Watson Wyatt Worker Wins Award after Early Plan Withdrawal

November 27, 2007 (PLANSPONSOR.com) - A federal judge in Connecticut ruled that a former Watson Wyatt & Co. employee can recover $14,223 in retirement plan losses stemming from her early withdrawal taken when she was fired from the consulting firm in May 2003.

Senior District Court Judge Ellen Bree Burns of the U.S. District Court for the District of Connecticut ruled that plaintiff Nicole Pappas was entitled to $13,827.50 in taxes and early withdrawal penalties and $394.78 for a matching employer contribution she missed when she left the company.

However Burns refused to award Pappas the $30,041.41 in interest and appreciation Pappas sought, saying lost investment earnings are not the type of compensatory damages that can be recovered under federal workplace discrimination laws.

Pappas sued Watson Wyatt, alleging her firing violated Title VII of the Civil Rights Act and a jury agreed. According to the Burns ruling, the two sides agreed that the jury’s verdict entitled Pappas to $77,688 in damages, representing back pay and a bonus Pappas would have received had she not been fired.

Pappas contended she was also entitled to the additional $44,264 for the plan losses.

Burns said in the ruling that Pappas withdrew approximately $72,000 from her retirement account to pay for household expenses during the approximately seven months she was unemployed after leaving Watson Wyatt.

“A jury could conclude that Plaintiff’s need to withdraw money from her account was reasonably foreseeable and anticipated as the natural consequence of the Plaintiff’s unlawful termination. It was also reasonably foreseeable that the Plaintiff would be forced to pay a penalty and forego her employer’s matching contribution upon invading her retirement account after her unlawful termination,” the court said.

The case is Pappas v. Watson Wyatt & Co.,D. Conn., No. 3:04CV304 (EBB), 11/20/07.