Apprentices Allege ABC Breach of Fiduciary Duty

APPRENTICES FILE LAWSUIT AGAINST ASSOCIATED BUILDERS AND CONTRACTORS
OF SOUTHERN CALIFORNIA

March 15, 2005 - Apprentices have filed a class action lawsuit for breach of fiduciary duty against the Associated Builders and Contractors of Southern California, a contractors' association, and the trustees of a trust fund set up by the contractors' association to receive contributions for apprenticeship training.

The Associated Builders and Contractors of Southern California is an association of non-union construction contractors. The lawsuit, filed in federal court in Los Angeles, alleges that the defendants used apprenticeship trust fund money to support the contractors' association rather than to pay for apprenticeship programs.

The plaintiffs are asking the Court to appoint new trustees and to order the return of any trust funds that were misused. The suit is based on the federal Employee Retirement Income Security Act (ERISA), which regulates apprenticeship trust funds.

The class action lawsuit follows a recent report by the AFL-CIO Building and Construction Trades Department that found flawed and incomplete financial reporting by the chapters and apprenticeship programs of the Associated Builders and Contractors throughout the United States. The State Building and Construction Trades Council of California has already called on Attorney General Bill Lockyer to conduct an investigation into whether training funds are being misused in California.

"The vast majority of apprenticeship programs in California are jointly run by labor and management to ensure that the interests of both apprentices and employers are protected," said Robert L. Balgenorth, President of the State Building and Construction Trades Council of California. "The ABC programs are run solely by employers so there is a risk that apprentices will be exploited and training funds will be misused by employers. These allegations of breach of fiduciary duty should receive very serious consideration from the courts," Balgenorth said.

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