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New Cases and Developments

NACUA's Legal Resources staff summarizes current higher education cases and developments and provides the full text of selected cases to members. New cases and developments are archived here for up to 12 months.  Cases provided by Fastcase, Inc.

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Employee Benefits & ERISA; Faculty & Staff

Parkland College v. Ill. Workers’ Comp. Comm’n, et al. (Ill. App. May 1, 2018)

Order affirming the decision of the Illinois Workers’ Compensation Commission to award Claimant benefits under the state Workers’ Compensation Act. Appellant is the Board of Trustees of Community College District No. 505, which includes Parkland College.  The Board appealed the decision of the Illinois Workers’ Compensation Commission, which awarded worker’s compensation to Lisa Eller, an instructor at Parkland College’s veterinary school for injuries that she sustained when she slipped and fell in a Parkland College parking lot. Appellant argued that Eller could not benefit from workers’ compensation because her injury did not arise out of and in the course of her employment. Specifically, Appellant argued that Eller failed to follow a designated path to her parked car and instead chose to walk through a reserved lot, thereby undertaking a risk for her own benefit and failing to act subject to Parkland’s control. The court found that the manifest weight of the evidence supported the Commission’s determination that Eller’s injury arose out of and in the course of her employment since Eller was injured on Parkland’s premises and Parkland knew that individuals frequently took that path to and from the building.

5/4/2018
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Employee Benefits & ERISA

Amicus Brief in Sweda v. University of Pennsylvania (April 12, 2018)

Amicus Brief by the American Council on Education and seven other higher education associations to the Court of Appeals for the Third Circuit for the case Sweda, et al. v. The University of Pennsylvania. At issue is whether university fiduciaries violated duties of prudence and loyalty under ERISA in administering its 403(b) retirement plan. Amici argue that universities adopted 403(b) plans to accommodate the unique employment landscape of higher education, where professors routinely moved among institutions, in contrast to corporate 401(k) plans, that incentivized loyalty to a single employer over the course of employment.  In recognition of fundamental differences between 403(b) and 401(k) plans, amici argue that ERISA fiduciary duties must be applied in recognition of these unique differences. Amici urge the court to dismiss actions unless Plaintiffs identify a plausible (rather than possible) violations of law, so as not to deter individuals from serving on fiduciary committees.

4/16/2018
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Employee Benefits & ERISA; Faculty & Staff

Filipek v. Oakton Community College (N.D. Ill. Feb. 27, 2018)

Memorandum Opinion and Order granting Defendants’ Motion for Summary Judgment. Plaintiffs represent a certified class of approximately eighty part-time and adjunct faculty who were not eligible for employment by Oakton Community College (OCC) as a result of its decision not to employ or re-employ State Universities Retirement System (SURS) annuitants.  Plaintiffs alleged that this policy  violated the Age Discrimination in Employment Act (ADEA), the Illinois Human Rights Act (IHRA), the Illinois Constitution, and 42 U.S.C. § 1983. SURS provides retirement benefits to eligible state university and public community college employees by collecting financial contributions from them until they are eligible to withdraw a retirement annuity at age fifty-five. Previously, SURS-eligible employees who returned to work after they retired were subjected to earning limitations, but in 2012, Illinois amended its legislation to require state universities and public community colleges with “affected annuitants” to contribute twelve times the amount of any rehired annuitant’s gross monthly retirement annuity. Following this change in the legislation, OCC’s President decided to discontinue employing SURS annuitants, regardless of whether they would become an “affected annuitant.” Addressing Plaintiffs’ ADEA, Section 1983, and IHRA age discrimination claims, the court determined that no reasonable factfinder could conclude that age, and not pension status, was the “but for” cause of OCC’s decision to no longer employ SURS annuitants, especially since OCC’s policy had no impact on those employees who were not SURS annuitants, regardless of their age.  Even if Plaintiffs could make out a prima facie case for disparate impact, the still could not show that OCC’s decision  was based on anything other than precautions to avoid costly contributions.  Last, the court found that OCC’s decision to discontinue employing SURS annuitants did not violate pension protections in the Illinois Constitution, nor did it amount to retaliatory discharge as recognized by the Illinois Supreme Court.

