Upcoming Appellate Arguments for Benefits Attorneys to Watch

Several important benefits cases are pending before various U.S. Courts of Appeals. Benefits attorneys should look out for the upcoming appellate arguments in these cases.

  1. Tanika Parker et al. v. Tenneco Inc. et al., case number 23-1857, U.S. Court of Appeals for the Sixth Circuit

In this class action lawsuit, workers allege that their automotive company employers mismanaged their 401(k) plan by charging excessive recordkeeping fees and maintaining high-cost investment offerings. Tenneco Inc. and its subsidiary, Driv Automotive Inc., have appealed the district court’s decision denying their motion to compel arbitration in the case. This argument will occur before the Sixth Circuit only days after a split panel of the Second Circuit affirmed a denial of arbitration in a similar case. The Tenth, Third, and Seventh Circuits also have declined to force arbitration in ERISA lawsuits. The Ninth Circuit previously enforced individual arbitration of ERISA claims in a 2019 decision, but that decision was partially unpublished. If the Sixth Circuit ruling departs from the rulings of most other Circuit Courts, the split could make the issue ripe for decision by the U.S. Supreme Court.

  1. Operating Engineers’ Local 324 Fringe Benefit Fund et al. v. Rieth-Riley Construction Co. Inc., case number 23-1699, U.S. Court of Appeals for the Sixth Circuit

A union local’s fringe benefits funds and its administrators have appealed the district court’s grant of summary judgment in favor of a construction company employer. The funds sought to compel the employer to undergo an audit after the collective bargaining agreement between the employer and the union had expired.

The funds argue that the plan documents require employer audits, which are enforceable under ERISA and the Labor Management Relations Act. They also claim that the district court’s decision contradicts Sixth Circuit precedent, which has allowed post-contract ERISA collection actions to proceed. They further claim that the district court’s decision undermines ERISA’s intent to make it easier for funds to collect employer contributions.

According to the construction company, the court properly dismissed the case because once a contract expires, any obligations under the National Labor Relations Act (NLRA) concerning an expired contract are solely within the jurisdiction of the National Labor Relations Board (NLRB).

  1. Julie Su v. John Fernandez et al., case numbers 23-2758 and 23-3290, in the U.S. Court of Appeals for the Seventh Circuit

After the U.S. Department of Labor sued the trustees of a multiemployer fund, alleging mismanagement, an Illinois federal district court removed them as fiduciaries and replaced them with independent managers. Two former trustees have now appealed the court order removing them as the United Employee Benefit Fund trustees.

The former trustees claim that they had no part in the alleged fraud conspiracy involving the fund and that their former legal counsel hid the wrongful actions from them. They also argue that the fund is not subject to ERISA.

However, the DOL counters that court records demonstrate that the individual employers that subscribed to the multiemployer fund established plans covered by ERISA. The plan provides death benefits to employees of multiple employers.

The DOL first sued the fund’s trustees in 2022, alleging mismanagement and misuse of plan funds. The agency also alleges that the fund’s former attorney assisted in efforts to transfer more than $1.1 million in plan assets to purchase one trustee’s home out of foreclosure. After the court granted a preliminary injunction, the DOL stated that its investigation revealed the misappropriation of more than $2.8 million by the fund trustees and their attorneys.

  1. Singh v. Deloitte LLP, case number 23-1108, in the U.S. Court of Appeals for the Second Circuit

Accounting firm Deloitte LLP employees have appealed the dismissal of their suit alleging excessive recordkeeping fees concerning their 401(k) plan, even though the recordkeeper, Vanguard, is one of the least expensive in the nation. The district court dismissed the case against Deloitte in January 2023 before the parties had even engaged in discovery. On appeal before the U.S. Court of Appeals for the Second Circuit, the U.S. Chamber of Commerce filed an amicus brief in support of Deloitte, arguing that the workers’ complaint lacked context that justified dismissal.

  1. Sysco Indianapolis LLC v. Teamsters Local 135, case number 23-1718, in the U.S. Court of Appeals for the Seventh Circuit

A Teamsters local appealed a decision of an Indiana federal court from March 2023 that the company and the union had no intent to arbitrate pension-related disputes under a 2018 collective bargaining agreement. Sysco Indianapolis LLC brought the grievance over early retirement benefits into federal court, where the Teamsters local sought to force arbitration of the dispute under an arbitration provision in their contract. However, Sysco pointed to Seventh Circuit precedent that supported in-court proceedings to resolve the dispute.

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.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.