American Bar Association Beats Pension Whistle-Blower’s Lawsuit

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By Jacklyn Wille

An American Bar Association employee who said he was fired for blowing the whistle on mismanagement of the association’s pension plan lost his appeal before the U.S. Court of Appeals for the Seventh Circuit ( Trujillo v. Am. Bar Assoc. , 2017 BL 311203, 7th Cir., No. 16-3612, 9/5/17 ).

The employee, who sought $800,000 in damages from the ABA after he was removed from his position as plan administrator and later terminated, wasn’t authorized to challenge these actions under the Employee Retirement Income Security Act, the Seventh Circuit held Sept. 5. That’s because he wasn’t a plan participant or beneficiary, and after his removal as plan administrator, he wasn’t a plan fiduciary either, the court said.

The case asks whether ERISA authorizes a former plan fiduciary to sue for violations of the statute. The Second, Sixth, and Eighth circuits have prohibited ERISA lawsuits by former plan fiduciaries, while the Fourth and Ninth circuits have issued conflicting opinions.

Here, the Seventh Circuit said the majority position represented a “fair reading” of the ERISA statute. However, it was unnecessary to adopt one approach over another, the court said, because the ABA employee didn’t bring his lawsuit in a fiduciary capacity.

Despite upholding the dismissal of the employee’s ERISA claim, the Seventh Circuit ordered a federal court to reconsider his state law tort claim. According to the Seventh Circuit, the district court was wrong to conclude it lacked jurisdiction over that clam.

The court’s unpublished opinion was joined by Chief Judge Diane P. Wood and Judges William J. Bauer and Frank H. Easterbrook.

ABA employee Robert Trujillo represented himself without assistance from counsel. Seyfarth Shaw LLP represented the ABA.

To contact the reporter on this story: Jacklyn Wille in Washington at jwille@bna.com

To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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