Pension Benefit Claims

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This week’s notable decision is an unpublished ERISA preemption decision in Abernethy v. EmblemHealth, Inc., No. 19-422, __F.App’x__, 2019 WL 5302825 (2d Cir. Oct. 21, 2019), where the Second Circuit revived the state law claims retired officers brought against EmblemHealth after they cancelled the officers’ retiree medical coverage.

The retirees claimed that they were entitled to continued medical coverage based on their employment and separation agreements.  The employment agreements provide that the employee “shall be entitled to participate in, and receive benefits under” any retiree health benefit plan provided by EmblemHealth, “subject to the terms of such plans, program or policies.” But, the agreement also disclaims that the employee has any vested interest in any employee benefit plan, which the company may, in its discretion, change or revoke.  The separation agreements state that the employee will be able to “commence Retiree Health Benefits at the same level as that provided an active officer.”
Continue Reading Second Circuit Holds Breach of Contract Claims for Retiree Medical Coverage Not Preempted by ERISA

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