Lawsuit  Updates

AT&T Pension Litigation Status as of January 3, 2012.

Update on the ADEA Claims

On November 14, 2011, Plaintiffs filed a Petition for Certiorari asking the Supreme Court to review the Third Circuit’s decision on our ADEA, plan amendment, and Summary Plan Description claims. You can read the Petition here. Our case, and all the briefs, were distributed to the Supreme Court on Wednesday 12/28/2011. The Justices will review and consider our petition on Friday, January 13th, 2012. The disposition to determine if they will hear the case will be announced on an Orders List that will be released at 10:00 a.m. on Tuesday January 17. The docket file is here.

Chronology of Engers v. AT&T Management Pension Plan, C.A. 98-3660 (D.N.J.):

Judge Hedges rejects AT&T's arguments to exclude expert reports and testimony - August 11, 2005

Summary Judgment Decison received - Friday, March 25, 2006. Judge Linares found for AT&T on two claims of notification: 204h Notice of Reduction and SPD Claim. The Court required a refilling of the Summary Judgment on the Wearaway and 6% Early Retirement Reduction claims. The Court is also requiring that we reenter an appeal to AT&T to exhaust our internal remedies.

Action: The two claims that the Judge found for AT&T will be part of the overall appeal. A Summary Judgment has been refilled requesting a decision on the remaining claims. A petition and possible subsequent appeal to AT&T Pension Administration will be filed.

Attorney's request for the judge to reconsider his decision (PDF READER REQUIRED) - April 17, 2006

Attorney's letter (Notice of Supplemental Authority) to Judge Chesler regarding two relevant precedants (PDF READER REQUIRED) - Nov 2, 2006 

(12/12/2006): Judge Chesler is reinstating the basic age discrimination claims (Claims One and Two) in light of the Supreme Court's decision in Smith v. City of Jackson. He denied the motion to reinstate the narrower Ninth Claim on the ground that there has been no clear change in the law relating to that claim. However, there is a case pending in the Third Circuit, Register v. PNC Financial, which may clearly change the law related to that claim in the next few months.

In the end of 2006, our attorney refiled the age discrimination claims that had previously been dismissed. They were refiled because of the Court opinions that have occurred in the last year that were favorable to us. For the past few months, our attorney has been responding to AT&T's motions to dismiss. Once this is settled, and the age discrimination claims stand, all parties that are part of the case must be notified.

On May 24, 2007, the Court conditionally certified Claims One and Two of our suit as a collective action under the ADEA. Notices will be mailed to over 40,000 individuals who fit the class definition. They will give those individuals an opportunity to "opt-in" to the collective action by signing a one-page consent to join form. The notices are expected to be mailed before the end of July 2007.

The Court's May 24, 2007 decision. (PDF READER REQUIRED)

January 25, 2008 update: The Engers v. AT&T Class filed 23,938 signed and completed opt-in forms from current and former AT&T employees with the Federal Court on December 27, 2007. To confirm that your opt-in form was received, call (toll free) 1-888-952-9104. Mediation sessions between the class representatives and AT&T were scheduled for January 17 and 18 in New York City. On January 17, 2008, the Plaintiffs' lawyers and two former employees met with a nationally-known mediator and five representatives of AT&T to see if there was a way to resolve this case. Unfortunately, no progress was made and the mediator declared an impasse. The Plaintiffs' experts are now preparing statistical and actuarial reports to show the Court how AT&T's rules about pension "crossover" were a thin-disguise for age discrimination. The trial of the case will take place in Federal court in Newark, New Jersey, but the dates have not yet been set.

July 29, 2008 update: Pursuant a subpoena and a scheduling order from the U.S. District Court in New Jersey, AT&T's consultants, Aon (formerly known as ASA) are being required to produce all data and documentation that they possess related to the cash balance pension plan conversion by August 8, 2008 (for data and technical documentation) and August 15, 2008 (for consulting advice about the changes). Expert reports from the Plaintiffs' actuarial and statistical experts are due September 22, 2008. In those reports, the experts will show how AT&T's cash balance design produced periods of "wear-away" (with no growth in retirement benefits) that were based on how close AT&T employees were to age 55. Plaintiffs allege that the cash balance design was skewed to produce periods of wear-away based on age.
NOTE: These are new dates as a result of the judge granting Aon an extension.

September 2008 update: The Plaintiffs’ expert statistical report and actuarial reports dated September 22 and 23, 2008 are submitted (read here). These reports show how AT&T’s cash balance design created periods of “wear-away” during which older employees did not earn any additional retirement benefits for an average of almost 8 years, and also analyze the additional losses in benefits for employees who commenced their pension benefits before age 55. The company's reports are due by November 4th, then our rebuttal reports are due by December 2nd.

January 2009 update: Depositions of the actuarial and statistical experts took place in Newark, NJ on December 22-23, 2008 and January 15-16, 2009. AT&T's benefit consultants (AON, formerly ASA) were deposed about their responses to a subpoena issued by the plaintiffs on January 27, 2009, in Woodbridge, NJ. The rebuttal reports dated December 3 and 9, 2008 that the Plaintiffs' actuarial and statistical experts prepared in response to the reports by AT&T's experts are posted here.

