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Department of Labor sues Janesville company

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Ted Sullivan
January 20, 2011
— The U.S. Department of Labor has sued Premier Vending of Janesville and its president, accusing the company of using employee retirement contributions for its own benefit.

The department is asking Premier Vending and co-owner David R. Biggerstaff to restore $26,163.50 in voluntary contributions plus interest to the company's 401(k) plan, according to the lawsuit filed Friday in U.S. District Court in Madison.


The lawsuit alleges that the company and Biggerstaff failed to put employee contributions into the retirement plan from Oct. 26, 2007, through Jan. 30, 2009.


Instead, the money was put in Premier Vending's general account and used to pay the company's operating expenses, according to the lawsuit.


The lawsuit also alleges that the company failed to place employee contributions into the plan in a timely manner from Sept. 1, 2006, through Jan. 30, 2009.


The lawsuit stems from a Department of Labor Employee Benefits Security Administration investigation into alleged violations of the Employee Retirement Income Security Act.


The lawsuit seeks a court order to restore money owed to the plan and to prevent Biggerstaff from serving as a fiduciary to any similar employee benefit plans in the future.


"It is an egregious violation of trust when employees' voluntary salary contributions are incorporated into the general assets of the company and not forwarded to their retirement plans," said Steve Haugen, the benefits security administration's regional director in Chicago.


"The labor department will continue to help workers obtain their rightful benefits when fiduciaries fail in their responsibilities to properly administer employee benefit plans."


Currently, the plan has approximately nine participants and $181,742 in assets, according to the labor department.


Biggerstaff filed for Chapter 7 bankruptcy protection in August, according to the lawsuit.



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