Pension fund trustees can see payroll records

Monthly Labor Review, August, 1985 by George Ruben

The supreme Court expanded the right of pension fund trustees to examine the employee records of companies contributing to multiemployer benefit plans. The case originated in 1979, when some employers rejected a request by trustees of the Teamsters' Central States Pension and Health and Welfare funds for access to payroll records of employees the employers claimed were not covered by the plans. The trustees' request resulted from their concern that some of the employers were evading payments to the funds by underreporting the number of covered employees.

Justice Thurgood Marshall, writing for the six-member Court majority, said the proposed audit "is entirely reasonable" in light of the provisions of the Employee Retirement Income Security Act of 1974. Continuing, Marshall said that audits of all employee records are "a proper m eans of verifying that the employer has accurately determined the class of covered employee," particularly in view of the fact that the number of covered employees reduces the employer's liability to the funds.

Writing for the three-member minority, Justice John Paul Stevens agreed with the majority that the law does not prohibit such an audit by trustees, but he contended that the audit could not be performed because it was not specifically authorized by the Teamsters' labor contracts with employers.

The Court's decision reversed the finding of the Sixth Circuit Court of Appeals that such an audit was unwarranted because the trustees could rely on the Department of Labor to regulate employer contributions.