Deals & People March 19, 2012

Wilkes Joins The Wagner Law Group

Stephen Wilkes joined The Wagner Law Group in its San Francisco office. 
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Wilkes has more than 30 years of experience in employee benefits, related securities law and general financial services. Wilkes joins The Wagner Law Group from Drinker, Biddle & Reath, LLC.

With new sets of fee disclosure regulations taking effect on July 1 and August 31, Wilkes said he expects to see a lot of matters requiring the firm’s legal counsel and insight.

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The Wagner Law Group specializes in ERISA, employee benefits and executive compensation, estate planning and administration, and employment, labor and human resources law. 

Compliance March 19, 2012

Employer Wins Case Regarding Mistaken SPD Information

Former Northrop Grumman employees failed to prove that the company intended to mislead employees with a contradiction from plan terms in its summary plan description (SPD).
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In addition, the plaintiffs conceded that they did not rely on any of the misleading information in the SPD when deciding whether to retire, the 9th U.S. Circuit Court of Appeals found.   

The appellate court had previously sent the case back to a federal district court after finding the ambiguity between the SPD and the plan document being enforced by plan administrators created a triable issue. The district court again granted summary judgment for Northrop Grumman (see “Participants not Due Additional Benefits Based on Defective SPD”).    

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On appeal, the 9th Circuit noted that the Supreme Court’s resolution of CIGNA Corp. v. Amara in 2011 overruled, in relevant parts, its two prior decisions that had treated SPD language as if it were an enforceable part of the retirement plan. In holding that the SPD  language  was  not  part  of  the  plan,  the  high court  made  it clear  that  “summary  documents,  important  as  they  are,  provide communication  with  beneficiaries  about  the  plan,  but that their statements do not themselves constitute the terms of the plan for purposes of the Employee Retirement Income Security Act (ERISA) § 502(a)(1)(B), the 9th Circuit pointed out in its opinion.  

The appellate court concluded that the committee may  have  a  duty  to  enforce  the  terms  of  the  plan, but the terms of an SPD are not the terms of the plan.  

The opinion is available at http://www.ca9.uscourts.gov/datastore/opinions/2012/03/16/10-55161.pdf.

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