Branstetter, Stranch & Jennings (BS&J) attorneys Karla M. Campbell and R. Jan Jennings achieved a victory for sheet metal and HVAC workers in a claim involving unpaid employee welfare and pension benefit plans.
Campbell and Jennings successfully represented the Sheet Metal Workers’ Health & Welfare Fund of North Carolina, the local Apprenticeship Fund and the National Pension Fund, along with several joint labor-management organizations, in an effort to recover unpaid fringe benefit contributions by Stromberg Metal Works, Inc.
In a ruling issued Sept. 22, 2021, in the United States District Court for the Eastern District of North Carolina, the Honorable Terrence W. Boyle granted the plaintiffs’ motion for summary judgment and awarded them all $1.25 million in damages requested in the case. The award included $823,658 in delinquent contributions for the audit period, $430,658 in liquidated damages and interest on the delinquency, plus attorney’s fees and costs.
Additional plaintiffs included the International Training Institute for the Sheet Metal and Air Conditioning Industry, the National Energy Management Institute committee for the Sheet Metal and Air Conditioning Industry, the Sheet Metal Occupational Health Institute Trust, the National Stabilization Agreement of the Metal Industry and the Sheet Metal Workers’ International Scholarship Fund.
Headquartered in Maryland, Stromberg Metal Works is a commercial sheet metal fabrication and installation company with a regional office in Raleigh, North Carolina. The company employs workers represented by Local 5 and Local 100 of the Sheet Metal, Air, Rail and Transport International Union, and has been a signatory to their collective bargaining agreements (CBAs). The CBAs govern working conditions, rates of pay and benefits for workers performing sheet metal work.
A complaint was filed by the plaintiffs in late 2019 in the U.S. District Court for the Middle District of Tennessee to recover unpaid fringe benefit contributions pursuant to Section 515 of the Employment Retirement Security Income Act (ERISA) and Section 301 of the Labor Management Relations Act (LMRA). The case was transferred to the U.S. District Court for the Eastern District of North Carolina, Western Division, in early 2021. A hearing was held in June 2021 on the parties’ cross-motions for summary judgment and several motions to strike, and supplemental briefing was completed in July.
At issue was Stromberg’s ability to skirt its obligations under the CBAs, in particular its obligation to make contributions to the plaintiff funds on behalf of sheet metal workers in its employ, by hiring those workers from temporary staffing agencies, rather than through the union hiring hall.
“As Stromberg has failed to create a genuine issue of material fact,” Judge Boyle wrote in the ruling, “the Court determines that plaintiffs are entitled to summary judgment in their favor on their claim for damages in the amounts requested. ERISA therefore mandates the award of attorney fees and costs.”
“We are very pleased with Judge Boyle’s decision to grant summary judgment to our clients and award them the damages they requested,” Campbell said. “Stromberg’s blatant attempts to deny the fringe benefit contributions due for these employees’ work were an obvious breach of the CBAs the company signed in advance of any work taking place. In addition, Stromberg’s actions to avoid their responsibility in this matter were a direct violation of ERISA and the LMRA requirements, and BS&J is proud to have helped recover these monies for the payment of health and pension benefits work sheet metal workers.”