Justia ERISA Opinion Summaries

Before accepting a transfer to a Bridgestone facility in North Carolina, Deschamps expressed concern about losing pension credit for his 10 years of employment with Bridgestone in Canada. After receiving assurances from Bridgestone’s management team that he would keep his pension credit, Deschamps accepted the position. For several years, Deschamps received written materials confirming that his date of service for pension purposes would be August 1983. He turned down employment with a competitor at a higher salary because of the purportedly higher pension benefits he would receive at Bridgestone. In 2010, Deschamps discovered that Bridgestone had changed his service date to August 1993, the date he began working at the American plant. After failed attempts to appeal this change through Bridgestone’s internal procedures, Deschamps filed suit, alleging equitable estoppel, breach of fiduciary duty, and an anti-cutback violation of ERISA, 29 U.S.C. 1054(g). The Sixth Circuit affirmed summary judgment for Deschamps on all three claims. The text of the plan “is at worst ambiguous, but at best, favors Deschamps’s argument that he was a covered employee in 1983” and, as a result of the change in the interpretation of this provision that excluded foreign employees from being classified as covered employees, Deschamps’s benefits were decreased. View "Deschamps v. Bridgestone Americas, Inc." on Justia Law

Plaintiffs are trust funds and employee benefit plans for construction industry employees. MRS constructs commercial buildings. In 1997, MRS signed “me-too agreements” binding it to collective bargaining agreements (CBAs) bestowing rights on Plaintiffs. Under the agreement, MRS agreed to be bound by the 1997-2001 CBA in force between a multiemployer association and the union. According to Plaintiffs, MRS also agreed to be bound by later CBAs because the 1997 agreement contains an “evergreen clause” and MRS never gave the notice required to terminate the clause. MRS conceded that it never gave notice, but denied that the letter continuously granted bargaining rights. Under each CBA, employers had to make specified contributions to various Plaintiff funds and permit audits of records relevant to those obligations. Plaintiffs sent MRS requests for audits, believing that MRS had failed to make contributions required by the 2012-2015 CBA. When MRS did not comply, Plaintiffs sought post-audit relief under 29 U.S.C. 1145 for unpaid ERISA contributions and injunctive relief compelling MRS to comply with the 2012-2015 and subsequent CBAs. The Third Circuit reversed dismissal, rejecting an argument that all me-too agreements must satisfy two criteria in order to bind non-signatories to future CBAs. Absent that requirement, the plausibility of the complaint should be assessed under contract law principles and states a plausible claim for relief. View "Carpenters Health & Welfare Fund v. Mgmt. Res. Sys., Inc." on Justia Law

To stimulate economic development, Jersey City, New Jersey offers tax exemptions and abatements to private developers of projects in certain designated areas. Those tax benefits are conditioned on the developers’ entry into agreements with labor unions that bind the developers to specified labor practices. Employers and a trade group challenged that law, alleging that it is preempted by the National Labor Relations Act (NLRA) and Employee Retirement Income Security Act (ERISA) and barred by the dormant Commerce Clause of the U.S. Constitution. The district court dismissed the complaint, concluding that Jersey City acts as a market participant, not a regulator, when it enforces the law, so that NLRA, ERISA, and dormant Commerce Clause claims were not cognizable. The Third Circuit reversed, holding that Jersey City was acting as a regulator in this context. The city lacks a proprietary interest in Tax Abated Projects. The Supreme Court has recognized a government’s proprietary interest in a project when it “owns and manages property” subject to the project or it hires, pays, and directs contractors to complete the project; when it provides funding for the project; or when it purchases or sells goods or services. This case fits none of these categories. View "Assoc. Builders & Contractors, Inc. v. City of Jersey City" on Justia Law

