Employer Cleared of Wrongdoing in Benefits Case

November 25, 2009 (PLANSPONSOR.com)A federal judge in Pennsylvania has rejected claims by an AK Steel Corp. employee that the company failed in its obligation to tell him that a break in service would render him ineligible for long-term disability benefits.

In doing so, Senior Judge Maurice B. Cohill Jr. of the U.S. District Court for the Western District of Pennsylvania threw out the fiduciary breach case filed by Richard W. Davis against AK Steel that alleged a violation of the Employee Retirement Income Security Act (ERISA).

According to the court, Davis never inquired about disability benefits before his continuous service had broken, and AK Steel’s duty to inform him about the possibility of applying for such benefits was never triggered. To the allegation by Davis that AK Steel breached ERISA by not giving him a plan document explaining the impact of a break in service on a worker’s benefits eligibility, Cohill said Davis had gotten plan information when he was hired in 1991 and had likewise received other benefits materials over the years.

According to the decision, injuries suffered by Davis in a 1999 car accident led to several periods when he stopped working. Davis applied for long-term disability payments in 2007, but was informed his service break rendered him ineligible. He then filed suit against the company.

The case is Davis v. AK Steel Corp., W.D. Pa., No. 2:08-406-MBC.