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Seventh Circuit Orders Former Owners to Pay Backpay in HH3 Trucking Contempt Case

The Seventh Circuit issued an opinion ordering the former owners of HH3 Trucking, Inc., William and Gretchen Hudson, to pay backpay owed to former employees under threat of being brought into federal custody until they comply.

In 2005 and 2006, the Seventh Circuit enforced Board decisions ordering that HH3 Trucking, Inc., and the Hudsons, among other things, pay approximately $190,000 in backpay to four employees terminated in violation of Section 8(a)(3) of the National Labor Relations Act. The Board’s Contempt, Compliance, and Special Litigation Branch has since then pursued HH3 Trucking and its owners to achieve compliance, using garnishment proceedings under the Federal Debt Collection Procedures Act (FDCPA), executing levies on their automobiles, securing the dismissal of two individual bankruptcy cases, and finally obtaining a contempt adjudication issued by the Seventh Circuit. When the Hudsons failed to comply with the contempt order, the Court issued a writ of body attachment ordering the Hudsons to be held in custody until they complied or demonstrated their inability to do so.

The Court’s decision today reaffirmed its order, rejected the defenses raised by the Hudsons, and made clear that, if the Hudsons do not comply, they will be brought into federal custody until they do so. The Court said “[T]he Hudsons are scofflaws who for a decade have failed to comply with the Board’s decisions, which this court has enforced. They have preferred their own comfort over the welfare of their former employees. They must understand that failure to keep up with these payments will lead to an order returning them to custody until they comply.”

In rejecting the Hudsons’ defenses, the Court joined the majority of circuit courts of appeals which have held that the Employee Retirement Income Security Act (ERISA) “deals with how pension plans administer the funds in their charge. It does not say anything about what happens to the money after the plan distributes it to beneficiaries.” Thus the Court rejected the Hudsons’ attempt to protect funds received from Mrs. Hudson’s pension from the Board’s and the Court’s Order. 

The Court’s decision is available here.

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