For Immediate Release: December 19, 2011
Contact: Michael D'Aquino or Michael Wald
Release Number: 11-1741-ATL (592)
US Labor Department sues defunct Goldsboro, NC, company and
corporate officers to recover more than $20,000 for employee benefit plans
Employee contributions allegedly commingled with company assets
GOLDSBORO, N.C. – The U.S. Department of Labor is suing Jeffreys Seed Co. and its corporate officers to restore $20,324.08 in employee contributions to the defunct Goldsboro company’s employee pension and health plans. The department’s lawsuit resulted from an investigation by its Employee Benefits Security Administration that revealed violations of the Employee Retirement Income Security Act by the company, its president, Edward Taylor Jeffreys, and its corporate secretary, James T. Jeffreys III.
“Employees count on pensions and health benefits to provide security for themselves and their families,” said Isabel Colon, EBSA’s regional director in Atlanta. “The Labor Department is committed to holding fiduciaries of these plans accountable when they ignore the responsibility to act solely in the interest of plan participants.”
EBSA’s investigation found that from January 2006 through January 2009, the defendants withheld employee contributions to the Jeffreys Seed Co. Profit Sharing Plan and Trust but failed to timely forward them to the retirement plan. Additionally, from March until September 2008, the defendants allegedly withheld $13,242.08 in employee contributions but failed to segregate and forward the contributions from company assets to the plan in accordance with ERISA requirements. Since the company closed in January 2009, the defendants have failed to distribute the retirement plan’s balance – approximately $134,000 – to its seven remaining participants.
The Jeffreys Seed Co. Group Health Plan was funded by monthly premiums consisting of employee and employer contributions, which were collected by Jeffreys Seed Co. and transmitted to Blue Cross Blue Shield. From September through October 2008, Jeffreys Seed Co. and Edward Taylor Jeffeys allegedly withheld employee premium contributions of approximately $7,082 but failed to segregate and forward the contributions from company assets to the health plan in accordance with ERISA. In October 2008, Blue Cross Blue Shield informed defendants Jeffreys Seed Co. and Edward Taylor Jeffreys that the health plan was being retroactively terminated, effective Aug. 31, 2008, due to the lack of premium payments for September and October 2008.
The lawsuit seeks a court order requiring all three defendants to restore all losses to the retirement plan, including interest or lost opportunity costs that occurred as a result of breaches of fiduciary obligations. It asks that the individual retirement plan accounts of any defendant be set off against the amount of losses, if the losses are not otherwise restored by the defendants.
Additionally, the suit asks that Jeffreys Seed Co. and Edward Taylor Jeffreys restore all losses to the health plan participants, including interest or lost opportunity costs that occurred as a result of breaches of fiduciary obligations.
Finally, the Labor Department is seeking a court order permanently barring the defendants from serving as fiduciaries of any employee benefit plan subject to ERISA and has asked that an independent fiduciary or administrator be appointed to the retirement plan at the defendants’ expense.
This case was investigated by EBSA’s Atlanta Regional Office. It is being litigated by the Labor Department’s Regional Office of the Solicitor in Atlanta and was filed in the U.S. District Court for the Eastern District of North Carolina. Employers and workers can contact EBSA at 404-302-3900 or toll-free at 866-444-3272 for help with problems relating to private sector retirement and health plans. For more information, visit www.dol.gov/ebsa.
Solis v. Jeffreys Seed Co.
Civil Action File Number 5:11-cv-00692-FL
U.S. Department of Labor news materials are accessible at www.dol.gov. The information above is available in large print, Braille, audio tape or disc from the COAST office upon request by calling 202-693-7828 or TTY 202-693-7755.