Plaintiff filed suit against his former employer, RSA, alleging retaliatory discharge claims under both state law and the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq. A jury awarded him lump-sum damages on his state law claims, and the district court then entered judgment in his favor on his ERISA claim. Even though, at plaintiff's request, the jury had been instructed to include front pay in its damages award, the district court granted plaintiff additional equitable remedies consisting of reinstatement as well as front pay until reinstatement occurred. RSA appeals these equitable remedies. Given the way in which the jury was instructed and the evidence presented at trial, the court concluded that the jury’s verdict encompassed an implicit factual determination as to the entire amount of front pay to which plaintiff was entitled on account of his retaliatory discharge. Therefore, the court held that the district court’s grant of an additional front pay remedy for the same harm disregarded that determination in violation of the Seventh Amendment right to a jury trial. The court also held that, although the reinstatement remedy does not necessarily conflict with factual findings implicit in the jury’s verdict, it is nevertheless improper because plaintiff waived that relief when he elected to seek the duplicative front pay remedy from the jury. Accordingly, the court reversed the equitable awards. View "Teutscher v. Woodson" on Justia Law

Central States is multiemployer pension fund. Bulk Transport is a Fund member and made contributions to the pension account of its employee, Loniewski. Bulk had certified that Loniewski was entitled by a collective bargaining agreement to participate in the Fund although the agreement was limited to Bulk’s drivers. Loniewski was a Bulk mechanic for 40 years. Bulk now denies that he was covered and has demanded that Central States refund $49,000 that Bulk had contributed to Loniewski’s pension account between 2002 and 2012. The Fund denied the request and sought a declaratory judgment. The district judge rejected Bulk’s claim. The Multiemployer Pension Plan Amendments Act of 1980 amends ERISA by imposing liabilty on employers who withdraw, partially or completely, from participation in an underfunded multiemployer pension fund, 29 U.S.C. 1381. Central States also assessed Bulk with withdrawal liability of $740,000 for the years 2010 through 2012, which Bulk challenged as excessive. At Bulk’s request, the court barred the Fund from enforcing its rules, which require arbitration of such a dispute by and conforming to the procedures of the American Arbitration Association. The Seventh Circuit affirmed with respect to the refund, but reversed with respect to the arbitration rules. View "Cent. States, SE & SW Areas Pension Funds v. Bulk Transp. Corp." on Justia Law

Trent Lebahn sued Eloise Owens, a consultant for Lebahn’s employee pension plan, for negligently misrepresenting the amount of his monthly retirement benefits. The district court dismissed Lebahn’s negligent-misrepresentation claim, concluding it was preempted by the Employee Retirement Income Security Act. Lebahn then filed an untimely Rule 59 motion, arguing preemption did not apply because Owens was not a fiduciary of the pension plan. The district court construed the untimely motion as one under Rule 60(b) and denied relief, reasoning that Lebahn’s argument regarding Owens’s fiduciary status had been raised too late. Lebahn appealed. The Tenth Circuit concluded it lacked jurisdiction to consider Lebahn’s challenge to the district court’s underlying judgment, so its review was limited to the district court’s denial of relief under Rule 60(b). Upon review, the Court found Lebahn did not demonstrate the district court abused its discretion in denying relief under Rule 60(b), and therefore the district court’s judgment was affirmed. View "Lebahn v. Owens" on Justia Law

During negotiations, Rubber Associates proposed to the Union that it decrease its contribution rate to the United Food and Commercial Workers Union Employer Pension Fund (governed by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001) from 62 cents per hour to 30 cents per hour. The Fund’s actuary opined that collecting withdrawal liability would result in a better funding status for the Fund than accepting reduced contributions. Rubber Associates agreed to maintain its previous contribution rate. Negotiations resumed without success. The Union authorized a strike, which lasted for 17 months. After the Union unilaterally disclaimed interest in representing its employees, Rubber Associates was deemed to have withdrawn from the Fund, pursuant to the Multiemployer Pension Protection Amendments Act (MPPAA). The Fund calculated Rubber Associates’ withdrawal liability obligation at $1,713,169, which the arbitrator awarded in full. The Fund sued to enforce the award. Rubber Associates counterclaimed that, because withdrawal from the Fund was union-mandated, its liability should be calculated by an alternate method, making its liability only $312,000. The Sixth Circuit affirmed dismissal of the counterclaim, declining to recognize a claim under the federal common law of ERISA for equitable relief in the case of union-mandated withdrawals. View "United Food & Commercial Workers v. Rubber Assocs., Inc." on Justia Law

