Skip to main content

Breaking: U.S. Supreme Court Rejects Stricter Statute of Limitations Deadline For ERISA Suits


Earlier this morning, the United States Supreme Court handed down a unanimous ruling in Intel Corp. Investment Policy Committee v. Sulyma, holding that an employee does not necessarily have "actual knowledge", under Section 1113(2), of the information contained in disclosures that are received but in which the employee does not read or recall reading.  Consequently, the Court held that to meet the "actual knowledge" requirement, the employee must have in fact become aware of that information.

Taking a step back here, I had previously written about the case, prior to oral arguments.  The case itself involved a claim by Christopher Sulyma ("Sulyma"), a former engineer at Intel, that the retirement plans offered by the company had imprudently over allocated funds to alternative investments (in violation of the plan administrators' fiduciary duties.)  Intel argued that the claim was barred by the statute of limitations, as the information about the investments of the retirement plans had previously been provided to Sulyma.  Sulyma had apparently visited the links provided in the e-mails but could not remember whether he had actually read them.  (Generally speaking, there is a six year statute of limitations in which to bring a claim under the Employee Retirement Income Security Act of 1974 ("ERISA"), such as Sulyma's.  However, that statute of limitations can be narrowed to three years, if the claimant had "actual knowledge of the breach or violation."  As a result, if it can be shown that the claimant had actual knowledge, suit must be brought no more than three years after "the earliest date on which the plaintiff had actual knowledge of the breach or violation."  In this case, Sulyma's suit came more than three years after he had been provided the information.)

The District Court granted Intel's motion for summary judgment, holding that Sulyma had actual knowledge by way of Intel's delivery of the information about the retirement plans, thereby triggering the three year statute of limitations.  On appeal, the Ninth Circuit Court of Appeals reversed, finding that although Sulyma had been provided the information more than three years before suit was filed, it could not be established he actually read the information (therefore lacking "actual knowledge.)

The Supreme Court noted that while ERISA's "plain and unambiguous statutory language" must be enforced "according to its terms", ERISA did not define "actual knowledge."  As a result, the Court found that "actual knowledge" must be given its plain meaning.  After a review of the meaning of "actual knowledge", as set forth in the dictionary, the Court found that in order to have "actual knowledge", one must in fact be aware of it.  While "constructive knowledge" will sometimes be imputed to a person that fails to learn something that a reasonably diligent person would have learned, the Court pointed out that Congress had failed to add to the language of Section 1113(2) to include both "actual" and "constructive" knowledge.  Turning to the facts of this case, Justice Alito (delivering the opinion for the Court), wrote that it could not be shown that Sulyma had "actual knowledge" such that the three year statute of limitations would be triggered.  While the relevant information was apparently disclosed to Sulyma, more than evidence of disclosure is required to establish "actual knowledge."  As a result, to meet the "actual knowledge" requirement, it must be shown that the claimant had in fact become aware of the information.  The Court therefore affirmed the Ninth Circuit's ruling in favor of Sulyma.



Comments

Post a Comment

Popular posts from this blog

NLRB: Discussion Among Employees About Tip Pooling is Protected Concerted Activity

  This Advice Memorandum from the National Labor Relations Board’s Associate General Counsel, Jayme Sophir, addressed whether employees which discussed and complained about tip pooling at work constituted protected concerted activity. In relevant part, an employer in New York operated a chain of steakhouses.  While tip pooling was in place at these steakhouses, some of the employees objected to it on the grounds that it was not transparent and improperly divided tips among the workers.  Employees were told not to complain or talk to each other about the tip pool and were told that doing so would endanger their jobs.  Despite the employer later attempting to provide some clarity as to how the tips were being divided, rancor still existed among some employees.  At one point, the employees were told by a general manager that some employees that had been talking about the tip pool were “cleared out” and the employer would continue to do so. In the Advice Memorandum,...
Post a Comment
Read more

Breaking: Labor Secretary Rumored to Be Leaving Administration

A few hours ago, word leaked out that Labor Secretary Marty Walsh (“Walsh”) is in the midst of negotiations to head up the NHL Players Union and leave his position at the Labor Department. Walsh, who has served as the sole Labor Secretary under President Biden, has taken part in a labor renaissance of sorts as support for organized labor has increased during his term as Labor Secretary (although the number of workers that have joined a union over the past two years has not grown as mush as some expected.)  He has also overseen the ongoing negotiations with rail workers over a new contract, although that matter is still on shaky ground and playing out as we speak. As for who might step into the vacant Labor Secretary role, there are already rumblings that President Biden should nominate Deputy Labor Secretary Julie Su (a strong labor advocate) or even a progressive like Senator Bernie Sanders.  Until Walsh officially gives his notice, however, I would expect some/many potential...
Post a Comment
Read more

Distance in a Non-Compete Agreement Measured "As the Crow Flies"

Ginn v. Stonecreek Dental Care - Court of Appeals, Twelfth Appellate District of Ohio Facts :  Dr. R. Douglas Martin ("Martin") sold his dental practice to an employee who worked there, Dr. David Ginn ("Ginn").  In doing so, Martin and Ginn signed a contract for the sale which contained a non-compete provision that prohibited Martin from engaging in business "within 30 miles" of the practice for five years starting from October 2010.  While Martin initially stayed on and worked with Ginn for a period, the relationship subsequently deteriorated between the two and Martin went to work for another dental office.  The new dental office was less than 30 miles away when measuring the distance in a straight line.  However, when driving between the offices, the distance was more than 30 miles. Ginn filed a claim against Martin on the grounds that Martin breached the non-compete.   At the trial court level, the court found that "within 30 miles"...
Post a Comment
Read more