MARSHALL- An East Texas contracting company employing about 165 people is denying that it owes $1.35 million for past-due contributions to its union pension fund.

The company alleges an auditing company incorrectly included employees that are not eligible under the company's agreement with the union.

Capco Contractors Inc. filed suit against Central Pension Fund of the International Union of Operating Engineers and Participating Employers, International Union of Operating Engineers and Pipeline Employers Health and Welfare Fund, International Union of Operating Engineers Local 178 Apprenticeship Training Fund and International Union of Operating Engineers Local Union 178, AFL-CIO.

The lawsuit was filed Feb. 19, in the Marshall Division of the Eastern District of Texas.

Capco Contractors is involved in the construction and maintenance of pipelines used in gathering oil and natural gas from production wells.

Around May 2009, auditors for the Central Pension Fund pulled Capco's payroll records and determined that the company owed more than $1.35 million in past-due contributions, penalties and fees. Capco claims the audit is flawed because the auditors included more employees than are eligible to participate under the guidelines of the union's programs.

Under the union agreement, only operator engineers hired through the local union are covered by the benefit contributions.

Capco also claims the auditors did not provide credit for contributions already paid on behalf of those rightfully participating. The plaintiff states its off-the-shelf payroll system included many employees under the title "operator" and the auditors used that information instead of just the "operator engineers."

Under the terms of the agreements, the company states it is forced to seek a remedy through the initiation of a lawsuit to correct the audit.

Henderson attorney Mark Mann of The Mann Firm and Dallas attorneys James Birch and Christine Nowak of K & L Gates LLP are representing the plaintiff.

U.S. District Judge T. John Ward will preside over the litigation.

Case No 2:10cv00058

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