Justia ERISA Opinion Summaries

The Employee Retirement Income Security Act of 1974 (ERISA), generally exempts from its requirements “church plans”: employee-benefit plans established and maintained by churches for their employees. ERISA also extends that church-plan exemption to "principal-purpose" organizations. Catholic Health Initiatives (CHI), a nonprofit organization created to carry out the Roman Catholic Church’s healing ministry, operates 92 hospitals and numerous other healthcare facilities in 18 states. CHI offers a retirement plan for its employees, with more than 90,000 participants and beneficiaries, and nearly $3 billion in plan assets. Janeen Medina, a CHI employee, filed a class action, alleging that CHI’s retirement plan failed to satisfy the statutory criteria for the church-plan exemption. She contended that, since the plan did not qualify for the exemption, CHI should have complied with the reporting and funding requirements of ERISA. Medina also argued the individual defendants who administered the plan breached their fiduciary duties by failing to comply with ERISA. And, Medina argued, even if the CHI plan did qualify as a church plan, the exemption violated the Establishment Clause of the United States Constitution. The district court held that CHI’s plan was a church plan that qualified for the ERISA exemption. On appeal, the Tenth Circuit agreed, concluding that CHI’s plan satisfied the statutory requirements for the church-plan exemption as a proper principal-purpose organization. The ERISA exemption, moreover, does not run afoul of the United States Constitution’s Establishment Clause. View "Medina v. Catholic Health Initiatives" on Justia Law

Under the Multiemployer Pension Plan Amendments Act, part of ERISA, a construction industry employer who withdraws from a multiemployer pension plan owes liability to that plan if the employer conducts work “in the jurisdiction of the collective bargaining agreement (CBA) of the type for which contributions were previously required,” 29 U.S.C. 1383(b)(2)(B)(i). The Iron Workers Local 17 Pension Fund assessed pension liability against Stevens Engineers claiming that Stevens’s activities on a certain construction project involved such work within the jurisdiction of their previous CBA. An arbitrator, the district court, and the Sixth Circuit found that Stevens did not owe pension liability to the Fund because the work identified by Local 17 did not fall within the jurisdiction of the relevant CBA, and did not otherwise require contributions by Stevens. The CBA instead allowed Stevens to assign jobs like the ones at issue to other trade unions, and a job did not trigger pension liability to the Fund if, as here, it was properly assigned to a different union. View "Stevens Engineers & Constructors, Inc. v. Local 17 Iron Workers Pension Fund" on Justia Law

This case arose out of an underlying action to enforce the health benefits provisions of two court-approved settlement agreements. The Fourth Circuit affirmed the district court's denial of plaintiffs' motion for a preliminary injunction. The court held that a motion for preliminary injunction filed before the act to be enjoined has occurred, and subsequently intended to restore the status quo once it has been disturbed, was not moot. The court also held that the district court had jurisdiction over plaintiffs' claim pursuant to Section 502(a)(1)(B) of the Employee Retirement Income Security Act (ERISA). On the merits, the court held that the district court did not abuse its discretion in finding that plaintiffs failed to demonstrate a likelihood of success on the merits; that they were likely to suffer irreparable harm without a preliminary injunction; and that the balance of the equities and the public interest favor an injunction. View "Di Biase v. SPX Corp." on Justia Law

Plaintiffs, retired officers of Booz Allen, filed suit alleging that they were improperly denied compensation when, after their retirement, Booz Allen sold one of its divisions in the Carlyle Transaction. The Second Circuit affirmed the district court's dismissal of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., claims on the ground that Booz Allen's stock-distribution program was not a pension plan within the meaning of ERISA, and denial as futile leave to amend to "augment" the ERISA claims with new allegations; affirmed the dismissal of the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961 et seq., claims on the ground that they were barred by the Private Securities Litigation Reform Act of 1995 (PSLRA), 18 U.S.C. 1964(c); but vacated the district court's judgment to the extent it denied Plaintiff Kocourek leave to amend to add securities-fraud causes of action. The court remanded for the district court to consider his claims. View "Pasternack v. Shrader" on Justia Law

Former employees of World Airways challenged the dismissal of their complaint seeking damages for fraud, breach of contract and violation of an employee benefit plan. The Second Circuit agreed with the district court that plaintiffs' state law claims arose under the Railway Labor Act (RLA), 45 U.S.C. 151 et seq., and were thus preempted. Because those claims bear a close resemblance to claims brought pursuant to the Employee Retirement Income Securities Act (ERISA), 29 U.S.C. 1001 et seq., the court found it appropriate to borrow and apply the three‐year statute of limitations set forth in Section 1113 of ERISA rather than the six‐month limitations period the district court borrowed from Section 10(b) of the National Labor Relations Act (NLRA), 29 U.S.C.160(b). Accordingly, the court vacated the dismissal of the RLA claims and remanded for further consideration. The court affirmed in all other respects. View "Pruter v. Local 210’s Pension Trust Fund" on Justia Law

