US Labor Department finds illegal retaliation in Cement Masons Southern California Trust Funds case

WASHINGTON — As director of the Cement Masons Southern California Trust Funds' audit and collections department, Cheryle Robbins spoke up when she believed a trustee was breaking federal law protecting CMSCTF's retirement and benefit plans. Robbins later cooperated with federal investigators, and the board of trustees responded by placing Robbins on administrative leave. When the company outsourced her department to a third-party administrator, Robbins was the only employee not retained by the new employer.

Today, the U.S. District Court for the Central District of California ordered 12 trustees of the Los Angeles-based CMSCTF and its service provider, Zenith American Solutions, to pay $630,000 in lost wages and damages to Robbins and her co-workers, Cory Rice and Louise Bansmer — both of whom supported Robbins' whistleblowing efforts. The decision comes in a consent judgement obtained by the U.S. Department of Labor.

"There are no good stories about retirement savings crimes, but this case was particularly galling because three people were all punished for doing the right thing. But that's also what makes the resolution of this case so satisfying," said Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi. "Robbins, Rice and Bansmer suffered serious financial consequences because they stood up for what was right. This resolution ensures that they'll finally get the compensation they deserve."

As director of the CMSCTF audit and collections department, Robbins complained internally that Scott Brain, a CMSCTF trustee and business manager for Cement Masons Local Union 600, was violating the federal Employee Retirement Income Security Act. In 2011, she cooperated with a federal criminal investigation into Brain's activities. Upon learning of her cooperation, the joint board of trustees voted to place Robbins on administrative leave. When CMSCTF outsourced her department to Zenith American Solutions, Robbins was the only employee not hired by Zenith.

An investigation by the department's Employee Benefits Security Administration found that the trustees of the CMSCTF, the trust funds' counsel Melissa W. Cook, law firm Melissa W. Cook & Associates, Zenith American Solutions, and its account executive Bill Lee had retaliated against Robbins unlawfully. Section 510 of ERISA prohibits retaliation against whistleblowers for complaining of ERISA violations or cooperating with a governmental investigation of such violations.

The department filed suit on May 21, 2014. The lawsuit was later amended to allege that Rice and Bansmer were also fired because of their participation in Robbins' internal whistle-blowing activities or because they refused to cease communicating with her after she was placed on leave.

In addition to the $630,000 paid to the three whistleblowers in lost wages and damages, the order requires the settling trustee defendants to approve pension service credits to Robbins, who previously recovered $200,000 in a private state court action based on her wrongful termination.

The order also asks the settling trustee defendants to call for Scott Brain to resign from any trustee position he currently holds, and to support the adoption of an investigation procedure to address future complaints about trustees. Also, both the settling trustees and Zenith American Solutions, including Lee, are permanently enjoined from retaliating against whistleblowers and the settling trustees and Zenith American Solutions' employees, including Lee, are required to receive training under ERISA.

The lawsuit continues with respect to four defendants: Brain, Cook, Melissa W. Cook & Associates, and one Local 600 trustee. The action is the result of an investigation by EBSA's Los Angeles Regional Office. The department's San Francisco Regional Office of the Solicitor is litigating the case.

For help with problems related to private sector retirement and health plans, employers and workers can reach EBSA's Los Angeles office at 626-229-1000 or toll-free at 866-444-3272. Additional information can be found at www.dol.gov/ebsa/.