Justia ERISA Opinion Summaries

Bergamatto began working as a longshoreman in 2000 and stopped working in 2010. In 2013, he applied for retirement benefits under his pension plan, which is covered by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001. The 2010 plan said that “[t]he provisions … in effect during the Participant’s last year of credited service shall be applied to determine the Participant’s right to benefits and the amount thereof.” The 2010 plan originally precluded longshoremen hired between October 1996 and September 2004 from accruing benefits for work performed before October 2004. A 2013 amendment to the 2010 plan provided that, “[e]ffective October 1, 2012, Participants hired on or after October 1, 1996 shall receive pension benefit accruals for years of credited service earned from 1996 through 2004[.]” A 2015 plan eliminated the language preventing employees hired between October 1996 and September 2004 from accruing benefits for work prior to October 2004. Bergamatto’s application for pension benefits was approved based on only the years of credited service starting in October 2004 on the basis that the 2010 plan required that benefit determinations be made based on the plan provisions in force during the participant’s last year of credited service. The fund’s Board of Trustees agreed. The Third Circuit affirmed summary judgment in favor of the defendants, finding the Board of Trustees’ interpretation of the 2015 and 2010 plans “reasonably consistent” with the plans’ unambiguous language. View "Bergamatto v. Board of Trustees of NYSA-ILA Pension Fund" on Justia Law

This appeal involved one type of partial withdraw under the Multiemployer Pension Plan Amendments Act (MPPAA): "bargaining out," which occurs when an employer permanently ceases to have an obligation to contribute under one or more but fewer than all collective bargaining agreements under which the employer has been obligated to contribute but continues to perform work of the type for which contributions were previously required.The Third Circuit affirmed the district court's judgment and held that, under 29 U.S.C. 1385(b)(2)(A)(i), "work . . . of the type for which contributions were previously required" does not include work of the type for which contributions are still required. In this case, because CEC continues to contribute to its pension plan for engineering work at its remaining three casinos, it was not liable under section 1385(b)(2)(A)(i). View "Caesars Entertainment Corp. v. International Union of Operating Engineers Local 68 Pension Fund" on Justia Law

Trucking, owned by Bourdow, his wife, and their sons, sold and transported dirt, stone, and sand throughout lower Michigan and engaged in construction site preparation and excavation. Trucking employed other members of the Bourdow family. Trucking executed collective bargaining agreements (CBAs), under which it made fringe benefit payments to the Union’s pension fund (Fund). Experiencing financial difficulties, Trucking terminated its CBA. In 2012, the Fund informed Trucking that it had incurred withdrawal liability ($1,163,279) under the Employee Retirement Income Security Act (ERISA), 29 U.S.C 1381(a). Trucking missed its first withdrawal liability payment. The Fund filed suit, which was stayed when Trucking filed for Chapter 7 bankruptcy. The Fund filed a proof of claim. Trucking did not object; the claim was allowed, 11 U.S.C. 502(a). The Fund received $52,034. Contracting was incorporated the day after Trucking missed its first withdrawal payment; it bid on its first project two days before Trucking's bankruptcy filing. Contracting engages in construction site preparation and excavation in lower Michigan. Contracting is owned by the Bourdow sons; it employs other family members and retains the services of other professionals formerly retained by Trucking. The Fund sought to recover the outstanding withdrawal liability, alleging that Contracting was created to avoid withdrawal liability, and is responsible for that liability under 29 U.S.C 1392(c), and that Contracting is the alter ego of Trucking. The Sixth Circuit affirmed summary judgment in favor of the Fund, applying the National Labor Relations Act’s alter-ego test and citing the factors of business purpose, operations, customers, supervision, ownership, and intent to evade labor obligations. View "Trustees of Operating Engineers Local 324 v. Bourdow Contracting, Inc." on Justia Law

Former employees of Honeywell, who retired before age 65 during the terms of Honeywell's 2007 and 2010 collective bargaining agreements (CBAs), filed a class action alleging that Honeywell's announced plan to terminate early retiree healthcare benefits at the end of 2017 breached the CBAs and violated the Employee Retirement Income Security Act of 1974 (ERISA), because those healthcare benefits vested when each class member retired.The Eighth Circuit agreed with the Sixth Circuit and held that the Supreme Court's decision in CNH Indus. N.V. v. Reese, 138 S. Ct. 761 (2018), was controlling in this case. Under Reese, the court held that plaintiffs' retiree healthcare benefits were not vested as a matter of law. Therefore, the court reversed and remanded for further proceedings. View "Pacheco v. Honeywell International Inc." on Justia Law

The First Circuit affirmed the judgment of the district court rejecting Plaintiffs’ motion to set aside an earlier federal district court decision granting summary judgment in favor of Defendants on Plaintiffs’ claims seeking to recover lost benefits from their former employer, holding that the district court properly found that the judgment was not procured by “fraud on the court.”Plaintiffs claimed in their motion that various defendants made deliberate material misstatements in their answers and various sworn statements. The district court determined that the allegations did not warrant vacating the judgment. The First Circuit affirmed, holding that, even assuming the truth of Plaintiffs’ allegations, the allegations were not sufficient to constitute “fraud upon the court.” View "Torres v. Bella Vista Hospital, Inc." on Justia Law

