars, ships, aircraft, and all machinery and equipment; (3) any and
all material used in preparation, application or removal of any paint, coatings
or applications, including, but not limited to: the handling and use of thinners,
dryers, sealers, binders, pigments, primers, extenders, air and vapor barriers,
emulsions, waxes, stains, mastics, plastics, enamels, acrylics, epoxies, epoxy
injection and T-lock welding, alcalyds, sheet rubber, foams, seamless and tile-
like coatings, etc.; (4) all preparation for and removal of any and all materials
for finishes, such as deep cleaning, patching, all levels of finishing,
taping/finishing, skimcoating, pointing, caulking, high-pressure water,
chemical and abrasive blasting, environmental blasting, wet/dry vacuum
work, chemical stripping, scraping, air tooling, bleaching, steam-cleaning,
asbestos and lead abatement/removal; (5) the inspection of all coatings and/or
coating systems during their applications will be performed by the painter.
(CBA, Doc. No. 55-3 at 2-3).
Article X of the CLA obligates C3 to make payments to the Plaintiff Fund for each painters’
work hours and to follow the Fund’s governing documents:
Section 1. The hourly wage rates and fringe benefits paid employees covered
by this agreement shall be the hourly wage rates and fringe benefits in effect
on this date, October 1, 2016, as contained in Attachment 1.
Section 2. Future hourly wage rates and fringe benefit adjustments, effective
May 1 of 2017 and for each succeeding year, will be determined by the
Union/Management Administrative Committee using the average wage and
fringe benefit adjustment as arrived at by the Construction Labor Research
Council (CLRC) Southeast States Survey. This adjustment will be determined
at least sixty (60) days prior to May 1, 2017 and each succeeding year
thereafter.
Section 3. The Employer adopts and agrees to be bound by the written terms
of legally established fund trust agreements specifying the detailed basis on
which payments are to be made into, and benefits paid out of, such trust funds.
The Employer authorizes the parties to such trust agreements to appoint
trustees and successor trustees to administer the trust funds and hereby
ratifies and accepts the trustees so appointed as if made by the Employer.
Nothing contained in this Section is intended to require the Employer to
become a party to nor be bound by a local collective bargaining agreement
except for the Employee benefit fund contributions as required herein, nor is
the Employer required to become a member of any employee group or
association as a condition for making such contributions.
Section 4. Industry promotion or administrative funds or other funds which
do not accrue to the direct benefit of employees, covered by this Agreement,
are not considered fringe benefits for purposes of this Agreement and will not
be surveyed for future adjustments, and need not be paid by the Employer.
Section 5. The Employer agrees that it will, when requested by the Union,
deduct from the pay of each employee, who is at the time a member of the
Union, or made application to become a member of the Union, current Union
working dues from the gross wages. These deductions shall be deducted upon
presentation of a proper legal payroll deduction authorization signed by said
employee requesting such deduction, and remitted monthly by the 15" of the
following month, the aggregate amount of such deduction directly to the
respective local Union.
Section 6. Fringe benefit payments shall be paid only on the basis of hours
worked, not hours paid for, except where this is in violation of existing
applicable trust agreements, in which case the provisions of existing
applicable trust agreements will prevail.
Section 7. All employees covered by this Agreement shall be paid weekly, by
check before the end of their regular shift. When an employee cannot be paid
accordingly because of a holiday, he/she shall be paid on his/her last shift
before the holiday. Employees affected by layoff (reduction in force) shall be
paid in full upon termination. Alternate payment proposals can be developed
through the Union/Management Administrative Committee.
(CLA, Doc. No. 55-2 at 13-14).
