Harps v. TRW Automotive (6th Cir unpublished 11/03/2009) Several retired employees sued their former employer alleging that the employer was obligated to provide lifetime medical benefits, without reductions, to retirees. The suit alleged violation of LMRA Section 301 and ERISA Section 502. The 6th Circuit, in an "unpublished" opinion, upheld the trial court's dismissal for failure to state a claim.

The court found that a collective bargaining agreement (CBA) between the employer and the UAW was unambiguous, and that it did not impose any health care obligations beyond the expiration date of the CBA. The CBA said, "This clause shall not be construed to convey any rights to those beyond the term of this agreement," and it defined "term" as referring to the expiration date. In addition, the court found that a shutdown agreement, signed by the employer and the union in connection with the shutdown of a plant, did not plausibly suggest an intent to provide vested retiree medical benefits.

Hitachi Inc v. Bowler (Massachusetts 11/04/2009) The employer sued Bowler for unjust enrichment alleging retirement money was mistakenly paid to Bowler. The trial court granted Bowler's motion to dismiss. The Massachusetts Supreme Judicial Court affirmed.

The court was asked to determine whether ERISA preempted the unjust enrichment action. (1) The court examined Congress's intent to determine whether a claim for unjust enrichment "relates to" the employer's benefit plan. The court identified the following issues for resolution: (a) whether the employer could demand interest on the overpayment, (b) whether the employer should indemnify Bowler for tax liability incurred because of the overpayment, and (c) whether the employer should reimburse Bowler's attorney and accountant fees. The court pointed out states would resolve these issues with different results. The court noted that the employer's action arose from the actual administration of the plan. (2) The court agreed with Bowler's argument that the unjust enrichment action in state court constituted an "alternative enforcement mechanism." The court rejected the employer's argument that a restitution claim under section 1132(a)(3)(B) required an ill-gotten gain, stating the law had shifted in this area and it was a question for a federal court to decide. The court concluded the unjust enrichment claim was preempted by the threat of inconsistent regulation relating to the administration of ERISA plans and would constitute an "alternative enforcement mechanism."

United States v. Rosenbaum (6th Cir 11/03/2009) Rosenbaum and others were principals in a maintenance services company that employed hundreds of illegal aliens, paid them in cash, and failed to pay relevant federal taxes. He entered a plea of guilty to conspiracy to defraud the United States and harbor illegal aliens, and to harboring over 100 illegal aliens. The trial court sentenced him to 120 months in prison. The 6th Circuit affirmed.

The sentence was at the top of the Federal Sentencing Guidelines. The trial court considered all of Rosenbaum's mitigating arguments. A lower sentence was permissible, but the trial court's logic was reasonable and a lower sentence was not required.

Swanson v. Hearst Corp (5th Cir 11/03/2009) Swanson sued the administrator of her employer's long-term disability plan under the Employee Retirement Income Security Act (ERISA), challenging the plan's decision to terminate her benefits. The trial court granted summary judgment in favor of the plan administrator. The 5th Circuit affirmed, concluding that Swanson failed to exhaust her administrative remedies. The court determined that a letter sent by Swanson's attorney was not sufficient to constitute an administrative appeal within the applicable 180-day limitations period, and that the letter was only an expression of "an intention to appeal." The court rejected the argument that the plan administrator was estopped from invoking Swanson's failure to exhaust administrative remedies as an affirmative defense.

Davis v. Biloxi Public Sch Dist (Mississippi Ct App 11/03/2009) Davis sued the public employer, asserting various state law claims as well as federal claims under 42 USC Section 1983. The claims related to Davis' discharge from his job as a teacher's aide at a public school, and many of the same legal and factual issues were raised in prior litigation. The trial court dismissed the case. The court affirmed, concluding that several of Davis' claims were barred under the doctrines of collateral estoppel and res judicata, and the remaining claims were barred under the applicable statute of limitations.

VanCleave v. Reelfoot Bank (Tennessee Ct App 10/30/2009) VanCleave sued the employer, a bank, under common law and for violation of the Public Protection Act (PPA) alleging retaliatory discharge for refusing to open an account that was contrary to applicable statutes and regulations. The trial court granted the bank's motion for summary judgment. The Tennessee Court of Appeals reversed.

