Request Legal Help Now - Free

Advertisement
LAWSUITS NEWS & LEGAL INFORMATION

Labor Department Wins $4.7 Million in ERISA Lawsuit

. By
Trenton, NJAn ERISA lawsuit filed in 2005 by the Department of Labor has resulted in a $4.7 million judgment against the fiduciaries of the Professional Industrial Trade Workers Union (PITWU) Health & Welfare Fund. The ERISA plan complaint alleged that the fiduciaries violated their duties by compensating themselves for their services through employer contributions.

The lawsuit was initially filed in 2005 and originally resulted in a district court ruling in favor of the fiduciaries. In 2012, however, the US Court of Appeals for the Third Circuit found in favor of the Department of Labor and remanded the lawsuit to district court. The district court found that payments to administrators were assets of the fund and should not have been remitted to the administrators.

According to court documents, the district court found that the defendants breached their fiduciary duties, including by allowing more than 60 percent of the fund’s assets to go toward paying commissions and fees. One former trustee for the fund was found to have breached fiduciary duty because she did not investigate suspicious activities involving the fund.

The court found that although the former trustee resigned, that did not absolve her of her duties. According to the lawsuit, the trustee, Cynthia Holloway, resigned for several reasons, “including the lack of financial accountability for contributions to the Fund and resulting lack of funding to pay claims. She described the ‘vulnerability of the Fund due to actions taken by membership that has created insolvency of the Fund.’”

Court documents note that cease and desist orders from multiple states were sent to the Professional Industrial Trade Workers Union and other entities associated with the multiple employer welfare arrangement (MEWA). Despite her concerns, however, Holloway did not demand an audit of the funds.

The Secretary of Labor also alleged that James Doyle was a plan fiduciary because he, as head of PCMG (Privileged Care Marketing Group), had control over plan assets. Therefore, according to the Secretary, Doyle was subject to fiduciary duties.

The court found that both Doyle and Holloway were plan fiduciaries and therefore bound by fiduciary duties including prudence and loyalty. As a result, Holloway was made jointly liable for restoring $4.7 million to the fund and Doyle was made jointly liable for restoring $3.9 million to the fund.

READ ABOUT EMPLOYEE STOCK OPTION LAWSUITS

Employee Stock Option Legal Help

If you or a loved one have suffered losses in this case, please click the link below and your complaint will be sent to an employment law lawyer who may evaluate your Employee Stock Option claim at no cost or obligation.

ADD YOUR COMMENT ON THIS STORY

Please read our comment guidelines before posting.


Note: Your name will be published with your comment.


Your email will only be used if a response is needed.

Are you the defendant or a subject matter expert on this topic with an opposing viewpoint? We'd love to hear your comments here as well, or if you'd like to contact us for an interview please submit your details here.


Click to learn more about LawyersandSettlements.com

Request Legal Help Now! - Free