Section 3 of Article 13 of the CBA obligates C3 to make payments to the Plaintiff Fund for
each painters’ work hours – without distinction between union and non-union members – and to
follow the Fund’s governing documents:
1. Commencing with the 1st Day of September 2022, and for the duration of
the Agreement, and any renewals or extension thereof, the Employer agrees
to make payments to the IUPAT National Pension Fund, the District Council
No.77 Health & Welfare Fund, the District Council No.77 FTI Fund, for each
employee covered by this Agreement, as follows:
a) For each hour or portion thereof for which an employee receives pay, the
Employer shall make a contribution in the amount(s) set forth Article 32
of this Agreement.
b) For the purpose of this Article, each hour paid for, including hours
attributable to show-up time, and other hours for which pay is received
by the employee or payable by the Employer in accordance with the
Agreement, shall be counted as hours for which contributions are
payable.
c) Contributions shall be paid on behalf of any employee starting with the
employee's first day of employment in a job classification covered by
this agreement. This includes, but is not limited to, apprentices, helpers,
trainees, and probationary employees.
d) The payments to the IUPAT National Pension Fund, Health & Welfare
Fund, and District Council 77 FTI Fund, required above shall be made
separately to each respective Fund or as otherwise set forth in written
instructions that the Employer shall receive from the Administrators of
each Fund. The Employer hereby understands, accepts, and agrees to be
bound by all provisions set forth in the Agreement and Declaration of
Trust that has been adopted by the parties to each of the respective Trust
Funds identified above, including all amendments and modifications
made thereto, and the Employer agrees to be bound by and to said
Agreements and Declarations of Trust, as amended from time to time, as
though it had actually signed the same.
2. The Employer hereby irrevocably designates as its representatives on the
Board of Trustees of each Trust Fund identified above, such Trustees as are
now serving, or who will in the future serve, as Employer Trustees, together
with their successors. The Employer further agrees to be bound by all actions
taken by the Trustees pursuant to the said Agreement and Declaration of
Trust, as amended from time to time.
3. All contributions shall be made at such time and in such manner as the
Trustees require; and the Trustees of each respective Fund may at any time
conduct an audit in accordance with provisions set forth in the Agreement
and Declaration of Trust or other rules and regulations that may, from time to
time, be adopted by the Trustees.
4. If the Employer fails to make contributions to one or more, or any of these
Funds within twenty (20) days after the date required by the Trustees, the
Union shall have the right to take whatever steps are necessary to secure
compliance with this Agreement, and any other provisions hereof to the
contrary notwithstanding, and the Employer shall be liable for all costs of
collection of the payments due, together with attorneys’ fees and such
penalties as may be assessed by the Trustees. The Employer's liability for
payment under this Article shall not be subject to or covered by any grievance
or arbitration procedure or any "no strike" clause that may be provided or set
forth elsewhere in this Agreement, and such provisions shall not apply in the
event of a violation of this clause.
5. Each said Fund and each benefit plan adopted by the Trustees shall at all
times conform with the requirements of the Internal Revenue Code so as to
enable the Employer at all times to treat contributions to said Fund as a
deduction for income tax purposes.
(CBA, Doc. No. 55-3 at 13-14).
Section 4 of Article 13 of the CBA provides that:
1. Commencing with the 1" day of September 2022, and for the duration and
any renewal of this Agreement, the EMPLOYER agrees to make payments
to The International Union of Painters and Allied Trades District Council No.
77 Labor-Management Fund (“Fund”) for each EMPLOYEE covered by this
Agreement, as follows:
2. For each hour or portion thereof, for which an EMPLOYEE receives pay,
the EMPLOYER shall make contributions of $.10 to the Fund.
3. For the purpose of this Article, each hour worked for, including hours
attributable to show up time, and other hours for which pay is received by the
EMPLOYEE in accordance with the Agreement, shall be counted as hours
for which contributions are payable.
4. Contributions shall be paid on behalf of any EMPLOYEE starting with the
EMPLOYEE’S first day of employment in a job classification covered by
this Agreement.
5. The EMPLOYER and Union signatory to this Agreement agrees to be
bound by and to the Agreement and Declaration of Trust, as amended from
time to time, establishing the Fund. 6. The EMPLOYER hereby irrevocably
designates as its representatives on the Board of Trustees such Trustees as are
now serving, or who will in the future serve, as EMPLOYER Trustees,
together with their successors.
7. All contributions shall be made at such time and in such manner, as the
Trustees require and the Trustees may at any time conduct an audit in
accordance with the Agreement and Declaration of Trust.
