Archer, Byington, Glennon & Levine Partner prevails before the Second Circuit

A multiemployer pension fund properly suspended the pension benefits of a business owner who continued to draw a $300,000 salary from his company after he told the fund he had “retired,” the U.S. Court of Appeals for the Second Circuit ruled Dec. 15 in an unpublished decision (Cirincione v. Plumbers Local Union No. 200 Pension Fund, 2d Cir., No. 09-4963-cv, unpublished 12/15/10).

Affirming a lower federal court, the three-judge appellate panel found that the trustees of the Plumbers Local Union No. 200 Pension Fund acted within their authority under the plan when they halted monthly benefits being paid to Andrew Cirincione.

Cirincione was the owner of County Pneumatic Controls Inc. (CPC) for more than two decades when he announced his retirement in 1999. Upon his retirement, Cirincione applied for and was awarded benefits from the fund. Cirincione continued to receive pension benefits until 2006. It was in 2006 that he pleaded guilty in a New York state court to submitting fraudulent payroll records to avoid paying CPC’s employees prevailing wages.

According to the court, in his plea bargain Cirincione represented that he was the owner and president of CPC. Tax records also indicated that Cirincione was drawing a $300,000 annual salary from CPC. The fund trustees determined that Cirincione was not retired but instead was “re-employed” by CPC.

Under the fund’s terms, the trustees had the authority to suspend the pension benefits of any plan participant who was “re-employed for one or more hours of service in the industry, trade or craft or geographic area,” as defined by the plan. The trustees used this authority to suspend Cirincione’s benefits.

Cirincione sued the plan, seeking a court order that his monthly benefits be reinstated. The U.S. District Court for the Eastern District of New York ruled in favor of the fund and Cirincione appealed.


 

Not Limited to ‘Employees.’

The Second Circuit affirmed the lower court, agreeing that the fund trustees acted within their authority when they suspended Cirincione’s benefits. The appeals court rejected Cirincione’s contention that, in order to be considered “re-employed,” he would have to be an “employee” of CPC and he had not been an employee of CPC since his retirement in 1999.The court said the plan did not limit its re-employment language to participants who were considered “employees.” Because the plan’s suspension of benefits provision could be triggered by retirees who performed as little as one hour of “service” per month, the term “re-employed” could not be limited to individuals who are “employees” of a particular company, the court said.The per curiam decision was joined by Judges José A. Cabranes and Denny Chin, and Judge Edward R. Korman of the U.S. District Court for the Eastern District of New York, sitting by designation.Cirincione was represented by Rick Ostrove of Leeds Morelli & Brown, Carle Place, N.Y. The pension fund was represented by John H. Byington III of Archer Byington Glennon & Levine, Melville, N.Y.