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Court rules company violated ERISA

| Sep 1, 2016 | ERISA |

An insurance company has been ordered in court to pay $5.5 million to a hotel and its employees on the grounds that it violated its fiduciary duties in connection with the Employee Retirement Income Security Act of 1974. Workers in Houston who may be in similar circumstances might be interested in the case.

According to court records, Unite Here Health kept $5.5 million in excess assets after Greenbrier Hotel Corp. terminated its health care plan with the company. Greenbrier said that Unite Here should have turned the assets back over to it and its self-funded health plan. Unite Here said that transferring the funds would violate ERISA. The insurer claimed that it would displace money spent for employee benefits. The court said that there was no question that Greenbrier would use the money for employee benefits.

According to the U.S. District Court for the Southern District of West Virginia, Unite Here amended documents to support its position. The court called those amendments discriminatory and illegal.

ERISA deals with employee rights to pension or retirement funds. While in this case an employer acted to protect its employers against the insurance company, in other cases, the company an employee works for might be violating its fiduciary duty by withholding funds that the employee is entitled to. There are several steps employees may take in these circumstances. They might want to consult an attorney so that they are clear about their rights. Next, an employee might try to resolve the situation in the workplace. However, if this is not possible or is unsuccessful, the next step might be a lawsuit against the company.

Source: Bloomberg BNA, “Unite Here Must Pay $5.5M to Hotel Employees Over ERISA Breach,” Carmen Castro-Pagan, Aug. 30, 2016

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