The Ninth Circuit affirmed the district court's judgment against Quad in an action brought under the Multiemployer Pension Plan Amendments Act of 1980 (MPPAA). In this case, after the last of Quad's employees voted to decertify the union as their bargaining representative, Quad completely withdrew from the fund. The panel held that the Fund correctly applied the partial withdrawal credit pursuant to 29 U.S.C. 1386(b) against Quad's complete withdrawal liability before calculating the twenty-year limitation on annual payments provided for in 29 U.S.C. 1399(c)(1)(B). View "GCIU-Employer Retirement Fund v. Quad/Graphics, Inc." on Justia Law

The First Circuit vacated the judgment of the district court in part ruling in favor of Putnam Investments, LLC and other fiduciaries of Putnam’s defined-contribution 401(k) retirement plan on Plaintiffs’ lawsuit claiming that Defendants breached fiduciary duties to the plan's participants, clarifying several principles for the district court that should guide its subsequent rulings on remand.Plaintiffs, two former Putnam employees who participated in the Plan, brought this lawsuit on behalf of a now-certified class of other participants in the Plan and on behalf of the Plan itself pursuant to the civil enforcement provision of ERISA, see 29 U.S.C. 1132(a)(2), arguing that Defendants offered a range of mutual investments, including Putnam’s mutual funds, without regard to whether such funds were prudent investment options and that Defendants treated Plan participants worse than other investors in Putnam mutual funds. The district court ruled in favor of Defendants. The First Circuit (1) affirmed the district court’s dismissal of Plaintiffs’ prohibited transaction claim under 1106(a)(1)(C), breach of loyalty claim, and disgorgement claim; (2) vacated the court’s dismissal of Plaintiffs’ prohibited transaction claim under 1106(b)(3) and the finding that Plaintiffs failed as a matter of law to show loss; and (3) remanded for further proceedings. View "Brotherston v. Putnam Investments, LLC" on Justia Law

Plaintiffs, retirees who worked at Honeywell’s Greenville, Ohio plant, were members of a bargaining unit. The final collective bargaining agreement (CBA) did not expire until May 2014. Honeywell sold the plant in 2011 but continued to provide healthcare benefits for retirees after the CBA expired. The 2011 CBA stated that “[u]pon the death of a retiree, the Company will continue coverage for the spouse and dependent children for their lifetime.” In December 2015, Honeywell sent a letter stating that it intended to terminate the retiree medical and prescription drug coverage on December 31, 2016. Plaintiffs filed suit on behalf of themselves and similarly situated retirees and eligible dependents under the Labor Management Relations Act (LMRA), 29 U.S.C. 185, and the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132, claiming that Honeywell was obligated to provide retirees with lifetime healthcare benefits. Honeywell argued that the CBA’s general durational clause, which stated that the agreement remained in effect until May 22, 2014, governed its duty to provide those benefits. The Sixth Circuit held that the CBAs were unambiguous and do not vest retiree healthcare benefits for life. A CBA’s general durational clause applies to healthcare benefits unless it contains clear, affirmative language indicating the contrary. Retirees are not entitled to lifetime benefits; only the dependents of retirees who died while the CBA was in effect are entitled to lifetime benefits. View "Fletcher v. Honeywell International, Inc." on Justia Law

In 2012 Northern changed its defined-benefit pension plan under which retirement income depended on years worked, times an average of the employee’s five highest-earning consecutive years, times a constant (traditional formula). As amended, the plan multiplies the years worked and the high average compensation, by a formula that depends on the number of years worked after 2012 (PEP formula), reducing the pension-accrual rate. Northern provided people hired before 2002 a transitional benefit, treating them as if they were still under the traditional formula but deeming their salaries as increasing at 1.5% per year, without regard to the actual rate of change. Teufel sued, claiming that the amendment, even with the transitional benefit, violated the anti-cutback rule in the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001–1461, and, by harming older workers relative to younger ones, violated the Age Discrimination in Employment Act (ADEA), 29 U.S.C. 621–34. The Seventh Circuit affirmed dismissal of the suit. Nothing in the traditional formula guaranteed that any salary would increase in future years; ERISA protects entitlements that make up the “accrued benefit” but does not protect anyone’s hope that the future will improve on the past. Nor does the PEP formula violate the ADEA. Benefits depend on the number of years of credited service and salary, not on age. View "Teufel v. Northern Trust Co." on Justia Law

The Tennessee Valley Authority (TVA) funds a retirement plan, administered by “the Board, and provides defined benefits to participants that includes a cost-of-living adjustment. In 2009, the Plan found that its liabilities exceeded its assets and it needed to make some changes to ensure its long-term stability. The Board temporarily lowered cost-of-living adjustments and increased the age at which certain participants would become eligible for cost-of-living adjustments. Plaintiffs, a class of participants, maintain that the Board failed to give proper notice to the TVA and Plan members before making the cuts and violated the Plan’s rules by paying their cost-of-living adjustments for certain years out of the wrong account. The district court rejected both claims on summary judgment. The Sixth Circuit affirmed in part, agreeing that the Board gave the required 30 days’ notice to the TVA and Plan members, after which the TVA may “veto any such proposed amendment” within the 30-day period, “in which event it shall not become effective.” The court vacated and remanded the accounting claim with instructions to dismiss it for lack of subject-matter jurisdiction. Plaintiffs have suffered no injury-in-fact, and have no standing. View "Duncan v. Muzyn" on Justia Law