The ESOP Association sent out the following release today. We share it with readers here.
For Immediate Release: January 26, 2015
The ESOP Association Files Amicus in Supreme Court Case Tibble V. Edison Int’l
January 26, 2015 (Washington, DC) – On January 23, The ESOP Association filed an amicus curiae to the Supreme Court of the United States in the case Tibble v. Edison Int’l, No. 13-550.
President of The ESOP Association, J. Michael Keeling explains why the case is so important, “The Association is interested in the outcome of Tibble because it focuses on how the agencies that enforce laws and regulations governing ERISA plans, such as an ESOP (employee stock ownership plan), calculate the ERISA law that has a six year statute of limitation on when they, or plaintiff lawyers, can sue the sponsors and fiduciaries of an ERISA plan. If the Court sanctions the position of the petitioners, Tibble et. al, then any decision made at any time since the establishment of the ERISA plan can be deemed a violation of ERISA, even if the decision was made ten, fifteen, or even thirty years ago!”
In essence, petitioners are asking the Supreme Court to interpret an ERISA fiduciary’s duty to monitor prior decisions made more than six years ago, and decide if that long ago decision was not “right” in hindsight, or prudent to use the words of trustee law, and then, if the fiduciary does not unravel the long ago decision, s/he may be sued.
“Congress, in both ERISA and legislative history, in accordance with seven hundred years of common law principals, makes it clear that if a fiduciary’s decisions seemed prudent under the circumstances when made over six years earlier, is not to be second guessed,” President Keeling said. “To bring this into easily understood terms, in the Super Bowl several years ago, the referees maybe should have called pass interference on a reception in the end zone that resulted in Team A winning, and the NFL has decided to take the touchdown away, and declares Team B the winner,” he concluded.
The ESOP Association feels that if the Supreme Court negates the six year ERISA statute on limitations to sanction “Monday morning quarterbacking” by the regulatory agencies and/or plaintiff lawyers, many employers will back off establishing ESOPs and thus overall benefits for employee owners in their retirement years will be reduced.
Counsel for Amicus Curiae for The ESOP Association was Mayer Brown, LLP.
The ESOP Association is the national trade association for companies with employee stock ownership plans (ESOPs) and the leading voice in America for employee ownership. The core cause of The ESOP Association is the belief that employee ownership will improve American competitiveness, increase productivity through greater employee participation, and strengthen our free enterprise economy. More information: website – www.esopassociation.org and blog – www.esopassociationblog.org.