A customer asked VanCleave to open an account with a check payable to the customer's employer in the customer's employer's name with the customer's employer's social security number, where the customer's signature would be required on any checks written on the account. The customer declined to sign a signature card, and VanCleave refused to open the account and was subsequently discharged.

Contrary to the trial court, the court found that the Bank Secrecy Act's (BSA) regulations (31 CFR section 103.34(b)(1)) required the bank to retain an original or copy of the document granting signature authority and information verifying the identity of the signer, if this was the bank's standard practice; which it arguably was. The court also noted that the BSA and its regulations were concerned with weighty public issues involving money laundering and tax evasion. The court stated a trier of fact could reasonably conclude that this regulation would have been violated had the account been opened in the manner the customer requested. The court rejected the trial court's ruling, that VanCleave was required to show an intent to protect the public as opposed to herself or the bank, in a case alleging retaliatory discharge for refusal to participate in illegal activities.

Anton v. SBC Global (6th Cir unpublished 10/29/2009) Two former sales representatives secured a large customer contract, and a dispute arose as to how they would be compensated. The sales representatives claimed they were owed sales commissions under an implied-in-fact contract. The employer agreed that there was a contract, but disputed the terms and the amounts due. A jury returned a verdict of $3,191,400 for one and $3,510,540 for the other.

In an "unpublished" opinion, the 6th Circuit rejected the employer's argument that a reasonable jury would have applied the employer's interpretation of the contract. The evidence must be viewed in a light most favorable to the employees. After a thorough review of the evidence, the court concluded that there was sufficient evidence to support the verdict.

McCullough v. AEGON USA Inc (8th Cir 11/03/2009) McCullough sued his former employer's defined-benefit pension plan under 29 USC Section 1132(a)(2) of the Employee Retirement Income Security Act (ERISA), alleging that various plan fiduciaries breached their fiduciary duties to the plan and engaged in prohibited transactions. The trial court granted summary judgment in favor of the plan. The 8th Circuit affirmed.

The employer's pension plan was substantially overfunded during the relevant time period. In Harley v. Minnesota Mining & Manufacturing Co., 284 F.3d 901 (8th Cir 2002), the 8th Circuit held that "Section 1132(a)(2) does not permit a participant in a defined-benefit plan to bring suit claiming liability under Section 1109 for alleged breaches of fiduciary duties when the plan is overfunded." Section 1109 subjects ERISA fiduciaries to personal liability for breaches of their fiduciary duty. The court concluded that Harley is still good law, and rejected the proposition that it was inconsistent with an intervening decision by the United States Supreme Court in Sprint Communications Co. v. APCC Services, Inc., 128 S.Ct. 2531 (2008). Applying Harley to both of McCullough's claims, the court affirmed.

Rasenack v. AIG Life Ins Co (10th Cir 11/02/2009) Rasenack sued the administrator of his employer's disability plan under the Employee Retirement Income Security Act (ERISA), challenging the administrator's denial of his claim for benefits. The trial court granted summary judgment in favor of the plan administrator, based on application of an "arbitrary and capricious" standard of review. The 10th Circuit reversed.

The plan administrator failed to timely process Rasenack's claim and administrative appeal, finally issuing a decision on the administrative appeal only after Rasenack filed suit. The administrator was vested with discretionary authority under the terms of the plan, which generally entitles a plan administrator to a deferential standard of judicial review. However, in Gilbertson v. Allied Signal, Inc., 328 F.3d 625 (10th Cir 2003), the 10th Circuit held that a plan administrator loses that entitlement when the administrator's delay in deciding a claim results in it being "deemed denied." Under Gilbertson, "not only must the administrator be given discretion by the plan, but the administrator's decision in a given case must be a valid exercise of that discretion."

The court held that Gilbertson is still good law, and was not abrogated by the 2002 amendments to ERISA regulations (in particular, 29 CFR Section 2560.503-1(k)(1)(2002)). Applying Gilbertson, the court held that the administrator's decision should have been reviewed de novo by the trial court. The court remanded for reconsideration by the trial court under that standard. The court declined to remand to the plan administrator, noting "[the administrator] had its chance to exercise its discretion and it failed to do so...."

Schachter v. Citigroup Inc (California 11/02/2009) Citigroup offered a voluntary employee incentive compensation plan that provides employees with shares of restricted company stock at a reduced price in lieu of a portion of that employee's annual cash compensation. Employees agree that, should they resign or be terminated for cause before their restricted shares of stock vest (two years after the purchase date), they would forfeit the stock and the portion of cash compensation they directed be paid in the form of the restricted stock. Schachter enrolled in the plan and then voluntarily terminated his employment prior to the vesting dates.

