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jimKeymasterFascinating and Live, Listen to Lawyers
for Xerox and New York Local 14A Union Clash Over Pension Plan.
A long-running dispute between Xerox Corporation and a union representing its workers has reached the federal appeals court, where the two sides argued over the validity of a pension plan that the company adopted in 1999. The case, Xerox Corporation v. Local 14A, Rochester Regional Joint Board, Xerographic and Related Service Employees, Workers United, was heard by a three-judge panel of the U.S. Court of Appeals for the Second Circuit on February 13, 2024.The union, which represents about 2,000 Xerox employees in Rochester, New York, claims that the pension plan, known as the “cash balance plan”, violates the Employee Retirement Income Security Act (ERISA), a federal law that sets standards for pension plans. The union argues that the plan discriminates against older workers, reduces their benefits, and fails to provide adequate notice and information to the participants.
The cash balance plan, which Xerox implemented in 1999, replaced the previous “final average pay plan”, which calculated the pension benefits based on the average salary of the last five years of service. The cash balance plan, on the other hand, assigns each participant a hypothetical account that grows with annual credits and interest. The participants can choose to receive their benefits as a lump sum or an annuity when they retire.
The union filed a lawsuit against Xerox in 2000, challenging the legality of the cash balance plan. The case has gone through several rounds of litigation, involving multiple motions, appeals, and remands. In 2019, the U.S. District Court for the Western District of New York ruled in favor of the union, finding that the cash balance plan violated ERISA and ordering Xerox to pay $300 million in damages to the affected workers.
Xerox appealed the district court’s decision, arguing that the cash balance plan complies with ERISA and that the union’s claims are barred by the statute of limitations. Xerox also contends that the district court erred in calculating the damages and in certifying the case as a class action.
The appeals court has not yet issued a ruling on the case. The outcome could have significant implications for Xerox and its workers, as well as for other companies that have adopted similar pension plans. According to the union’s lawyer, David Preminger, the case is “one of the largest and longest-running ERISA class actions in the country”.
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AuthorFebruary 25, 2024 at 4:39 PM
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