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ERISA lawsuits not limited to plan administrators

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in Compensation and Benefits,Employment Law,Human Resources

The 9th Circuit Court of Appeals has clarified who can sue for unpaid benefits under the Employee Retirement Income Security Act (ERISA).

Recent case: Laura Cyr was terminated from her job as vice president of Channel Technologies. She immediately applied for disability benefits under the company’s long-term disability plan in­­sured by Reliance Standard Life In­­sur­­ance. Channel, not Reliance, was listed as the plan administrator, but Reliance made benefit decisions.

Cyr got benefits based on the $85,000 per year she had earned.

Then she sued Channel for sex discrimination and negotiated a retroactive raise to $155,000. Cyr then sued Re­li­­ance when it refused to increase her benefit. Reliance said it couldn’t be sued because it wasn’t the administrator.

The 9th Circuit Court of Appeals disagreed. It said that because Reliance made the actual benefit decisions, it was the appropriate defendant. (Cyr v. Reliance, No. 07-56869, 9th Cir., 2011)

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