Schachter sued, claiming that the plan's forfeiture provision violated the California Labor Code sections which require that earned wages be paid promptly upon resignation, and prohibit agreements that purport to circumvent that requirement. The California Supreme Court upheld summary judgment for the employer.

The court found that as an at-will employee, Schachter was free to renegotiate his compensation at any time so that it would be part in cash and part in incentive compensation. Because his right to the stock never vested, it was not something that he "earned," so he has no claim under Labor Code Sections 201 or 202. The court specifically rejected Schachter's claim that his incentive compensation vested on a pro rata basis (such as happens with vacation pay). Because the stock was never earned, the agreement was not an attempt to circumvent the statute.

Sollis v. Local 234, TWU (3rd Cir 11/02/2009) The Secretary of Labor, on behalf of union member Johnson, sued the union for violation of the Labor Management Reporting and Disclosure Act (LMRDA) alleging wrongful disqualification of Johnson's slate of candidates for election as union officers. The trial court granted the union's motion to dismiss for lack of subject matter jurisdiction (Johnson's administrative complaint to the Secretary of Labor was not timely). The 3rd Circuit reversed.

Johnson filed a pre-election protest and a post-election protest. The administrative complaint to the Secretary was untimely with respect to the pre-election protest, but timely regarding the post-election protest. The trial court found that Johnson had just one opportunity to protest under the union's constitution, which in this case was the pre-election protest; alternatively, 3rd Circuit precedent required that timeliness be measured from the pre-election protest. Interpreting the union's constitution regarding election protests, the court found the constitution ambiguous: (1) a "complaint" need not mean "just one election protest;" (2) the provision did not specify whether protests must be filed pre- or post-election; and (3) no where did the union constitution bar a union member from filing a post-election protest because he had already filed a pre-election protest. Construing the union constitution liberally in favor of the rank and file members like Johnson, the court found the language of the constitution supported Johnson's interpretation as reasonable. The court distinguished the precedents relied on by the trial court, and reiterated that ambiguous constitutional provisions must be construed broadly in favor of complaining union members, whose interpretations need only be reasonable under the circumstances.

Steele v. Mara Enterprises, Inc (Ohio Ct App 10/29/2009) Steele sued the employer for promissory estoppel, wrongful discharge, and other claims. The trial court granted the employer's motion for summary judgment. The Ohio Court of Appeals affirmed.

Steele was a shareholder, director, and employee of the employer, and in addition was the trustee of a trust which was the majority shareholder of the employer. At a shareholder meeting all directors were replaced and Steele was discharged. (1) A promise that Steele would have a job for as long as the founder's wife was alive was not a clear and unambiguous promise for continued employment for a specific period. The court found that Steele was unable to create a genuine issue of material fact concerning the first element of a promissory estoppel claim. (2) Steele argued that his discharge violated a recognized public policy of a heightened fiduciary duty between majority and minority shareholders, where he was a shareholder, director, and employee of a closely held corporation. The court pointed out that the corporation did not owe a fiduciary duty, the majority shareholder did; Steele sued only the corporation, not the majority shareholder.

New Process Steel v. NLRB (Certiorari granted 11/02/2009) The NLRB has had only two Members (instead of the normal five Members) since the end of 2007. Near the end of 2007, there were still four Members, and they delegated their powers to a group of three. Everybody knew that only two of those three would be left at the end of the year.

The US Supreme Court has granted certiorari to review the judgment of the 7th Circuit, which held that the two-Member NLRB had the statutory authority to hear cases and issue orders regarding unfair labor practice charges.

Official question presented: "Does the National Labor Relations Board have authority to decide cases with only two sitting members, where 29 U.S.C. § 153(b) provides that "'three members of the Board shall, at all times, constitute a quorum of the Board'?"

Fort Worth Transportation v. Thomas (Texas Ct App 10/29/2009) Thomas sued the employer for breach of the CBA contract and other claims. The trial court granted Thomas's motion for summary judgment. The Texas Court of Appeals affirmed.

