COURT REJECTS BENEFITS CLAIM BY DUPONT CONTRACT WORKERSPosted On: Jan. 19, 1997 12:00 AM CST
RICHMOND, Va.-Attorneys and benefit consultants differ over whether the 4th U.S. Circuit Court of Appeal's ruling that a leased employee is ineligible for benefits conflicts with a 9th Circuit ruling that found temporary workers eligible for benefits.
Some observers say the Jan. 9 decision in Ann Navey Clark vs. E.I. DuPont De Nemours & Co. Inc. is in such disagreement with the 9th Circuit's decision in Donna Vizcaino etc. vs. Microsoft Corp. that the U.S. Supreme Court ultimately will have to resolve the issue. But others say the factual backgrounds of the two cases are different, and there is in fact no inherent clash between the rulings.
In the Microsoft decision, the appellate panel found that Microsoft was liable to pay its long-term independent contractors benefits (BI, Oct. 21, 1996). Justice Stephen Reinhardt said that based on the Internal Revenue Service finding that these contractors were employees and Microsoft's plan language, these workers were eligible for benefits. Microsoft is seeking a rehearing of the case.
No decision has been made yet as to whether to appeal the Clark decision, said John Bertram Mann of Richmond-based law firm Levitt & Mann. The original plaintiff, Andrew J. Clark Jr., has died, and Mr. Mann now represents his widow, Anne Navey Clark.
Mr. Clark was employed directly by DuPont from 1962 until 1970 and subsequently continued to work at DuPont, primarily as an employee a particular employee leasing firm.
After DuPont terminated its contract with that firm, Mr. Clark applied for coverage under various DuPont employee plans, asserting he remained a DuPont employee after 1970 while nominally working for various contracting organizations.
In dismissing Mr. Clark's claim, the appellate court in Richmond, Va., said he "was not a 'participant' because he was not eligible to receive benefits under the plain language of the plans." No reference was made to the Microsoft case in the decision, although it had been discussed in oral argument.
"Both cases turn on questions of plan interpretation," said James P. McElligott Jr., an attorney with McGuire, Woods, Battle & Boothe in Richmond, who represented DuPont.
"If the Microsoft decision as written stands in the 9th Circuit, then I believe ultimately the Supreme Court will need to decide whether the 9th Circuit or the 4th Circuit has identified the proper standard for interpreting what these plans mean," Mr. McElligott said.
However, Bill Sweetnam, an attorney and consultant with Towers Perrin in Valhalla, N.Y., finds no disagreement in the rulings. In the Microsoft decision, the plan administrator had denied benefits because the workers had contractually waived any rights to them. The denial was not on the basis of the plan language, which was the case with the DuPont decision, Mr. Sweetnam said.
"I don't think there's any inherent difference in the law in the different circuits, because really the facts are just different," he said.
Anne Navey Clark, executrix of the estate of Andrew J. Clark Jr., deceased, plaintiff-appellant, vs. E.I. du Pont de Nemours and Co. Inc., as plan administrator et al. No. 95-2845, 4th U.S. Circuit Court of Appeals.