ERISA and Global Benefits

Trifecta of M&A-related ERISA Cases (and WARN decisions)
Transactional lawyers will be smart to take note of the following employment-related decisions that have come out within the past few weeks.
$16M Awarded to Optionees due to Flawed Cash-out in Spin/Merger
In business transactions, the parties generally address the target company's stock awards in a manner that honors the contractual rights of employees. Costly lessons come, however, when deal terms run afoul of the change-in-control provisions within the target's stock award plan and/or award agreements.
Assessing ERISA Risks from ESOPs – 5th Circuit Clobbers Founder of Closely-Held Company
When the owner of a closely-held company sells stock to an employee stock ownership plan (ESOP), there are numerous valuation, fiduciary, and conflict of interest issues that could explode into ERISA liability. Imagine having ESOP participants recover damages equal to 33% of the amount the ESOP paid for the founder’s shares. The 5th Circuit recently upheld such an award. Its decision provides warning signs for companies with ESOPs and owners who sell shares to ESOPs – and for those performing diligence before they buy or invest in companies that sponsor ESOPs.
Equity Aids the Vigilant: The Supreme Court's Montanile Decision And Its Lessons for ERISA Plans' Efforts To Recover Medical Payments
After the U.S. Supreme Court’s opinion in Board of Trustees of the National Elevator Industry Health Benefit Plan holding that ERISA prohibits suits by benefits plans where the beneficiary spent the settlement money on nontraceable items.
Summary Plan Description Discretionary Grants Are Ineffective To Invoke Firestone Defense, Ninth Circuit Holds
In a decision highlighting the importance of considered plan design and documentation, the Ninth Circuit ruled that a grant to the plan administrator of discretionary authority to interpret plan terms in the plan’s summary plan description (“SPD”), but not in the plan document itself, was insufficient to bestow Firestone deference.
Ninth Circuit Holds That Beneficiary Designation Forms Are Not Plan Documents
In a recent decision significant both to benefit plan sponsors and administrators, and even more critical to plan participants and their beneficiaries (or would-be beneficiaries), the Ninth Circuit held that beneficiary designation forms were not plan documents under ERISA, where the forms did not provide information to participants about the plan and the plan documents did not incorporate the forms by reference.
Avoid Self-Inflicted Liability: Extraneous Plan Provisions
Retirement plan sponsors are constantly reminded of the many potential liabilities imposed on them by the labyrinthine ERISA statutory scheme, from minimum standards for participation, vesting and funding to the requirement of a claims and appeals process within each plan. However, despite the already existing complexities of ERISA, plan sponsors sometimes include unnecessarily exacting plan provisions that create employer obligations – and hence liability -- where none might have existed otherwise.
First Circuit rejects “continuing violation” or “installment contract” accrual theories for ERISA benefits claims
The First Circuit in Riley joins the Second, Third and Ninth Circuits in rejecting the theory that each monthly benefit payment received by a participant under an ERISA plan is an accrual event giving rise to a new statute of limitations for benefits claims. To date, no Circuit court has adopted a continuing violation or installment contract theory with respect to the accrual of a claim for unpaid benefits under ERISA.
11th Cir. declares: Tracing not required for ERISA liens
In AirTran Airways, Inc. v. Elem, et al., 2014 WL 4694776 (11th Cir. 2014), a welfare plan sued a participant and her personal injury attorney to recover funds the plan paid for medical expenses after the participant received a settlement from the car accident that gave rise to the medical expenses. The Eleventh Circuit held that the plan terms unambiguously created an equitable lien against the settlement funds up to the amount of benefits the plan had paid.
Forfeiture-for-Disloyalty Sustained by Texas Supreme Court (applying NY Choice of Law)
There is a crucial difference between non-competition provisions and forfeitures-for-competition, and the Supreme Court of Texas highlighted that in ruling against a Texas-based employee who resigned from Exxon Mobil to join a competitor.
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