Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Civil No. 84-2996).
Before ALDISERT, Chief Judge, and STAPLETON and MANSMANN, Circuit Judges.
This appeal requires us to decide whether the holder of 50 percent of the stock of a company who was also the president and chief executive officer can be held personally liable for unpaid amounts due a retirement fund pursuant to a collective bargaining agreement between the corporation and the union. The parties have stipulated "that there is no basis for the Plaintiff to proceed on a theory that the corporate veil should be pierced," App. at A-66. In interpreting the statute, the district court held that Congress did not intend to expose corporate officers to personal liability for violation of the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001 et seq. (ERISA). WE affirm.
The trustees of the retirement funds brought this action against A.J.I.D., Inc., and a corporate officer, Don S. Klein to recover delinquent payments to the fund. The parties agreed that the corporation was liable and summary judgment was entered in behalf of the trustees against the corporation. The sole question in the limited posture before us is whether Klein is also liable.
In this appeal, the trustees of the fund argue that Klein can beheld liable simply because he managed and directed all of the corporation's financial, production, other business activities, and acted for the corporation in all matters related to employee benefit plan funds, including payroll audits, calculation of contributions, making payment to the employee benefit funds, signing checks, paying the bills and dealing on behalf of the corporation directly wit the employment benefit plans. In its brief before us, the trustees concede that the issue in this case is not "whether Courts can pierce the corporate veil under ERISA and hold officers who are corporate alter egos liable for corporate delinquencies." App. at 9 n.3a.
Because the issue before us is whether Klein was entitled to summary judgment, as a matter of law, our review is plenary. Goodman v. Mead Johnson & Co., 534 F.2d 566, 573-74 (3d Cir. 1976), cert. denied, 429 U.S. 1038, 50 L. Ed. 2d 748, 97 S. Ct. 732 (1977).
Under ERISA, "the term 'employer,' means any person acting directly as an employer, or indirectly in the interest of an employer, in relation to an employee benefit plan. . . ." 29 U.S.C. § 1002(5). The term "person," as defined, does not include corporate officers, but does include " an individual, partnership, joint venture, corporation, mutual company, . . . ." 29 U.S.C. § 1002(9).
The trustees rely on an argument by analogy. They ask us to draw a relationship between the Fair Labor Standards Act of 1938, 29 U.S.C. §§ 201 et seq. (FLSA), and ERISA. They rely principally on Donovan v. Agnew, 712 F.2d 1509 (1st Cir. 1983), which upheld the imposition of personal liability for unpaid wages under the FLSA. An employer is defined under the FLSA as "any person acting directly or indirectly in the interest of an employer in relation to an employee . . . ." 29 U.S.C. § 203(d). The FLSA defines "person" as "an individual, partnership, association, corporation, business trust . . . ." 29 U.S.C. § 203(a).
We are not impressed by appellants' argument. Had they proceeded on an later ego basis our inquiry would be different. There, we would apply the following factors which we have deemed relevant in determining when to pierce the corporate veil: the failure to observe corporate formalities; non-payment of dividends; the insolvency of the debtor corporation from the dominant stockholder; nonfunctioning of other officers or directors; absence of corporate records; and the fact that the corporation is merely a facade for the operation of the dominant stockholder or stockholders. ...