Waskiewicsz suffers from type-1 diabetes, major depression, and gender identity disorder She worked as a product design engineer for Ford from 1990 until October, 2010, when she suffered “a debilitating emotional breakdown.” In December, after her father found her barricaded in her house, she sought long-term disability benefits under Ford’s Plan, governed by the Employment Retirement Income Security Act, 29 U.S.C. 1001. Under the plan: An Active Employee whose employment is terminated . . . shall cease to be eligible for Benefits as of the earlier of: (a) the date the Employee has been notified; or (b) the day prior to the date of such termination (in the case of retroactive terminations) . .... An employee is required to notify the Claim Processor ... if the employee is absent for more than five (5) consecutive Workdays.” She did not give notice within the five-day period and was, apparently, terminated in the interim. UniCare concluded that she did not qualify for benefits. The Sixth Circuit reversed. On remand, Waskiewicz must be given the opportunity to show that her alleged failure to comply with the requirements of the Plan was due to the very disability for which she seeks benefits. View "Waskiewicz v. UniCare Life & Health Ins. Co." on Justia Law

Until 2011, Woodbridge, the largest wholesale grocery distributor by revenue in the U.S., contributed to the fund pursuant to collective bargaining agreements (CBAs). Under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001, Multiemployer Pension Plan Amendments Act (MPPAA), 29 U.S.C. 1381-1461, employers withdrawing from multi-employer pension plans must pay the share of the fund’s total unfunded vested benefits allocable to them. Woodbridge owes $189,606,875 and elected to satisfy its “withdrawal liability” through annual payments instead of a lump sum. Under the MPPAA, annual payments must be based on “the highest contribution rate at which the employer had an obligation to contribute under the plan.” The plan’s board claimed the single highest rate from the multiple contribution rates established in the three CBAs . Woodbridge argued that it was responsible only for a weighted average of those contribution rates. The board also claimed that Woodbridge’s payments should include a 10 % surcharge it had been paying under the 2006 Pension Protection Act, 29 U.S.C. 1085. The Third Circuit affirmed that the annual withdrawal liability payment should be based on the single highest contribution rate, but should not include the surcharge. The “highest contribution” rate means the single highest contribution rate established under any of the CBAs. View "Bd. of Trs. of the IBT Local 863 Pension Fund v. C&S Wholesale Grocers Inc" on Justia Law

After a bench trial, the district court held that Michael's was not liable as a successor employer by weighing continuity of the workforce as the most important factor. At issue was: (1) whether a successor employer, both generally and in the construction industry in particular, can be subject to withdrawal liability under the Multiemployer Pension Plan Amendments Act (MPPAA), 29 U.S.C. 1381–1453, amendments to the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq.; and (2) if so, what factors are most relevant to determining whether a construction industry employer is a successor for purposes of imposing MPPAA withdrawal liability. The court concluded that a construction industry successor employer can be subject to MPPAA withdrawal liability, so long as the successor took over the business with notice of the liability; that the most important factor in assessing whether an employer is a successor for purposes of imposing MPPAA withdrawal liability is whether there is substantial continuity in the business operations between the predecessor and the successor, as determined in large part by whether the new employer has taken over the economically critical bulk of the prior employer’s customer base; and, in this case, the district court erred in weighing continuity of the workforce as the most important factor and applying an incorrect test to determine whether there was continuity of the workforce. Accordingly, the court reversed and remanded for further proceedings. View "Resilient Floor Covering Pension Trust Fund Bd. of Trs. v. Michael's Floor Covering" on Justia Law