Supreme Court Sides With Former Intel Employee in ERISA Dispute
Author: David B. Weisenfeld, XpertHR Legal Editor
March 3, 2020
Employees must have "actual knowledge" to start the clock running on ERISA's three-year statute of limitations, the Supreme Court has ruled unanimously. And actual knowledge, the Court held, means that the plaintiff's knowledge must be more than potential, theoretical or hypothetical.
Former Intel employee Christopher Sulyma sued the company claiming that plan administrators breached their fiduciary duty to employees by overinvesting in alternative assets.
But Intel countered that the suit was time barred because Sulyma filed it more than three years after Intel had disclosed its investment decisions to him. For instance, Sulyma received numerous disclosures while working at Intel, some explaining how his retirement plans were invested.
The Court found, though, that those disclosures were not enough to show actual knowledge. Writing for the Court, Justice Samuel Alito said ERISA is clear that the limitations period begins "only when a plaintiff actually is aware of the relevant facts, not when he should be."
Justice Alito added that plan participants are not the only potential plaintiffs, noting that the Secretary of Labor may also sue on behalf of plan participants. And, he said, the Secretary will have a hard time doing so within the three-year time frame if a mere disclosure was enough to constitute "actual knowledge."
The ruling makes it easier for employees to bring ERISA claims since they now must be deemed to have read any disclosure information and understood it for the statute of limitations to begin running.
At the same time, the Court made clear that nothing in its opinion blocks any of the usual ways to prove actual knowledge at any stage during litigation. It noted that employers can still contend that evidence of "willful blindness" supports a finding of "actual knowledge." But, it said, Intel never made that argument in this case.
Other Supreme Court News
The justices announced this week that they will hear a major challenge to the Affordable Care Act (ACA). However, arguments will not be heard until the fall, meaning that any ruling is almost certain to come after the 2020 election.
A group of Republican state officials claim that the ACA's individual mandate is unconstitutional and that the law should be struck down in its entirety. A 5th Circuit Court of Appeals panel agreed last December that the individual mandate is invalid but stopped short of ruling on the entire law.
The stakes are significant as the outcome has the potential to affect health coverage for millions of Americans.