Former New York Communications Company Accused of ERISA Benefits Violations

Endicott, NYThe US Labor Department recently filed a civil suit against former Endicott, New York-based ITS Communications Corp. and the firm's former president for alleged ERISA pension violations.

According to the Press & Sun-Bulletin of Binghamton, New York, the suit accuses the company and president of collecting payroll deductions from employees every week, masking them as IRA Plan contributions but not depositing the money in the accounts of the workers.

In total, the lawsuit claims the company did not deposit $43,654 into the accounts between January 2004 and December 2008.

The news source reports that the company officially shut its doors in the spring of 2009 after operating for 33 years, saying the down economy was hurting its business. The provider of intercom and public address systems reportedly had eight employees at the time of its closure.

Binghamton resident Herbert L. Griffith III, the former president of ITS Communications, reportedly could not be reached for comment on the Employee Retirement Income Security Act (ERISA) violations, according to the news provider.

The lawsuit initiated by the Labor Department reportedly seeks a restoration of all the losses from the plan for the plaintiffs in addition to interest.

John Chavez, a spokesman for the Labor Department, claimed that masking the payroll deductions as IRA Plan contributions was part of the company's scheme to stay afloat amid the struggling economy.

"They used it to cover the company's expenses," Chavez explained, according to the news source. "Apparently, the company was obviously in some kind of financial trouble back then and instead of taking these payroll deductions, which were meant for the employees' plan accounts...they simply paid the company's bills with some of that money."

Chavez did not disclose the number of employees who were affected by the alleged scheme, the news source reported.

According to the publication Human Resource Executive, increased job dissatisfaction among employees in the US has led to more ERISA lawsuits being filed across the country.

Additionally, according to MetLife's ninth annual Study of Employee Benefits Trends, approximately one-third of responding employees reported being so unhappy at work that they planned to switch jobs within the next year.