Every football fan dreams of watching his or her favorite team play in the Super Bowl. Attending that Super Bowl is an even bigger dream. As a Detroit Lions fan, I am not holding out much hope that I will ever have my dream fulfilled. However, this past year, numerous Seattle Seahawks fans thought that their big dream would become a reality. They went online, purchased tickets for Super Bowl XLIX between the New England Patriots and their beloved Seahawks, and traveled to Arizona to attend the game. Yet, the online ticket retailer crushed their dream when, only hours before kickoff, it admitted to not having their “guaranteed” tickets.
The State of Washington recently filed a lawsuit against that online ticket retailer, SBTickets.com, for violations of its Consumer Protection Act. A Seattle-based law firm filed a similar lawsuit in Arizona as a class action for violations of the Arizona Consumer Fraud Act, breach of contract, promissory estoppel, unjust enrichment, and fraud. Whether or not they are ultimately successful, the lawsuits provide lessons for both consumers and businesses.
March 30, 2015
Businesses looking for areas to cut costs since the economic downturn have occasionally directed their gaze at employee benefits, either by requiring additional contributions from employees or by scaling back benefit levels. These businesses have just received some assistance from the Supreme Court, which recently clarified a longstanding circuit split regarding an employer’s right to alter welfare benefits provided to retired employees. In M&G Polymers USA, LLC v. Tackett, No. 13-1010 (2015), the Court held that the law does not presume that retiree benefits are guaranteed for life and ordinary principles of contract law determine whether any such guarantee exists.
The case stems from the Employee Retirement Income Security Act (“ERISA”), which creates two classes of employee retirement benefits: pension plans and welfare plans. Pension plans provide employees with income upon retirement, and are subject to significant legal requirements. Employee welfare plans, on the other hand, provide benefits other than income (such as medical insurance) and are exempt from many of the requirements imposed on pensions.
February 19, 2015
The Supreme Court was recently presented the question of whether collective-bargaining agreements (“CBAs”) that provide for benefits governed by the Employee Retirement Income Security Act (“ERISA”) should be interpreted differently than other contracts. The Court’s response in M&G Polymers USA, LLC v. Tackett, 574 U.S. __, No. 13-1010, 2015 U.S. LEXIS 759 (Jan. 26, 2015), was an emphatic “no.”
The Tackett case arises from a 2000 Pension, Insurance, and Service Award Agreement (“P&I Agreement”) entered into between Petitioner M&G Polymers, USA, LLC (“M&G”) and Respondents’ (“Retirees”) union. Tackett, 2015 U.S. LEXIS, at *7-8. The P&I Agreement contained a provision by which M&G agreed to pay the health benefits of retirees and their dependents “‘for the duration of this Agreement,’” which “provided for renegotiation of its terms in three years.” Id. at *8. In December 2006, more than a year after M&G and the union reached a new agreement, “M&G announced that it would begin requiring retirees to contribute to the cost of their health care benefits.” Id. The Retirees sued, claiming that the 2000 P&I Agreement “had created a vested right” to employer-funded health care benefits that went beyond the expiration of the P&I Agreement. Id. at *8-9. The new contribution requirement, they argued, violated the Labor Management Relations Act, 29 U.S.C. § 185 (“LMRA”), and ERISA, 29 U.S.C. § 1132(a)(1)(B). Id.
February 10, 2015