Written by Andrew Staab
Rosene, Haugrud & Staab, Chartered
P: 651.227.6621 E: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

In many collections lawsuits, the level of peculiarity in delinquent employers’ defenses and counterclaims is relative to the severity of the delinquent employers’ breaches of the Collective Bargaining Agreement and ERISA.  Moore v. R.T.L. Construction, Inc., 2010 WL 2521733 (D.Minn. 2010) confirms this notion with oddball defenses and counterclaims.  Before going into Moore, I want to illustrate the distinction between a defense and a counterclaim.  A defense is “I’m innocent” or “I didn’t do it!”  A counterclaim is “I’m innocent, and you owe me” or “I didn’t do it, and while we’re at it, you did something to me that justifies an award of money from you to me.”

In Moore, the Funds’ payroll auditor’s initial findings showed that the employer refused to give up all the payroll records, that the employer kept a separate set of payroll records, and that the employer had struck a deal with its employees to under-report their work hours.  If Taft-Hartley collections violations were criminal in nature, then this employer is heading to the electric chair.  But they are not, and the Funds sued to compel a more comprehensive audit.  The employer counterclaimed (not just defended against) the Funds’ claims by asserting that it had actually overpaid by using the wrong wage rates and demanded reimbursement of the “excess” payments.  Additionally, the employer asserted that its payments to the Funds actually “over-funded” the plans, and the employer asserts a constructive trust on the “over-funded” amounts.  Finally, the employer claimed the Funds’ trustees breached their fiduciary duties by not reimbursing the alleged overpayments.  Fortunately, U.S. District Judge Donovan W. Frank dismissed the delinquent employer’s counterclaims and allowed the Funds to complete their audit.

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