Reliance on HR Director Advice goes Against SPD

In its opinion, the court said the language of the SPD was unambiguous, and that participants are not entitled to benefits promised verbally when written documents clearly state otherwise.   The retiree’s reliance on statements made by an HR director was unreasonable, and the Employee Retirement Income Security Act (ERISA) equitable estoppel principles only apply to representations on which the participant reasonably relied.

Prior to Terrence Fitzpatrick’s retirement from Pentair, he met with the company’s HR Director to discuss retiree health benefit options.   According to Fitzpatrick, the director informed him that he could obtain COBRA coverage for up to 18 months, after which he could enroll in the company’s “pre-65” plan.   He then could enroll in the company’s “post-65” plan when he turned 65.

Fitzpatrick obtained COBRA coverage when he retired at age 56.   When his coverage period drew near, he contacted Pentair to enroll in the “pre-65” plan.   Fitzpatrick was told he was ineligible and could never enroll in either the “pre-65” or “post-65” plans because he failed to enroll within 31 days following retirement.

The SPD for the “pre-65” plan says the retiree must fill out an eligibility election notice and return it to human resources no later than 31 days after retirement or after receipt of the SPD, whichever is later.   The only language in the SPD regarding COBRA discusses the suspension of company credits for health plan coverage during the COBRA coverage period.

The court determined that this language was unambiguous and Fitzpatrick’s reliance on the HR Director’s advice was unreasonable.   The lawsuit was dismissed.

The opinion in Fitzpatrick v. Porter Cable Corporation is here .