Participants not Due Retirement Benefits on Wages not Paid

February 19, 2010 ( – A federal court has found that an employer owed no fiduciary or recording obligations under the Employee Retirement Income Security Act (ERISA) for hours allegedly worked but not paid.

U.S. District Judge Donetta W. Ambrose of the U.S. District Court for the Western District of Pennsylvania, in dismissing the ERISA claims, pointed out that the document for West Penn Allegheny Health System’s retirement plan provided that benefits would be calculated based on compensation, which was defined as annual wages as reported on participants’ W-2 forms. Ambrose cited several similar court cases which found that wage and hour violations cannot be remedied through ERISA unless the ERISA plans tie benefits to wages earned and not to wages actually paid.

The plaintiffs claimed West Penn violated the Fair Labor Standards Act (FLSA) by not paying them for meal breaks during which they actually worked, and that by not crediting their retirement plan accounts for these unpaid hours, the health system violated ERISA and breached its ERISA fiduciary duties.

The court also found the plaintiffs’ claims under the Racketeer Influenced and Corrupt Organizations Act (RICO) to be time-barred, saying their allegations were vague and ambiguous and they acknowledged they did not discover their injuries within RICO’s four-year statute of limitations.

The case is Henderson v. UPMC, W.D. Pa., No. 09-1871, 1/11/10.