Justia ERISA Opinion Summaries

Union members, working at Navistar’s Indianapolis engine-manufacturing plant, were represented by a union and were subject to a collective-bargaining agreement. They claim that on unidentified dates they were laid off, ostensibly for lack of work, but that Navistar actually subcontracted their work to nonunion plants in violation of the CBA and that Navistar failed to recall them as work became available. They claim to have filed hundreds of grievances that were diverted or stalled. In 2009, Navistar closed the Indianapolis plant. The union members sued. When union members sue their employer for breach of contract under the Labor Management Relations Act, 28 U.S.C. 185, they must also claim breach of their union’s duty of fair representation. The district court dismissed, finding that the plaintiffs had failed to adequately plead the prerequisite union breach of fair representation. A separate interference-with-benefits claim under the Employment Retirement Income Security Act, 29 U.S.C. 1001, was resolved by summary judgment in favor of Navistar. The 29 remaining plaintiffs appealed only the LMRA claim. The Seventh Circuit affirmed, stating that all of the allegations concerning the duty of fair representation were conclusory, so that the complaint lacked the required factual content. View "Yeftich v. Navistar, Inc." on Justia Law

Plaintiffs, current and former employees of Amgen and AML, participated in two employer-sponsored pension plans, the Amgen Plan and the AML Plan. The Plans were employee stock-ownership plans that qualified as "eligible individual account plans" (EIAPs) under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1107(d)(3)(A). Plaintiffs filed an ERISA class action against Amgen, AML, and others after the value of Amgen common stock fell, alleging that defendants breached their fiduciary duties under ERISA. The court concluded that defendants were not entitled to a presumption of prudence under Quan v. Computer Sciences Corp., that plaintiffs have stated claims under ERISA in Counts II through VI, and that Amgen was a properly named fiduciary under the Amgen Plan. Therefore, the court reversed the decision of the district court and remanded for further proceedings. View "Harris v. Amgen" on Justia Law

Hakim was an Accenture employee for nearly 10 years before being let go as part of a workforce reduction. During part of his tenure with the company, he participated in the company’s pension plan. In 1996, Accenture amended the plan to exclude a number of employees in various departments. In 1999, Hakim was promoted to a position in which he was no longer eligible to participate in the plan under the terms of the 1996 amendment. Upon his 2003 termination, at age 39, Hakim signed a release in exchange for separation benefits that waived all claims that arose prior to signing the release. In 2008, while employed elsewhere, Hakim sought additional pension benefits from Accenture, arguing that the notice of the 1996 amendment to the plan (which was emailed to employees) was insufficient and violated ERISA’s notice requirements, 29 U.S.C. 1054(h). His claim was denied by Accenture. The district court granted summary judgment in favor of Accenture, holding that Hakim knew or should have known about his claim when he signed the release, and thus waived his claim. The Seventh Circuit affirmed. View "Hakim v. Accenture U.S. Pension Plan" on Justia Law

Central States is a multiemployer pension plan for members of the Teamsters union in the eastern half of the U.S. Ready Mix employed Teamsters labor and participated in the Central States plan. In 2007 Ready Mix ceased employing covered workers and incurred $3.6 million in withdrawal liability to fully fund its pension obligations. Two affiliated companies under common control by Nagy, the owner of Ready Mix, conceded liability for the shortfall under the Employee Retirement Income Security Act, as amended by the Multiemployer Pension Plan Amendments Act of 1980, 29 U.S.C. 1301(b)(1). The district court concluded that Nagy held and leased property to Ready Mix as a passive investment, not a trade or business, so the leasing activity did not trigger personal liability, but that Nagy’s work as a manager for a country club was as an independent contractor, not an employee, and this activity qualified as a trade or business under section 1301(b)(1), which was enough for personal liability. The Seventh Circuit affirmed, holding that Nagy’s leasing activity is categorically a trade or business for purposes of personal liability under 1301(b)(1). View "Cent. States SE & SW Areas Pension Fund v. Nagy" on Justia Law

Plaintiffs filed a putative class action, claiming that fiduciaries for their retirement plans violated the Employee Retirement Income Security Act, 29 U.S.C. 1001, by continuing to offer employer stock as an investment option while the stock price dropped. The individual retirement account plan at issue allowed employees to choose among more than 20 investment funds with different risk profiles that had been selected by plan fiduciaries. ERISA imposes on the fiduciaries a duty to select only prudent investment options. One of the investment options in the Plan was the M&I Stock Fund, consisting of M&I stock, under an Employee Stock Ownership Plan. In 2008- 2009, M&I’s stock price dropped by approximately 54 percent. The district court applied a presumption of prudence, found that plaintiffs’ allegations could not overcome it, and dismissed without addressing class certification. The Seventh Circuit affirmed, stating that plaintiffs’ theory would require the employer and plan fiduciaries to violate the plan’s governing documents and “seems to be based often on the untenable premise that employers and plan fiduciaries have a fiduciary duty either to outsmart the stock market, which is groundless, or to use insider information for the benefit of employees, which would violate federal securities laws.” View "White v. Marshall & Ilsley Corp." on Justia Law

