Fired Before Coffee, Worker Gets Benefits

February 8, 2008

She may have been thinking of other adjectives for it, but a federal judge limited herself to "disingenuous" and "arbitrary and capricious" to describe what a major financial firm did to avoid paying benefits to a long-time employee severed with the sale of a subsidiary. Under the Employment Retirement Income Security Act (ERISA), companies can't always just wash their hands of any responsibility for their former employees' health and pension benefits, according to U.S. District Judge Faith S. Hochberg.

In Howley v. Mellon, Hochberg said Robert Howley, a 25-year employee of a Mellon subsidiary transferred with his unit to another company and fired when he showed up for work the next day, is entitled to the benefits of his Mellon pension plan and displacement benefits.

The company argued that as of 12:01 a.m. the day he was fired he was no longer its employee and therefore not eligible. But when the subsidiary was sold to Affiliated Computer Services, Howley's new employer had a list, compiled by Mellon, of workers to be laid off (even though Mellon managers testified they couldn't figure out who made the list).

Howley was represented by Kevin E. Barber, Peter J. Heck and Matthew Justin Vance of Niedweske Barber in Morristown. Mellon's counsel included Sherri A. Affrunti of Reed Smith in Princeton. Daily Briefing published by New Jersey Lawyer. Used with their permission.

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