Thomas argued that the attendance policy in the operator handbook was part of the CBA and did not allow the employer to count time on (Family and Medical Leave Act) FMLA leave as an absence. The court found that the CBA did not define absence, the operator handbook excluded FMLA leave as an absence, the operator handbook referenced the CBA and was to be construed in accordance with the CBA, the operator handbook was a subsequent document to the CBA, and the operator handbook provided it was not an employment contract. Under the circumstances of this case, the court determined that the CBA and the operator handbook related to the same transaction because they set forth the terms and conditions of Thomas's employment. The court held that the CBA must be interpreted to exclude FMLA leave when calculating whether Thomas was absent from work for more than a year.

The DISSENT argued that a unilateral, nonbargained employee handbook could not create contractual rights and alter the unambiguous language of a CBA where the handbook specifically and plainly stated that it could not do so.

Garner v. State Dept of Education (Hawaii Ct App 10/30/2009) Garner sued the employer alleging underpayment of substitute teacher salary. The trial court granted partial summary judgment in favor of Garner. The Hawaii Intermediate Court of Appeals affirmed in part and reversed in part.

The court ruled that the trial court did not err in ruling that applicable law (HRS section 661-5) barred claims against the employer for back pay prior to November 8, 2000; the doctrine of equitable tolling did not apply. The court found that the per diem salary for substitute teachers (HRS section 302A-624(e)), as a pay-mandating statute, provided an alternative basis for invoking the trial court's jurisdiction under the "founded upon any statute" language in HRS section 661-1.

Greater Missoula Educators v. Child Start (Montana 10/30/2009) The union sued the employer alleging violation of the reduction in force provisions of the collective bargaining agreement (CBA) by refusing to arbitrate the reduction of 40 hours of employment for all employees. The trial court granted the union's motion to compel arbitration. The Montana Supreme Court affirmed.

The union agreed not to seek back pay or other financial reward in this suit. The employer argued the controversy was moot. The court agreed with the trial court that the issue of whether the grievance was moot was for the arbitrator to decide. The court found that at the time the trial court issued its order to compel arbitration the union maintained that the employer must arbitrate by the terms of the CBA, while the employer maintained it was not obligated to arbitrate under the CBA. The court noted that arbitrators have broad powers to fashion remedies.

Marion Center School v. Marion Center Association (Pennsylvania Cmnwlth Ct 10/30/2009) The union filed a grievance under the collective bargaining agreement (CBA) seeking three days of pay withheld from teachers where the statutory school year of 180 days was shortened by three days due to weather. The trial court sustained an arbitrator's award of back pay with interest in favor of the union. The Pennsylvania Commonwealth Court affirmed.

The employer argued the arbitrator's decision was not rationally derived from the CBA and violated public policy. The court stated that the arbitrator was not irrational to conclude that the inclusion in the CBA of a method to increase the teachers' pay for extra days worked, coupled with the absence of a method to decrease the teachers' pay for fewer days worked, implied that the teachers' pay could not be decreased for fewer days worked. Because Act 88 granted teachers the right to strike and the strike was timely settled allowing a 180 day school year, the court concluded it could not be against public policy for teachers to exercise that right granted by statute.

Powers v. Lexington-Fayette (Kentucky Ct App 10/30/2009) Powers sued the employer for retaliatory discharge in violation of Kentucky's Whistleblower Act (KWA) alleging her supervisor had committed numerous administrative violations. The jury found in favor of the employer. The Kentucky Court of Appeals affirmed.

The jury found that Powers had reported the violation of the KWA to an appropriate body or authority and that, by clear and convincing evidence, the report was not a material factor in Powers' discharge. The court found the report by Powers to her own agency satisfied the "any other appropriate body or authority" language of the KWA. Citing Workforce Development Cabinet v. Gaines, 276 SW3d 789 (2008), for the goals of liberally construing the KWA in favor of its remedial purpose and of giving words their plain meaning, the court rejected the employer's argument that the report must be made to third party entities with investigative authority for wrongdoing by public agencies.

Keyes v. North Carolina DOT (North Carolina Ct App 10/20/2009) Keyes appealed the trial court's decision affirming the State Personnel Commission's dismissal of Keyes for just cause. The North Carolina Court of Appeals affirmed in part and remanded.

