Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...
Feb. 13 — Guardian Life Insurance Co. of America properly rescinded a company's long-term disability policy after discovering that the company made misrepresentations about its workforce, the U.S. Court of Appeals for the Ninth Circuit held.
According to the court, the company claimed it had two employees. The court agreed with Guardian that one of the company's two workers, Melissa Alexanians, failed to qualify as an employee under the Employee Retirement Income Security Act, because Alexanians worked at a separate facility for only four months, during which time she controlled her own work schedule and was paid only by commission.
Given this, the court found that Guardian didn't err in rescinding the company's disability policy based on the company's “material misrepresentation” about Alexanians's employment status. Guardian determined that, without Alexanians as an employee, the company had only one full-time employee and thus was ineligible for a group disability policy.
The court's unpublished Feb. 12 ruling was joined by Judges Consuelo M. Callahan, Paul J. Watford and John B. Owens. The ruling affirmed a 2012 decision of the U.S. District Court for the Central District of California.
Guardian was represented by Ogletree Deakins Nash Smoak & Stewart PC. The company was represented by Arkin Law Firm.
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