ERISA & ERISA Litigation

Overview

Employee benefit plans and the laws that govern them are inherently complex and constantly evolving. By combining substantive knowledge in employee benefits laws with the talents of experienced litigators, Arent Fox provides clients with the requisite tools, resources and experience for success.

ERISA Litigation Practice

We have witnessed an explosion in litigation involving employee benefit plans in recent years – including class actions – and there is no sign that this trend is letting up. Plaintiffs’ class action lawyers are constantly “trolling the waters” for new kinds of ERISA actions to file. The cash balance plan age discrimination cases of yesterday are giving way to today’s securities lending and excessive fee cases, and the ever present stock drop cases. The way to mount a successful defense in complicated ERISA litigation is with attorneys who have the substantive knowledge of employee benefits law and the litigation skills and experience to be able to put that knowledge to work.

Our ERISA litigation attorneys possess that critical blend of knowledge and experience. We are a relatively small group of five attorneys with more than 50 combined years of specialized ERISA experience. Two of our ERISA litigation partners spent more than 20 years between them in senior positions at the Pension Benefit Guaranty Corporation. This group of attorneys runs every ERISA litigation matter the firm handles, utilizing additional resources from the firm’s general litigation, employee benefits, and tax practices when necessary. This unique team approach to ERISA litigation ensures that clients get the best of both worlds as we combine the unparalleled skills of lawyers with nationally recognized technical experience with tough litigators who employ creative “outside the box” thinking to develop successful litigation strategies. Even our opposing counsel have described us as “formidable.”

Our attorneys are experienced in all aspects of ERISA, as well as the Internal Revenue Code, the Bankruptcy Code, the Family and Medical Leave Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act and other laws affecting employee benefit plans. We have handled a wide variety of benefit issues arising under these statutes in connection with defined benefit pension plans (including cash balance plans), defined contribution pension plans, ESOPs, and health and welfare plans.  

By evaluating our clients’ strategic goals at the outset of a case, and continually throughout it, our litigators always have their “eye on the prize.” As a result, we are able to navigate our clients through complex litigation efficiently and effectively.

We are particularly suited to handle complex benefit issues faced by companies that are confronting bankruptcy or are in financial distress. We regularly help companies navigate this specialized area of the employee benefits world, both as special pension counsel in bankruptcy cases and outside of bankruptcy.

The ERISA litigation team has defended employers, employee benefit plans and fiduciaries in federal trial and appellate courts throughout the country. Our ERISA litigators have also briefed and/or argued more than a dozen cases before the United States Supreme Court, including PBGC v. LTV Corp., and Concrete Pipe & Products of California, Inc. v. Construction Laborers Pension Trust.

Our recent cases include:

• Obtaining a judgment in favor of  Monsanto Company and its cash balance pension plan in a class action challenging the plan’s provisions as age discriminatory
• Obtaining a judgment in favor of W. R. Grace & Co. and the fiduciaries of its 401(k) plan in a class action in which the plaintiffs contended that the fiduciaries breached their ERISA duties by selling the plan’s employer stock
• Defending the fiduciaries of the W. R. Grace & Co. 401(k) plan in a class action alleging breaches of fiduciary duty in connection with the plan’s investment in employer stock, which lead to a settlement for a small fraction of the amount demanded
• Successfully defending Rand McNally & Co. and Quebecor World (USA), Inc. in a class challenge contending that a cash balance pension plan discriminated on the basis of age
• Achieving a precedent-setting victory in a class action involving the cash balance pension plan of ARINC Incorporated, in which the plaintiffs alleged that the plan’s benefit formula discriminated on the basis of age in violation of ERISA
• Defending individual fiduciaries of the Retirement Program of LV Ventures, Inc. in a fiduciary breach lawsuit brought by the government, which resulted in a settlement to which our clients contributed nothing
• Representing Mercedes Homes, Inc. in related benefit claims, a DOL investigation and an IRS audit, all relating to its ESOP
• Achieving favorable settlements and litigation results as outside counsel to the PBGC in the Global Crossing and Cone Mills bankruptcy proceedings and related litigation
• Defending Westmoreland Coal Company in a multiemployer pension plan arbitration proceeding for withdrawal liability, leading to a settlement for less than half of the amount demanded
• Defending various employers in actions alleging that they terminated employees to prevent them from becoming eligible for retirement benefits, in violation of ERISA
• Defending various employers and plans in actions for benefits under employee benefit plans
• Representing numerous employers seeking to terminate their pension plans before the PBGC
• Assisting various employers in obtaining waivers of the minimum funding obligation to their pension plans from the Internal Revenue Service (IRS)
• Representing numerous employers in negotiations with PBGC arising from its “early warning program”
• Representing debtors, secured creditors, and official committees of unsecured creditors in dealing with PBGC issues in bankruptcy

