Justia ERISA Opinion Summaries

In 2009, George, a vice president of JA, discovered that money withheld from his pay was not being deposited into his retirement account and health savings account. He complained to JA’s accountants and executives, including Burk. He contacted the Department of Labor but declined to file a complaint. He raised the issue with board members, then received checks for $2,600 for the missed deposits plus interest. His employment agreement ran until June 30, 2010, but he had discussed, with Burk and others, retiring in April 2010. On January 4, 2010, Burk told George not to return to work. Burk later discovered that George had drawn down the account containing his deferred compensation. J A concedes that George was entitled to withdraw the funds, but it did not rescind his discharge. George claimed violation of the Employee Retirement Income Security Act, 29 U.S.C. 1104(a) and retaliation for reporting that violation. The district court granted JA summary judgment. The Seventh Circuit vacated. An employee’s grievance is within ERISA’s scope of protection against retaliation whether or not the employer solicited information. George notified JA of the potential breach of its fiduciary duties and asked what would be done. Those conversations involved an “inquiry.” View "George v. Jr. Achievement of Cent. IN, Inc." on Justia Law

Plaintiffs are retired unionized employees of defendant and were covered by collective bargaining agreements that addressed healthcare benefits. The parties contest whether the CBAs guaranteed employees and their spouses lifetime healthcare benefits after retirement. After retiring, the employees and spouses continued to receive healthcare insurance from defendant. Between ages 62 to 65, defendant paid 80% of the premium costs. When the retirees turned 65, defendant assumed 100% of premium costs. In 2006, defendant informed plaintiffs that the company was instituting a new healthcare plan that would no longer cover 100% of the premiums. Plaintiffs claimed violations of the Labor Management Relations Act, 29 U.S.C. 185, and the Employee Retirement Income Security Act, 29 U.S.C. 1132. The district court ruled in plaintiffs’ favor as to employee coverage, but in favor of defendant as to spouses. The Sixth Circuit reversed in part, in favor of plaintiffs. Although healthcare is a “welfare benefit,” not entitled to the same ERISA protection as pension benefits, employers are free to waive their power to alter welfare benefits. Defendant did so by offering vested healthcare coverage to retired employees and spouses, and by agreeing that CBAs could only be modified with signed, mutual consent of the parties. View "Moore v. Menasha Corp." on Justia Law

Multiemployer pension plans are created by collective bargaining agreements to provide benefits to employees of different firms. When an employer withdraws from an MPP, the plan remains liable to employees who have vested pension rights, but can no longer look to the employer to cover these obligations. The Multiemployer Pension Plan Amendments Act, 29 U.S.C. 1381-1461, assesses the employer with an exit price equal to its pro rata share of the funding shortfall (difference between present value of fund assets and present value of future obligations). Estimating the shortfall depends on estimating the amount by which current assets can be expected to grow with compound interest. To avoid having an employer new to a plan inherit withdrawal liability where existing members failed to fund the plan adequately in prior years, the statute creates default rules for assigning each employer a share of only so much of the shortfall as occurred while the employer was participating, 29 U.S.C. 1391(b)(2)-(4). Disputes about withdrawal liability are resolved by arbitration. The arbitrator in this case ruled that MMP trustees had over-assessed CPC’s withdrawal liability by $1,093,000. The district judge upheld the ruling. The Seventh Circuit affirmed, noting the “Hideous complexities” involved and its own lack of expertise. View "Chicago Truck Drivers, Helpers, & Warehouse Workers Union (Indep.) Pension Fund v. CPC Logistics, Inc." on Justia Law

The Fund is a multiemployer defined-benefit pension plan. Honerkamp, a New York employer, contributed to the Fund pursuant to collective bargaining agreements with its employees. In 2008, the trustees announced that the Fund was in critical status as defined by the Pension Protection Act of 1996, 29 U.S.C. 1085(b)(2) and began drafting a rehabilitation plan. Because the rehabilitation plan would figure prominently in negotiations between Honerkamp and the union, the parties extended existing agreements. The final rehabilitation plan set forth new schedules of reduced benefits and increased contributions. According to the plan, the Fund was unlikely to emerge from critical status within the statutory 10-year rehabilitation period because employer contribution rates required for that result would exceed amounts that employers would have had to pay to withdraw from the Fund. The trustees therefore designed schedules “to impose approximately the same burden actuarially on employers that a withdrawal from the [Fund] would produce.” Following negotiations, Honerkamp withdrew from the Fund. The trustees sued, arguing that the PPA prevented Honerkamp from withdrawing and required the company to make certain ongoing pension contributions pursuant to the rehabilitation plan. The district court granted summary judgment to Honerkamp. The Second Circuit affirmed. View "Trs. of Local 138 Pension Trust Fund v. F.W. Honerkamp Co. Inc." on Justia Law

