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Top court rejects Xerox case
Company stymied as earlier ruling in pension matter stands
(March 2007) — The U.S. Supreme Court on Monday declined to consider a dispute centered on whether Xerox Corp. improperly calculated pension benefits for several employees who left the company and were later rehired.The decision lets stand a ruling by the 9th Circuit Court of Appeals, which determined that the company’s formula for calculating certain pension benefits violated the Employee Retirement Income Security Act, or ERISA.Xerox had sought the top court’s review, contending that the 9th Circuit’s ruling conflicted with an earlier decision by the 2nd Circuit Court of Appeals in a separate case.”As a result, a nationwide pension plan covering 40,000 employees is lawful in one circuit and unlawful in another, and the lawfulness of numerous other pension plans is called into question,” Xerox said.The 2nd Circuit case originated in Rochester. A group of Xerox workers and retirees sued the company, claiming Xerox improperly calculated the benefits of workers who also left the company and later returned.The 2nd Circuit judges ruled Xerox had also violated ERISA and sent the case back to U.S. District Court Judge David Larimer. Earlier this year, Larimer ruled largely for the plaintiffs when he decided what formula the company should use to pay those affected workers.It is unclear how the Supreme Court’s decision in the 9th Circuit case might affect the Rochester case. A Xerox spokesman declined to comment, and Robert Jaffe, a New Jersey attorney representing the local workers, could not be reached.The three employees in the 9th Circuit case — Waldamar Miller, Thomas Sudduth and J. Denton Allen — left the company in 1983 and were later rehired.Under Xerox’s pension plan, the company reduced the employees’ retirement benefits by the amount they received in cash payments when they first left the company in 1983. The reduction, or “offset,” also assumed that the employees subsequently earned the same rate of return on their cash payments as the company’s pension fund received.The employees said Xerox’s method resulted in an “exaggerated offset” that denied them benefits they had accrued.
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