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  January 23, 2006 A group of employees of Wal-Mart Stores Inc. can go forward with their lawsuit charging that the retailer violated the Employee Retirement Income Security Act by amending its benefit plans to include “union exclusion” clause, the U.S. Court of Appeals for the Eighth Circuit ruled Jan. 19 (Lupiani v. Wal-Mart Stores Inc., 8th Cir., No. 04-1392, 1/19/06). In reversing a lower federal court’s dismissal of the lawsuit, the three-judge appellate panel said the district court erred when it found it lacked jurisdiction over the ERISA claims because such claims were preempted by the National Labor Relations Act. Finding that NLRA did not preempt the ERISA claims, the appeals court said the Wal-Mart employees’ ERISA claims were not “inextricably intertwined” with the NLRA and the ERISA claims could be decided without determining whether the union exclusion clause violated the NLRA. In 2001, Wal-Mart amended its profit-sharing, tax code Section 401(k), and health plans to include a provision that stated, “[C]ontractually excluded and certain other union represented associates are not eligible for coverage.” The workers who brought the lawsuit alleged Wal-Mart used the union exclusion clause as a method of undermining efforts to unionize Wal-Mart employees. According to the appeals court, the National Labor Relations Board investigated Wal-Mart’s actions and issued a complaint. In February 2003, an administrative law judge concluded that the union exclusion clause violated Section 7 and 8(a) (1) of NLRA. The administrative law judge ordered Wal-Mart to rescind the clause. Wal-Mart filed exceptions to the administrative law judge’s decision and those exceptions remain pending with NLRB, according to the appeals court. A group of workers filed a lawsuit against Wal-Mart charging the company with several violations of ERISA. The workers argued that Wal-Mart issued misleading summary plan descriptions that improperly led employees to believe they would lose their benefits if they chose to unionize. In addition, the workers alleged that Wal-Mart breached its ERISA fiduciary duties by placing the union exclusion clause in the plans. The U.S. District Court for the Western District of Arkansas dismissed the lawsuit after finding its jurisdiction over the case was preempted by the primary jurisdication of NLRB under the NLRA. Claims Not ‘Inextricably Intertwined.’ Reversing the district court, the appeals court found that the workers’ ERISA claims were not preempted by NLRA that the elements of the workers’ ERISA claims were not “inextricably intertwined” with NLRA. “[T]he issue of whether the plaintiffs relied on the Union Exclusion Clause does not involve the [NLRA]. The plaintiffs’ claim references the [NLRA]; it does not depend on it,” Judge Michael J. Melloy said in writing for the court. “[A]lthough the plaintiffs’ causes of action reference the question of the legality of Wal-Mart’s conduct towards unions, it does not depend on a determination of whether Wal-Mart’s actions violated” the NLRA, the court added. In addition, the court said the workers’ lawsuit was not rendered moot by the fact that Wal-Mart has since revised the union exclusion clause. According to the court, the case “remains live” because the issue of damages and attorneys’ fees sought by the workers had not yet been addressed. The opinion was joined by Judges Myron H. Bright and Pasco M. Bowman. The employees were represented by David A. Rosenfeld, Christen L. Raisner, and David A. Bohl of Weinberg & Roger, Alameda, Calif. Wal-Mart was represented by William B. Putman of Mashburn & Taylor, Fayetteville, Ark., and Mark A. Casciari, Ian H. Morrison, and Sarah. N. Chomiak of Seyfarth Shaw, Chicago.
The article originally appeared in the Daily Labor
Report on January 20, 2006, and was written by Jo-El J. Meyer. |
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