8. If an EMPLOYER fails to make contributions to the Fund within twenty
(20) days after the date required by the Trustees, the Union shall have the
right to take whatever steps are necessary to secure compliance with this
Agreement, any other provision hereof to the contrary notwithstanding, and
the EMPLOYER shall be liable for all costs of collection of the payments due
together with attorney fees and such liquidated damages as may be assessed
by the Trustees. The EMPLOYER’S liability for payment under this Article
shall not be subject to or covered by any grievance or arbitration procedure
or any “no-strike” clause which may be provided or set forth elsewhere in
this Agreement.”
(CBA, Doc. No. 55-3 at 14).
Article XVI of the CLA obligates C3 to apply the terms of the CLA to subcontractors it
hires to do painting work:
Section 1. Any Subcontractor, of whatever tier, performing covered work on
these project sites shall become signatory to this Agreement. Such
Subcontractor shall indicate his/her acceptance of the terms and conditions
of this Agreement by signing the Agreement and by delivering a copy to the
appropriate Union(s) prior to commencement of work on a project site. All
Subcontractors, of whatever tier, will arrange and conduct a pre-job
conference with the signatory Unions prior to starting their work on a project.
Work will not proceed in the event that a pre-job conference is not arranged
and held.
Section 2. All Subcontractors will be required to pay a total wage and benefit
package as contained in Article X of this Agreement through the duration of
their work on the project and will provide certified payrolls to the appropriate
Employer's Contract Administrator which will be available to the Union upon
request.
(CLA, Doc. No. 55-2 at 17).
Article 24 of the CBA obligates C3 to apply the terms of the CBA to subcontractors it hires
to do painting work:
Section 1. The Employer shall not contract out, subcontract, or outsource
work to be done at the site of the construction, alteration, painting, or repair
of a building or structure or other work unless the Employer or person who
will perform such work is a party to a Collective Bargaining Agreement with
this Union or another Union affiliated with the IUPAT.
Section 2. In the event that the Employer shall contract out, subcontract, or
outsource any bargaining unit work, whether or not job site or other work
encompassed by Section 1 here-of, the Employer must notify the Union as to
the identity of the contractor or subcontractor to which the work will be
assigned within 30 days prior to finalizing any agreement with such
contractor, subcontractor, or other person.
Section 3. In the event of contracting, subcontracting, or outsourcing of any
job site work encompassed by the provisions set forth in Section 1 hereof, if
the Union has provided the Employer with written notice that a contractor is
presently delinquent in making contributions to the Union or any fringe
benefit fund to which contributions are required by this Agreement, and, after
being provided such written notice, the Employer nonetheless enters into or
continues a contract for the performance of any job site work that is covered
by this Agreement with such delinquent contractor, the Employer shall be
liable for any unpaid fringe benefit contributions owed by such contractor
because of the performance of such job site (or other) work pursuant to that
contract.
(CBA, Doc. No. 55-3 at 20).
C3 subcontracted with Blais Paperhanging, a non-signatory subcontractor, to do painting
work for it on the Veterans’ Home project in Cleveland, Tennessee. (Pl. SOF ¶ 11). C3 was hired
by the general contractor, Christman, to do a broad scope of painting work on the project. (Id.). C3
subcontracted with Volunteer Floor Coatings, a non-signatory subcontractor, to do painting work
for it on the X-Energy project in Oak Ridge, Tennessee. (Id. ¶ 12). The general contractor on the
Hard Rock Casino project in Bristol, Virginia hired C3 to do a broad scope of painting work on
the project, which C3 then subcontracted J. Ross Conglomerate, a non-signatory painting
company, to perform. (Id. ¶ 13). C3 subcontracted with Allen Painting & Drywall, a non-signatory
subcontractor, to do painting work for it on the ECU Stadium project in Greenville, North Carolina.
(Id. ¶ 14).
In 2023, C3 was notified that the Fund had engaged an auditor to audit C3’s payroll. (Doc.
