CEOs Beware — ERISA May Give Rise To Personal Liability For Fiduciary Breaches

In Trustees of Sheet Metal Workers Int’l Ass’n Local No. 30 Vacation Fund v. Hopwood, S.D.N.Y., No. 7:09-cv-0588-ERR, Sept. 27, 2012, the District Court granted summary judgment in favor of a number of union benefit funds and found the Company’s CEO personally liable for the company’s failure to pay fringe benefit contributions owed to the funds due to his breach of his ERISA fiduciary duties.  This decision is a cautionary tale that every executive should heed – substantial personal liability may flow from decisions affecting ERISA plans, even where the decisions are made with the intention of benefiting employees.

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