Employees Can Sue to Rescind Early-Retirement Offers

by on
in Employee Benefits Program,Human Resources

A federal district court judge in Texas recently ruled that an employee may proceed with a lawsuit claiming that he was entitled to rescind his early retirement because his employer misrepresented his pension benefits.

The judge rejected the employer’s argument that rescission of the employee’s early retirement was not an “equitable” remedy allowed under the Employee Retirement Income Security Act (ERISA).

The case: Verizon employee Michael Frawley accepted an early retirement offer in May 2003 that came with a lump-sum payment of more than $560,000. Two years later, the company informed Frawley that it erred in calculating his pension benefits to the tune of a $240,000 overpayment. Frawley refused to return the $240,000, and the plan’s benefit committee filed a lawsuit to recover the overpayment.

Frawley filed counterclaims, requesting that he be permitted to rescind his early retirement. He also requested a reinstatement to full retirement benefits effective as of his normal retirement date.

The court denied Verizon’s request to dismiss Frawley’s claims, saying that many courts have acknowledged that reinstatement of benefits is appropriate equitable relief under ERISA Section 502(a)(3).

According to the court, “Frawley is seeking to be restored to the same position he would have been in had the misrepresentations not been made to him, in which case he would not have elected to retire until a normal retirement age.” (Verizon Employee Benefits Comm. v. Frawley, No. 3:05-CV-2105-P, U.S. District Court for the Northern District of Texas, 2006)  

{ 3 comments… read them below or add one }

antani shmeka June 30, 2013 at 12:05 pm

I found a united airlines credit card with your name on it Manuel A Meza. im not sure if this is you but im trying to find the owner. please call me at 703-861-4654

Reply

Judy February 19, 2012 at 9:31 am

Manuel, there’s a group of UA retirees. http://www.theunitedretired.com will introduce you. There’s also a group on facebook, “Protect United Airlines Retiree’s Seniority and Boarding priority”. Lots of people just like you, getting organized and taking action.

Welcome

Reply

Manuel a Meza January 4, 2012 at 9:14 am

In my case I retired from United Airlines in Feb of 2002Due to the type of work that i did loading and unloading airplanes,Durning my employment due to a pinch nerve i hand cause while working i had a plate put in my neck and 2 knee surgerys,had i knew that the changes that United Airlines were going to make on my pension i never would had retire.upon retirement my life insurance was taken away—my stocks that i could not touch until retirement went from $700,000.00 to 13,000.00 when i retired.I believed my retirement package that was promise to me upon employment was broken please help me or guide me to my next stept to try and get what was promise to me

Reply

Leave a Comment