No. 63-1 ¶ 8). C3 received a copy of the audit report, which identified discrepancies in C3’s payroll
compliance. (Id. ¶ 10). On February 28, 2025, C3 made a “catch-up” payment of past-due
contributions. (Id. ¶ 31). In or around November 2025, C3 received an additional audit report,
including the period of April 1, 2023, through September 30, 2025. (Id. ¶ 11).
II. STANDARD OF REVIEW
Summary judgment is appropriate “if the movant shows that there is no genuine dispute as
to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). “The standard that a movant must meet to obtain summary judgment depends on who will
bear the burden of proof at trial.” Trustees of Iron Workers Defined Contribution Pension Fund v.
Next Century Rebar, LLC, 115 F.4th 480, 488 (6th Cir. 2024) (citation modified). “Where the
moving party has the burden of proof his showing must be sufficient for the court to hold that no
reasonable trier of fact could find other than for the moving party.” Id. at 488–89 (citation
modified). “Put differently, when the moving party bears the burden of proof, their initial summary
judgment burden is higher in that it must show that the record contains evidence satisfying the
burden of persuasion and that the evidence is so powerful that no reasonable jury would be free to
disbelieve it.” Id. at 489 (citation modified).
In evaluating a motion for summary judgment, the court views the facts in the light most
favorable for the nonmoving party, and draws all reasonable inferences in favor of the nonmoving
party. Bible Believers v. Wayne Cty., Mich., 805 F.3d 228, 242 (6th Cir. 2015); Wexler v. White’s
Fine Furniture, Inc., 317 F.3d 564, 570 (6th Cir. 2003). The Court does not weigh the evidence,
judge the credibility of witnesses, or determine the truth of the matter. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 249 (1986). Rather, the Court determines whether sufficient evidence has been
presented to make the issue of material fact a proper jury question. Id.
I. LAW AND ANALYSIS
ERISA governs employee benefit funds, regulates their maintenance, and protects workers’
interests in them. See 29 U.S.C. § 1001(a). Although ERISA is a complex statute, its purpose is
simple: to establish a uniform regulatory regime for plan administration that protects monies
belonging to plan beneficiaries while such funds are held and managed by others. See Trustees of
Sheet Metal Workers Local 7 Zone 1 Pension Fund v. Pro Services, Inc., 65 F.4th 841, 847 (6th
Cir. 2023). “Collective-bargaining agreements that establish ERISA plans are interpreted by use
of ordinary contract principles to the extent those principles are not inconsistent with federal labor
policy.” Trustees of Iron Workers, 115 F.4th at 490. If a contract is in writing and its terms are clear
and unambiguous, a court ascertains the contract's meaning in accordance with the contract's
plainly expressed intent. See id. If a term of a provision in an ERISA plan is ambiguous, courts
resolve ambiguities in the insured's favor because doing so aligns with ERISA's goals to promote
the interests of employees and their beneficiaries in employee-benefit plans and to protect
contractually defined benefits. See id.
A. C3
1. Liability
Plaintiffs contend C3 was obligated to make fringe benefit contributions under the CLA
and CBA. ERISA provides:
Every employer who is obligated to make contributions to a
multiemployer plan under the terms of the plan or under the terms
of a collectively bargained agreement shall, to the extent not
inconsistent with law, make such contributions in accordance with
the terms and conditions of such plan or such agreement.
29 U.S.C. § 1145.
Section 502(g) of ERISA, gives funds a cause of action to enforce Section 515's duties
against “employers who are delinquent in meeting their contractual obligations.” Operating
Engineers’ Local 324 Fringe Benefit Funds v. Rieth-Riley Construction Co., Inc., 43 F.4th 617,
619 (6th Cir. 2022) (quoting Laborers Health & Welfare Tr. Fund for N. Cal. v. Advanced
Lightweight Concrete Co., 484 U.S. 539, 547 (1988)). Plaintiffs have submitted evidence that C3
failed to make all contributions to the Plaintiff Fund required by the CBAs, and that its foregoing
breach is undisputed. (See Doc. Nos. 56, 56-1, 56-2 (audit reports); see also Doc. No. 63-1 ¶ 31
(acknowledging that C3 made a “catch-up” payment of past-due contributions in February 2025)).
