Blogging Employee Benefits

January 19, 2006

8th Circuit Reverses District on Wal-Mart ERISA Case

Filed under: Collective Bargaining, Litigation — Fuguerre @ 4:13 pm

“[I]t is possible to determine whether the SPD’s terms are understandable and consistent with the plan documents without reference to substantive labor law.”

The 8th Circuit Court of Appeals has reversed a district court’s dismissal of an ERISA lawsuit, remanding the case for further proceedings on the suit’s claims. [Frank Lupiani v Wal-Mart Stores, CA8, No. 04-1392 (1/19/06)]

The dispute arose in connection with a unionization attempt by Wal-Mart employees. The union election was not held as the employees instead brought charges against Wal-Mart before the National Labor Relations Board, claiming that unionization efforts were improperly undermined by Wal-Mart’s Union Exclusion Clause in its 401(k) plan, profit-sharing plan, and health and welfare plan. Settlement discussions involving the NLRB are said to be in progress.

Separately, the employees brought a lawsuit under ERISA, claiming that the plans’ summary plan descriptions (SPDs) were misleading and inaccurate. The plaintiffs also argued that Wal-Mart violated fiduciary duties by placing the union exclusion in Associate Benefit Books.  The employees sought injunctive relief, monetary damages, and attorneys’ fees.

The District Court for the Western District of Arkansas dismissed the ERISA complaint, concluding that it lacked subject matter jurisdiction due to preemption by the primary jurisdiction of the NLRB under the National Labor Relations Act.  The 8th Circuit has reversed that dismissal, finding no conflict between ERISA and NLRA with respect to the claims raised. Although the plaintiffs relied on the plans’ union exclusion clause for actions still being addressed by the NLRB, the determination of whether the SPD and other plan documents satisfy ERISA is a separate issue subject to the federal court’s jurisdiction.  Similarly, the issue of ERISA fiduciary violation is separate from a decision as to whether the union exclusion clause violates NLRA.


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