The Pioneer Centres Holding Company Employee Stock Ownership Plan and Trust and its trustees sued Alerus Financial, N.A. for breach of fiduciary duty in connection with the failure of a proposed employee stock purchase. The district court granted summary judgment to Alerus after determining the evidence of causation did not rise above speculation. The Plan appealed, claiming the district court erred in placing the burden to prove causation on the Plan rather than shifting the burden to Alerus to disprove causation once the Plan made out its prima facie case. In the alternative, the Plan argued that even if the district court correctly assigned the burden of proof, the Plan established, or at the very least raised a genuine issue of material fact regarding, causation. Finding no reversible error, the Tenth Circuit affirmed the district court. View "Pioneer Centres Holding Co v. Alerus Financial, N.A." on Justia Law

Plaintiffs, CNH employees who retired between 1994 and 2004, filed suit in 2004, seeking a declaration that they were entitled to lifetime healthcare benefits without paying premiums, based on collective-bargaining agreements (CBAs), negotiated by UAW beginning in 1971. The case was remanded to the district court twice. While the second remand was pending, the Supreme Court (Tackett, 2015) abrogated Sixth Circuit precedent creating an inference in favor of employees in collective-bargaining cases. Initially, the district court ruled in favor of CNH, noting that it was “[c]onstrained by the Supreme Court’s decision” in Tackett. On reconsideration, the district court found not only that plaintiffs’ rights were vested even after Tackett, but also that CNH’s proposed changes were unreasonable. The Sixth Circuit affirmed as to vesting, noting that the CBA is ambiguous and extrinsic evidence indicated that parties intended for the healthcare benefits to vest for life. The court remanded because the court failed to properly weigh the costs and the benefits of the proposed plan, as previously instructed. “To find ambiguity in this case, partially from the silence as to the parties’ intentions, does not offend the Supreme Court’s mandate from Tackett that we not infer vesting from silence.” View "Reese v. CNH Industrial, N.V." on Justia Law

Plaintiffs, Medicare-eligible retirees from Kelsey-Hayes' Detroit automotive plant, retired before the plant’s 2001 closing and were members of a UAW bargaining unit. The final (1998) collective bargaining agreement (CBA) provided for comprehensive healthcare for retirees. A Plant Closing Agreement stated that it did not extinguish pension or retiree healthcare obligations. Kelsey-Hayes continued to provide retiree healthcare coverage for 10 years, consistent with the 1998 CBA. In 2011, Kelsey-Hayes announced that it was replacing the retirees’ group-insurance plan with company-funded health reimbursement accounts (HRAs) from which retirees could purchase individual Medicare supplemental insurance plans. In 2012, Kelsey-Hayes contributed $15,000 to each participant’s HRA; in 2013 and 2014, it contributed $4,300 per year. Plaintiffs sued under the Labor Management Relations Act, 29 U.S.C. 185, and the Employee Retirement Income Security Act, 29 U.S.C. 1001. The Sixth Circuit stayed litigation pending the Supreme Court’s 2015 Tackett decision. The district court then granted the plaintiff-retirees partial summary judgment and ordered defendants to reinstate the group insurance plan. The Sixth Circuit affirmed, distinguishing the language and history of the Kelsey-Hayes CBAs from the language at issue in Tackett. Tackett explicitly overruled Sixth Circuit precedent and held that a presumption toward lifetime benefits violates basic principles of contract interpretation; however, pre-Tackett courts’ interpretation of language that parties subsequently agree to maintain can inform interpretation of their intent at the time they entered into the CBA. View "International Union, United Automobile, Aerospace & Agricultural Implement Workers of America v. Kelsey-Hayes Co." on Justia Law

Steven Williams alleged that his former employer, FedEx Corporate Services, violated the Americans with Disabilities Act (ADA) by discriminating against him based on his actual and perceived disabilities, and by requiring his enrollment in the company’s substance abuse and drug testing program. Williams further alleges that Aetna Life Insurance Company, the administrator of FedEx’s short-term disability plan, breached its fiduciary duty under the Employee Retirement Income and Security Act (ERISA) when it reported to FedEx that Williams filed a disability claim for substance abuse. Both FedEx and Aetna filed motions for summary judgment, which the district court granted. After review, the Tenth Circuit affirmed in part, and reversed and remanded. An employer is liable for an improper medical examination or inquiry, “unless such examination or inquiry is shown to be job-related and consistent with business necessity.” FedEx argued that it satisfied the business necessity exception because its employee testing program “ensure[] that employees who seek assistance for drug abuse or dependencies are no longer abusing the drug if they return to FedEx.” The Tenth Circuit found that the district court did not address this argument. As a result, the Court did not have an adequate record from which it could decide this issue on appeal. The Court reversed for the district court to decide that issue, and affirmed in all other respects. View "Williams v. FedEx Corporate" on Justia Law

This appeal concerned a dispute between employees represented by a Union and their successor employer. The parties agreed to arbitrate this dispute regarding change in the terms of pension provision in a collective bargaining agreement. The district court refused to compel arbitration on the grounds that ERISA preempted the Union’s claims, and this, in turn, presented an issue of arbitrability properly decided by a judge, not an arbitrator. The First Circuit vacated the order of the district court and remanded with instructions to grant the Union’s motion to compel arbitration, holding that the issue of ERISA preemption in this case was not an issue of arbitrability but, rather, one that was squarely for the arbitrator to decide. View "Prime Healthcare Services - Landmark LLC v. United Nurses & Allied Professionals, Local 5067" on Justia Law