Colgate Retirees Alleging Benefit Denial Receive Class Certification
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A class of former Colgate-Palmolive Co. brought denial of benefits claims in an ERISA action. Their suit was filed in June 2016 following an earlier ERISA case that included allegations that Colgate miscalculated retirement benefits. The June 2016 suit resulted in a $45.9 million settlement.
In July 2017, a New York federal judge approved class certification. The certification of the class of former workers essentially shut down the company’s arguments stating that a former employee is not an adequate representative for a class that is seeking resolution on an additional benefits case.
Allegedly, Colgate miscalculated pension benefits for retirees under their “residual annuity amendment” the standard retirement plan/policy. The amendment was generated to correct an error that failed to provide beneficiaries with specific benefits when lump sum payments were taken out. The complaint alleges that Colgate didn’t address those payments until it was included in a previous Employee Retirement Income Security Act action.
The judge’s 15-page decision stated that the plaintiffs met all the requirements for certification (in accordance with Rule 23(a)). Colgate’s challenge to the putative class was based on typicality and adequacy requirements. No arguments were made regarding numerosity or commonality. Colgate specifically claims that plaintiff Rebecca McCutcheon is not an adequate representative because she defers to legal counsel. The judge did not find the argument persuasive enough due to the highly technical nature of the case at hand. McCutcheon, who is not a lawyer, would obviously have difficulty providing answers to questions about claims in the case. She exhibited a general understanding of the case and a general desire to be a “watchdog” for the proposed class in seeking corrections to calculations. The judge felt this was sufficient in fulfilling the adequacy requirements.
Colgate also stated that McCutcheon was atypical of the class and that claims being made were barred by the 180-day contractual limitations period as defined in the retirement plan. The judge disagreed. He found that the limitations period was unenforceable due to the omission from a denial latter Colgate issued in 2014 in reference to an administrative claim for benefits and the letter’s explicit statement that she had a year to file suit regarding the matter. As the judge found that the limitations period does not apply in regard to McCutcheon’s claim, the argument does not currently define McCutcheon as atypical.
The judge granted class certification and appointed McCutcheon class representative as well as naming counsel. The proposed class includes approximately 1,200 members and applies to specific subcategories of retirees that received lump sum payments from their retirement plan and who are still due additional benefits from the company.
According to the suit, Colgate agreed to provide a residual annuity benefit in 2005 that would provide a residual annuity benefit to workers for close to a decade. When the company started to pay the benefit out, they distributed it to some plan participants and not others. They also failed to provide the benefit to certain plan participants (like McCutcheon) who had already received lump sum payments of their benefits – even when they requested payment.
If you need to discuss alleged retirement benefit denial or if you are due retirement benefits you are not receiving, please get in touch with one of the experienced California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.
