Federal Judge Gives Chevron Workers Back Pay

April 26, 2002 (PLANSPONSOR.com) - A San Francisco court sided with workers at a Richmond refinery who claimed that in 1999 their employer tricked them into retiring early, causing them to miss out on a lucrative buyout opportunity.

In early 1999, Chevron adopted a new early retirement program. Employees at the Richmond refinery, having got wind of the plan, began to ask managers about it.

Richmond refinery officials explained that the Richmond facility had to reduce staff, but would do so by attrition rather than by layoffs.

Relying on this, workers close to retirement age began to retire through May 1999. Officials continued to say there would be no retirement packages until May 28 when a generous buyout was announced.


The Chevron Texaco mechanics and machinists will be paid retroactively, the court ruled. The decision will go some way in ensuring that employees receive complete and honest information about changes their retirement benefits, according a news report in the San Francisco Chronicle.

US District Judge William Alsup awarded the workers who retired in 1999 the money they would have been eligible for had they left Chevron after the company announced its retirement incentives.

According to court papers, workers, prior to retiring, had questioned the refinery manager William Steelman about a possible buyout, but he had put them off, even after he agreed to offer buyouts to certain other workers.

The judge ruled that the oil refinery “actively misinformed its Richmond workforce by representing that a final decision had been made by Chevron when, in fact, Mr. Steelman knew or should have known that no final decision had been made.”

He added that as a fiduciary, Steelman had a duty under ERISA to:

  • not actively misinform employees about “the likely future of plan benefits”
  • to tell employees who asked that the company was giving “serious consideration” to changing benefits.

Alsup also denied awards to four other workers because they retired before Chevron had started to consider buyouts.