As the media and the plaintiffs' bar have increased their attention on retirement and health benefits, and employees have become more aware of litigation in this area, there has been a corresponding increase in individual and class action lawsuits. The issues that are the focus of class-action suits include:
- revenue sharing and fee arrangements under 401(k) plans;
- decreases in the value of employer securities in defined contribution plans;
- misrepresentation and fiduciary breaches relating to a reduction in force or an early retirement "window" plan;
- valuation and other aspects of employee stock option plans (ESOPs); and
- the elimination of retiree medical or retiree death benefits.
In addition, a number of cases relate to claims involving coverage under health and welfare benefit plans. These cases often involve state law considerations and whether such laws are preempted by the Employee Retirement Income Security Act (ERISA).
Employers recognize the importance of retirement and health benefits to their employees and the importance of limiting risk and litigation exposure through appropriate compliance, plan governance, and employee communications. Nevertheless, there are often overlapping laws that apply, and the state of the law is both complex and constantly evolving. As a result, and despite their best intentions, many employers, along with plan administrators, trustees, and others, find themselves entangled in increasingly costly and time-consuming benefits-related litigation.
Scope of the Litigation Team
Epstein Becker Green has a national, dedicated ERISA and Benefit Plan litigation practice staffed with attorneys who combine a real-world understanding of the intricacies of benefit plan administration and employee benefits operation with their extensive experience as ERISA counselors and trial and appellate court litigators. The attorneys in this practice group represent employers and service providers to benefit plans, both in class-action and individual litigation. When potential litigation issues arise, these attorneys provide the practical legal advice and representation needed to resolve potential benefits disputes as quickly and efficiently as possible.
Our litigation team includes former attorneys from the Office of the Solicitor of Labor, who previously prosecuted actions brought by the Secretary of Labor to enforce ERISA, as well as former United States Attorney prosecutors. EBG attorneys, who have represented both major employers and providers (such as health providers and insurance companies), have chaired professional programs and American Bar Association committees on ERISA fiduciary and investment-related matters. EBG attorneys also have significant experience in the ongoing administration and operation of benefit plans. This proficiency often provides an "edge" in tackling the issues that arise in benefit litigation, as well as the possible application of employment, tax, and securities-related considerations.
Range of ERISA/Employee Benefits Litigation and Related Services
Epstein Becker Green attorneys have worked on many cases involving ERISA and employee benefits in a broad range of areas, including the following:
a. Plan Benefits and Governance. The firm is engaged on behalf of numerous employers in cases involving benefit plans and ERISA-related claims against plan sponsors, fiduciaries, and service providers. Stemming from one of its core practice groups, EBG also is involved in matters relating to multi-employer plans as well as ERISA issues arising from downsizing and reductions in force. Because many of EBG's benefit clients are plan sponsors, the firm is often involved in audits, investigations, and other issues surrounding government agencies charged with statutory enforcement. Among these agencies are the Internal Revenue Service, the U.S. Department of Labor, and the Pension Benefit Guaranty Corporation.
EBG has been involved in cases and regulatory investigations concerning:
- Breach of fiduciary duty claims, including claims related to alleged retaliation and misrepresentation or failure to properly inform by a plan fiduciary
- Elimination of retiree medical coverage
- Defined benefit plan amendment to eliminate a death benefit
- ESOP operation
- Breach of duty to supervise service providers
- Claims under ERISA related to executive incentives, equity, and deferred compensation plans
- Disputes regarding payments under stock options, other incentives, and performance-based plans and individual agreements
- Disputes over pension and health and welfare plan contribution payments
- Entitlement to disability, pension, death, health and welfare plan benefits, as well as to COBRA issues
- Conversion of a defined benefit plan to a cash balance plan
- Rescission remedy following an alleged prohibited transaction
- Claims alleging actions intended to eliminate benefits in violation of Section 510 of ERISA
b. Health Care. EBG has experience in ERISA litigation matters involving another of its prominent core practice areas—health care and related sectors. These clients include insurance companies, hospitals, and other providers such as managed care organizations and the services provided by these clients with respect to insured and noninsured single, multi-employer, and multiple welfare benefit plans. As much of the health care industry receives payments for its services from health plans subject to ERISA, very special issues arise that require knowledge of both the health care industry and ERISA.
For example, these cases, which included ERISA preemption matters, concerned:
- Entitlement to disability, and health, as well as to related COBRA and HIPAA considerations
- Authority of states to treat self-funded plans with stop-loss insurance as insured plans exempt from ERISA's insurance savings clause
- Determination of the point at which payments for health benefits from an ERISA plan to a third-party administrator (who, in turn, pays the providers) stop being "plan assets," so that the prohibited transaction provisions of ERISA are not applicable
- The extent to which state anti-subrogation statutes apply to ERISA plans
- Prohibited transaction issues arising out of DOL audits of different reimbursement/payment arrangements between plans, providers, and different vendors and brokers of the provision of medical services for ERISA plans
c. Multi-Employer Plans. Our litigation attorneys are also proficient in multi-employer plan-related litigation and Title IV of ERISA and the Age Discrimination in Employment Act (ADEA). For example, our litigation attorneys have handled cases involving:
- Fund-related disputes over pension and health and welfare plan contribution payments
- PBGC single employer pension plan liability
- MEPPA withdrawal liability
- Fiduciary issues arising with respect to Taft-Hartley plans
- Pension Protection Act issues
- ADEA claims related to employee benefit plans
d. Executive Compensation. We also have attorneys with knowledge and skills in executive compensation-related litigation. Examples of our casework include:
- Federal district court matters relating to disputes under ERISA-deferred compensation plans (e.g., SERP benefits)
- Litigation involving top-hat plan status under ERISA
- Disputes regarding payments related to stock options, restricted stock, and other equity-based arrangements, as well as incentives and performance-based compensation plans
- 409A-related disputes
Our experience includes real-world successes when ERISA cases need to be litigated. For example, Epstein Becker Green attorneys have achieved success for their clients in many unreported cases and in such reported favorable decisions as:
- Eichorn v. AT&T Corp., 248 F.3d 131 (3rd Cir.)—upheld the employers' claims that the plaintiffs were not entitled to relief under ERISA
- Wachtel v. Health Net, Inc., 482 F. 3d 225 (3rd Cir.)—ruled that the ERISA fiduciary exception to the attorney-client privilege was not applicable
- In re Lucent Death Benefits ERISA Litig., 541 F.3d 250 (3rd Cir.)—putative class action challenge to the elimination of a retiree death benefit
- Chastain v. AT&T, 558 F.3d 1177 (10th Cir.)—class action suit brought by retirees of AT&T challenging the subsequent elimination of a retiree death benefit and certain reductions in medical and dental benefits
- Kerber v. Qwest Pension Plan, 572 F.3d 1135 (10th Cir.)—class action challenge to changes to a retiree death benefit based in plan language and misrepresentations/breach of fiduciary duty
- Tholke v. Unisys Corp., 335 Fed.Appx. 105 (2d Cir.)—suit by an employee for long-term disability benefits