Gould, Inc., Et Al. v. Adams Et Al.

Background

Gould, a company that closed its plant, had a union-negotiated pension plan that paid current retirees first and then vested employees when they retired. The pension fund lacked enough money to pay even current retirees. An arbitrator found Gould had reduced contributions by changing actuarial assumptions and ordered the parties to calculate and pay the shortfall, which they agreed was $570,600. Without telling the vested employees, Gould and the union settled so current retirees received a supplemental annuity and Gould avoided paying the $570,600; vested employees got nothing and then sued, claiming the settlement violated the arbitrator’s award and that the union breached its duty of fair representation.

Reasoning

The core question was which time limit applies to the employees' suit: a uniform six-month deadline the Court had applied to many union representation claims, or ERISA’s three-year deadline for certain pension claims. The Court of Appeals held that ERISA’s three-year deadline applied because pension disputes often unfold slowly and may not immediately affect most employees. The Supreme Court declined to hear the appeal, so the appeals court’s decision stands.

Real world impact

Because the Supreme Court refused review, the decision leaving ERISA’s three-year deadline in place remains binding in this case. That outcome makes it more likely that vested employees can bring certain pension-related claims later than they could under a six-month rule. Petitioners warned this approach may revive uncertainty about which deadline applies to different union disputes.

Dissents or concurrances

Justice White, joined by Justices Brennan and Powell, dissented from the denial and said he would grant review to resolve whether the single six-month deadline should control these fair-representation claims.