Local IBEW chapter required to provide financial accounting information

By Nicholas Malfitano | Jan 27, 2016

International Brotherhood of Electrical Workers  

PHILADELPHIA – According to the U.S. District Court for the Eastern District of Pennsylvania, an electrical union will need to furnish financial information to satisfy a counterclaim filed by the case’s defendant.

On Thursday, Judge Ronald L. Buckwalter ruled the International Brotherhood of Electrical Workers Local Union 98 would be compelled to provide LP Herman Company and Lawrence Herman with information required for a legal accounting.

In this suit, IBEW Local 98 is joined by multi-employer benefit funds, including those for health and welfare, pension, apprentice training, profit sharing/deferred income, labor management cooperation committee and scholarship funds, established under the Labor Management Relations Act (LMRA) and Employee Retirement Income Security Act of 1974 (ERISA).

LP Herman and its owner Herman are based in Montgomeryville and provide electrical services to the public, with Herman signing a letter of assent for labor agreements with IBEW Local 98 in September 1989.

LP Herman was a party to the multi-employer collective bargaining agreement (CBA) between Local Union No. 98 and the Philadelphia division of the Penn-Del-Jersey Chapter, National Electrical Contractor’s Association (NECA), in effect from May 3, 2010 until April 20, 2013.

Provisions of this and other agreements were to establish the prior-mentioned benefit funds for employees of the local NECA group, furnish monthly reports to Local Union No. 98 listing the names of the members of the Union it employs and the number of hours of employment and gross earnings of each member, and “provide monthly contribution payments consistent with the terms” of the various agreements.

Further, LP Herman Company is obligated to deduct working dues, vacation and job recovery funds from each IBEW Local 98 member and “remit the withholdings in lump sum monthly payments” to the Financial Secretary of Local 98. However, the plaintiffs allege that, in spite of the agreements and provisions and despite plaintiffs’ repeated demands, the defendants have failed to timely remit contributions and deductions due and owing.

The plaintiffs filed suit on Feb. 18, 2015, and after dismissal of several counts, the remaining charge allege the defendants failed to make a variety of monthly payments to the Union and contributions to the various multi-employer benefit funds

The defendants, in turn, brought a counterclaim for an accounting. Thereafter, on Nov. 13, the plaintiffs motioned to dismiss this counterclaim, which the defendants opposed in a response filed on Dec. 3.

The defendants’ counterclaim insists they are entitled to an accounting from the plaintiffs “(1) showing the financial transaction history of payments to plaintiffs by defendants pursuant to the commercial agreement and the applicable trust agreements during the relevant time period”, and “(2) showing the exact methodologies utilized by plaintiffs to calculate the monies alleged to be due and owing from defendants pursuant to the commercial agreement and the applicable trust agreements during the relevant time period.”

According to the Superior Court of Pennsylvania, the party seeking a legal accounting must show both a valid contract and that the defendant was in dereliction of their duty under the terms of the contract.

Buckwalter said the defendants have “properly pled” these elements for a legal accounting, including a valid contract where plaintiffs are obligated to determine the defendants’ delinquencies using information currently only in their possession; and that the plaintiffs demanded restitution from the defendants for those same deficiencies without providing how they arrived at those calculations or a proper total.

“The mere fact that plaintiffs may have to ultimately produce this information in support of its own claims in discovery or during a jury trial does not negate the legal propriety of defendants’ counterclaim request for this information,” Buckwalter said. “Taking defendants’ allegations as true, the Court declines to dismiss this claim.”

The plaintiffs are represented by Steven F. Marino of Marino Associates, in Philadelphia.

The defendants are represented by Alfred M. Abel of Alfred Abel Law Offices and Peter J. Weidman of Weidman Law, both in Plymouth Meeting.

U.S. District Court for the Eastern District of Pennsylvania case 2:15-cv-00815

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nickpennrecord@gmail.com

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