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In The News:
Alter Ego Liable for
Fringe Benefit Contributions
A union plumbing company, Wolf
Mechanical, defaulted on it obligation to make
contributions to the union fringe benefit funds
and went out of business. Shortly thereafter,
the live-in girlfriend of the owner of Wolf
Mechanical formed Wolf Plumbing. Both companies
did the same work with the same equipment and
the owner of Wolf Mechanical was involved in the
management of Wolf Plumbing. The court found
that Wolf Plumbing was an alter ego or
disguised continuation of Wolf Mechanical, was
bound by Wolf Mechanical’s labor agreement and
was obligated to pay Wolf Mechanical’s fringe
benefit.1
Moral: Union contractors cannot
avoid obligations under a labor agreement by
trying to continue their business in the form of
another entity disguised as a new and separate
business.
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1
Plumbers Local 98 Defined Benefit
Fund v. Wolf Mechanical, Inc., E.D.
Mich. No. 06-12005 (12/10/07)
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