Compliance February 3, 2006

State Law Claims are Valid for Employees No Longer Participants

February 3, 2006 (PLANSPONSOR.com) - The US District Court for the Western District of New York has remanded the state law claims of employees who no longer qualified as pension plan participants back to state court .
Reported by

BNA reports that, though the employer had the claims removed from state court saying they were preempted by the Employee Retirement Income Security Act (ERISA), the employer had stopped contributing to its pension plan and admitted the employees were not entitled to any benefits. The court said the fact that the employees did not meet the requirements of ERISA Section 501(a) meant they were not entitled to ERISA’s civil enforcement provisions.

In addition, the court said the award of attorney’s fees to the employees due to the employer’s improper removal of claims from state court was inappropriate.   According to the court, the fact that the employees could not afford the cost of necessary litigation was insufficient reason for the award.

The case is Bialy v. Honeywell International Inc., W.D.N.Y., No. 04-CV-0980E(Sc), 1/24/06.

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