Keyes left his assigned work as a flagger to respond to his spouse's request for help with a leaking water heater at home despite the employer's notification he had been selected for a random drug test that day as a transportation worker with a commercial driver's license (CDL). Keyes argued (1) he was not subject to a random drug test as a flagger and (2) the administrative law judge (ALJ) did not rule on whether his refusal was willful. The court held that the employer's interpretation that Keyes was an occasional driver according to its rules and regulations was not erroneous. Because the ALJ never reached the issue of willfulness and Keyes did not have the opportunity to present evidence on that issue, the court remanded for further hearing on the issue of willfulness.

Martins v. Univ of Mass Med Sch (Massachusetts Ct App 10/30/2009) Martins, after filing an administrative complaint with the Massachusetts Commission Against Discrimination (MCAD), sued the employer (among other claims) for violation of G.L. c. 151B and for violation of the Massachusetts Equal Rights Act (MERA) alleging discrimination (race and age) and retaliation. The trial court granted summary judgment in the employer's favor. The Massachusetts Appeals Court affirmed in part and reversed in part.

The point of law clarified in this case was whether a complainant seeking a judicial remedy for discrimination who satisfied his administrative requirements could bring parallel claims under the Massachusetts Equal Rights Act (G.L. c. 93, sections 102-103), in addition to his G.L. c. 151B claims in court. The court answered no. The Massachusetts Supreme Judicial Court previously established that the right to file a parallel MERA claim in court turned not on the proper exhaustion of administrative remedies, but on the availability of a remedy under c. 151B. The court stated that in Thurdin v. SEI Boston, LLC, 452 Mass 436 (2008), the Massachusetts Supreme Judicial Court held that where a c. 151B remedy was unavailable, the employee had the right to bring a MERA claim in the first instance in court, a result entirely consistent with the rule of preemption. The court noted a statement made in Thurdin to reconsider the exclusivity rule in cases where c. 151B was applicable, but that statement was dicta where the Supreme Judicial Court harmonized prior case law with Thurdin by indicating it was not changing the exclusivity rule in cases where c. 151B applied (452 Mass 436, at 458 n. 4).

Cox v. Standard Insurance Co (6th Cir 10/29/2009) Cox sued the employer for violation of ERISA alleging wrongful discontinuance of his long-term disability benefits. The trial court entered judgment on the administrative record in the employer's favor. The 6th Circuit affirmed.

The court considered the decision in the light of a conflict of interest, the employer both determined eligibility and paid benefits. The court found the evidence as a whole showed the employer's decision was the result of a principled and deliberative process. While the Social Security Administration (SSA) decided Cox was disabled, the court did not have any information in the record on the SSA's determination of Cox's disability. Without evidence of some abuse on the employer's part, the court concluded that the conflict of evidence factor was not enough.

State v. McPike (Wisconsin Ct App 10/29/2009) McPike, a police detective, was charged with drunk driving. An internal investigation was started, and his supervisor told him she was "administratively compelling" him to take a blood test. Nobody told McPike that a refusal would result in discipline or discharge. He submitted to the test, and also made incriminating statements. At his criminal trial, the court suppressed the test results and the statements. The Court of Appeals reversed as to the statements, and affirmed as to the test results.

(1) Garrity v. New Jersey, 385 US 493 (1967) held that when an officer makes statements under "threat of removal from office," those statements cannot be used in a criminal trial because that would violate the right against self-incrimination. The court decided that McPike's case did not involve an express threat of termination, and there was no police policy that refusal would lead to termination. Therefore, the statements were not involuntary within the meaning of the Garrity case. (2) The blood test was inadmissible evidence due to a Wisconsin statute.

Harris v. City of Santa Monica (California Ct App 10/29/2009) Harris sued the public employer, asserting a pregnancy discrimination (discriminatory discharge) claim under California's Fair Employment and Housing Act (FEHA). Harris prevailed after a jury trial. The court reversed, remanding for a new trial. The court concluded that the jury was incorrectly instructed on the "mixed-motive" theory, because the jury was not instructed that the employer could prevail by showing it would have taken the same action even absent discriminatory animus.

Kitsap Co Deputy Sheriff's Guild v. Kitsap Co (Washington 10/29/2009) Dissent: http://case.lawmemo.com/wa/kitsapcodissent.pdf

The public employer appealed the trial court's decision declining to vacate a grievance arbitration award. The award reinstated a deputy discharged for alleged misconduct (including untruthfulness). The appellate court below reversed, based on its determination that the arbitration award violated public policy. The court reversed.

