Electrical Construction Industry Prefunding Credit Reimbursement Program, et al., Plaintiffs-Appellants, Cross-Appellees,
Veterans Electric, LLC, Defendant-Appellee, Cross-Appellant,
Submitted September 4, 2019
Appeals from the United States District Court for the Eastern
District of Wisconsin. No. 2:17-cv-01576-NJ - Nancy Joseph,
WOOD, Chief Judge, and BAUER and HAMILTON, Circuit Judges.
International Brotherhood of Electrical Workers, AFL-CIO
Local 494 and the Electrical Contractors Association
Milwaukee Chapter, N.E.C.A., Inc. ("NECA"), entered
into a collective bargaining agreement ("CBA")
providing health, welfare, and pension benefits for union
workers. The Electrical Construction Industry Pre-funding
Credit Reimbursement Program, a/k/a Electrical Construction
Industry Health & Welfare Plan, Electrical Construction
Industry Annuity Plan, Electrical Construction Industry
Pension Plan, Milwaukee Electrical Joint Apprenticeship &
Training Trust Fund, and Electrical Construction Industry
Vacation - Holiday Plan (the "Funds") operate as
trusts for these benefits. Veterans Electric, LLC
("Veterans") participated in NECA, assented to the
CBA, and contributed to the Funds for its union employees.
The CBA makes multiple references to the Funds and details an
Employee Retirement Income Security Act of 1974
("ERISA") governs benefit plans between labor
unions and multiemployer associations. As association
members, employers agree to be bound by the CBA. Unions set
up trust agreements, which set out the terms for benefit
plans for union employees. Trustees may demand and examine
pertinent employer records to effectively administer the
trust. Signatory employers self-report benefit payments owed
under the CBA.
4, 2017, the Funds attempted to audit Veterans' payroll
records and Veterans only provided records for union
employees. This payroll information accounted for about half
of the total reported wages. Due to the discrepancy, the
Funds requested payroll information for non-union employees.
Veterans refused, contending that the records were outside
the scope of a proper audit under the CB A. The Funds were
unable to complete the audit and initiated litigation. During
discovery, Veterans provided the additional payroll
district court granted summary judgment in favor of Veterans,
limiting the scope of the trustees' audit authority. For
the following reasons, we reverse.
review the district court's grant of summary judgment
de novo, construing all factual disputes and
reasonable inferences in favor of the nonmovant. Landmark
Am. Ins. Co. v. Deerfield Constr., Inc., 933 F.3d 806,
806 (7th Cir. 2019). Summary judgment is appropriate when the
movant has shown 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).
to the merits, we first address Veterans' argument that
once it furnished the payroll records to the Funds in
discovery, and the Funds dismissed the original fraud
charges, this case became moot. Rather than being moot, there
exists a live dispute between the parties over attorney's
fees. A fee award under ERISA, 29 U.S.C. § 1132(g),
requires at least "some degree of success on the
merits." Hardt v. Reliance Standard Life Ins.
Co., 560 U.S. 242, 245 (2010) (quoting Ruckelshaus
v. Sierra Club, 463 U.S. 680, 694 (1983)); see also
Pakovich v. Verizon Ltd. Plan, 653 F.3d 488, 494 (7th
Cir. 2011). Here, Veterans complied with the Funds'
request for pertinent audit information after not only the
threat, but the reality, of litigation. Because the
Funds' right to pursue attorney's fees remains
cognizable, this appeal remains ripe for adjudication and we
move to the merits.
Supreme Court discussed this issue in Cent. States,
Southeast & Southwest Areas Pension Fund v. Cent.
Transp., Inc., 472 U.S. 559 (1985), where an employer
refused to share nonunion employee payroll information with
the union trustees. Union trustees relied on employers,
multiemployer association participants that are signatory to
a CBA, to self-report the extent of liability. Id.
at 561. Unions police employer self-reporting through random
audits. Id. Certain employers refused to produce
"payroll, tax, and other personnel records" of
non-union employees for audit purposes. Id.
Supreme Court held that the "audit requested by [the
trustees was] well within the authority of the trustees as
outlined in the trust documents." Id. at 581.
The trustees have the "right to conduct this
particular kind of audit, [but it is] not their duty
to do so." Ibid, (emphasis in original). In
particular, "the trust documents included a number of
provisions that are highly supportive of the right to audit
by [the] trustees." Id. at 565. Furthermore,
"an examination of the duties of plan trustees under
ERISA, and under the common law of trusts upon which
ERISA's duties are based, makes clear that the requested
audit is highly relevant to legitimate trustee
concerns." Id. at 569.
ERISA clearly assumes that trustees will act to ensure that a
plan receives all funds to which it is entitled, so that
those funds can be used on behalf of participants and
beneficiaries, and that trustees will take steps to identify
all participants and beneficiaries so that the trustees can