ERISA Transactional Practice

Arent Fox's transactional ERISA lawyers regularly advise clients on benefit issues related to ERISA and other statutes that regulate Employee Stock Ownership Plans (ESOP's), 401(k) plans, defined benefit pension plans, health and welfare plans (including COBRA and HIPAA), executive deferred compensation programs (Section 409A of the Internal Revenue Code), severance programs and fringe benefit plans. We design and draft all types of employee benefit plans, and advise both for-profit and nonprofit clients on compliance rules.

We also develop practical solutions for fixing broken plans, particularly when a client has been sold an “off-the-shelf” program that does not meet its business objectives, and we have been very successful in negotiating practical solutions with the IRS when employers have discovered operational problems with their benefit plans.

We have expertise in the Internal Revenue Code, applicable Department of Labor regulations and all other laws relating to employee benefits. We normally handle pension and welfare benefit plan matters on behalf of employers, plan fiduciaries, and sometimes the plans themselves. Arent Fox serves as outside counsel to sponsors of many large and small multiemployer, multiple employer and single-employer plans. We also serve as plan counsel to a number of pension and health plans, some of them governmental plans.

Some representative activities include:

• Advising clients with respect to employee benefit issues in the context of mergers, acquisitions and office or plant relocations, such as plan coverage issues during the transition period following an acquisition and/or plan partial termination issues, and undertaking due diligence with respect to the target entity's benefit programs.
• Attending trustee meetings and providing advice on questions raised by the executive management team, trustees, plan administrators, plan actuaries, plan accountants, investment advisors and other service providers concerning the administration of the plan.
• Advising clients on strategies for permitting employees to voluntarily retire through the implementation of a subsidized early retirement or “window” program.
• Advising clients on the impact of the “Golden Parachute” rules and compensation deduction limitations in the context of developing executive incentive programs.
• Drafting descriptive materials with respect to the plans of a major trade association, including preparing information periodicals that are regularly sent to members concerning developments in the employer's program and general developments in the law that may affect plan participants.
• Advising clients on the federal and state law requirements related to multiple employer welfare arrangements (MEWAs), the funding of welfare arrangements (including voluntary employees' beneficiary associations or VEBAs), the fiduciary and prohibited transaction implications of receiving income for the endorsement of health insurance programs and, as our clients have moved into programs with more extensive managed care aspects, the structuring of plans and service provider contracts so as to minimize potential sponsor liability.
• Assisting clients with the implementation of nonqualified retirement programs to provide highly compensated employees with a subsidy to make up for the “lost” benefits resulting from the various Internal Revenue Code limitations on the amount of benefits payable under tax-qualified programs, as well as with other executive compensation vehicles subject to the complex rules under Section 409A (including “Rabbi Trusts”).
• Assisting employers with the development of appropriate disclosure and education programs to deal with the challenges of employee-directed investments under Section 401(k) programs and compliance with Section 404(c) of ERISA.
• Assisting clients with requests for proposals and related advice concerning changes in (or conversions involving) third party service providers and investment vehicles.

Rankings

LEGAL 500 2011

"Arent Fox LLP’s Washington DC benefits practice is biased towards ERISA matters in the widest sense. The firm has a reputation for fixing problem plans, as well as being competent in complex advisory areas, including advice to pension plan trustees looking to expand investment portfolios into areas such as real estate. The small group provides ‘an overall level of service which is top-notch’ and ‘reasonably priced’, to a clientele of mid-tier corporations, non-profit institutions, pensions funds and individuals. Recommended lawyers include practice chair William Charyk, who has ‘in-depth knowledge of ERISA and provides high quality advice, guidance, and written documents within a very responsive timeframe’, and Quana Jew, who is ‘particularly excellent and extremely client-focused’. Clients include Carl Zeiss, Choice Hotels International, K-Sea Transportation and AARP."