Possible SCOTUS Pick Hardiman Offers Pro-Worker ERISA Streak

Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...

By Jacklyn Wille

One judge thought to be on President Donald Trump’s short list for elevation to the U.S. Supreme Court could mean good news for workers involved in disputes over employee benefits.

Since his appointment to the U.S. Court of Appeals for the Third Circuit in 2007 by President George W. Bush, Judge Thomas M. Hardiman has signed on to several decisions favoring workers who attempt to enforce their rights under the Employee Retirement Income Security Act. He’s twice joined opinions offering a broad view of ERISA standing in disputes over medical payments, and in 2015 he added his name to a decision placing the burden of demonstrating administrative exhaustion on plan administrators rather than the participants challenging denied benefits.

If Hardiman is nominated to the Supreme Court and confirmed later this spring, he may be in a position to recuse himself from one high-profile ERISA dispute. Hardiman was on the three-judge panel that in 2015 refused to allow New Jersey hospital Saint Peter’s Healthcare System to run its pension plan as an ERISA-exempt church plan. That decision, along with two similar rulings by the Seventh and Ninth circuits, is currently under review by the Supreme Court, and the court’s ultimate decision could affect dozens of ongoing lawsuits and the pension benefits of more than 300,000 hospital workers.

Worker-Friendly Streak

Two of Hardiman’s ERISA rulings have affirmed the ability of health plan participants to assign the right to sue over plan benefits to their medical providers. N. Jersey Brain & Spine Ctr. v. Aetna, Inc., 801 F.3d 369 (3d Cir. 2015), held that standing to bring an ERISA lawsuit could be assigned even on an assignment form that didn’t specifically mention this right. Earlier this year, Franco v. Conn. Gen. Life Ins. Co., 647 Fed. Appx. 76 (3d Cir. 2016), built off that ruling to find that medical providers had standing to challenge an insurer’s methodology for determining service fees.

In one worker-protective decision, Am. Chiropractic Ass’n v. Am. Specialty Health, Inc., 625 Fed. Appx. 169 (3d Cir. 2015), Hardiman was on a panel that placed the burden of proving administrative exhaustion—a common way for ERISA plans to avoid liability for denied benefits—on the plan defendant, rather than on the worker seeking benefits.

Hardiman has been less friendly toward workers accusing companies of retaliating against them for benefits-related issues, joining two decisions ruling against workers who’ve tried to challenge their terminations under ERISA Section 510’s anti-retaliation provision. In particular, Edwards v. A.H. Cornell & Son, Inc., 610 F.3d 217 (3d Cir. 2010), held that Section 510 doesn’t protect a worker who is fired after making informal, unsolicited complaints about the way an employer runs its benefit plans.

Nomination Coming Soon

Trump has promised to unveil his nominee for the Supreme Court seat formerly held by Justice Antonin Scalia on Feb. 2. Other judges thought to be in the running are Neil Gorsuch of the Tenth Circuit and William H. Pryor Jr. of the Eleventh Circuit.

Hardiman could have a leg up on his rumored competitors, though. Since his appointment to the Third Circuit in 2007, he’s sat on the same court with Senior Judge Maryanne Trump Barry, who is the president’s older sister.

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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