Compliance June 22, 2006

Tyson Wins Back Pay Lawsuit

June 22, 2006 (PLANSPONSOR.com) - Tyson Foods overcame a wage and hour lawsuit in a Philadelphia federal courtroom where a jury rebuffed allegations that the poultry company improperly denied workers compensation for time spent putting on and taking off protective clothing.
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The jury in the US District Court for the Eastern District of Pennsylvania ruled on a lawsuit filed in 2000 by attorneys representing seven workers at Tyson’s New Holland, Pennsylvania, plant, according to a Tyson news release. About 540 current or former workers eventually joined the suit, which alleged that the company failed to pay them for changing into and taking off protective clothing before and after shifts and breaks, which they considered part of work.

The jury decided that those activities did not constitute “work” under federal law, the release said. The jury verdict came after a day of deliberations following a 2 1/2-week trial, the Associated Press reports.

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“We’re grateful for this ruling because it shows we’re paying our people correctly for the time they devote to their jobs,” said Ken Kimbro, senior vice president of Human Resources for Springdale, Arkansas-based Tyson Foods, in the news release.

Attorneys for the plaintiffs vowed to appeal the case to the 3rd US Circuit Court of Appeals, the AP said. Brian Kenney, one of the attorneys representing the plaintiffs, said they “vehemently” disagreed that the decision showed that workers were being properly paid.

He said the plaintiffs would take issue on appeal with the judge’s instructions to the jury about the Fair Labor Standards Act.

Compliance June 21, 2006

Cash Balance Litigation Settles for $1.85M

June 21, 2006 (PLANSPONSOR.com) - A federal judge has approved a $1.85 million settlement between a Pennsylvania health care firm and its former employees over allegations that workers were never informed that the company's retirement program was a cash balance arrangement.
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US District Judge for the Eastern District of Pennsylvania, Eduardo Robreno said the pact between the former workers of Allegheny Health, Education and Research Foundation (AHERF) and the company was fair. Robreno ordered notice of the settlement be sent to about 5,000 participants who would share the proceeds.

Five former AHERF employees filed the lawsuit in 1998, alleging they were led to believe their pension plan was a fully funded defined contribution program   with pools of money set aside for them, according to the ruling.

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Workers discovered the truth about the plan when AHERF sold medical facilities in 1998 and went into US Bankruptcy Court for protection from its creditors. That triggered a plan takeover by the Pension Benefit Guaranty Corporation (PBGC), which took control of the plan as statutory trustee.

According to the opinion, employees were then notified that, under the plan, employees who had less than five years of service with AHERF were not entitled to any benefits because their benefits were not vested. The settlement, which was reached last fall, calls for potential class action members to receive about $0.04241 per dollar in their individual account plans. Individuals would recover amounts ranging from $23 to $2,269.

The court also said it would grant conditional approval of the settlement because the $1.85 million in monetary compensation was “a welcomed recovery particularly in light of AHERF’s bankruptcy.”

The case is Grunewald v. Kasperbauer, E.D. Pa., No. 05-1273, 5/30/06. The latest court ruling is   here .

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