The United Automobile, Aerospace, and Agricultural Implement Workers International Union and Local 997 appealed the district court judgment after a five-day bench trial declaring that Whirlpool Corporation may unilaterally modify the health care benefits it provided to retired hourly workers previously employed at the Newton, Iowa manufacturing facilities of Whirlpool's now-dissolved subsidiary, Maytag Corporation. The Eighth Circuit Court of Appeals affirmed, holding (1) the district court correctly found that a case or controversy existed when Whirlpool filed its declaratory judgment action; and (2) the retirees did not have a vested right to the previously granted health benefits under ERISA, as the benefits were provided in a collectively bargained agreement that had no express vesting provision. View "Maytag Corp. v. Int'l Union" on Justia Law

Plaintiffs David McCorkle and William Pender appealed a district court order dismissing two of their class action claims against Bank of America Corporation for alleged violations of certain provisions of the Employment Retirement Income Security Act of 1974 (ERISA). Their claims centered on the Bank's use of a normal retirement age (NRA) that allegedly violated ERISA in calculating lump sum distributions and further ran afoul of ERISA's prohibition of "backloading" the calculation of benefit accrual. Upon review, the Fourth Circuit agreed with the district court's conclusion that Plaintiffs failed to state a claim upon which relief could be granted, and it affirmed the district court's judgment to dismiss those claims. View "Pender v. Bank of America Corp." on Justia Law

Plaintiffs, former directory-advertising sales representatives for Idearc were discharged in 2007. Each was older than 40 and each had at least 18 years of service. Idearc claimed they were let go for poor performance; the employees alleged that the terminations were motivated by age discrimination (Age Discrimination in Employment Act, 29 U.S.C. 621) and a desire to negate pension benefits (Employee Retirement Income Security Act, 29 U.S.C. 1140,). They also advanced a retaliation claim. The district court rejected all of their claims. The First Circuit affirmed, noting the company’s performance-based standards. Idearc’s 2002 collective bargaining agreement authorized Idearc to terminate underperforming employees as specified by the plan. Employees were ranked within six-month periods by "percent net gain," calculated by comparing a salesperson's revenues against the revenue produced by his accounts in the previous year. Idearc was permitted to terminate employees failing 4 out of 7 consecutive semesters, but no more than 7.5 percent of a peer group could be terminated in any given semester. View "Cameron v. Idearc Media Corp." on Justia Law

David Day, an ERISA plan beneficiary, elected to roll over his pension benefits into an individual retirement account (IRA) upon separation from his employer, AT&T. Exercising its discretion, the plan's claims administrator construed Day's lump sum rollover as the equivalent of his having "received" his pension benefits and, according to the terms of AT&T's Disability Income Benefit Plan, reduced Day's long-term disability (LTD) benefits by the amount of the rollover. The district court entered judgment in favor of the plan. The Ninth Circuit Court of Appeals affirmed, holding (1) the administrator reasonably interpreted the plan; (2) AT&T did not breach its fiduciary duties by failing to disclose the possibility that Petitioner's LTD benefits would be reduced by his receipt of pension benefits; and (3) the administrator's actions did not violate the Age Discrimination in Employment Act. View "Day v. AT&T Disability Income Plan" on Justia Law

Plaintiff appealed the district court's dismissal of her claim challenging the termination of her long-term disability benefits under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1132. Plaintiff challenged the district court's grant of summary judgment in favor of Unum on it's counterclaim for restitution of overpaid benefits. The court held that the district court abused its discretion by dismissing the claim for denial of benefits for failure to exhaust administrative remedies. The exhaustion requirement should have been excused because plaintiff acted reasonably in light of Unum's ambiguous communications and failure to engage in a meaningful dialogue. Accordingly, the court vacated the judgment in favor of Unum on plaintiff's claim for denial of benefits. View "Bilyeu v. Morgan Stanley Long Term Disability Plan, et al." on Justia Law

Defendant appealed the district court's grant of partial summary judgment in favor of CGI in its action seeking "appropriate equitable relief" under section 502(a)(3) of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq. CGI appealed the district court's grant of partial summary judgment in favor of defendant's counsel and codefendant, dismissing the codefendant from the action. CGI also appealed the district court's grant of proportional fees and costs to the codefendant, deducted from CGI's recovery from defendant. The court affirmed the district court's grant of summary judgment in favor of the codefendant, dismissing it from the action. However, because the court saw no indication that in fashioning "appropriate equitable relief" for CGI, the district court did more than interpret the plain terms of the reimbursement provision, and no indication that the district court considered traditional equitable principles in assigning responsibility to CGI for attorneys' fees and costs, the court vacated the judgment in favor of CGI, vacated the judgment that the codefendant deducted fees and costs from CGI's entitlement, and remanded to the district court for further proceedings. View "CGI Technologies and Solutions v. Rose, et al." on Justia Law