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LawTalk, Attorney
Category: California Employment Law
Satisfied Customers: 35393
Experience:  I have 30 years of experience in the practice of law, including employment law and discrimination law.
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Hello! My husband has been in the Carpenters Union in California

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Hello! My husband has been in the Carpenter's Union in California for 28 years. He plans to retire as soon as he gets his 30 years and becomes fully vested. He wants to get his contractor's license and own his own small business. Per the Carpenter's Union, he is not allowed to work in the building trades industry after he retires or they will penalize his pension. Do they have the right to tell him that he cannot ever work in his chosen profession after retirement and is it legal for them to take away his pension if he opens his own small contracting company? Thanks!!

Good morning,

I'm Doug, and I'm very sorry to hear of your husband's situation. My goal is to provide you with excellent service today. Yours is a very typical complaint about union pension plans, and I empathize with your family's dilemma, and with the fact that the unions do attempt to prevent competition with their rules.

However, union pension plans uniformly contain a requirement that for a retiree of the union to qualify for present benefits under the pension plan, that they not be employed in a business as an owner, manager or employee of a non-union business in the same trade as the person worked while in the union. This applies even in areas where there are no unions operating.

While the pension is not lost, during the time that they participate in the non-union position, they remain ineligible for monthly pension benefits. When they cease the non-union employment, they again become eligible for monthly benefits.

This is a typical clause in Union Pension Agreements, and has been found to be legally enforceable not only in CA, but in all state of the US. I am very sorry.

I wish you and your family the best in 2013.

I understand that you may be disappointed by the Answer you received, as it was not particularly favorable to your situation. Had I been able to provide an Answer which might have given you a successful legal outcome, it would have been my pleasure to do so.

You may reply back to me using the Reply to Expert link if you have additional questions.

Kindly take a moment to rate my service to you based on the understanding of the law I provided. Please understand that I have no control over the how the law impacts your particular situation.

Thank you,

Doug

Customer: replied 3 years ago.

Thanks for your insight.... we had heard that some of these cases had gone to court and found to be unenforceable, but your answer validates the Union's claims. If he were to open his own business as a contractor after he gets his 30 years in, could he freeze his pension without any penalties for a few years? Would there be any long term effects if he retired after 30 years at age 57 or 58 and ran his own business for 5 years or so before taking his retirement?

 

Also, he is considering the pest control/inspection/treatment certification. Would that be considered part of the building trade industry? Is there some sort of list of what he can and can't do for employment after retirement if he did not want to freeze his benefits? Thanks!

Good morning,

If your husband chooses to open up his own shop, he could just freeze his pension benefits for the time he operated the business and then when he got out of the business, he could restart the benefits. The months of no benefits would simply be lost though. They would not be made up at a later time or through a higher benefit.

Aside from that, there would be no long term problems. Keep in mind though that if he will get health insurance as part of the retirement benefit, that will be withheld as well.

Pest control, as far as I know and can research is not unionized, nor is it part of the carpenters union in terms of trade jobs. That would seem to be a safe business to have---so long as the business did not do remediation that involved carpentry work. No, I don't have a list of jobs he could do. But I am certain that his union can provide one for him---or at least a comprehensive list of positions that would result in a cessation of benefits.

If you have additional questions, you may reply back to me using the Reply to Expert link.

Please also keep in mind that, even though you have already paid your deposit money over to JustAnswer, until you rate me highly for my service, I will not be paid for having assisted you with your questions.

I wish you the best in your future.

Doug



LawTalk and other California Employment Law Specialists are ready to help you

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Please feel free to bookmark the following link so you can request me to answer any future legal questions you may have:
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Thanks again.

Doug

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Customer: replied 3 years ago.


Hello again! I talked over the information that you gave me yesterday and I have an additional question.. am I allowed to ask another question?

Good afternoon,

 

Yes, you may, so long as it is related to the original question, there is no need to open a new thread. What do you need to know about pension penalties for working in the same trade?

Doug

Customer: replied 3 years ago.


Thanks! What he would like to do is own a full-service pest control company. That would entail pest control inspections, reports and clearances. In order to provide full service, he would need to hire or contract out to carpenters to do the repair work before he reinspects, treats, and issues clearances. He would not be performing any of the work that relates to the building trade, but would be hiring and/or overseeing someone else doing the work. How would we find out if that is considered disqualified employment? The union says to submit a letter to them at the time of retirement and they will approve or deny, but obviously, this is something that he would need to be working toward before he gets to that point. What are your thoughts?

Good afternoon,

Not being able to read the fine print of the complex Union Pension Contract all I can do is give my best hypothesis as to the outcome.

So long as he is not doing anything that requires a contractor's license, and he hires licensed contractors to do the carpentry work, then I think that he would be okay. He would seemingly not even be obliged to use union carpenters.He will not even be able to hire a sub, and bill the property owner for the carpentry work, paying the sub and making a profit---as that would make it part of his business.

Also, you mention "oversight", and that suggests to me that he will be acting as a contractor in the field of carpentry---and I can pretty much guess that would cause a cessation of benefits as well.

He is going to have to stay out of the carpentry area of the process altogether.

Doug

Customer: replied 3 years ago.

Thanks, XXXXX XXXXX So if I understand correctly, he could hire a licensed carpenter to do that part of the job, pay him from the business account, and submit a bill to the homeowner for the entire process?

Good afternoon,

No, I said that he cannot have anything to do with that work. He cannot pay someone to do it from his business account, and he cannot bill the customer for the work.

All he can do is give the owner a contact number for the carpenter. Your husband can have no direct involvement with the work, the permitting for the work or the billing and payment for the work.

Doug

Customer: replied 3 years ago.


Ok, got it.... thank you..... it doesn't seem fair, but it sounds like he will need to find a new line of work completely if he wants to continue to create income. Again, thanks for your help.


 

My pleasure. Have a nice evening,

Doug

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