Connecticut Employment Lawyer & Attorney : Daniel Schwartz : Stamford, Hartford New Haven, CT

Lawyers representing the class of retirees from CIGNA will argue that their clients are entitled to "hundreds of millions" of dollars in retirement benefits as a result of misrepresentations made by CIGNA, according to a report in yesterday's Hartford Courant. 

The Courant -- which finally reported on the decision 5 days after it came out and well after we posted on it  -- barely mentions the argument of whether the new cash balance plan is age discriminatory (which the court found it wasn't). Instead, it focuses on the fact that CIGNA failed to mention that the benefits could be subject to "wear-away". 

Eager to claim victory, the class representative attorneys now say that the disclosure argument is vitally important to the case:

Friday's ruling will serve as "an excellent blueprint for other courts to scrutinize these disclosures" that companies make concerning conversion to cash balance plans, said Tom Moukawsher in Hartford, co-counsel representing the CIGNA employees. "This court decision is a precedent for looking at the underbelly of the disclosures for basic honesty."

Certainly the court was disturbed by communications by CIGNA. For example, in a Newsletter discussing the changes, the Court found that: "nothing in the Newsletter indicated to plan participants that their rate of benefit accrual might decrease, much less by a significant margin. And yet that is exactly what happened." (Decision at 80.) Indeed, as the Court said later:

Taking all of this information into consideration, the Court concludes that CIGNA was aware of the significant reduction in the rate of future benefit accrual that would affect at least a substantial proportion of its employees as a result of the transition to Part B, that CIGNA wished to avoid the employee backlash likely to result from a thorough discussion of these aspects of Part B, and that CIGNA sought to negate the risk of backlash by producing affirmatively and materially misleading notices regarding Part B. As a result, its § 204(h) notice failed to meet ERISA's stringent standards.

As I indicated previously, both parties have until March 17th to brief the issue of what the appropriate remedy would be in this situation. 

Although the lawyers for the class have reason to be pleased with the decision, certainly CIGNA and other companies nationwide must be relieved that the underlying conversion from a defined benefit plan to a cash balance plan itself has been upheld.  If the court had found that the conversion was discriminatory, it could have had an impact nationwide; the decision here may have a more modest impact given the evidentiary findings of the court that are particular to this case.

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As with other U.S. Supreme Court cases this term, there's been more virtual ink spilled this week over two oral arguments scheduled for the U.S. Supreme Court this week that will examine some of the parameters of  when it is illegal for an employer to retaliate against an employee for complaining about discrimination.  For most employers, however, these cases may not have nearly the practical impact that some commentators seem to suggest.

I'll leave it to others, such as Ross's Employment Law Blog to explain the cases. 

• In Gómez-Pérez v. Potter, to be argued today, the question for the court is whether for federal employees, the ADEA prohibits retaliation for filing an EEO complaint.  ADEA already prohibits retaliation by private employers.  Even if the U.S. Supreme Court decides that the statute does not explicitly cover retaliation claims by federal employees, it is hard to imagine that Congress would not take up this issue immediately with bi-partisan support.
• In CBOCS West, Inc. v. Humphries , to be argued tomorrow, February 20th, the question for the court is whether 42 U.S.C. Sec. 1981 (which prohibits race discrimination in the "making, performance, modification, and termination of contracts...") provides a cause of action for retaliation as well.   However, as readers are no doubt aware, Title VII already prohibits retaliation on the basis of race, so there is and has always been some overlap between the two claims. 

Emily Bazelon, over at Slate, suggests that this is a "Big Discrimination Case."  Unless the decision's rationale is broad, that seems to be an overstatement at this point.  Most discrimination and retaliation claims, as a practical matter, are brought under Title VII, not Section 1981.  Indeed, the only reason the Humphries case is not a Title VII claim is that the Plaintiff missed the statute of limitations.  Section 1981 mostly gets used when an employee bringing a retaliation or discrimination claim misses that deadline.  Thus, even if the court were to rule against the employee in this case, it will have no impact on the vast majority of race retaliation cases out there that are being filed under Title VII.

Jon Hyman, at Ohio Employer's Law Blog, has some additional thoughts on the Humphries case as does Workplace Prof.  A decision on these cases is expected by June 2008.

For employers in Connecticut, I would ignore the hype about these cases.  Retaliation against employees for filing race and age discrimination claims would still violate state law, under Conn. Gen. Stat. 46a-60(a)(4).  Regardless of how the Supreme Court decides, state law will continue to apply.  If and when an employee claims discrimination at the workplace, take steps to avoid a retaliation lawsuit, and don't worry about whether federal or state law will ultimately apply. 

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