Department files suit to force defunct Missouri engineering firm to restore $15K owed to employees' retirement and health care plans

Date of Action: Dec. 30, 2015

Type of Action: Complaint

Name of Defendant: James M. Claxton Jr.

Allegations: An investigation by the U.S. Department of Labor's Employee Benefits Security Administration, Kansas City Regional Office, resulted in the department filing a suit in federal court alleging violations of the Employee Retirement Income Security Act.

James M. Claxton Jr. was the sole officer and owner of Claxton Consulting Engineers Inc., a Missouri corporation providing engineering consulting services. CCE operated within Missouri until ceasing operations in August 2009. CCE was the sponsor and plan administer of two employee benefit plans, a 401(k) plan and a group health plan. At varying times from October 2006 through September 2008, Claxton withheld and failed to forward $13,119.19 in employee elective deferrals to the 401(k) plan. At varying times in 2007 through August 2009, Claxton also withheld and failed to forward $1,363.38 in payroll withholdings of insurance premiums intended for payment of health care premiums.

In the U.S Bankruptcy Court for the Eastern District of Missouri, Claxton and his wife filed for protection from creditors under Chapter 13 Bankruptcy. Claxton signed a stipulation of non-dischargeability in which he admitted that he was a fiduciary to the 401(k) plan and to the health plan and the debt was non-dischargeable.

Resolution: The suit asks the court to order Claxton to restore $10,720.33 to the 401(k) plan plus $2,816.58 in lost earnings, and $1,363.38 to the health plan plus $96.09 in lost earnings. Furthermore, the department seeks to enjoin Claxton permanently from engaging in any further action in violation of Title I of ERISA.

Court: United States District Court for the Eastern District of Missouri.

Docket Number: 4:15-cv-01946

Employers and workers can reach EBSA toll-free at 866-444-3272 for help with problems related to private sector retirement and health plans. Additional information can be found at http://www.dol.gov/ebsa/.