Compliance October 27, 2011

Court Approves Attorney Fees in ERISA Claim

October 27, 2011 (PLANSPONSOR.com) – The U.S. District Court for the Western District of North Carolina ruled, an employee who previously won a claim to re-enter a service-based pension program after repaying a lump-sum distribution she had taken from the plan is entitled to receive repayment of over $161,000 in attorneys’ fees.  
Reported by

Lynn M. Vincent won her claim in 2010 to be readmitted to Lucent Technologies’ defined benefit pension plan, after she was temporarily laid off. The court found the Lucent benefits committee had incorrectly blocked her efforts to return to the benefits program. The court ruled that the committee members had ignored a section of the plan documents for the Lucent Retirement Income Plan (LRIP) allowing such re-entry to the service-based DB program if Lucent rehired a temporarily laid-off employee within three years. (See Court Orders Lucent Employee Readmitted to DB Plan). 

To determine whether or not to award the attorney’s fees in an ERISA action, the court used five factors: degree of opposing parties’ culpability or bad faith;
ability of opposing parties to satisfy an award of attorneys’ fees;
whether an award of attorneys’ fees against the opposing parties would deter other persons acting under similar circumstances;
whether the parties requesting attorneys’ fees sought to benefit all participants and beneficiaries of an ERISA plan or to resolve a significant legal question regarding ERISA itself; and
the relative merits of the parties’ positions.

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The case is Vincent v. Lucent Technologies Inc., W.D.N.C., No. 3:07-cv-00240.

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