erisa litigation: best practice tips from speakers
Post on 19-Oct-2014
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Best Practice Tips
#ERISALitigation www.AmericanConference.com/ERISA 1
Miriam (Dusty) M. Burke
Vinson & Elkins LLP
Dusty Burke is a partner in the Employee Benefits and Executive
Compensation group at Vinson & Elkins. She devotes a significant
portion of her practice to ERISA litigation, defending clients in class
actions involving stock drop claims, cash balance plan claims, breach
of fiduciary duty claims, claims for pension plan benefits, cutback
claims, and executive compensation litigation. Dusty also frequently
counsels clients on best practices for avoiding or mitigating exposure
to ERISA litigation. She is a frequent speaker at ERISA litigation
conferences and employee benefits and executive compensation
seminars and has authored several articles on various aspects of ERISA
litigation. Dusty has been professionally recognized in The Best
Lawyers in America in ERISA litigation, 2012, 2013, 2014; The Best
Lawyers in America in employee benefits and executive
compensation, 2002 to 2014; The Legal 500 U.S. in employee
benefits/executive compensation, 2011, 2012, 2013; and "Texas Super
Lawyer," Texas Monthly, 2002 to 2010.
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The best way for a fiduciary to winor even completely avoidan ERISA lawsuit is to make sure he has checked all the best practices
boxes before the lawsuit is filed.
You are a fiduciary of an ERISA 401(k) plan reading a complaint recently
filed against you alleging that you breached your fiduciary duties under
ERISA. What do you and the plan sponsor of your plan wish had been
done before the lawsuit was filed?
Pre-Litigation Best Practices Check List:
Provide fiduciary training for the plans administrative committee. Few
fiduciaries actually know before they get sued what duties ERISA
requires of plan fiduciaries. Two hours of fiduciary training goes a long
Be aware of the fiduciary exception to the attorney client privilege.
Communications relating to the administration of an ERISA plan are
generally not protected from discovery in a lawsuiteven if made to or
from inside/outside counsel. Keep protected communications (e.g.,
minutes relating to amendments to the plan) separate from
unprotected communications (e.g., minutes relating to plan
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Protect the Board of Directors, the Company, and the officers from
being named as deep-pocket defendants in a breach of fiduciary
duty action by structuring the administration of the plan to (i) give
the administrative and investment authority to a defined group of
individuals (e.g., an administrative committee, an investment
committee) and (ii) limit the individuals who are authorized to
appoint members of those fiduciary committees.
Dont use your corporate/securities documents as substitutes for
ERISA plan documents.
Dont take legal advice from your record keeper or third party
Draft plan documents to prevent plaintiffs from forum shopping by
including (i) a stated limitations period for bringing benefit claims,
(ii) a stated event that will trigger the accrual of that limitations
period, and (iii) a governing jurisdiction.
Regularly update the plan fiduciaries of recent developments in
the case law. An excellent way to determine how not to act is to
know what conduct the courts have recently determined constitutes
a breach of fiduciary duty.
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James P. Mc Elligott Jr.
McGuire Woods LLP
Mr. McElligott has a national ERISA litigation and arbitration practice,
is a Fellow of the College of Labor and Employment Attorneys, and is
listed in Best Lawyers in America (under ERISA, ERISA Litigation, Labor
Law, and Employment Law), AV-Preeminent-Rated, Labor &
Employment Law, Martindale-Hubbell, a Leading Lawyer for
Business, Labor & Employment: Employee Benefits & Compensation
in Chambers USA, 2008-2013, and "Virginia Super Lawyers,"
Employee Benefits/ERISA, Employment & Labor, 2007-2013.
Mr. McElligotts practice includes defense of class action claims of
ERISA fiduciary breach; multi-employer plan withdrawals and mass
withdrawals; ERISA stock-drop litigation; retiree medical claims;
severance claims; top hat litigation; ERISA 510; PBGC lien and ERISA
4062(e) claims; and HIPAA privacy and security litigation. He has
litigated in federal district and appellate courts, in Tax Court, in
bankruptcy courts, and has handled matters before and in litigation
with the PBGC, the NLRB, the EEOC, and the Department of Labor.
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Mr. McElligott is a member of the Employee Benefits Committee of
the US Chamber of Commerce, the Employee Benefits Committees of
the ABA Sections of Labor and Employment Law and Taxation, former
president of the Federal Bar Association, Richmond Chapter, and
former President of the Central Virginia Employee Benefits Council.
He received his law degree from Harvard Law School, cum laude,
served as Note Editor for the Harvard Journal on Legislation, and is a
Phi Beta Kappa graduate of the University of Illinois.
Best Practices for Dealing with Multiemployer Plans
Large, otherwise sophisticated companies often misunderstand
liabilities of multiemployer plans.
Investors, including private equity funds, need to know controlled
group rules to avoid liability.
Plans audit pension and welfare contributions and frequently claim
additional contributions beyond what employers anticipated.
The right to resist additional contribution claims may be limited and
subject to substantial penalties.
Avoid any participation by any controlled group member in a
multiemployer plan if possible. This is difficult in certain industries
and areas, such as construction/hotels in major metropolitan areas.
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If any controlled group member participates in multiemployer
plans, due diligence should be done on estimated withdrawal
liability potential for mass withdrawal, and contribution obligation
required by the collective bargaining agreement and plan
Understand how to repudiate NLRA 8(f) construction pre-hire
Study the collective bargaining agreements, trust agreements,
bylaws and rules, and on funding status and participation by
other employers, available on the plans Form 5500s, DOL
website, and other sources.
Monitor potential likelihood of mass withdrawal, understand mass
withdrawal rules, and withdraw if possible before mass
withdrawal becomes likely.
Unions are increasingly willing to agree to early withdrawal by
Lump sum and periodic payment withdrawal liability figures are
not actuarially equivalent. Employers generally must pay
withdrawal liability while they contest it.
Know and strictly follow the special rules and deadlines for
reviewing and arbitrating withdrawal liability.
Courts can determine whether an entity is an employer subject
to withdrawal liability.
Know how the plan can accelerate employers lump sum liability.
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Seyfarth Shaw LLP
Mark Casciari is a partner with Seyfarth Shaw LLP. He has represented
employers, plan sponsors, plans, fiduciaries and plan administrators
in ERISA class actions and in other employee benefits cases, in federal
courts throughout the United States, in state courts and before
arbitrators and mediators. Mark has served as amicus curiae counsel
of record in two United States Supreme Court ERISA cases. He was
counsel of record in these 2013 published ERISA decisions of the
Court of Appeals for the Seventh Circuit: Hakim v. Accenture United
States Pension Plan, 718 F.3d 675 (7th Cir. 2013) and Laskin v. Siegel,
728 F.3d 731 (7th Cir. 2013). Mark is a frequent author of articles on
employee benefits litigation topics, and is a frequent contributor to
Seyfarth's ERISA & Employee Benefits Blog, which can be found at
www.erisa-employeebenefitslitigationblog.com. Mark is a Fellow in
the American College of Employee Benefits Counsel, a Fellow in the
College of Labor and Employment Lawyers and a long-standing
Adjunct Professor of Trial Advocacy at Northwestern University
School of Law.