September 27, 2021

Volume XI, Number 270

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September 27, 2021

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Another ERISA Church Plan Class Action Settles

Citing to the “significant uncertainties in predicting the outcome” of their litigation “where the critical issue is pending before the Supreme Court (oral argument on the scope of ERISA’s church plan exemption is set in three consolidated cases for March 27), Plaintiffs in Butler et al. vs. Holy Cross Hospital, another church plan class action, have filed an unopposed motion for preliminary approval of settlement.

In Butler, former employees of Holy Cross Hospital filed suit in June of 2016 in the United States District Court for the Northern District of Illinois on behalf of themselves and other participants of the Pension Plan for Employees of Holy Cross Hospital, alleging that Defendants breached duties under ERISA by incorrectly treating the Plan as an ERISA-exempt “church plan.” Among Plaintiffs’ allegations are that Defendants underfunded the Plan by $31 million and improperly attempted to terminate the Plan while it was underfunded.

The Plan was originally sponsored by Holy Cross Hospital, which transferred plan sponsorship and liabilities to the Sisters of Saint Casimir shortly before the hospital’s merger with Sinai Health System. Plaintiffs allege that this transfer was an unlawful attempt to avoid liability for the Plan’s underfunding. They claim that upon the Plan’s purported termination, Defendants offered participants a discounted distribution based on incorrect classification of the Plan as a church plan.

The parties’ settlement provides for a settlement amount of approximately $9 million, which would consist of $4 million paid by Defendants into an escrow account (less attorney’s fees not to exceed 15% of the amount in escrow), as well as approximately $5 million in Plan assets held in trust that have not yet been distributed. According to the motion, after notice and administrative costs, Defendants anticipate that approximately $8.4 million will be available for distribution to Plan participants. After final distribution of the settlement amount will the Plan be fully liquidated and formally terminated.

Jackson Lewis P.C. © 2021National Law Review, Volume VII, Number 68
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About this Author

René E. Thorne, Jackson Lewis, Employment Litigation, ERISA Attorney"
Office Managing Principal and Office Litigation Manager

René E. Thorne is Office Managing Principal of the New Orleans, Louisiana, office of Jackson Lewis P.C. Her practice covers the full range of employee benefit litigation matters, including representation of employers, plans, plan fiduciaries, and trustees.

In that regard, she has handled numerous ERISA class actions for clients such as Nortel Networks, Target, Krispy Kreme Doughnuts, Owens Healthcare, United Airlines ESOP Committee, Dunbar Armored, United Companies, Benefits Administration Corporation, and Beverly Enterprises. Ms. Thorne also has handled...

504-208-1755
Eileen Kuo, Jackson Lewis, retaliation claims lawyer, federal and state employment laws attorney
Associate

Eileen Kuo is an Associate in the Memphis, Tennessee, office of Jackson Lewis P.C. She represents management in Title VII, ADA, FLSA, FMLA, ADEA and retaliation claims, as well as other federal and state employment laws.

Ms. Kuo also represents employers in responding to EEOC and NLRB administrative charges. She has litigation experience on the state and federal level, and has handled employee benefits matters on behalf of employers and employee welfare benefit plans throughout the United States.

Prior to joining...

901-462-2615
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