Supreme Court Denies AT&T Benefits Interference Case

December 4, 2007 ( - The U.S. Supreme Court has declined to review a federal appelate court ruling that a group of former AT&T Corp. employees had no remedy under the Employee Retirement Income Security Act for its alleged interference with their pension benefits, according to BNA.

The news report from BNA said, the petition for Supreme Court review asked it to decide whether the equity enforcement power of ERISA Section 502(a)(3) should be considered in cases of a violation of Section 510 even if that would qualify aggrieved employees for present or future monetary benefits that would not be available under Section 502(a)(3).

In addition, the court was asked to decide if benefits can be awarded to employees under ERISA Section 502(a)(1)(B) when an element of monetary relief prevents correction of ERISA Section 510 violations under ERISA Section 502(a)(3), BNA said.

In May, the 3rd U.S. Circuit Court of Appeals ruled that back pay and other remedies sought by the former AT&T Corp. employees were not “equitable” under Section 502(a)(3) of ERISA, therefore the employees had no remedy for the alleged Section 510 violation, according to the news report.

The plaintiffs in the case argued that AT&T’s decision in 1995 to adopt a plan that placed restrictions for eight months on the ability of employees at its subsidiary, Paradyne Corp., to transfer to other divisions of AT&T interfered with their ability to accrue pension benefits under AT&T’s plans.

The AT&T plans entitled participants to “bridging rights” only if they returned within six months, the BNA report said.

The appellate court agreed with the district court that the employees had no remedy under ERISA Section 502(a)(1)(B) which only provides relief for violations of the terms of a benefit plan because the employees had not alleged such a violation. The appellate court also agreed with the lower court that the back pay requested by the employees was not available as an equitable remedy under ERISA Section 502(a)(3).