Defendants submit no evidence or argument disputing Plaintiffs’ claim that C3 failed to make all
contributions to the Plaintiff Fund required by the CBAs. Accordingly, Plaintiffs have met their
burden of demonstrating no genuine issue of material fact as to C3s’ liability.
2. Relief
Having found liability, the Court turns to the question of relief:
In any action under this subchapter by a fiduciary for or on behalf
of a plan to enforce section 1145 of this title in which a judgment in
favor of the plan is awarded, the court shall award the plan—
A. the unpaid contributions,
B. interest on the unpaid contributions,
C. an amount equal to the greater of—
i. interest on the unpaid contributions, or
ii. liquidated damages provided for under the plan in an
amount not in excess of 20 percent (or such higher
percentage as may be permitted under Federal or
State law) of the amount determined by the court
under subparagraph (A),
D. reasonable attorney's fees and costs of the action, to be paid
by the defendant, and
E. such other legal or equitable relief as the court deems
appropriate.
29 U.S.C. § 1332(g)(2). Under this provision, Plaintiffs seek a total of “$480,858.55, which figure
is inclusive of delinquent contributions, liquidated damages, and interest.” (Doc. No. 54 at 15).
i. Unpaid contributions
Plaintiffs provide proof that C3 owes $322,712.29 in delinquent contributions during the
audit period from 2019-2025. (Id. (citing Cooper Declaration, Doc. No. 56 ¶ 3 and Exhibits 1 and
2; Renolds Declaration, Doc. No. 44 ¶ 6)). ERISA requires employers to maintain adequate
records. 29 U.S.C. § 1059(a)(1). As noted above, Plaintiffs rely on audits to show that C3 has not
met its contribution obligations. If an employer fails to maintain adequate records regarding its
employees' work as required by ERISA, then the results of such an audit are presumptively
accurate. Mich. Laborers' Health Care Fund v. Grimaldi Concrete, 30 F.3d 692, 696 (6th Cir.
1994). This is because when an employer violates ERISA’s recordkeeping duty and a plaintiff
shows that at least “some [CBA-]covered work was performed,” the employer is presumed liable
for contributions on all work at issue and bears the burden to show what work was not covered
under the CBA. See id. at 697. Here, C3 has provided no records at all with respect to the work
performed under the CBAs. Accordingly, it is presumed liable for contributions on all work at
issue and bears the burden to show what work was not covered under the CBA. See id.
C3 claims it was not required to make contributions for work performed outside of the
geographic scopes of the CBAs. However, this contention fails under the plain language in Article
3 of the CBA, which provides that C3’s employees who performed covered work outside the
geographic jurisdiction, are still “entitled to receive the wages and conditions including fringe
benefits effective in either the home or outside jurisdiction, whichever are more favorable to such
employees.” C3 is also incorrect to the extent it claims the scope of the CLA and CBA are mutually
exclusive. For example, while the scope of the CLA is limited to work on the DOE Oak Ridge
facilities, work performed in Oak Ridge at a non-DOE facility is still within the scope of the CBA
because Oak Ridge spans Anderson and Roane counties, which are expressly included within the
scope of the CBA. See supra. And C3’s contention that it was not required to make contributions
for all hours worked by all painters employed through subcontractors is belied by the plain
language in the CBAs:
Section 1. Any Subcontractor, of whatever tier, performing covered work on
these project sites shall become signatory to this Agreement. Such
Subcontractor shall indicate his/her acceptance of the terms and conditions
of this Agreement by signing the Agreement and by delivering a copy to the
appropriate Union(s) prior to commencement of work on a project site. All
Subcontractors, of whatever tier, will arrange and conduct a pre-job
conference with the signatory Unions prior to starting their work on a project.
Work will not proceed in the event that a pre-job conference is not arranged
and held.
Section 2. All Subcontractors will be required to pay a total wage and benefit
package as contained in Article X of this Agreement through the duration of
their work on the project and will provide certified payrolls to the appropriate
Employer's Contract Administrator which will be available to the Union upon
request.
