England v. Marriott International, Inc.
764 F. Supp. 2d 761
D. Maryland2011Background
- Former Marriott employees allege Retirement Deferred Stock Bonus Awards (Retirement Awards) were not paid when they vested and that terms violate ERISA minimum vesting.
- Awards were issued by Marriott-Hot Shoppes, Marriott Corporation, then transferred/converted through reorganizations into Marriott International, Inc. and related plans.
- Awards promised stock vesting pro-rata upon retirement age, disability, death, or age 65, with distributions over ten years after vesting; no ongoing plan documents provided.
- Defendants allegedly failed to inform participants, authorities, or provide a formal ERISA plan description or claims procedure prior to litigation.
- In 1993 and 1998 reorganizations, obligations migrated to successor entities; later plans (1993 Conversion Awards, 1998 Plan) governed benefits, but recipients not notified of ERISA status.
- Plaintiffs filed in 2010 in DC federal court; Maryland court transferred/kept proceedings, and Defendants moved to dismiss on multiple ERISA-related grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| accrual and statute of limitations | Plaintiffs argue accrual delayed due to unclear ERISA status and discovery rule. | Defendants contend accrual when awards issued; claims time-barred. | Not time-barred at this stage; accrual depends on ERISA status and discovery. |
| exhaustion of administrative remedies | Remedies deemed exhausted because plan never provided proper procedures before suit. | Exhaustion required despite post-filing creation of claims procedure. | Administrative remedies deemed exhausted; post-suit procedure does not bar claims. |
| equitable relief under ERISA 502(a)(3) vs 502(a)(1)(B) | Count I seeks equitable reformation and injunction; Count II seeks benefits; claims are distinct injuries. | Korotynska bars simultaneous 502(a)(3) and 502(a)(1)(B) relief. | Count I states equitable claim; plaintiffs may pursue both 502(a)(3) and 502(a)(1)(B) for different relief and theories. |
| retroactivity of ERISA vesting for pre-1976 employees | England and others may have ERISA vesting rights despite pre-1976 termination. | Cohen v. Martin's holds vesting provisions apply only to employees on 1/1/1976. | Count I dismissed as to employees who terminated before ERISA's effective date; England excluded. |
| breach of contract vs ERISA preemption | Contract claim viable where ERISA status uncertain; seeks damages if ERISA applies. | If ERISA applies, contract claim preempted. | Breach-of-contract claim not dismissed at this stage; ERISA applicability must be resolved first. |
Key Cases Cited
- Fenwick v. Merrill Lynch & Co., Inc., 570 F. Supp. 2d 366 (D. Conn. 2008) (claims accrual depends on ERISA status and plan documents)
- Eastman Kodak Co. v. STWB, Inc., 452 F.3d 215 (2d Cir. 2006) (deemed exhausted where plan procedures implemented post-suit)
- Korotynska v. Metropolitan Life Ins. Co., 474 F.3d 101 (4th Cir. 2006) (no simultaneous 502(a)(3) when 502(a)(1)(B) provides adequate relief)
- Varity Corp. v. Howe, 516 U.S. 489 (Sup. Ct. 1996) (ERISA 502(a)(3) is a safety net for inadequate other relief)
- Carrabba v. Randalls Food Markets, Inc., 145 F. Supp. 2d 763 (N.D. Tex. 2000) (reformation-based relief for terms not in plan may fall under 502(a)(3))
- Laurenzano v. Blue Cross & Blue Shield of Massachusetts, Inc. Retirement Income Trust, 134 F. Supp. 2d 189 (D. Mass. 2001) (benefits not in plan may support 502(a)(3) relief)