Jottings By An Employer's Lawyer

Thursday, April 08, 2004

Keeping HR In the Dark - Generally A Bad Idea, In This Case a Real Problem. And A Broader Thought On Political Discourse.


I don't often refer to district court decisions because they are difficult to easily obtain, the sheer volume, and their generally limited precedential effect. Obviously however there is much wisdom to be gained from federal district judges who are the first to face issues, often with little guidance, and almost always with the difficult task of applying general principles of law to specific, often factually complex and tangled situations. The 73 page opinion from Judge Dominic J. Squatrito, probably falls into that category. I qualify only because I know nothing about him, or I must candidly confess even having read the whole opinion. However, just based on the summary from today's DLR (subscription required) I know that the case presents the difficult, and ever more common, case where retirees are claiming that they were misled by the company about anticipated changes in retirement plans. And it is hard not to have confidence in a judge who candidly notes:
The parties have spent much of their time before this Court arguing about what fiduciary duty NU owed its employees. This is a thorny question, and requires the Court to balance two important interests: the interest of employees to have access to relevant retirement information, and the interest of employers in maintaining the confidentiality of their deliberative process with regard to downsizing plans. The Court cannot carve out a specific protocol for employers to follow when seeking to balance these two interests. All the Court can do is assess the facts of this case under the standard that has been set by courts in this Circuit. The Court believes that the touchstone of this standard is one crucial ideal: truthfulness.
Broga v. Northeast Utilities One aspect of the case that caught my eye was that the employer in an effort to ensure no leaks until everyone was informed of its plans kept changes even from its human resources group charged with supplying information to employees about benefits. Judge Squatrito may not ultimately be held correct in his determination, but his view of the matter, taken from an earlier case is this:
Fundamentally, NU argues that it did not breach its fiduciary duty to avoid misstatements because its human resources employees spoke truthfully, based on their own ignorance. In sum, this argument is contrary to ERISA's fiduciary ideal: A fiduciary cannot leave its front-line benefits counselors in the dark, or instruct them to give noncommittal and nonfactual responses to inquiries regarding potential benefit changes, if the information that is withheld is material to beneficiaries. Such a stance is inconsistent with the mandate that a fiduciary discharge its duties with the care, skill, prudence and diligence required by the statute. Mullins, 147 F. Supp. 2d at 109.
The following may not be reflective at all of what happened in Broga, given my lack of knowledge. But for some reason particularly today, when Condolezza Rice by all accounts appears to have acquitted herself quite well in light of what could be considered harsh questioning, it seems important to remember how difficult problems can be, how people of good will and good faith can approach and view them so differently, and how hindsight is so ever more clear than peering into the future. It is refreshing to see how our legal system can work at the ground level to try to sort out some of those difficult issues, the best way we can. As lawyers, when we contribute our arguments forcefully but civilly with respect for those whose opinions differ, we contribute. The same is true of those who serve in the more political realm of government. But when any of us resort to rhetoric and ill will, without respect for others and remembering they may also serve in good faith, all are served badly.

The soapbox is hereby put away.


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