The opinion of the court was delivered by: THOMAS P. GRIESA
This is an action to collect unpaid contributions owed by Goodee Fashions, Inc. to four union benefit funds. The amount owed is $ 70,647.17. A judgment against Goodee was obtained in this amount. However, it appears that the amount cannot be collected from Goodee.
Suit is now brought under New York Bus. Corp. Law § 630, which provides that the ten largest shareholders of a corporation will be liable jointly and severally for all debts owing to employees, including amounts owed to benefit funds. Defendant Alan Lin was a principal shareholder of Goodee Fashions.
Plaintiff moves to remand. Defendant moves to dismiss. Plaintiff's motion is denied and defendant's motion is granted.
The facts are not in dispute. On July 1, 1990 Goodee Fashions and the Union entered into a collective-bargaining agreement which, among other things, required Goodee Fashions to make contributions to four employee benefit funds: (1) the ILGWU National Retirement Fund, (2) the ILGWU Health Services Plan, (3) the ILGWU Health & Welfare Fund and (4) the Sportswear Industry Trust Fund. It is agreed between the parties that the first three of these are ERISA funds. Plaintiff alleges that the Sportswear Industry Trust Fund is not an ERISA fund. Plaintiff appears to be correct on the latter point, so that no federal defense would exist as to the amount owed to the Sportswear Industry Trust Fund. This amount is $ 598.27.
Between January 1, 1992 and June 30, 1992, Goodee Fashions failed to make its required contributions to the funds. Pursuant to the collective-bargaining agreement, the Union sought arbitration of the benefit contribution dispute. On October 9, 1992 the Union won a default arbitration award. The award was confirmed by a judgment in Supreme Court, New York County on April 22, 1993 for the sum of $ 70,647.17. Execution against Goodee Fashions, however, was returned unsatisfied.
ERISA contains a provision entitled "Supersedure." This provision states that, with exceptions not here relevant, ERISA "shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan" covered by ERISA. 29 U.S.C. § 1144(a). The question, under the statute, is therefore whether the state law relates to an employee benefit plan.
The statute here in question, N.Y. Bus. Corp. Law § 630, provides in relevant part as follows:
(a) The ten largest shareholders . . . of every corporation . . ., no shares of which are listed on a national securities exchange or regularly quoted in an over-the-counter market by one or more members of a national or an affiliated securities association, shall jointly and severally be personally liable for all debts, wages or salaries due and owing to any of its laborers, servants or employees . . . .
(b) For the purposes of this section, wages or salaries shall mean all compensation and benefits payable by an employer to or for the account of the employee for personal services rendered by such employee. These shall specifically include but not be limited to salaries, overtime, vacation, holiday and severance pay; employer contributions to or payments ...