Kyle Bragg, as Trustee v. Alstate Maintenance LLC

Background

The plaintiffs, Kyle Bragg, as Trustee, and the Trustees of the Building Service 32BJ Health Fund, sued Alstate Maintenance LLC under Sections 502(a)(3) and 515 of the Employee Retirement Income Security Act (ERISA) and Section 301 of the Labor-Management Relations Act. They sought unpaid contributions to the Fund for health-insurance coverage from July 1, 2021, through the date of judgment.

The Fund is a jointly administered, multi-employer employee-benefit trust fund established under collective bargaining agreements. Alstate provides cleaning services at LaGuardia and John F. Kennedy airports and is party to a collective bargaining agreement with the Service Employees International Union, Local 32BJ. The agreement required Alstate to make monthly contributions of $649 for each eligible employee meeting the agreement’s conditions, including working at least 30 hours per week and performing covered work.

The agreement also required Alstate to provide employee information and make reports and payments according to the Fund’s Collection Policies. Those policies treated incomplete reports and failures to report employee status changes as delinquencies. They required monthly payments by the 20th day of the month and allowed the Fund to charge contributions from the time of an employee’s status change until Alstate reported that change.

In June 2021, the Union requested information about Alstate’s bargaining-unit employees so eligible employees could receive health insurance beginning July 1. An Alstate employee sent the requested employee list to the Union, and the Fund uploaded the list to its Employer Self-Service System. Between June and September 2021, the Fund repeatedly asked Alstate to review the roster, identify inaccuracies or status changes, and submit hours and payments. Alstate first sent the Fund a list of employees to terminate in the system on December 14, 2021. The Fund ended those employees’ coverage prospectively from that date.

The parties’ motions and arguments

Both sides moved for summary judgment under Federal Rule of Civil Procedure 56. Summary judgment is available when the evidence shows no genuine dispute over a fact that could affect the outcome and the moving party is entitled to judgment under the law.

The Fund argued that Alstate had breached the collective bargaining agreement and violated ERISA by failing to make required contributions. It sought unpaid contributions, interest, liquidated damages, attorneys’ fees, and costs. Alstate did not dispute that it was required to make contributions for covered employees beginning July 1, 2021, or that it failed to make those contributions. Alstate argued instead that the Fund could not seek payment without first auditing Alstate’s records and that the Fund had improperly relied on an employee list that it uploaded without Alstate’s authorization.

Court’s analysis

The court held that Alstate’s obligation to make contributions did not depend on which entity uploaded the employee list to the Fund’s system. The collective bargaining agreement and Collection Policies required Alstate to contribute for eligible employees and to provide the relevant employee information. The court found that the identity of the party responsible for uploading the list did not affect Alstate’s contribution obligation.

The court also rejected Alstate’s argument that the list was defective. The record showed that Alstate could submit a revised list or report employee status changes. The Fund repeatedly asked Alstate to review the roster and report discrepancies. The court found no evidence that Alstate notified the Fund of errors or attempted to correct the list before December 14, 2021. Under the Collection Policies, later-reported status changes could not eliminate contributions owed between the change and the date notice was provided.

The court rejected the argument that an audit was required before the Fund could sue for contributions. ERISA did not require a multi-employer fund to audit every employer. The collective bargaining agreement was silent on audits, and the Collection Policies permitted audits in certain circumstances but did not require one. The Fund was not suing to compel an audit or seeking contributions revealed by an audit.

Disposition

The court granted summary judgment in favor of the Fund and denied Alstate’s cross-motion for summary judgment. The court held that Alstate was liable for unpaid benefit contributions, interest, liquidated damages, and reasonable attorneys’ fees under ERISA, as well as $470 in costs. The Fund had identified $470,972.47 in unpaid contributions, $35,433.63 in interest, and $109,112.96 in liquidated damages as of its August 18, 2023 motion, but the court stated that those figures were outdated and that updated amounts were required before entering judgment. The Clerk was directed to terminate the two summary-judgment motions.