(CLA, Doc. No. 55-2 at 17).
Section 1. The Employer shall not contract out, subcontract, or outsource
work to be done at the site of the construction, alteration, painting, or repair
of a building or structure or other work unless the Employer or person who
will perform such work is a party to a Collective Bargaining Agreement with
this Union or another Union affiliated with the IUPAT.
Section 2. In the event that the Employer shall contract out, subcontract, or
outsource any bargaining unit work, whether or not job site or other work
encompassed by Section 1 here-of, the Employer must notify the Union as to
the identity of the contractor or subcontractor to which the work will be
assigned within 30 days prior to finalizing any agreement with such
contractor, subcontractor, or other person.
Section 3. In the event of contracting, subcontracting, or outsourcing of any
job site work encompassed by the provisions set forth in Section 1 hereof, if
the Union has provided the Employer with written notice that a contractor is
presently delinquent in making contributions to the Union or any fringe
benefit fund to which contributions are required by this Agreement, and, after
being provided such written notice, the Employer nonetheless enters into or
continues a contract for the performance of any job site work that is covered
by this Agreement with such delinquent contractor, the Employer shall be
liable for any unpaid fringe benefit contributions owed by such contractor
because of the performance of such job site (or other) work pursuant to that
contract.
(CBA, Doc . No. 55-3 at 20).
However, C3 has filed proof that at least one of its employees covered in the audit
performed non-covered work. (See Henderson Deposition at 114). Accordingly, C3 has created a
material question of fact as to the accuracy of the unpaid contribution amount submitted by
Plaintiffs. Therefore, summary judgment is DENIED as to the amount of unpaid contributions.
ii. Liquidated damages
Under ERISA, liquated damages are recoverable if a plan provides for them “in an amount
not in excess of 20 percent.” 29 U.S.C. § 1132(g)(2)(C)(ii). Here, the CBA provides for liquidated
damages against the employer if it fails to make required contributions to the Fund within twenty
(20) days after the date required by the Trustees. (See CBA, Doc. No. 55-3 at 14). And Plaintiffs
submit proof that the Fund’s administrator has calculated the liquidated damages and interest due
on C3’s delinquency as totaling $160,858.55. (See Doc. No. 54 at 15 (citing Reynolds Declaration,
Doc. No. 44 ¶ 7)). Although Defendants do not argue against Plaintiffs’ request for liquidated
damages, the Court’s finding of material disputes of fact as to the amount of unpaid contributions
precludes summary judgment as to the amount of liquidated damages and interest. Accordingly,
summary judgment is DENIED as to the amount of liquidated damages and interest.
B. Henderson
Plaintiffs seek to hold Henderson personally liable for C3’s failure to make the
contributions to the Plaintiff Fund as required by the CBAs because, as an owner and primary
decision maker of C3, she chose to divert contributions that were due to the Fund for other business
expenses. (See Doc. No. 54 at 14). However, Henderson submitted a declaration denying that she
had ever “diverted contributions due to the Fund for other business expenses” or “made any
interest-free loans to C3 out of Fund assets.” (Doc. No. 63-1 § 33).
While Henderson’s foregoing testimony appears to be based on her incorrect reading of the
CBAs as not requiring contributions for work performed in certain locations or by subcontractors
and non-union employees, the Court cannot draw such negative factual inferences against a non-
moving party. And Plaintiffs have not come forward with proof of Henderson’s purported
diversions. Rather, viewing the facts in the light most favorable to Henderson (as the non-moving
party), there is a genuine issue of material fact as to whether she paid other creditors or entities
instead of paying contributions owed to the Fund. Accordingly, Plaintiffs’ motion for summary
judgment is DENIED as to Henderson.
Il. CONCLUSION
For the foregoing reasons, Plaintiffs’ motion for summary judgment (Doc. No. 53) is
GRANTED in part and DENIED in part.
It is so ORDERED. Lhd =
CHIEF UNITED STATES DISTRICT JUDGE
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