As noted by Vogue Magazine, August marked the 23rd anniversary of the federal Family and Medical Leave Act. Though considered landmark legislation at the time, the law only provides for unpaid leave, and does not apply to a large percentage of Americans employed by companies with fewer than 50 employees. Seeking to correct this situation, four states - California, New Jersey, Rhode Island and New York - now have paid leave laws. Even in those states, however, there remain gaps, particularly when it comes to job protection.
The SEC voted on Wednesday to require public companies to disclose the ratio of their CEOs' compensation to the median compensation of its employees. The new rule, which was approved by a 3 to 2 vote, stems from a mandate included in the Dodd Frank Wall Street Reform and Consumer Protection Act.
The Supreme Court - presented with a simple question about ERISA's fiduciary-duty statute of limitations (29 U. S. C. § 1113) - lays the foundation for a potential new round of litigation about how strictly and often plan fiduciaries must monitor the performance of their retirement investment plans. The Court, without dissent, agrees that there is no set-it-and-forget-it rule for fiduciaries.
Since July 2014, the price of oil has dropped by half. That's good for consumers' pocketbooks, but one segment of the population is facing hard times: U. S. oil industry workers. In the past few years, the boom in oil production meant that companies needed to quickly expand hiring to meet the demand for workers. The rush to hire meant that some companies did not follow wage and hour laws.
While ERISA does not provide a limitations period for most claims, it does impose a three-year limitations period after discovery of a breach of fiduciary duty, plus a six-year period of repose. Yet the statute also provides that "in the case of fraud or concealment, such action may be commenced not later than six years after the date of discovery of such breach or violation." The Tenth Circuit examined this quoted language today, and remanded parts of a class action to be reconsidered under this provision.
This class action, now over 13 years old - with a liability finding against CIGNA and its pension plan under ERISA for cutting back and misrepresenting benefits under an amended plan - returns from the U.S. Supreme Court to determine what kind of relief should be ordered. The Second Circuit affirms, holding that the district court properly reformed the pension plan to preserve all of the benefits earned under the pre-amended plan, up to the date of the amendment. The court also upholds the class certification order.
The duty of the administrator of a short-term disability (or other welfare benefit) plan can sometimes extend beyond reviewing the participant's submitted claim. The Fourth Circuit holds that it can also be an abuse of discretion for the administrator to disregard "readily available material evidence of which it was put on notice." Here, the administrator allegedly failed to follow up on a notation in the medical file indicating that the participant's recent widowhood "could have triggered PTSD caused by the [recent] death of her mother and children."
A hidden difficulty many American employees face is that a huge amount of their retirement income - an estimated $4 trillion - is in 401(k) plans, too many of which are managed by individuals indifferent to (or not competent to advance) the interests of future retirees. In this Fourth Circuit case, the district court found the fiduciaries of the retirement plan in breach of their duty of prudence by their arguably poor timing in liquidating a company-stock fund when its shares were in a trough, without performing a reasonable investigation, but excused them from paying any relief to the participants. The court holds (2-1) that the judge erred in insulating the fiduciaries from remedying that breach, concluding that the fiduciaries had the burden of proving that a prudent fiduciary would have made the same decision.
After three trips to the district court - and a side visit to the U.S. Supreme Court - the Second Circuit issues a liability judgment in this ERISA matter, dating back to 1989. It holds the Xerox retirement plan liable as a matter of law for miscalculating retirement benefits and for misinforming class of their rights under the summary plan description (SPD). The case is remanded yet again to the district court for entry of remedy. Notably, the Second Circuit puts real teeth in the ERISA requirements in 29 U.S.C. §§ 1022 and 1054(h) that a plan must accurately inform participants of plan terms and of any amendments.
The Supreme Court today - in a unanimous opinion authored by Justice Thomas - lays a trap for the unwary ERISA plan participant. It holds that an ERISA plan sponsor can impose its own limitations period and accrual rule for claims under ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), different from what is provided by state or federal law, provided that it is not "unreasonably short" (and remains subject to equitable exceptions). This post explains the significance of Monday's opinion and sets out three things that participants and beneficiaries must do to protect themselves from these legal landmines.