Covington & Burling LLP | Practices, Industries & Regions | ERISA & Employee Benefits Litigation

Covington handles the full range of litigation, audits, investigations, and government enforcement actions involving employee benefit plans. Our experienced ERISA litigators draw on the technical skills of one of the best advisory practices in the country to produce exceptional results for our clients. We also provide creative pre-litigation and settlement advice to reduce the risks and costs of litigation.

Litigation
Covington represents clients such as GE, IBM, Schering-Plough, United Technologies, Verizon, Xerox, the National Football League, and The ERISA Industry Committee in a wide variety of litigation and contested agency proceedings involving employee benefit plans. We have won cases that run the gamut from large class actions involving hundreds of millions of dollars to benefit claims brought by individual employees. Recent cases handled by our ERISA litigators include:

Representing Xerox before the U.S. Supreme Court in a case addressing the deference owed to the plan administrator’s interpretation of the plan;
On behalf of Schering-Plough, obtaining the appellate reversal of a class certification order in an ERISA “stock drop” case;
On behalf of United Technologies, obtaining summary judgment against class action claims of excessive fees and imprudent investment choices in a 401(k) plan;
On behalf of Verizon, obtaining judicial reformation of a potential $1.7 billion drafting error in a pension plan formula;
Representing GE in the defense and court-approved settlement of an ERISA “stock drop” class action;
Representing DuPont before the U.S. Supreme Court in a case concerning the proper designation and identification of plan beneficiaries;
On behalf of IBM and Verizon, winning decisions by courts of appeals that cash balance plans are not inherently age discriminatory;
Representing Harris Trust and Savings Bank, as trustee of the Ameritech pension trust, before the U.S. Supreme Court in a case establishing the right of a plan fiduciary to sue a non-fiduciary party in interest;
Defending several employersin class actions alleging improper calculation of benefits under cash balance plans;
Defending Capital Cities/ABC, GE, the NFL, Verizon, and the Pharmaceutical Research and Manufacturers of America against claims that independent contractors were entitled to benefits under company plans; and
Defending IBM and Verizon against fiduciary breach claims alleging misrepresentation in voluntary separation programs.

On behalf of our client The ERISA Industry Committee, we have filed amicus briefs in dozens of ground-breaking cases in the U.S. Supreme Court and federal courts of appeal. We have also filed amicus briefs on behalf of other clients, including PricewaterhouseCoopers, Mercer, and Towers Perrin.

Audits and Investigations
Covington has a superb record in audits, investigations, and enforcement proceedings. Our lawyers have held important posts at most of the federal agencies that oversee employee benefits. Drawing on the experience of these lawyers, we have successfully represented clients in matters before the IRS, the Labor Department, the EEOC, the Pension Benefit Guaranty Corporation, the Centers for Medicare and Medicaid Services, the SEC, and state regulatory agencies. In a number of cases we have persuaded federal agencies to abandon enforcement proceedings in which they originally sought millions of dollars in damages and penalties. We have also persuaded federal regulators to provide valuable support for our clients’ positions in private disputes.

Covington advises and represents clients in connection with self-audits and voluntary compliance procedures. We have conducted comprehensive compliance audits of our clients’ retirement plans, and we have helped clients correct administrative problems—some of them quite serious—through the voluntary compliance programs at the IRS and Labor Department. Our experienced associates and non-lawyer professionals are able to handle benefit plan audits and voluntary compliance applications cost-effectively.

Pre-Litigation and Settlement Advice
We bring our skills and experience to bear in a variety of ways to reduce our clients’ litigation risks. For example, we have:

Helped companies revise their procedures for offering company stock through their benefit plans in light of recent litigation;
Prepared guidelines for paying administrative expenses from plan assets in a way that will satisfy IRS and Labor Department auditors;
Drafted plan provisions designed to increase companies’ control over where and when they may be sued for benefits; and
Advised on insurance coverage for benefit plan fiduciaries.

Covington frequently settles employee benefits disputes on favorable terms. Our lawyers excel at designing cost-effective settlements that maximize the tax benefits of all parties, and that can be paid from existing benefit plan assets. We are experienced at addressing fiduciary issues and obtaining government approvals necessary to implement settlements.

Benefit Claims
Covington also resolves individual benefit claims efficiently both in administrative appeals and in court. We frequently help our clients build an administrative record that discourages claimants from bringing suit, or that positions a dispute for favorable resolution once it reaches the courts. We have successfully litigated a number of individual benefit claims on behalf of GE, Verizon, IBM, and other clients.

Representative Matters

Conkright v. Frommert, 130 S.Ct. 1640 (2010). In a case in which we began representing the Xerox pension plan following an adverse decision in the Second Circuit, we persuaded the Supreme Court that the lower courts erred in refusing to give deference to the plan administrator's reasonable interpretation of the plan, despite a prior mistaken interpretation adopted in good faith. The Court’s ruling in favor of the Xerox Corporation pension plan and the plan’s administrator has implications for many other ERISA plans. Covington secured the victory despite vigorous opposition from the Solicitor General, the Department of Labor, and the Internal Revenue Service.
Kennedy v. Plan Administrator for DuPont Savings & Investment Plan, 129 S. Ct. 865 (2009). Together with co-counsel, we represented DuPont in the Supreme Court of the United States, securing a unanimous decision in favor of the DuPont Savings and Investment Plan. The Court held that DuPont’s plan administrator “did its statutory ERISA duty” when it paid deceased worker William Kennedy’s retirement benefits to his ex-wife, whom he had named as his beneficiary, even though his divorce decree stated that his wife gave up any interest in the account. The decision is an important victory for benefit plan administrators because plan administrators may now rely on the beneficiary designations that follow the plan’s terms.
Harris Trust and Savings Bank v. Salomon Smith Barney, Inc., 530 U.S. 238 (2000). The Supreme Court reversed summary judgment against our client Harris Trust and held that ERISA permitted a fiduciary to sue a non-fiduciary party in interest that had participated in a prohibited transaction.
In re Schering Plough Corp. ERISA Litig., 2009 WL 4893649 (3d Cir. Dec. 21, 2009). The Third Circuit vacated a district court's certification of a class of participants in a "stock drop" lawsuit against our client Schering Plough that alleges breach of fiduciary duty for imprudent retention of a company stock fund in a 401(k) plan.
Taylor v. United Technologies Corp., 2009 WL 4255159 (2d Cir. Dec. 1, 2009), aff’g 2009 WL 535779, 46 Empl. Ben. Cas. (BNA) 1935 (D. Conn. Mar. 3, 2009). The Second Circuit affirmed the summary judgment entered in favor of our client United Technologies in a 401(k) plan expense class action lawsuit. The court upheld the rejection of all of plaintiffs’ claims concerning a variety of fiduciary decisions over more than a decade, for which plaintiffs had calculated alleged damages of $230 million.

More Representative Matters