Northrop Faces ERISA Class Action In Response to Pension Cuts

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Northrop Grumman Space and Mission Systems Corp. faced allegations of ERISA violations in a recent California class action.  

Details of the Case: Baleja v. Northrop Grumman Space and Mission Systems Corp. Salaried Pension Plan et al.

Court: U.S. District Court for the Central District of California

Case No.: 5:17-cv-00235

Getting to Know the Case: The Allegations

In Baleja v. Northrop Grumman Space and Mission Systems Corp. Salaried Pension Plan et al., Northrop Grumman Corp faces ERISA class action. The ERISA class action includes allegations that the group improperly slashed from 1,000 to 2,000 retiree pensions. A California federal judge that heard the original claims, trimmed the suit but allowed it to continue to trial with the core claims intact. 

Getting to Know the Case: The Case Progresses

U.S. District Judge Jesus G. Bernal dismissed the retirees’ claim that a pension plan document they unearthed flouted the ERISA disclosure requirement. However, the same judge preserved accusations that the defendant improperly cut retirees’ pensions, and that in doing so, violated federal law. Judge Bernal felt it was too soon to grant the motion for summary judgement for either party. Before doing so, he could need answers to key questions about the pension cuts. 

The Retiree Pension Cuts: Brought On by an Amendment

The cuts referenced in the case refer to retiree pension cuts brought about by a pension plan amendment. The amendment, called the ESL offset provision, was added decades ago in the 1980s. The court will seek answers to these key questions during the trial phase. 

Questions About the ESL Offset Provision: 

The court will need to determine the appropriate interpretation of the ESL offset provision, as well as the 1986 TRW plan as the case moves forward. The ERISA class action was launched years ago in February of 2017. The claims were originally filed by John Baleja, a retiree who was an employee of subsidiary of the aerospace and automotive company TRW Inc.(this company was an acquisition of Northrop in 2002). 

The Pension Plan Termination: 

The subsidiary’s pension plan was terminated in the mid 80’s. Baleja and other ESL Inc. employees and retirees became part of the TRW pension plan. When terminated, the old plan made payments to those transitioning into the new plan (TRW’s pension plan). According to court documents related to the case, Baleja received payments totaling $4,078. An offset was applied when Northrup acquired TRW. The amount was based on the termination payment. According to Baleja, Northrup significantly overcalculated the offset amount. Baleja alleged that the company cut his approximate $1,000 pension by close to 50% based on the fact that he received a payout of a few thousand dollars in the 1980s. 

The Class Members: 

Class members include plan members who had their accrued pension benefits cut due to the ESL offset since the end of 1984. Class certification was granted in March 2020, and estimates of class numbers are between 1180 and 2000. 

If you have questions about ERISA violations or the law protects you, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.