United States District Court, M.D. Tennessee, Nashville Division
RODNEY GOOD and IRON WORKERS TENNESSEE VALLEY AND VICINITY WELFARE FUND; IRON WORKERS TENNESSEE VALLEY AND VICINITY PENSION FUND, and IRON WORKERS TENNESSEE VALLEY AND VICINITY ANNUITY FUND Plaintiffs,
SOUTHERN STEEL AND CONSTRUCTION, LLC; J. WARREN “SKIP” BROCK; DEBBIE BROCK; DENNY M. RUTLEDGE, JR.; and SHARON RUTLEDGE Defendants and SOUTHERN STEEL AND CONSTRUCTION, LLC; Third Party Plaintiff,
QUALITY IRON FABRICATORS, INC. Third Party Defendant.
HOLMES, MAGISTRATE JUDGE
ORDER AND MEMORANDUM OPINION
WILLIAM L. CAMPBELL, JR. UNITED STATES DISTRICT JUDGE
before the Court is Third-Party Defendant, Quality Iron
Fabricators, Inc.'s (“Quality”) Motion to
Dismiss the Third-Party Complaint of Iron Workers Tennessee
Valley and Vicinity Welfare Fund, Iron Workers Tennessee
Valley and Vicinity Pension Fund, and Iron Workers Tennessee
Valley and Vicinity Annuity Fund (hereinafter collectively
“Iron Workers”). (Doc. No. 30, 31). The Iron
Workers have responded in opposition. (Doc. No. 37). For the
reasons discussed below, Quality's Motion to Dismiss is
FACTUAL AND PROCEDURAL BACKGROUND
Iron Workers filed their Complaint on August 11, 2017,
against Southern Steel & Construction, LLC
(“SSC”) under the Employment Retirement Income
Security Act of 1974 (“ERISA”) seeking to recover
employer contributions allegedly owed to the fund managed by
Iron Workers (hereinafter the “Plaintiffs
Funds”). (Doc. No. 1). On November 2, 2017, SSC filed a
Third-Party Complaint against Quality alleging the Iron
Workers' claim arose out of a construction project on
which SSC provided labor, services, and materials as a
subcontractor to Quality for construction of a facility
located on the Vanderbilt University campus. (Doc. No. 17).
On January 5, 2018, the Iron Workers asserted a third-party
claim directly against Quality. (Doc. No. 25). The Iron
Workers allege that Quality is liable to the Iron Workers for
the same ERISA contributions that the Iron Workers seek
against SSC, asserting that Quality was a joint employer with
SSC starting in December 2015. (Id.). Iron Workers
allege Quality is obligated to pay contributions to the
Plaintiffs Funds as required by the collective bargaining
filed their Motion to Dismiss alleging the claims asserted by
Iron Workers fail to set forth a cause of action upon which
relief can be granted. (Doc. No. 31).
STANDARD OF REVIEW
Rule of Civil Procedure 12(b)(6) permits dismissal of a
complaint for failure to state a claim upon which relief can
be granted. For purposes of a motion to dismiss, a court must
take all of the factual allegations in the complaint as true.
Ashcroft v. Iqbal, 556 U.S. 662 (2009). To survive a
motion to dismiss, a complaint must contain sufficient
factual allegations, accepted as true, to state a claim for
relief that is plausible on its face. Id. A claim
has facial plausibility when the plaintiff pleads facts that
allow the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged. Id.
Threadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, do not suffice.
Id. When a complaint includes well-pleaded factual
allegations, a court should assume their veracity and then
determine whether they plausibly give rise to an entitlement
of relief. Id. at 1.
asserts the Iron Workers Third-Party Complaint fails to meet
the pleading requirements of Rule 8 of the Federal Rules of
Civil Procedure. Specifically, Quality argues the Iron
Workers fail to state an ERISA claim under a theory of joint
employment based on the facts in the Third-Party Complaint.
(Doc. No. 31). The Iron Workers respond by pointing to
specific factual allegation related to joint employment
liability and, based on the motion to dismiss pleading
standard, the Third-Party Complaint states a claim under
ERISA. (Doc. No. 37).
determining whether two companies can be considered a joint
employer for purposes of liability under ERISA and a
collective bargaining agreement, the court must consider the
following four factors: (1) interrelation of operations, (2)
common management, (3) centralized control of labor
relations, and (4) common ownership.” Distillery,
Wine & Allied Workers Int'l Union v. National
Distillers & Chemical Corp., 894 F.2d 850, 852 (6th
Cir.), see also International Longshoremen's
Ass'n v. Norfolk Southern Corp., 927 F.2d 900, 902
(6th Cir.), Metropolitan Detroit Bricklayers Dist.
