When Double Lives Unravel: Unions Sue 'Alter Ego' Companies Over Fringe Benefit Contributions
Written by: Sam Orlando
The Lawsuit: A Battle Over Unpaid Benefits
VINELAND, NJ - In what could be the plot for the next corporate thriller, two labor unions are alleging that Urban Sign and its suspected alter ego, Urban Manufacturing, played a game of shell companies to avoid paying employee fringe benefits. According to the recent lawsuit filed in the Eastern District of Virginia, the companies owe tens of thousands in contributions, interest, and liquidated damages to various funds.
The Players: Unions, Funds, and Two Companies Sharing More Than an Address
Urban Sign is a New Jersey-based company involved in a collective bargaining agreement with two labor unions: Local 19 and Local 137. These unions represent workers in industries affecting interstate commerce. On the other side of the chessboard are two companies—Urban Sign and Urban Manufacturing—both under the auspices of founder Seth Davis. The lawsuit alleges that Urban Manufacturing was specifically designed as a loophole to sidestep Urban Sign's obligations to its employees.
The Fine Print: Collective Bargaining Agreements and Fringe Benefits
At the crux of the issue are collective bargaining agreements that require Urban Sign to contribute to various funds on behalf of its employees. These funds are related to pension plans, scholarship funds, and insurance, among other things. Urban Manufacturing, while not formally a signatory to these agreements, is accused of being essentially a clone of Urban Sign and thus equally liable.
The Legal Twist: "Alter Ego" and "Single Employer" Status
The unions are deploying the concept of "alter ego" to pierce through the corporate veil separating Urban Sign and Urban Manufacturing. The terms of the collective bargaining agreement would thus extend to Urban Manufacturing, making them jointly liable for unpaid benefits. According to the unions, both companies have common ownership, perform the same work, and share the same business facilities—a point they see as evidence of a single employer status.
The Alleged Damages: Numbers That Add Up
According to the lawsuit, the total estimated amount owed by both companies for the period from July 2021 to July 2023 is $52,724.71, plus ongoing daily interest. The unions claim that efforts to collect these amounts outside of court have been unsuccessful.
The Repercussions: More Than Just Money
Beyond the financial aspect, the lawsuit argues that the failure to pay the required benefits has caused "irreparable harm" to the plan participants, endangering their eligibility for various benefits and potentially encouraging other employers to engage in similar evasive practices.
The Next Steps: What the Unions Want
The unions are seeking a judgment declaring that both companies are, for all intents and purposes, a single employer and therefore jointly liable for the delinquent contributions, interest, and damages. They are also asking for the court to retain jurisdiction for any future audits or additional amounts that may become due.
In the end, the unfolding legal drama serves as a stark reminder: corporate gamesmanship may provide short-term gains, but when the house of cards comes tumbling down, the price can be steep. And as always, it’s the workers who are caught in the crossfire.
This story is based on a lawsuit which has been filed in a federal court. The case is ongoing, and the report is based on its allegations. The allegations in the lawsuit are just that - allegations - until the Court makes a judgment on the merits of the case. Stay tuned to Breaking Through News for more information on this case.
Sam Orlando is an Editor and Senior Reporter with Breaking Through News. If you have news tips you can email Sam at: sam@breakingthrough.com
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