DM&E and its president and CEO, defendant, entered into an Employment Agreement to encourage his retention following an anticipated change of control. When DM&E terminated defendant without cause and triggered the Employment Agreement's severance provision, defendant filed a demand for arbitration under the Employment Agreement. DM&E then filed this action in federal court to enjoin the arbitration. The court agreed with the district court that the benefits sought in defendant's arbitration demand were not claims for benefits due under an Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1001 et seq., plan. The court held that it lacked federal subject matter jurisdiction to consider arbitrability, or any other issue arising under the Employment Agreement. View "Dakota, MN & Eastern R.R. v. Schieffer" on Justia Law

Former employees of AK Steel filed a class action under the Employee Retirement Income Security Act (ERISA), including claims for a “whipsaw” calculation of their benefits from a pension plan in which they participated before terminating their employment. The employees were originally involved in a related class action that included identical claims against the same defendants, but were excluded from that litigation due to their execution of a severance agreement and release that each of them signed during the that litigation. The district court ruled in favor of the employees. The Sixth Circuit reversed an award of prejudgment interest for failure to consider case-specific factors, but otherwise affirmed denial of a motion to dismiss; class certification; and partial summary judgment on liability. The employees’s future pension claims were not released as a matter of law because the whipsaw claims had not accrued at the time of the execution of the severance agreements and because the scope of the contracts did not relate to future ERISA claims. View "Schumacher v. AK Steel Corp." on Justia Law

Tompkins began working in 1978 and was a participant in the Fund, a multi-employer pension fund established and administered under the Employee Retirement Income Security Act, 29 U.S.C. 1001. In 1999, Tompkins was granted a disability pension based on chronic asthmatic bronchitis, which he attributed to working with cement dust for 22 years. Tompkins’s application included agreement to be bound by all the Fund’s rules and regulations, although he did not inquire about those rules or make any effort to find out what they were. Upon receiving his first monthly payment of $2,115.43, he was required to sign a Retirement Declaration that provided notice of disqualifying employment for plan participants receiving retirement pensions but did not include the rules and regulations specific to disability pensioners. In 2007, the Fund suspended his disability pension, claiming that his full-time employment in 2005 and 2006 indicated that he no longer met the definition of “total and permanent disability.” The district court granted summary judgment in favor of the Fund. The Seventh Circuit affirmed. Although the Fund acknowledged ambiguity, it based its decision on a reasonable interpretation. View "Tompkins v. Cent. Laborers' Pension Fund" on Justia Law

Petitioner Jose Cardoza brought this lawsuit pursuant to the Employee Retirement Income Security Act of 1974 (ERISA), to challenge United of Omaha Life Insurance Company’s calculation of his long-term disability benefits (LTD benefits). United of Omaha answered, asserting its calculation was appropriate, and counterclaimed, demanding that Petitioner reimburse it for payments of short-term disability benefits (STD benefits) which it claimed were miscalculated. On cross-motions, the district court granted Petitioner's motion for summary judgment and denied United of Omaha’s motion, concluding United of Omaha’s decision to calculate Petitioner's LTD benefits and recalculate his STD benefits as it did was arbitrary and capricious. United of Omaha appealed. Upon review, the Tenth Circuit concluded that the district court erred in granting Petitioner's motion for summary judgment with respect to United of Omaha’s LTD benefits calculation: "[t]he plain language of the long-term disability benefits policy instructed United of Omaha to base its calculation of Cardoza’s LTD benefits on his earnings as verified by the premium it received. Thus, United of Omaha’s decision to do so was reasonable and made in good faith." The district court did not err, however, in granting Petitioner's motion for summary judgment with respect to United of Omaha’s recalculation of his STD benefits and demand for reimbursement "United of Omaha’s decision to recalculate Cardoza’s STD benefits based on his earnings verified by premium rather than his actual earnings was not reasonable." The Court therefore reversed in part, affirmed in part, and remanded the case to the district court for further proceedings. View "Cardoza v. United of Omaha Life Insurance" on Justia Law

Plaintiff appealed from the district court's dismissal of his suit alleging claims of equitable estoppel and breach of fiduciary duties pursuant to the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. The district court dismissed the complaint for failure to state a claim. The court held that plaintiff stated a claim for relief that was cognizable under ERISA, in light of CIGNA Corp. v. Amara. Because relief was available under the surcharge doctrine under Amara, the court did not address the equitable estoppel claim and the district court was free to consider that claim on remand. Finally, the district court did not err in dismissing Defendant Entergy Mississippi where plaintiff failed to allege that Entergy Mississippi sponsored or administered the plan or made any decisions with respect to his benefits. View "Gearlds, Jr. v. Entergy Services, Inc., et al" on Justia Law