The Third Circuit today affirmed summary judgment against former AT&T employees who missed out on the chance to earn more pension benefits after AT&T sold the business unit for which they worked.  AT&T agreed in the sale not to rehire the business unit’s employees for eight months.  The agreement prevented the employees from retaining pension credit for prior service if they rejoined an AT&T company within six months.  The employees complained that the interference with their opportunity to "bridge" previous AT&T employment with future AT&T employment violated ERISA.

The Third Circuit agreed with the district court’s conclusion that the employees had no claim under ERISA.  Section 501(a)(1) of ERISA, the court held, requires violation of the pension plan’s terms, but the employees didn’t assert that interference with their potential bridging rights actually conflicted with any plan terms.  Nor did section 501(a)(3) help them.  The employees wanted money (to replace the pension benefits that they could have earned), but section 501(a)(3) permits only "equitable" relief.  Eichorn v. AT&T Corp., No. 05-5461 (3d Cir. May 2, 2007).

Barry Barnett

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