The court had not yet explicitly adopted the public policy exception as a basis for vacating a grievance arbitration award. The court took that opportunity here, concluding "[w]e now join the federal and other state courts in adopting the narrow public policy exception to enforcing arbitration decisions." The court noted that several lower appellate court decisions have followed or made reference to the public policy exception. Applying that exception to the facts of this case, the court concluded ultimately that the arbitration award reinstating the deputy didn't violate an explicit, well defined, and dominant public policy. The court noted that "Washington statutes prohibit making false statements to a public officer but there is no statute or other explicit, well defined, and dominant expression of public policy that requires the automatic termination of an officer found to have been untruthful."

Three DISSENTERS argued that the award did violate public policy.

Price v. Southwest Airlines (New York App Div 10/29/2009) Price filed a complaint with the State Division of Human Rights (SDHR) alleging race discrimination (disparate treatment and hostile work environment) and constructive discharge. Price appealed the decision of the SDHR finding she failed to prove her claims. The New York Appellate Division affirmed.

Price did not establish disparate treatment with respect to evaluations, posting of commendation letters, or reporting of parking in handicapped spots. The court found the incidents alleged to create a hostile work environment were time barred, occurring more than a year before she filed her complaint.

Cirilli v. Country Insurance (Wisconsin Ct App 10/28/2009) Cirilli sued the employer for insurance commissions allegedly unpaid at termination of his employment. The trial court denied the employer's motion to compel arbitration. The Wisconsin Court of Appeals reversed.

(1) The court determined that Cirilli's claim fell within the scope of the employer's arbitration agreement. The court rejected the argument that the employer's release of any claims or defenses to non-payment of commissions, provided in a settlement and release resolving prior litigation, rendered the employer's arbitration agreement inapplicable. The court reasoned that determination of the issue whether the employer had released any claims or defenses "requires an analysis of the merits of the dispute, resolution of which is to be considered exclusively in arbitration."

(2) Cirilli also asked the court to apply issue preclusion based on a litigation judgment (involving another plaintiff) which incorporated an arbitrator's finding that the releases barred all of the employer's defenses to payment of the termination commissions. The court held that the effect of the prior judgment went to the merits of the dispute, and is an issue to be decided in arbitration rather than by the court.

Lewitton v. ITA Software, Inc (7th Cir 10/28/2009) Lewitton sued the employer for breach of employment contract alleging that the employer prevented him from exercising his options to purchase shares. The trial court granted Lewitton's motion for summary judgment. The 7th Circuit affirmed.

Lewitton supervised the development and marketing of a new travel distribution system. The determinative question was whether the employment contract unambiguously allowed Lewitton to exercise options for all the shares he accumulated during his 25-month tenure with the employer. The contract granted 200,000 options vesting at a rate of 5,660 per month and provided up to 150,000 of the options could be subject to forfeiture based on revenue goals during an "assessment period," which could be deferred. The court found that "materially deferred" was unambiguous and meant "significantly delayed," particularly where the contract used the terms "defer" and "delay" interchangeably. Because the employer conceded that the product had not been produced, the court agreed with the trial court that the "assessment period" never began, and the forfeiture provision did not apply.

Stahl v. New Jersey Dept Human Svcs (New Jersey App Div 10/27/2009) Stahl sued the public employer, asserting state law claims for retaliation and sexual orientation-based hostile environment harassment. The trial court granted summary judgment in favor of the employer. The court affirmed, concluding that Stahl's claims were untimely under the applicable two-year limitations period. The court rejected Stahl's argument that her claims were subject to the continuing violation doctrine.

Standard Insurance Co v. Morrison (9th Cir 10/27/2009) Mont. Code Ann. Section 33-1-502 requires its insurance commissioner to "disapprove any [insurance] form...if the form...contains...any inconsistent, ambiguous, or misleading clauses or exceptions and conditions which deceptively affect the risk purported to be assumed in the general coverage of the contract...." Montana's insurance commissioner has interpreted this statute as requiring him to disapprove any insurance contract containing a "discretionary clause." Typically, such clauses confer upon the insurer full discretion and authority to review claims for benefits and interpret the terms and provisions of its insurance plan.

