Justia ERISA Opinion Summaries

Plaintiffs brought a class action against their former employer, Siemens, and its retirement plans, claiming violation of the Employee Retirement Income Security Act in refusing to provide permanent job separation (PJS) pension benefits when Siemens terminated their employment. The Third Circuit reversed in part and directed entry of judgment in favor of Siemens on all issues. By their plain terms, the Siemens plans do not provide for PJS benefits. Siemens did not establish an ERISA section 204 "transition" plan by virtue of 13-day arrangement in 1998 that was part of Siemens' purchase of a business unit from Westinghouse, nor was Siemens obligated to provide PJS benefits under section 208, based on the purchase from Westinghouse. View "Shaver v. Siemens Corp." on Justia Law

The employer sought an early withdrawal from its obligation to make pension contributions to a multiemployer pension fund; it entered into a new collective bargaining agreement, six weeks before expiration of the existing agreement, that abrogated its obligation to make payments to the fund. The fund sued under the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1145. The district court entered summary judgment in favor of the fund. The Seventh Circuit affirmed, rejecting an argument that the agreement was ambiguous in providing that the employer could not “prospectively” change its obligation.View "Cent. States SE & SW Areas Pension Fund v. Waste Mgmt of MI, Inc." on Justia Law

GM offered separate defined-contribution 401(k) plans. Benefits were based on the amount of contributions and investment performance of an individual's separate account. The plans offered several investment options, including mutual funds, non-mutual fund investments, and the General Motors Common Stock Fund. Participants could change the allocation in any investment on any business day. The plans invested, by default, in the Pyramis Fund, not the GM Fund. In 2008, the fiduciary suspended purchases of GM and began selling the stock. Plaintiffs filed suit under the Employee Retirement Income Security Act, 29 U.S.C. 1109(a), alleging breach of fiduciary duty in allowing investment in GM after its financial trouble was the subject of reliable public information. The district court dismissed. The Sixth Circuit reversed, holding that plaintiffs sufficiently pleaded that "a prudent fiduciary acting under similar circumstances would have made a different investment decision." The fiduciary cannot escape its duty simply by asserting that the plaintiffs caused the losses by choosing to invest in the GM Fund. Such a rule would improperly shift the duty of prudence to monitor the menu of investments to participants. The fact that a participant exercises control over assets does not automatically trigger section 404(c) safe harbor.View "Pfeil v. State Street Bank & Trust Co" on Justia Law

Debtors were eligible to participate in their employers' ERISA 401(k) qualified retirement plans, but were not making contributions to those plans when they filed Chapter 13 petitions, but were repaying 401(k) loans to the plans. Proposed Chapter 13 plans called for a five-year commitment period under 11 U.S.C. 1325 and for repayment of 401(k) loans before completion of the commitment periods. Rather than calling for an increase in plan payments to the Chapter 13 trustee for the benefit of unsecured creditors once that repayment was complete, the plans proposed that debtors begin making contributions to their 401(k) retirement plans. The trustee filed objections. The bankruptcy court held that because 11 U.S.C. 541(b)(7) excludes contributions to a 401(k) plan from property of the estate and disposable income, debtors were allowed to exclude proposed 401(k) contributions from disposable income. The Bankruptcy Appellate Panel ruled in favor of the Trustee. The Sixth Circuit affirmed. Post-petition income, available to debtors after 401(k) loans are fully repaid, is "projected disposable income" that must be turned over to the trustee for distribution to unsecured creditors under 11 U.S.C. 1325(b)(1)(B) and may not be used to fund voluntary 401(k) plans. View "Seafort v. Burden" on Justia Law

In this case, the district court found that plaintiff's claims against defendant were preempted by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., because they arose under defendant's Pension Plan (Plan) and not separately and independently out of plaintiff's written employment agreement (Agreement). On appeal, plaintiff argued that the additional benefits he sought were based on a promise separate and independent from the Plan. The court held that the district court properly denied plaintiff's motion to remand the case to state court because plaintiff's state law claims were preempted by ERISA where the Agreement merely described the benefits plaintiff would receive as a Plan member and it made no promises of benefits separate and independent from the benefits under the Plan. The suit was properly removed to federal court, the district court had federal jurisdiction over the case, and remand to state court was not warranted. The district court properly dismissed plaintiff's action for failure to state a plausible claim. Finally, the court considered plaintiff's remaining arguments and concluded that they were without merit. Accordingly, the court affirmed the judgment of the district court. View "Arditi v. Lighthouse Int'l" on Justia Law

