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Can a Mechanic’s Lien be Filed by a Union for Unpaid Fringe Benefits?

 In Mechanic’s Lien Law Updates and News

Absolutely not (Well, we will hedge our bet in a moment and talk about one errant case). All such attempts to do so have failed under the theory that the Federal Employee Retirement Income Security Act of 1974 preempts mechanic’s lien law. In other words, it takes precedence over all state laws. This comes from the case of EklecCo v. Iron Workers Locals 40, 170 F 3rd353 (2nd Cir. 1999). The court made it clear that the U.S. Supreme Court has already held that any state statute providing an alternative enforcement to ERISA is preempted.

The reason is clear. A collective bargaining agreement is not a contract for purposes of improving real property. Fringe benefits are not considered labor or materials conferred by most mechanic’s lien acts.

But of course, unpaid union laborers could file mechanic’s lien individually. And there’s no pre-lien required. This is because it is a simple case of labor conferred on the project.

But there is only one case that holds otherwise and could very well be knocked down by the court of appeal in the future. On January 6, 2012, the Pennsylvania Superior Court held, in a matter of first impression, that a union trust find could record a lien for unpaid contributions owed to union workers—all stemming from a collective bargaining agreement between a contractor and the union. Bricklayers of Western Pennsylvania Combined Funds, Inc. v. Scott’s Development Company, 2012 Pa. Super 4. In that case, a commercial general contractor had entered into a collective bargaining agreement with the bricklayers union and failed to pay the fringe benefits. A mechanic’s lien was filed and the lower court held that it was proper. The theory was that the collective bargaining agreement specified that the workers had to be union, describe their job duties, and actually contributed to the improvement of the property.

But we will see whether the court of appeal overturns it on ERISA grounds.