3/8/2018
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Employee Benefits & ERISA; Faculty & Staff

Sacerdote v. New York University (S.D.N.Y. Feb. 13, 2018)

Opinion and Order granting Plaintiffs’ Motion for Class Certification. Plaintiffs allege that New York University breached fiduciary duties of loyalty and prudence under the Employee Retirement Income Security Act (ERISA).  In certifying the class of plaintiffs, the Court found that Plaintiff’s had established the numerosity requirement for class certification, since between 19,000 and 24,000 employees participated in the retirement plan, thus making joinder impracticable.  The court also determined that the was a commonality in questions of law and fact and a typicality of circumstances among the named Plaintiffs and the unnamed class of individuals. The court also determined that the Plaintiffs were adequate representatives of the proposed class.

2/14/2018
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Employee Benefits & ERISA; Faculty & Staff

In re Walker v. Long Island University (N.Y. App. Div. Dec. 20, 2017)

Decision and Order denying Petitioner’s Motion for Summary Judgment and granting Respondent’s Cross-Motion for Summary Judgment. Walker, a deceased former employee of Long Island University (LIU) and represented by her estate’s administrator, alleged that LIU’s death benefits should be turned over to Walker’s estate and distributed through intestacy, rather than distributed to Walker’s sister who was designated a beneficiary. The court found that LIU met its burden in proving that the death benefit was ancillary to the group term life insurance policy, that Walker while alive designated her sister as beneficiary of the death benefit, and that LIU acted according to its policy of paying the death benefit to a deceased’s designated beneficiary, while Respondent failed to show that LIU was required to pay the death benefit to the estate. 

1/4/2018
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Employee Benefits & ERISA; Faculty & Staff

Nicolas v. The Trustees of Princeton University (D. N.J. Dec. 19, 2017)

Opinion denying Defendant’s Motion for Reconsideration and granting Defendant’s Motion to Stay.  This is a class action suit that alleges breaches of fiduciary duties under the Employee Retirement Income Security Act (ERISA).  In particular, Plaintiff, as a participant in Princeton University’s retirement plan and on behalf of a class of other participants and beneficiaries, alleged that Princeton caused participants to pay excessive fees, failed to negotiate lower fees or conduct competitive bidding for record keepers, contracted with two record keepers instead of one, administered an asset-based model instead of a revenue sharing model, and failed to remove underperforming investment options.  In granting Defendant’s motion to stay proceedings pending the outcome of the Third Circuit case in Sweda v. University of Pennsylvania, the court found that a stay would promote judicial economy and “prevent[] needless back and forth” since the claims in the lawsuits were “strikingly similar.”  The Court denied Defendant’s Motion for Reconsideration, hesitant to “disturb its previous ruling, given that the Third Circuit will soon resolve many of the precise issues that Defendant Requests this Court to reconsider.”

1/3/2018
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Employee Benefits & ERISA; Faculty & Staff

Lane, et al. v. The Bd. of Trustees of California State Univ. (Cal. App. Nov. 22, 2017)

Unpublished Opinion affirming summary judgment for the Defendant. Plaintiffs are retired professors of California State University at Long Beach (CSULB) and members of the California Public Employees’ Retirement System (CalPERS) who seek declaratory relief or a writ of mandamus to correct alleged errors by the Defendant, which they argue resulted in CalPERS to under-calculate their pension payments.   Plaintiffs attribute the purported underpayments to their election to have their salaries paid over 12 months, instead of the 8-month academic year, during which Plaintiffs earned their compensation.  The court found that Plaintiffs failed to exhaust administrative remedies provided to them by California statutes and further, an exception to the exhaustion requirement did not apply because an adequate administrative remedy that addresses Plaintiff’s claim existed, and statements by a CalPERS retirement program specialist did not make the administrative process futile. 

11/29/2017
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Employee Benefits & ERISA; Faculty & Staff

Cunningham, et al. v. Cornell University (S.D.N.Y. September 29, 2017)

Memorandum and Order granting in part and denying in part Defendant’s Motion to Dismiss. Plaintiffs, as participants and beneficiaries of the Cornell University Retirement Plan and Tax Deferred Annuity Plan (the Plans), alleged that Defendants engaged in prohibited transactions and violated their fiduciary duties under sections 404 and 406 of the Employee Retirement Income Security Act (ERISA). The court found that only Plaintiff’s claims of a fiduciary breach of the duty of prudence, duty to monitor, and co-fiduciary duty of liability could proceed based on allegations that Defendants allowed the Plans to pay unreasonable administrative fees, continued to include accounts with high fees but otherwise performed poorly, selected and retained investment options with high fees and poor performance relative to other available investment options, and chose and retained high-cost retail mutual funds instead of materially identical, lower-cost alternatives. 

10/5/2017
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