E Point Perfect
Law \ Legal

Court Hearings for Benefits Attorneys to Watch


AT&T Workers Appeal Dismissal of 401(k) Excessive Fees Suit to Ninth Circuit

The U.S. Court of Appeals for the Ninth Circuit recently heard oral arguments in Robert Bugielski et al. v. AT&T Services Inc. et al., case number 21-56196. A class of almost 250,000 AT&T workers appealed after a federal district court judge granted summary judgment in favor of AT&T in their ERISA lawsuit. The workers allege that plan administrator AT&T Services Inc. breached its fiduciary duty in violation of ERISA by charging workers excessive fees in connection with an employer-sponsored 401(k) plan.

The AT&T case is particularly important because although the Ninth Circuit has heard arguments in several cases involving excessive fee challenges under ERISA this year, it only has issued unpublished decisions in those cases. A published decision, in this case, would create a precedent for similar cases in the future.

Ninth Circuit Hears Appeals by Pilots Alleging Workplace Discrimination Against Service Members

The Ninth Circuit also recently heard oral arguments in a lawsuit filed by a class of pilots against Alaska Airlines and its regional subsidiary. The pilots claim that the airlines violated the Uniformed Services Employment and Reemployment Rights Act (USERRA), a federal law prohibiting workplace discrimination against servicemembers. According to the pilots, the airlines violated USERRA when they failed to compensate them while on military leave, even though they compensated other employees on comparable leave, such as jury duty or sick leave.

A federal district court judge granted summary judgment to the airlines, finding that military leave was not equivalent to jury duty or sick leave. The Seventh and Third Circuit Courts of Appeal ruled in similar cases in recent months that military leave was equivalent to other forms of leave under USERRA.

The case is Casey Clarkson v. Alaska Airlines Inc. et al., case number 21-35473, U.S. Court of Appeals for the Ninth Circuit.

Insurer Appeals Order Finding ERISA Violation to Tenth Circuit

The U.S. Court of Appeals for the Tenth Circuit heard oral arguments in K. et al. v. United Behavioral Health et al., case number 21-4088, which involves an insurer’s payment of benefits for inpatient mental health treatment. United Behavioral Health, the behavioral health unit of UnitedHealth Group Inc., and the Alcatel-Lucent Medical Expense Plan for Active Management Employees have appealed an order of a Utah district court judge requiring them to pay additional benefits for a patient’s mental health treatment.

A family sued the insurer and plan in 2017, seeking reimbursement for their daughter’s extended stay at an inpatient mental health facility. The father was a plan participant through his employer, Alcatel-Lucent. The family requested relief under ERISA and the Parity Act, which requires equal coverage of mental health and substance abuse disorder treatments and other medical care.

In June 2021, the federal district court granted summary judgment to the plaintiffs on their ERISA claim, finding that United and the plan were arbitrary and capricious in denying coverage for inpatient mental health treatment. The judge also ordered that the defendants reimburse the family for the costs of the daughter’s treatment. The court granted summary judgment to the defendants on the Parity Act claim, stating that the plaintiffs had abandoned the claim during a summary judgment hearing.

On appeal, United and Alcatel-Lucent argued that their denial of the claim was proper, and even if it was improper, the judge should have remanded the claim to the plan rather than directly awarding benefits to the plaintiffs.

Chipmaker Seeks Dismissal from ERISA Claim Over 401(k) Mismanagement

A California federal district court recently held a hearing on a motion to dismiss a proposed class action alleging ERISA violations due to mismanagement of a 401(k) plan. Workers at NvidiaCorp., a U.S. chipmaker, allege that their employer breached its fiduciary duty under ERISA by allowing excessive fees to be charged to the plan. They also claim that the company violated ERISA by failing to utilize the lowest-cost share class for many offered mutual funds.

The case is Tobias et al. v. NVIDIA Corporation et al., case number 4:20-cv-06081, U.S. District Court for the Northern District of California. Benefits attorneys should follow this case as it raises a relatively new type of claim that recently has gained traction in ERISA class actions alleging excessive fees. In recent court decisions, share class claims have become more viable than other claims. (See Danielle Forman et al. v. Trihealth, Inc. et al., case number 21-3977, U.S. Court of Appeals for the Sixth Circuit.)

Companies Argue for Dismissal of ERISA 401(k) Class Action Suit

Three named defendants have filed motions for summary judgment in the ERISA suit of Robert Lauderdale et al. v. NFP Retirement Inc. et al., case number 8:21-cv-00301, U.S. District Court for the Central District of California. Engineering firm Wood Group U.S. Holdings Inc. and two financial companies contracted to manage its 401(k) plan are facing allegations that they violated ERISA in this class action lawsuit involving an estimated 18,000 retirement plan participants. The court recently held a hearing on the motions for summary judgment after dismissing various claims from the case in February.

The Wood Group workers initially sued in February 2021, claiming that the companies had breached their fiduciary duties under ERISA and engaged in prohibited transactions by offering a set of flexPath investments, including target-date funds, in the Wood Group 401(k) plan. Since flexPath was a subsidiary of NFP Retirement, Inc., the employees argued that the investments benefited NFP at the expense of the workers.

Previously, the federal court judge ruled that Wood Group and NFP should not be held liable for plan decisions made by flexPath Strategies. The court also ruled that the two companies should face claims related to Wood selecting flexPath as an investment manager and Wood and NFP failing to supervise flexPath adequately.

Target-date funds and other types of new investments have created difficulties for courts in determining how to evaluate claims of breach of fiduciary duty related to those investment choices. As a result, the outcome of this case may be important for benefits attorneys to observe.

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.


Source link

Related posts

Some certainty in public procurement

DOL’s Proposed Independent Contractor Rule Would Classify More Workers As Employees

Crypto Exchange Bittrex Settles $53 Million in Fines with Treasury Department for Sanctions, Anti-Money-Laundering Violations

Episode 434: ChatGPT Successfully Imitates a Talented Sociopath with Too Many Lawyers

PMPRB round-up: report on current reforms

American Bar Association Ethics Rules and Innovation Will Co-Exist