U.S. Department of Labor Obtains Injunction Enjoining Fleet Owners Insurance Fund from Paying Attorney’s Fees in Defense of ERISA Violations
CLEVELAND, OH – The U.S. District Court for the Northern District of Ohio has issued a preliminary injunction enjoining the Fleet Owners Insurance Fund from paying or advancing attorneys’ fees to any of the defendants in a U.S. Department of Labor Employee Benefits Security Administration (EBSA) enforcement case.
Judge Pamela A. Barker issued the preliminary injunction in response to the Department’s motion arguing that paying attorney’s fees to defend fund trustees against alleged Employee Retirement Income Security Act (ERISA) violations would be improper and a further violation of the law.
“The judge’s ruling makes clear that use of employee benefit funds to defend these fiduciaries from allegations of violations of their fiduciary obligations to the fund is improper. The U.S. Department of Labor’s Employee Benefits Security Administration is committed to ensuring that fiduciaries that fail to work solely in the interest of plans and participants will be held accountable,” said Employee Benefits Security Administration Regional Director L. Joe Rivers, in Cincinnati, Ohio.
In March 2019, the Department filed a complaint alleging Robert Kavalec, Charles Alferio, Victor Collova and the Board of Trustees of the Fleet Owners Insurance Fund violated ERISA. An EBSA investigation alleges the defendants committed prohibited acts by paying themselves more than $1.5 million in compensation over a six-year period, approved unreasonable and excessive expenses, allowed a former union officer to participate in the plan at no cost and failed to comply with the Affordable Care Act and Health Insurance Portability and Accountability Act.
ERISA requires fiduciaries operate employee benefit plans solely in the interest of participants and beneficiaries. Employers and workers can reach EBSA toll-free at 866-444-3272 for help with problems related to private sector retirement and health plans.
EBSA’s mission is to assure the security of the retirement, health and other workplace related benefits of America’s workers and their families. EBSA accomplishes this mission by developing effective regulations; assisting and educating workers, plan sponsors, fiduciaries and service providers; and vigorously enforcing the law.
The mission of the Department of Labor is to foster, promote and develop the welfare of the wage earners, job seekers and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.
Scalia v. Robert Kavalec, Charles Alferio, Victor Collova and the Board of Trustees of the Fleet Owners Insurance Fund
Case No. 1:19-CV-00968