Judge Backs Employer for Benefits Forfeiture

February 8, 2006 (PLANSPONSOR.com) - A federal judge in Illinois has rejected allegations that an employee was due significantly higher benefits after being promised them by one of the employer's executives.

US District Judge Amy St. Eve of the US District Court for the Northern District of Illinois threw out a lawsuit filed by Wendell Berg against his former employer, BCS Financial Corp. Because Berg had misled the company into believing that he was promised the higher benefits, the company had every right to decide that he had forfeited the benefits altogether.

There was no evidence that the executive who Berg said had promised the additional benefits actually had the authority to do that, St. Eve said.

According to the opinion, Berg was allowed to resign in March 2003 after the situation was discovered. The plan administrator and the administrative committee concluded that Berg’s actions in misleading the company about his promised benefits level constituted embezzlement, were grounds for termination for cause and properly merited a forfeiture of benefits, the court said.

The case is Berg v. BCS Financial Corp., N.D. Ill., No. 04 C 7922, 2/2/06.