The title’s a bit of a nerdy inside lawyer joke - ERISA, the federal law that governs employee benefit plans, is infamous for its wide and broad preemption provision, which basically means that no state court actions get the chance to look at cases with ERISA implications, and even when the federal district courts are involved, the “discretion” standard in ERISA pretty much guts all claims. That’s generally seen as great for plan administrators, bad for plan participants (that means you, as the worker).
So, it’s news when the Sixth Circuit comes up with a ruling that says “Not so fast with the preemption, there.” The facts of the Thurman v. Pfizer, Inc. case are pretty straightforward, and I’ll let Jottings By An Employer’s Lawyer’s Michael Fox take it from here:
Dr. Thurman, a veterinary pathologist, interviewed for a job with
Pfizer and was told that if he accepted the position, at age 62 he
would be entitled to a pension in the amount of $3,100. He accepted and
later was told that the information he received was incorrect and his
monthly pension benefits would be about $816 a month. Thurman
sued seeking either the difference or for rescission and reliance
damages in the form of benefits he relinquished by leaving his prior
position (higher wage and stock options among others). The district
court held that his entire claim was preempted by ERISA.
The appellate court said that while his claim for the difference was preempted, the other claims weren’t. In cautioning employers, the court stated, “If adhering to promises regarding ERISA
governed plans proves too cumbersome for employers, then during the
recruitment process, those employers must simply be more careful before
informing potential employees of the ERISA governed benefits to which they might be entitled.”
Not surprisingly, Michael apparently thinks this isn’t very practical. My response to that is confusion. Is it really that difficult for an employer to know what benefits are available to new hires? And if it is, the answer isn’t “let them tell the employee whatever they want” but “don’t tell them anything except ‘we’ll have to look into that’” - and then, do so. I really don’t see the issue here at all. Employers ought to know what they’re offering their new hires, period.
Technorati Tags: thurman v. pfizer, sixth circuit, erisa preemption
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