826 F. Supp. 2d 25
D.D.C.2011Background
- ERISA violations found: backloading under §1054(b)(1) and vesting deficiencies under §1053; the Plan was amended post-violation but remedies pending; remedies hearing held July 28–29, 2011; equitable relief sought to place class in substantially the position as if ERISA compliance occurred; remedies include formulas, offsets, and vesting credits; plan records, union/NYHA service credits, and pre-ERISA service issues addressed; final remedial order to implement Court rulings and possibly further proceedings before magistrate for individual disputes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Permissibility of NYHA/union offsets concurrent with service | Offsets violate antibackloading rules | Offsets are proper to prevent double benefits | Offsets for NYHA/union concurrent service permitted |
| Remedial framework for backloading violation | Proposed formulas/notice inadequate | Defendants’ revised formula and notice appropriate | Court adopts the agreed backloading remedy formulas and notices |
| Vesting remedies—record searches and union service claims | Search inadequate; claims process burdensome | Search adequate; claims process approved | Court approves union service search and the claims procedure with modifications |
| Equivalencies applied to salaried employees | Improper equivalencies used; 190-hour equivalency suggested | Records show hours worked; no improper equivalencies found | No credible evidence of improper equivalencies; 58 salaried participants not vested for this claim |
| Pre-ERISA service vesting adjustments | Pre-ERISA service should be counted under ERISA rules | Remedial scope not include pre-ERISA issues; follow Plan rules | Court declines to address pre-ERISA service in remedial order |
Key Cases Cited
- Carrabba v. Randalls Food Markets, Inc., 145 F.Supp.2d 763 (N.D. Tex.2000) (equitable relief to place participants in similar position to ERISA compliance)
- Frommert v. Conkright, 433 F.3d 254 (2d Cir. 2006) (recalculation of benefits falls within § 502(a)(1)(B))
- Varity Corp. v. Howe, 516 U.S. 489 (U.S. 1996) (catchall equitable relief limits when plan complies; otherwise may be appropriate)
- Mertens v. Hewitt Assocs., 508 U.S. 248 (1993) (equitable relief limited; not all relief available in ERISA actions)
- Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538 (Fed. Cir.1995) (pre-judgment interest discretion; simple vs. compound)