Hundreds of former Anheuser-Busch Cos. Inc. employees are owed enhanced retirement benefits under the terms of the company's pension plan, a federal appeals court has ruled.
In a unanimous decision handed down July 10, a three-judge panel of the 6th U.S. Circuit Court of Appeals in Cincinnati said pension plan administrators for Anheuser-Busch applied an “arbitrary and capricious” standard in denying a group of former employees' claims for enhanced benefits.
Four former employees of Metal Container Corp. — an aluminum beer can manufacturer owned by Anheuser-Busch — originally brought a class action against Anheuser-Busch and its pension plan administrators in 2010, accusing the company of breaching its fiduciary duty under ERISA in denying certain plan participants enhanced benefits under a 2000 amendment to the company's pension plan.
The amendment provides plan participants an additional five years of credited service and an additional five years of age in the event that their employment is involuntarily terminated within three years of a change in control of the company, according to court documents.
Employees of Metal Container Corp. filed claims for the enhanced pension benefits in 2009 after the subsidiary was sold to Broomfield, Colo.-based Ball Corp., which effectively terminated their employment less than a year after Leuven, Belgium-based Inbev N.V. acquired Anheuser-Busch.
Anheuser-Busch's pension plan administrator denied the benefit claims on the grounds that the employees were all given jobs at Ball Corp., reasoning they were never technically unemployed, according to court documents.
In the ruling last week, the appellate judges unanimously overturned a federal district judge's previous finding that the term “involuntarily terminated” was not defined with enough specificity so as to preclude Anheuser-Busch's determination that in order to qualify for the enhanced pension benefits, plan participants must be unemployed in addition to being terminated from the company involuntarily.
“(The plaintiffs) argue that the defendants' interpretation of the plan improperly ignores terms, adds an eligibility requirement — job loss — and fails to recognize that the plan is a retirement plan, not a severance or unemployment policy,” Judge Martha Daughtrey wrote in the court's opinion. “We conclude that the plaintiffs' employment … was 'involuntarily terminated' when Anheuser-Busch sold Metal Container to Ball and the plaintiffs became Ball employees. The plan administrator's decision to the contrary was therefore arbitrary and capricious.”
In a statement, Anheuser-Busch said the company is “disappointed with the 6th Circuit's decision.”
“We continue to believe the Anheuser-Busch Cos. Pension Plan made the right decision in denying claims made by former salaried Metal Container Corp. employees for enhanced pension benefits,” the statement said.