Court Slaps Employer with $100 Daily Fine over Document Production

US Judge Michael Baylson of the US District Court for the Eastern District of Pennsylvania ordered Rohm and Haas Co. to pay to participant Gerald Kollman $9,800 in statutory penalties under the Employee Retirement Income Security Act (ERISA). Baylson imposed the fine because of what he said was Rohm and Haas’s 98-day delay in providing Kollman with information about the calculation of his benefits.

Baylson rejected Rohm and Haas’s contention that Kollman never made specific, identifiable requests for certain documents and that, in the absence of specific requests, it was not obligated to provide him with the material. Instead, the court sided with the holdings of other federal courts that a written request for information is adequate if it gives “clear notice” to the administrator of the types of documents requested.

However Baylson sided with the company when he rejected Kollman’s contention that Rohm and Haas should pay statutory penalties under ERISA for Rohm and Haas’ breach of its fiduciary duties. 

According to case background from the court, Kollman participated in the Rohm and Haas pension plan. Hewitt Associates, which provided administrative services to the plan maintained a Web site that allowed Rohm and Haas employees to view calculations of their pension benefits.

The court said that in October 2000, Kollman checked the Web site to get a statement of his benefits in anticipation of early retirement. The Web site showed Kollman would receive a $522,043 lump-sum payment if he retired early. The Web site also indicated this amount was adjusted pursuant to a qualified domestic relations order that required Kollman to pay part of his benefits to his ex-wife.

After Kollman retired, Hewitt contacted him to inform him that he was entitled only to a $419,918 lump-sum distribution because the projected $522,043 did not include a subtraction of his ex-wife’s benefits. After learning of this, Kollman e-mailed Rohm and Haas’ human resources department alleging he had relied on the $522,043 calculation when he decided to retire early.

Through a series of e-mails and other correspondence, Kollman requested in February 2003 that Rohm and Haas provide him with numerous items, such as tape recordings of his telephone conversations with Hewitt and computerized notes relating to Kollman’s calls and use of Hewitt’s Web site.

According to the court, Rohm and Haas failed to respond to the request and in May 2003, Kollman filed a lawsuit against Rohm and Haas and Hewitt charging both with several violations of ERISA as well as several state law claims. The requested documents were produced after the lawsuit was filed, according to the court.

Baylson’s ruling is  here .