Council v. J.E. Hoetger & Co., 672 F.2d 580, 584
(6th Cir.1982). “In applying the factors, no individual
factor is outcome determinative; instead, ‘all the
relevant factors must be considered together.'”
Trustees of the Detroit Carpenters Fringe Benefit Funds
v. Industrial Contracting, LLC, 581 F.3d 313, 318 (6th
Cir. 2009). The resolution of determining joint employment is
essentially a factual issue. Michigan State Painters Ins.
Fund v. Ron Simmons Painting, Inc., 875 F.Supp. 417, 421
(E.D. Mich. Feb. 6, 1995) (citing Boire v. Greyhound
Corp., 376 U.S. 473 (1964)).
asserts the Third-Party Complaint merely alleges that Quality
agreed to pay for certain financial obligations of SSC and
this is the sole basis for the Iron Workers joint employer
theory. (Doc. No. 31 at 6). Quality argues the Third-Party
Complaint does not allege that Quality and SSC have any
interrelation of operations, common management, centralized
control of labor relations, or a common ownership, nor does
the Third-party Complaint set forth any factual basis which
would amount to, or support, any such claims. (Doc. No. 31 at
8). Quality argues the Third-Party Complaint only alleges
“parallel conduct” that arises “to no more
than suspicion of improper conduct, ” which is fails to
meet the plausibility pleading requirements set forth in Rule
8. (Id. at 8-10)(citing Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 555 (2007). Quality asserts that
paying some of SSC's obligations is permissible business
conduct and does not create a joint enterprise or joint
employment for purposes of ERISA; they had a business
interest in preventing a default by its subcontractor, SSC.
(Id. at 9). Quality further argues the Iron Workers
claim fails because the Third-Party Complaint pleads no more
than a suspicion of improper conduct. (Id. at 10).
Iron Workers responds that the Third-Party Complaint includes
factual assertions supporting at least three of the four
factors for determining joint employer liability, and
therefore states a plausible claim for relief. (Doc. No. 37
at 4-5). The Iron Workers cite to Paragraph 9 of the
Third-Party Complaint, which includes allegations that
Quality agreed to pay wages to SSC under the collective
bargaining agreement, were responsible for paying the
contributions, and, with Quality's assumption of these
responsibilities, it had control over labor relations. (Doc.
No. 37 at 5; Doc. No. 25 at ¶ 8-10). Quality also made
two substantial payments towards Plaintiffs Funds and began
the process of paying wages to employees covered by the
collective bargaining agreement, and to vendors of structural
steel. (Doc. No. 25 at ¶ 11). The Iron Workers argue, as
a whole, the allegations establish a basis to conclude
Quality and SSC “shared or co-determined matters
governing the essential terms and conditions of
employment”, and ultimate success on the claims can
only be determined through discovery. (Doc. No. 37 at
6)(citing Trustees of Detroit Carpenters Fringe Benefit
Funds v. Andrus Acoustical, Inc., 2014 WL 1746399, at
*16 (E.D. Mich. Apr. 30, 2014)). Finally, the Iron Workers
assert the policy behind ERISA prevents Quality from assuming
responsibility for contributing to the funds, then
disclaiming liability. (Doc. No. 37 at 8-9)(citing
Irigaray Dairy v. Dairy Employees Union Local No. 17
Christian Labor Ass'n of U.S. Pension Tr., 43
F.Supp.3d 1080, 1088 (E.D. Cal. 2014)).
the Court must determine whether the Third-Part Complaint
pleads sufficient facts to place Quality on notice of the
claims against them. “The major factors in [joint
employment] determination are the ability to hire, fire, and
discipline, affect compensation and benefits, and direct and
supervise performance.” Sanford v. Main St. Baptist
Church Manor, Inc.,449 Fed.Appx. 488, 492 (6th Cir.
2011). Construing the facts in favor of the Iron Workers, the
Court finds they have alleged facts to establish at the
initial pleading stage that Quality and SSC were joint
employers. From the facts alleged, as discussed above, the
Court finds on its face that the Third-Party Complaint
sufficiently alleges Quality could have had control, at a
minimum, over compensation or related ...