Court Denies Payroll Audit Request

The U.S. court of Appeals for the First Circuit recently ruled that a company was not required to submit a payroll audit by a group of Multiemployer Funds after it notified the Funds in writing that it no longer would bid on union jobs.

The company sent the written notification to the Fund’ ‘collection agent in April, 2007. The Funds requested the payroll audit for the years 2007-2009 claiming that the employer was still subject to the collective bargaining agreement.

The district court agreed with the employer and denied the requested audit. The appeals court concurred with the district court decision citing two reasons:

  1. Both the Union and the Funds had communicated to each other the fact that the employer was to be removed from the records as a contributing employer.
  2. The union was treating the employer as a terminated employer by visiting them and requesting them to rejoin the union.

The case is: New England Carpenters Cent. Collection Agency v. Labonte Drywall Co., 2015 BL 246013, 1st Cir., No. 14-1739, 7/31/15

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