Benefits June 23, 2006

Apparel Company Joins Line of Cos. Freezing DB Plans

June 23, 2006 (PLANSPONSOR.com) - G&K Services, Inc., provider of branded identity apparel programs and facility services in the US and Canada, has announced that it plans to enhance its defined contribution plans and freeze its defined benefit plans, effective January 2007.
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Beginning January 1, 2007, the company will enhance both its 401(k) plan and its deferred compensation plan, offering new company retirement contributions, an increase in company matching contributions and greater flexibility for employee contributions, G&K said in a press release. The enhanced plans will also allow additional transition contributions for employees closer to retirement age and with greater years of service.

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The company will freeze its defined benefit pension plan and its supplemental DB executive retirement plan as of December 31, 2006, the release said.

The changes will affect approximately 6,300 401(k)-eligible employees and will not affect current company retirees, former employees with vested pension benefits or employees who retire prior to December 31, 2006.

The company joins a growing list of others that are freezing DB plans and enhancing DC offerings in order to gain more control on retirement plan costs (See GM Unveils Finalized Pension Restructuring and Two More Companies Join DB Plan Freezing List ).

Compliance June 22, 2006

Tyson Wins Back Pay Lawsuit

June 22, 2006 (PLANSPONSOR.com) - Tyson Foods overcame a wage and hour lawsuit in a Philadelphia federal courtroom where a jury rebuffed allegations that the poultry company improperly denied workers compensation for time spent putting on and taking off protective clothing.
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The jury in the US District Court for the Eastern District of Pennsylvania ruled on a lawsuit filed in 2000 by attorneys representing seven workers at Tyson’s New Holland, Pennsylvania, plant, according to a Tyson news release. About 540 current or former workers eventually joined the suit, which alleged that the company failed to pay them for changing into and taking off protective clothing before and after shifts and breaks, which they considered part of work.

The jury decided that those activities did not constitute “work” under federal law, the release said. The jury verdict came after a day of deliberations following a 2 1/2-week trial, the Associated Press reports.

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“We’re grateful for this ruling because it shows we’re paying our people correctly for the time they devote to their jobs,” said Ken Kimbro, senior vice president of Human Resources for Springdale, Arkansas-based Tyson Foods, in the news release.

Attorneys for the plaintiffs vowed to appeal the case to the 3rd US Circuit Court of Appeals, the AP said. Brian Kenney, one of the attorneys representing the plaintiffs, said they “vehemently” disagreed that the decision showed that workers were being properly paid.

He said the plaintiffs would take issue on appeal with the judge’s instructions to the jury about the Fair Labor Standards Act.

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