Fiduciaries to restore $144k to South Portland, Maine, retirement plan following US Labor Department lawsuit

Date of action: March 1, 2016

Type of action: Consent Judgment and Order

Names of defendants: H.C. Watson Corp., doing business as Interim HealthCare, James C. Watson and Melissa Moore, formerly known as Melissa Belanger and Melissa Greenlaw.

Background: The H.C. Watson Corp. Deferred Savings and Profit Sharing Plan was established in March 1987 to provide retirement benefits for employees of H.C. Watson Corp., doing business as Interim HealthCare. The company is currently located in South Portland, Maine, but has or has had operations in Massachusetts, New York and Rhode Island as well. In addition to the company itself, the defendants were the plan's fiduciaries and responsible for ensuring that employee contributions and loan repayments to the plan were deducted from employees' paychecks and that the contributions and loan repayments were forwarded to the plan in a timely manner.

Allegations: Following an investigation by the U.S. Department of Labor's Employee Benefits Security Administration, the department filed a complaint in federal court on Oct. 6, 2014, alleging violations of the Employee Retirement Income Security Act. The violations included the defendants’ failing to forward employee contributions and loan repayments to the plan between February 2011 and June 2014, instead using the monies for purposes unrelated to the plan.

Resolution: The Labor Department has secured a consent judgment that orders the defendants H.C. Watson Corp. and James C. Watson to restore $144,336.72 to the plan and allocate the recovery amounts to each participant according to the amounts they are due. None of the monies will be allocated to defendants James Watson’s or Melissa Moore’s accounts. Defendants H.C. Watson and James Watson will then take steps to terminate the plan or hire an independent fiduciary to manage it and provide proof of compliance to the department. The order also prohibits the defendants H.C. Watson and James Watson from future ERISA violations and prohibits James Watson from ever again serving as a fiduciary to an ERISA-covered plan. This case is still pending against defendant Melissa Moore.

Quote: “The defendants H.C. Watson and James Watson had a legal obligation to carry out their duties solely in the interests of the plan’s participants, not their own benefit, and to do so with care, skill, prudence, and diligence. Their breach of the law was also a breach of trust with the plan’s participants. Now, they must make restitution,” said Susan Hensley, EBSA regional director in Boston.

Court: U.S. District Court for the District of Massachusetts

Docket Number: 1:14-cv-13797-FDS