Compliance October 6, 2005

Ex-Employees Lack Standing for Co. Stock Suit

October 6, 2005 (PLANSPONSOR.com) - A Texas federal judge has thrown out a lawsuit over allegations that a company's thrift savings plan purchased company stock at inflated prices, because the plaintiffs were not current employees and didn't have legal standing.
Reported by

US District Judge Ed Kinkeade of the US District Court for the Northern District of Texas ruled that the plaintiffs were not “participants” under the Employee Retirement Income Security Act (ERISA) and had already received their plan benefits, BNA reported. The suit only sought damages for defendants’ fiduciary breaches, Kinkeade said.

The employees alleged that their employer, TXU Corp., and its thrift savings plan fiduciaries breached their ERISA duties by purchasing TXU stock at artificially inflated prices after TXU made false and misleading statements about its revenues and earnings.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

In denying the employees’ motion to certify the case as a class action, Kinkeade said that, as former employees, the plaintiffs would have standing as participants under ERISA if they had a reasonable expectation of returning to covered employment or had a claim to vested benefits.

The former employees “are now seeking additional damages that might have accrued but for the Defendants’ alleged misconduct . . .  These additional damages are speculative and cannot be considered as vested under ERISA,” the court said.

The case is Hargrave v. TXU Corp., N.D. Tex., No. 3:02-CV-2573-K, 9/29/05.

Benefits October 5, 2005

Golf Caddy Sues for Gender Discrimination

October 5, 2005 (PLANSPONSOR.com) - The Equal Employment Opportunity Commission (EEOC) is suing a New York golf club on behalf of a male caddy who was subjected to ridicule after losing two golf games to a female.
Reported by

According to the EEOC complaint, found on The Smoking Gun Web site, after the first match was lost, a male manager at the Tallgrass Golf Club distributed a newsletter mocking Eugene Palumbo. The EEOC said the manager subjected Palumbo to “public harassment, humiliation, and discriminatory stereotypes because of his sex.” Among other discriminatory comments in the newsletter was a suggestion that Palumbo move to a particular summer vacation spot that is know to have a large gay population, according to the complaint.

Get more!  Sign up for PLANSPONSOR newsletters.

After losing the second golf match, a second newsletter with “derisive stereotypic and sex-based attacks” was distributed, the EEOC said. The complaint said the Club subjected Palumbo to a hostile work environment, with repeated taunts and insults that impeded his ability to work. In addition, the EEOC claims that when Palumbo complained, the Club not only took no action, but retaliated against him by firing him.

The claim asks that the US District Court for the Eastern District of New York forbid the defendants from engaging in any gender discrimination practices, require Tallgrass Golf Club to institute and carry out policies against gender discrimination, and provide back pay and monetary damages in an amount to be determined at trial to Palumbo.

«