HIGH POINT – More than a dozen former Stanley Furniture executives have filed a lawsuit to claim retirement funds they set aside from their compensation over the years, but that the company has not paid in full up to this point.
Attorneys for the 17 plaintiffs filed the lawsuit on Oct. 21 in the United States District Court for Western District of Virginia in Danville. They are seeing a jury trial to settle the matter.
All are former and retired employees of Stanley Furniture Company who participated in the Stanley Interiors Corporation Deferred Compensation Capital Enhancement Plan (DCP). In addition they were participants in the Supplemental Retirement Plan of Stanley Furniture Company (SERP) and the Stanley Retirement Plan or Basic Retirement Plan (BRP).
According to the suit, the plaintiffs participating in the DCP deferred certain amounts of their compensation, which entitled them to annual payments to be made on Jan. 2 of each year after they retired. The suit said the amounts varied according to factors such as retirement age and the amount of pay deferred by each employee.
Those plaintiffs participating in the SERP were entitled to monthly retirement benefits which were calculated based on the amount they were entitled to under the BRP based on average compensation and years of service.
The suit said that on March 2, 2018, defendant Stanley Furniture Company LLC became Stanley Furniture Company Inc.’s successor after an asset sale and became responsible for the administration of the DCP and SERP.
The administration of both plans was limited, the suit said, to the payment of monies owed to all the participants because all participants were retired. Neither the DCP nor the SERP were open to additional participants at that point.
The suit claims that on Sept. 6, 2018, Stanley Furniture sold certain assets to defendant Stone & Leigh LLC and as part of this sale, Stone & Leigh LLC took over obligations for the SERP and that Stanley Furniture LLC retained obligations for the DCP.
The suit claims that in 2019, Stanley Furniture Company LLC failed to pay plaintiffs the full amount of what they were owed. Instead, it spread “out fractional payments throughout the year, totaling just 5/8, or 62.5% of the amounts owed.
In 2020, the suit went on to say, Stanley Furniture Company LLC failed to pay the plaintiffs the full amount of what they were owed – along with the amount still due for 2019. Instead, the suit said, the plaintiffs were only paid a small fraction of what was owed in August 2020.
The suit said that Stanley Furniture Company LLC “has repeatedly assured plaintiffs it will pay what plaintiffs are owed under the DCP, but has repeatedly failed to live up to those assurances, such that it has for all practical purposes repudiated any further obligation to plaintiffs.”
The suit went on to say that since May 2020 Stone & Leigh, LLC has failed to pay plaintiffs the monthly benefits they are owed under the SERP.
The former employees have brought the action under the Employee Retirement Security Act (ERISA) of 1974 to recover benefits owed to them under the DRP and the SERP.
To the extent that the DCP is not governed by ERISA, the plaintiffs are claiming a breach of contract against Stanley Furniture Company LLC to recover past, present and future damages for the breaches of the individual agreements under the DCP.
Adam Tilley, president of Stanley Furniture, said Wednesday that this was the first time he had heard of the lawsuit and declined to comment.
According to the lawsuit, the plaintiffs are entitled to an annual payment, to be paid on Jan. 2 of each year between $10,000 and $34,800, under the DCP. As of the date of the filing, they are collectively owed between $6,062.50 and $47,350, for a total of $370,185.76.
The suit said that Stanley Furniture LLC has made no indication that the remaining 2019 and 2020 annual retirement payments still owed to the plaintiffs would be made in a timely fashion, if at all. Nor did the company give any indication it would make the annual retirement payments in subsequent years, the suit said.
Under the SERP, administered by Stone & Leigh, the plaintiffs are owed monthly payments between $102.43 and $1,315.63. Currently, the plaintiffs are collectively owed between $614.52 and $7,893.78 for a total of $38,083.26, the suit said.
“Stone & Leigh, LLC has essentially repudiated its obligation to make monthly payments to the plaintiffs pursuant to the SERP,” the suit said.
Matthew W. Smith, identified in the lawsuit as manager of Stone & Leigh, said Wednesday that he was not aware of a suit involving Stone & Leigh. He, too, did not offer comment for this story.
For the first count, an alleged violation of ERISA by Stanley, the suit is seeking collective damages of $370,185.76, plus additional damages which have accrued at the time of trial, plus prejudgment interest. For the second count, should the court find the DCP is not an employee benefit plan under ERISA, the suit alleges a breach of contract by Stanley, and seeks collective damages of $370,185.76.
For count three, an alleged violation of ERISA by Stone & Leigh, the plaintiffs are seeking collective damages of $38,083.26, plus any additional damages that have accrued at the time of the jury trial, plus prejudgment interest.
In addition the suit seeks reasonable attorney fees and costs.
In a statement issued on behalf of their plaintiffs, attorneys for the law firm Fishwick & Associates PLC of Roanoke, Va said., “This case is filed on behalf of a group of retired Stanley Furniture employees who did not receive the earned retirement benefits they were promised. We look forward to moving this case forward.”