Chrysler Worker Gets DOL Support in Pension Mismatch Case

By Jacklyn Wille

A Chrysler Group LLC retiree has the backing of the Labor Department in his quest to recover enhanced early retirement benefits.

The department argued in support of the retiree that workers who are denied benefits based on undisclosed plan terms should be able to pursue equitable claims against their plans, even if there’s no evidence of intentional deception ( Pearce v. Chrysler Grp. LLC Pension Plan , 6th Cir., No. 17-1431, amicus brief filed 7/28/17 ).

The DOL on July 28 filed an amicus brief supporting a Chrysler Group LLC retiree who sued the company for denying him enhanced early retirement benefits. The DOL urged the U.S. Court of Appeals for the Sixth Circuit to hold that when the terms of an Employee Retirement Income Security Act plan don’t match the terms of the summary plan description, plan participants can sue for equitable reformation of the plan document even if there’s no indication that the plan intentionally tried to deceive them.

This brief is one of the first ERISA amicus briefs filed by the DOL since the Trump administration took over in January. During the Obama administration, the Labor Department filed an average of 13 ERISA-related amicus briefs per year, including 15 filed in 2009 alone, according to a Bloomberg BNA analysis.

The Trump-era DOL has had a quieter start to its amicus program, with this brief coming about six months after the department signed onto a multi-agency amicus brief in a U.S. Supreme Court case involving ERISA’s church plan exemption. On July 12, the department filed another amicus brief asking the Sixth Circuit to block pension plan administrators from imposing strict requirements before accepting domestic relations orders that award benefits to a participant’s former spouse.

In this brief, the DOL is arguing for an expanded view of ERISA’s equitable remedies provision, which courts have used to award money to plan participants who wouldn’t otherwise be entitled to benefits under the terms of a given plan.

According to the DOL, the Chrysler retiree may be able to use ERISA’s equitable remedies provision to obtain additional pension benefits under the pension plan’s summary plan description—which didn’t match the less-generous terms of the plan document itself—even without showing that Chrysler intended to deceive him about his benefits. Earlier this year, both a magistrate judge and a federal district judge determined that the retiree’s inability to show an intent to deceive defeated his equitable claim under ERISA.

In objecting to this standard, the DOL emphasized the importance of summary plan descriptions, which the DOL said are “vital to achieving ERISA’s purposes” and are often the “only document a participant receives to explain her rights and responsibilities.” When a misrepresentation or omission in an SPD causes harm to a plan participant, a “possible equitable remedy is reformation of the plan document to meet the SPD’s promises.”

The brief was filed by DOL attorneys Nicholas C. Geale, G. William Scott, Thomas Tso, and Eirik Cheverud.

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

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