DoL Updates Voluntary Correction Program

April 18, 2006 (PLANSPONSOR.com) - The Department of Labor (DoL) has announced it has expanded and simplified the Voluntary Fiduciary Correction Program (VFC) that allows employers and professional advisors to voluntarily correct violations of the law pertaining to employee benefit plans.

According to the announcement, the update to the VFC program includes:

  • expansion and simplification of eligible transactions;
  • streamlined documentation and clarified eligibility requirements;
  • a model application form;
  • clarification of what constitutes “under investigation” allowing more entities to qualify for the program, and
  • relief from civil penalties for transactions involving health and welfare plans.

A final amendment to add the sale of illiquid assets and certain settlor expense violations to the existing VFC Program’s class exemption also will be included in the update.  

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The update will be published in the April 19 Federal Register and will be effective thirty days after publication.

Philly Reverse Discrim Verdict Reduced but Maintained

April 17, 2006 (PLANSPONSOR.com) - A federal judge in Philadelphia has refused to throw out a $2.9 million 2005 jury verdict to four while male Philadelphia School District employees in a reverse discrimination case.

However, while Chief US District Judge Harvey Bartle III of the US District Court for the Eastern District of Pennsylvania refused to call for a new trial, he nonetheless cut the plaintiffs’ compensatory damages awards after finding that the jury was too generous in its calculations of the their back pay, the Legal Intelligencer reported.

As a result, Bartle reduced those awards from a total of $757,271 to $417,530. Bartle turned away requests to also cut the jury’s award of $2 million – $500,000 to each plaintiff – for “past, present, and future mental anguish, pain and suffering, loss of enjoyment of life, and humiliation because of any unlawful discrimination or retaliation.”   The verdict now stands at $2,660,530.

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The four plaintiffs had charged they were fired by an African-American woman who had complained there were “too many white male managers in this department.”

For his part, Bartle concluded that each plaintiff had presented sufficient evidence to support such an award, and that there was nothing suspicious about the fact that the awards were identical.

“Contrary to defendants’ assertion, the mere fact that the jury awarded identical amounts to each plaintiff is not conclusive proof that the awards are unsupported by the evidence and are clearly excessive,” Bartle wrote in his 32-page opinion in Johnston v. School District of Philadelphia.

Fired Because of their Race

In the trial, lead plaintiffs attorney Michael Homans argued that his clients were fired only because they were white several months after Kimberly Sangster, an African-American woman, was hired as the district’s chief procurement officer, the Legal Intelligencer reported.

Homans told the jury that during Sangster’s first day on the job in November 2002 she asked plaintiff Robert Johnston if he was “going to have a hard time working for a black woman.” Within her first month, Homans said, Sangster complained that there were too many white male managers in the department, and later told Johnston that “Caucasian managers’ offices are too big. I’m going to do something about it.”

In its verdict, the jury found that race was the motivating factor in the terminations of all four men, and that three of the men also suffered retaliation when the school district refused to consider them for other jobs because they had already started the process of pursuing a race discrimination suit.

In its verdict, the jury awarded each man $500,000 in emotional damages and awards of back pay totaling $757,271 and ranging from $71,000 to $302,000.

Homans said Bartle will also order that three of the men be reinstated to their jobs. Since plaintiff Bracchi has moved to Florida to take a new job, reinstatement was not an option, Homans said. As a result, his award also included $243,000 in “front pay” in lieu of reinstatement.

The Bartle ruling is  here .

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