Justices Take Up Claims Over Pension Offerings

WASHINGTON (CN) - A landscape supply company will get another shot at fighting off unpaid remittances it owes to union-affiliated benefit funds, the Supreme Court said Monday.

Central Pension Fund of the International Union of Operating Engineers leads the federal complaint against Ray Haluch Gravel Co., a landscape supply company based in Ludlow, Mass.

It and several other funds had claimed that the company improperly denied them additional remittances for previously unreported work that they claimed their union contract covered.

In June 2011, a federal judge awarding the funds more than $26,000 in unpaid remittances referable to covered work performed by one employee, Martin Jagodowski, but denied recovery for any other work. A month later, the court awarded the funds more than $34,000 in attorneys' fees.

On appeal, the funds claimed that the trial court should have ordered additional payments with respect to certain unidentified employees.

A three-judge panel of the 1st Circuit vacated both the judgment on remittances and the attorneys' fees in September 2012.

"The evidence presented in the court below indicates quite clearly that some covered work was done by unidentified employees," according to the decision. "The plaintiffs contend that the lack of required records triggered a burden-shifting paradigm under which the defendant had to show which hours represented covered work and which did not."

Sister circuits have "concluded that an employer's failure to keep adequate records as required by section 1059(a)(1) may trigger burden-shifting," the panel found.

The judges agreed that "the burden-shifting paradigm makes good sense."

"Nevertheless, the validity and contours of this burden-shifting paradigm have, until now, been a matter of guesswork within this circuit," the judges wrote. "Given this lack of clarity, we think that the fairest course is to vacate the challenged portion of the district court's decision in Haluch I and remand so that the district court, applying the presumption and considering any countervailing evidence that the defendant adduces, may determine the amount of remittances owed on account of covered work performed by unidentified employees."

Recalculating remittances also compels the court to adjust attorneys' fees, the court found.

"In refashioning the award of overdue benefit-remittance payments, the district court should reinstate that portion of its previous award referable to work performed by Jagodowski (a portion of the award that was not challenged on appeal)," the judges added (parentheses in original).

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