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This week’s notable decision is Dorman v. Charles Schwab Corp., No. 18-15281, __ F.3d __, 2019 WL 3926990 (9th Cir. Aug. 20, 2019), where the court addressed the question of whether ERISA claims can be subject to mandatory arbitration.  In short, the Court determined that an arbitration agreement in the Schwab Retirement Savings and Investment Plan (“the Plan”) is enforceable.  To get there, the court revisited and overruled prior Ninth Circuit authority.  

By way of background, in Amaro v. Continental Can Co., 724 F.2d 747 (9th Cir. 1984), the Ninth Circuit held that exhaustion of arbitration procedures for contractual grievances is not required prior to bringing a statutory claim under ERISA Section 510.  The court reversed and remanded the district court’s decision that the arbitration award on a contractual grievance that was adverse to former employees of the company barred their ERISA claims.
Continue Reading Ninth Circuit Holds that ERISA Claims Can be Subject to Mandatory Individual Arbitration

This week’s notable decision is O’Rourke v. N. California Elec. Workers Pension Plan, No. 17-17419, __F.3d__, 2019 WL 3850604 (9th Cir. Aug. 16, 2019), a case involving a dispute over the payment of early retirement benefits through a multiemployer ERISA plan.  The court was tasked with deciding whether Defendant abused its discretion by determining that Plaintiff’s work as an administrator for an electrical workers’ union falls within the Plan’s definition of “Prohibited Employment.”  The district court granted summary judgment in favor of the Plan’s board of trustees (“Board”), and for the reasons below, the Ninth Circuit affirmed the decision.  

The Plan provides for an early retirement benefit for participants at age fifty-five if they have accumulated ten or more years of covered employment.  No benefits are paid for either normal pensions or early pensions for any month in which a participant works in “Prohibited Employment.”  For participants under the age sixty-five, the Plan defines “Prohibited Employment” as “the performance of services in any capacity in the Electrical Industry.”  “Electrical Industry” is defined as “all branches of the Electrical Trade in the United States.” The Plan does not define “Electrical Trade.” 
Continue Reading Ninth Circuit Upholds Pension Plan’s Denial of Early Retirement Benefits for Participant’s Union Work

Happy Sunday, ERISA Watchers!  I’m glad to be able to report some good news in the post-Tackett world of retiree medical.  In this week’s notable decision, Kelly v. Honeywell Int’l, Inc., No. 17-2075, __F.3d__, 2019 WL 3673139 (2d Cir. Aug. 7, 2019), the Second Circuit affirmed the district court’s grant of summary judgment in favor of the retirees, and their surviving spouses, whose medical benefits it determined had vested before the expiration of the effects bargaining agreement (“EBA”).  The court also affirmed the district court’s order preliminarily enjoining Honeywell from terminating medical benefits vested after the EBA expired.

All of this started after the Supreme Court’s decision in M&G Polymers USA, LLC v. Tackett, ––– U.S. –––, 135 S. Ct. 926, 190 L.Ed.2d 809 (2015), which prompted Honeywell to review its collective bargaining agreements.  Believing it was justified to terminate the retiree medical coverage it had been providing Plaintiffs for over 15 years, Honeywell announced that it was doing so effective December 31, 2016.  As a result of the various lower court proceedings, however, Honeywell has continued to provide medical coverage to the retirees.
Continue Reading Second Circuit Holds Employer to Promise of Lifetime Retiree Medical Benefits