BRS Wins ERISA Class Action Appeal
November 16, 2011Beck, Redden & Secrest recently prevailed for a class of retirees in a significant ERISA class action appeal before the United States Court of Appeals for the Fifth Circuit.
The case arose when an American chemical company bought an existing chemical business, and in the agreement consummating the sale, guaranteed important retirement benefits to the acquired employees. Several years after the acquisition, the company filed for Chapter 11 bankruptcy and had the agreement consummating the sale rejected. Then the company raised retirement premiums dramatically, claiming that the bankruptcy had nullified the earlier guarantee.
The employees formed a class and sued the company in the United States District Court for the Southern District of Texas, alleging that under ERISA and prior Fifth Circuit precedent, the retirement-benefit guarantee stayed alive through the bankruptcy. The district court granted judgment for the company on all claims, and BRS appealed on behalf of the retirees.
In a unanimous published decision, the Fifth Circuit reversed the district court and held that the employees prevailed on their claim as a matter of law. The Court concluded that under its Halliburton decision (also handled by BRS), the company had amended its ERISA plan with the purchase agreement, and that as a result, the retirement-benefit guarantee “remained at all times a valid and enforceable provision."
Russell Post argued the appeal, and authored the brief with appellate associate Chad Flores.