Labor Department sues Alabama's Law Partners LLC for improper use of employee retirement contributions

Date of Action: April 28, 2015

Type of Action: Complaint

Names of Defendants: Law Partners LLC, Milton Bryan Peoples, and the Law Partners LLC 401(k) Salary Reduction Plan

Allegations: Law Partners LLC, located in Trussville, Alabama, sponsored the Law Partners LLC 401(k) Salary Reduction Plan in 2003. Milton Bryan Peoples was the company's owner and the plan trustee. Peoples had the authority and responsibility to make all administrative decisions with respect to the plan, including decisions regarding the remittance of employee contributions to the plan. The plan permitted participants to contribute a portion of their pay to the plan through payroll deductions. During payroll periods between January 2007 and December 2010, the defendants withheld employee contributions totaling $64,725 and never forwarded them to the plan while also failing to segregate the contributions from company assets as soon as they reasonably could. The defendants commingled contributions with the general assets of the company, allowing the contributions to be used for company purposes and obligations rather than for the exclusive benefit of the plan participants.

Resolution: The department is asking the court to order the defendants to restore to the plan all losses, including interest or lost opportunity costs, which occurred as a result of their breaches of fiduciary obligations; set off the individual plan accounts of the defendants against the amount of losses, including lost opportunity costs, resulting from their fiduciary breaches; permanently enjoin defendants from serving as fiduciary, administrator, officer, trustee, custodian, agent, employee, representative, or having control over the assets of any employee benefit plan subject to the Employee Retirement Income Security Act of 1974. The defendants additionally will have to appoint a successor fiduciary to the plan at their cost; and be permanently enjoined from engaging in any further action in violation of Title I of ERISA.

Court: United States District Court for the Northern District Court of Alabama

Docket Number: 2:15-cv-00721-JHH