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United States Supreme Court Employment Law Cases
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Conkright v.
Frommert (08-810)
ERISA Plan administrator's interpretation is entitled to deference even
after reversal for violating ERISA (5-3).
Decided April 21, 2010
[Full text of opinion]
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Xerox employees sued their ERISA retirement Plan and
administrator challenging the method used by the Plan to calculate how their
current benefits are offset to reflect prior distributions. The employees
claimed that the Plan violated ERISA's provisions relating to summary plan
description, notice, and anti-cutback rules.
There were two appeals to the 2nd
Circuit. In the first appeal, the court held that the Plan had violated ERISA in
several respects, and remanded for fashioning a remedy. On remand, the Plan
administrator proposed a new interpretation of the Plan. The district court
declined to apply a deferential standard to this new interpretation, and adopted
instead an approach proposed by the employees. In the second appeal, the 2nd Circuit
held that the district court was correct not to apply a deferential standard on
remand, and that the district court's decision on the merits was not an abuse of
discretion. The US Supreme Court reversed (5-3),
holding that the district court should have applied a deferential standard of
review to the Plan administrator's new interpretation of the Plan on remand.
(The Court did not reach the question of whether the 2nd Circuit erred by
applying a deferential standard of review to the district court's decision.) This case is governed by Firestone Tire
& Rubber Co v. Bruch, 489 U S 101 (1989), which held that that an ERISA plan
administrator with discretionary authority to interpret a plan is entitled to
deference in exercising that discretion. The Court said that "a single
honest mistake" should not change that basic rule of trust law. The lower
courts made no finding that the Plan administrator had acted in bad faith or
would not fairly exercise his discretion to interpret the terms of the Plan, so
the Court rejected a "one-strike-and-you're-out" approach.
Case below: Frommert
v. Conkright, 535 F.3d 111 (2nd Cir 07/24/2008)
Question presented:
1. Whether the Second Circuit erred in holding, in conflict with decisions of this
Court and other Circuits, that a district court has no obligation to defer to an ERISA
plan administrator's reasonable interpretation of the terms of the plan if the plan
administrator arrived at its interpretation outside the context of an administrative
claim for benefits. 2. Whether the Second Circuit erred in holding, in conflict with decisions of other
Circuits, that a district court has "allowable discretion" to adopt any "reasonable"
interpretation of the terms of an ERISA plan when the plan interpretation issue
arises in the course of calculating additional benefits due under the plan as a result
of an ERISA violation.
Certiorari Documents:
Briefs on the merits:
Counsel:
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