The 9th Circuit held that the commissioner's practice of disapproving any insurance contract containing a discretionary clause is not preempted by ERISA. Applying the two-part test set forth in Kentucky Ass'n of Health Plans, Inc. v. Miller, 538 US 329 (2003), the court concluded that the practice fell within the scope of ERISA's savings clause (29 USC Section 1144(b)(2)(A)). More specifically, the court concluded that the commissioner's practice 1) was specifically directed toward entities engaged in insurance; and 2) substantially affected the risk pooling arrangement between the insurer and the insured.

Perry v. Sheet Metal Workers (7th Cir 10/27/2009) Perry sued the pension fund for violation of ERISA alleging he was denied benefits. The trial court granted summary judgment to the pension fund. The 7th Circuit affirmed.

Perry sought 8.25 years of pension credit for working as an instructor for an apprenticeship training program. The training program did not make contributions to the pension fund on Perry's behalf. The court found that Perry did not establish that the training program was required to make contribution as a "covered employer" under the pension plan. (The court reminded litigants to ask the trial court to enter a proper Rule 58 judgment on a separate document.)

Butler v. Village of Round Lake (7th Cir 10/27/2009) Butler was a police sergeant who stopped working after being diagnosed with chronic obstructive pulmonary disease. He applied for a disability pension, and the police pension board held a hearing at which Butler testified that his pulmonary condition made it impossible to do the required duties such as chasing a suspect or wrestling with an unruly one. He submitted physicians' statements which indicated that he was permanently disabled from police service, and could not run or engage in strenuous activity. The pension board found him to be disabled and awarded benefits.

Later, Butler sued his former employer under the Americans with Disabilities Act (ADA). The trial court and the 7th Circuit held that Butler was judicially estopped to claim that he could have performed the essential functions of his job with or without an accommodation.

Claiming disability benefits and asserting ADA claims are not always mutually exclusive, but a sworn assertion that one is "unable to work" negates an essential element of an ADA case unless the employee offers a sufficient explanation. Cleveland v. Policy Mgmt Sys Corp, 526 US 795 (1999). For an explanation to be sufficient, it must warrant a juror's concluding that the employee could perform the essential functions of the job with or without an accommodation. Here, Butler offered no evidence that he could have performed the essential functions of police work during the relevant time frames. Although the pension board did not consider whether an accommodation would have permitted Butler to continue working, there was no accommodation that would have sufficed.

Delay v. Rosenthal Collins Group LLC (6th Cir 10/27/2009) After Delay was discharged from his job, the Commodities Futures Trading Commission sued him for alleged violations of the Commodities Exchange Act (CEA). Delay prevailed in that suit, and then brought a state-law claim against his former employer seeking indemnification for his legal expenses.

The 6th Circuit held that Congress did not intend to displace the state-law indemnification rights (if any) of parties who successfully defended against claimed violation of the CEA. There have been cases in other circuits holding that state-law indemnification claims for expenses related to federal securities law violations are preempted or incompatible with federal law, but those cases involved wrongdoers. The court found that allowing Delay, who was not proved to be a wrongdoer, to enforce a state-law indemnification right would not tend to frustrate the purposes of the CEA.

Myers v. Trendwest Resorts (California Ct App 10/26/2009) A jury returned a defense verdict on Myers' s claim that she had been sexually harassed in violation of California's Fair Employment and Housing Act (FEHA). The trial court denied a motion for judgment notwithstanding the verdict, and the California Court of Appeal affirmed.

Myers claimed that the employer was estopped from denying that her manager sexually harassed her because the employer's statement of undisputed facts, made for purposes of summary judgment, admitted she had "suffered severe sex harassment." The Court of Appeal held that, "There is no merit to Myers's contention that [the employer's] statement of undisputed facts made for purposes of summary judgment constituted a judicial admission of the facts contained therein." The court explained that judicial admissions may be made in a pleading, by stipulation during trial, or by response to a request for admission. However, "neither a motion for summary judgment nor its accompanying statement of undisputed facts constitutes pleadings within the meaning of" the relevant statute listing the "pleadings" allowed in civil cases. The employer's admission was made solely for the purpose of seeking a dismissal as a matter of law, and is a concession only for purposes of the summary judgment motion. It is neither evidence nor a judicial admission.

The court also found that Myers waived her claim that there was a lack of substantial evidence to support the verdict. This was because Myers's brief focused exclusively on her own evidence and ignored the evidence favorable to the employer, including directly contradictory evidence.