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Railroad Maintenance and Industrial Health and Welfare Fund v. Procut Concrete Sawing Service

May 23, 2011

RAILROAD MAINTENANCE AND INDUSTRIAL HEALTH AND WELFARE FUND, PLAINTIFF,
v.
PROCUT CONCRETE SAWING SERVICE, INC., DEFENDANT.



The opinion of the court was delivered by: Richard Mills, U.S. District Judge:

E-FILED

3:09-cv-03001-RM -CHE # 28 Page 1 of 15 Monday, 23 May, 2011 04:00:22 PM Clerk, U.S. District Court, ILCD

OPINION

This case deals with an employer's obligation to comply with a collective bargaining agreement's requirement that notice be given by registered or certified mail in order to withdraw from a pension plan.

The Court holds that the notice requirement must be strictly complied with, and that notice via fax is inadequate.

This action arises under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1145.

The Plaintiff, the Railroad Maintenance and Industrial Health and Welfare Fund ("Fund"), is a multiemployer employee benefit plan.

The Defendant, ProCut Concrete Sawing Services, Inc. ("ProCut"), is an entity based in West Burlington, Iowa that provides concrete sawing services for residential and heavy industrial customers. Daniel Mark is the Vice President of ProCut.

I

On December 28, 2006, a Memorandum of Agreement ("MOA") was executed between ProCut, Laborers' Local 539, and the Great Plains Laborers District Council. The MOA incorporated by reference a large number of Collective Bargaining Agreements already in force between the union and various builders' associations.

On or about the same date, Mark signed the Wage and Benefit Addendum to the Heavy Highway Construction Agreement.

In order to be eligible for insurance benefits from the Fund, ProCut employees were required to first work 300 hours.

Daniel Mark claims that during negotiations, representatives of Laborer's Local 538 assured him that ProCut employees would immediately enjoy Fund insurance coverage without having to work 300 hours. The union representatives have denied the allegation.

In May 2007, ProCut stopped making contributions to the Fund on behalf of its employees. On June 15, 2007, Mark sent a fax to Laborers' Local 538 stating the following:

To whom it may concern,

I am requesting a full refund of any dues paid to the [L]aborers [L]ocal 538 and its affiliates due to the misrepresentation, when I was approached on joining the union as a company, it was made VERY [c]lear that you were willing to let up to 5 employees join and have FULL [m]edical coverage right away and [waive] the usual required hours because we [were] a new company.

After several months of getting the run around from Mr. Hartman stating that he was "looking into it" and [unreturned] phone calls from you, I was informed by the railroad fund that you in fact did not have the authority to have our employees join without working the required hours.

I feel that with that said you deliberately lied about the medical coverage just to have us as a company join your union. The company was forced to purchase insurance [through] a reputable carrier so my employees would not be without.

I have spent many hours and phone calls trying to work this situation out with you, but I have yet to receive a response from you in this matter. The only contact that I have received was from Mr. Hartman when he was collecting sign on dues.

Due to your actions and failure to respond, I feel that you have breeched any agreement ...


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