Plaintiff appealed the district court's grant of summary judgment dismissing her claims against her former employer for defamation; breach of a unilateral contract to pay a performance bonus; failure to timely pay wages after discharge in violation of Minn. Stat. 181.13(a); age discrimination; and interference with her rights to employee benefits in violation of section 510 of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1140, and the court's denial of her motion to continue the summary judgment proceedings. The court agreed with the district court that the employer was entitled to the qualified privilege as a matter of law for plaintiff's defamation claims. The court affirmed the district court's dismissal of the breach of contract and unpaid wages claims because all the employer's documents clearly stated that the awarding of bonuses was discretionary. The court further held that the district court properly granted summary judgment dismissing plaintiff's age discrimination claim where plaintiff failed to show that either of her replacements were "sufficiently younger" or that there was a material question of fact regarding pretext; the district court correctly concluded that plaintiff failed to establish a prima facie case of employee benefit plan interference under section 510 of ERISA; and the district court did not abuse its discretion in denying her motion for continuance. View "Chambers v. The Travelers Companies, Inc." on Justia Law

Abbott created Hospira for its Hospital Products Division. Before the spin-off, HPD employees had access to Abbott's pension plan. Hospira did not offer a pension plan. The spin-off included reciprocal two-year no-hire policies. When HPD employees became Hospira employees, non-vested pension rights in the Abbott plan were eliminated. Retirement-eligible HPD employees were effectively prevented from retiring from Abbott then joining Hospira. A certified class of Hospira employees alleged that violation of the Employee Retirement Income Security Act, 29 U.S.C. 1140, by using the spin and no-hire policy to get rid of pension liability and deter HPD employees from exercising pension benefits before the spin. They alleged that Abbott breached its fiduciary duty by failing to disclose that Hospira would not offer pension benefits. The district court entered judgment for Abbott and Hospira on all counts. The Seventh Circuit affirmed. ERISA claims failed because Abbott and Hospira did not act with the requisite intent to interfere with plaintiffs' pension benefits. The breach-of-fiduciary-duty claim failed because Abbott had nothing to do with the Hospira benefits plan and because Abbott reported truthfully to HPD employees that benefits might change after the spin. View "Nauman v. Abbott Labs., Inc." on Justia Law

This appeal arose from the district court's order dismissing plaintiffs' claim for lack of subject matter jurisdiction due to the Railway Labor Act's (RLA), 45 U.S.C. 151, 181, exclusive and mandatory dispute resolution process that applied to plaintiffs' claims. Plaintiffs argue that the RLA did not apply to them because they were no longer "employees" as contemplated by the RLA. Alternatively, plaintiffs argued that even if the RLA applied to them as former employees, they complied with the terms of their Collective Bargaining Agreement (CBA), which allowed them to bring an action in federal district court pursuant to section 501(a)(1)(B) of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. The court held that plaintiffs were employees under the RLA pursuant to Supreme Court precedent. In the alternative, plaintiffs were explicitly looking for a "contracted-for" judicial remedy following an adverse RLA-established Retirement Board ruling without showing any of the narrow exceptions to RLA exclusivity. Therefore, the court declined to depart from established precedent preventing parties from creating federal court jurisdiction where there was none. Accordingly, the judgment was affirmed. View "Ballew, et al. v. Continental Airlines, Inc., et al." on Justia Law

Plaintiffs appealed from the judgment of the district court dismissing as time-barred their putative class action complaint against their former employer and the employer's pension plan for benefits alleged to be due under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. Plaintiffs asserted that the district court erred when it looked past the six-year New York limitations period for contract actions; applied part of the New York regime known as the "borrowing statute," which directed it to Pennsylvania law; and ruled that Pennsylvania's four-year limitations period barred plaintiffs' claims. The court held that in an action for benefits under 29 U.S.C. 1132, the court applied the forums state's statute of limitations, including its borrowing statute. Therefore, the district court was correct in applying New York's borrowing statute and plaintiffs' claims were untimely under Pennsylvania law. View "Muto, et al. v. CBS Corp." on Justia Law

DIRECTV sold business segments. In 1997 it sold defense units to Raytheon, transferring $5,774,655,148 in pension assets and $3,310,028,559 in pension liabilities, a net transfer of $2,464,626,589 in surplus pension assets. In a 2000 sale of satellite business units to Boeing, DIRECTV transferred $1,843,930,981 in pension assets and $1,037,344,156 in liabilities, a net transfer of $806,586,825 in surplus assets. In both transactions, DIRECTV retained a small portion of surplus pension assets. The Government asserted noncompliance with Cost Accounting Standard 413.50(c)(12) (41 U.S.C. 422(f)(1)), which regulates assignment of actuarial gains and losses, valuation of assets of a pension fund, and allocation of pension costs to a contractor’s business segments, and demanded payments of $68,695,891 and of $12,197,704. The Court of Federal Claims granted DIRECTV summary judgment. The Federal Circuit affirmed. The claims court correctly determined that DIRECTV's segment closing obligations could be satisfied by cost savings realized by the Government in successor contracts. The court rejected arguments that the trial court erred by calculating segment closing adjustments based on assets and liabilities of the entire segment, rather than only assets and liabilities that DIRECTV retained and that the Federal Acquisition Regulation required DIRECTV itself to pay any amount due as a segment closing adjustment.View "DIRECTV Group, Inc. v. United States" on Justia Law