August 31, 2009 update: the Magistrate Judge ordered that the Plaintiffs are permitted to depose former CEO’s Michael Armstrong and Robert Allen, and Scott Macey, an AT&T consultant, about the cash balance changes. The Magistrate Judge also ordered AT&T to produce documents about a “special frozen annuity” that was offered to Senior Managers.

We are also still seeking information about a "special frozen annuity for executives" that was developed secretly to protect the highest-level Senior Managers from the periods of "crossover" effected by the cash balance changes. Plaintiffs' counsel are also obtaining AT&T's videotapes and other records of meetings at which Mike Armstrong told employees that he personally examined the impact of the cash balance changes when he arrived and believed the changes were "fair."

Six more current and former AT&T employees have agreed to testify on the employees' side at trial and have all been deposed by AT&T's lawyers. This brings the total number of current and former AT&T employees who are prepared to testify at trial for the plaintiffs to sixteen (16). Two former executives who AT&T previously listed as potential witnesses on its side have said in writing that they want to be removed from AT&T's list.

April 5, 2010 update: AT&T filed a motion for summary judgment on the ADEA and ERISA claims and the employees filed a motion for summary judgment on the ERISA claims. The briefs in opposition and related court papers were all filed on the same date, including 191 exhibits assembled by counsel for the employees, primarily from AT&T's own records. After the Court decides the motions, it will schedule the case for trial (with a jury trial on the ADEA claims). A final pre-trial conference has been set for September 21, 2010 in Federal court in Newark, New Jersey. An article on the case appears in the April 7, 2010 Wall Street Journal (AT&T Fights Pension Suit: Potential Liability for Retirees' Plan Conversion Is Estimated at $2.3 Billion).

June 7, 2010 update: Judge Chesler issued an unfavorable decision, dismissing the case without a trial. An appeal will be filed with the United States Court of Appeals for the Third Circuit in Philadelphia within the next 30 days. Appeals usually take at least a year to be resolved. The District Judge's decision was disappointing, but have a very strong case on appeal.

November 3, 2010 update: Plaintiffs filed their brief in support of their appeal on the ERISA and ADEA claims. Briefing will be completed at the end of December after which an oral argument will be scheduled.

March 17, 2011 update: The oral argument on the appeal took place in the U.S. Court of Appeals for the Third Circuit. Listen to the procedure here.

June 22, 2011 update: The Appeal Court found in favor of AT&T on our case. A petition for rehearing and rehearing en banc (a hearing before all of the Third Circuit judges) will be filed by July 6th. The response should be fairly quick.

Third District Court of Appeals Decision (PDF READER REQUIRED) - June 22, 2011

August 1, 2011 update: The Third Circuit denied the petition for rehearing and rehearing on banc. Our only recourse at this point is a petition for certiorari to the Supreme Court. Statistically, the Supreme Court only hears less than 5% of the petitions it receives.

Other Pension Lawsuit Updates

NOTE: These cases are not related to the cash balance case of Engers vs. AT&T or the old (legacy) AT&T. this information is for general knowledge of pension related cases by other plaintiffs.

The recent Supreme Court decision on Age Discrimination will have a positive impact on our Cash Balance Pension case.  One of our early setbacks may now become a success.  The ruling, in essence, makes“wearaways” that affect only senior employees illegal.  Thanks to the forethought of one of our members who filed a "timely" EEOC age discrimination complaint in February, 1998, we may be able to enjoy the rewards.  See "High Court Ruling Seen Favoring Older Workers " article published March 5, 2005.

LONG TERM SAVINGS PLAN LAWSUIT - 8/11/05

Sept 1, 2006: Age discrimination suits against IBM reinstated.
A federal appeals court reinstated age discrimination lawsuits against International Business Machines Corp., finding that termination pay agreements were misleading and confusing. Employees laid off as part of the company's 2001 work-force reductions were offered severance pay and benefits in exchange for signing an agreement not to sue IBM. Ten employees at IBM microchip plants who signed the waiver sued the company in San Jose, Calif., after reviewing an information packet from IBM showing the ages of those laid off and those who were retained. The waiver used language that was "unfamiliar to lay people," created "confusion" about employees' rights to sue for age discrimination and was unenforceable, the San Francisco-based court ruled. The ruling opens the door to tens of thousands of age discrimination claims.

Jun 9, 2008: Supreme Court rejected AT&T appeal in (Ameritech) pension case.
The Supreme Court on Monday rejected AT&T Inc.'s appeal of a lower court's $31.2 million verdict against the company in a class action lawsuit over retirement benefits. At issue in the case is whether a pension plan administered by Ameritech, a local phone company, improperly reduced retirement benefits paid to an employee in 1999. January 9, 2007: The U.S. Court of Appeals in Chicago upheld a 2004 lower court ruling in January 2007 that Ameritech Corp., acquired by AT&T in 1999, underpaid early retirees by $31 million when they sought to take a lump sum.

Jul 29, 2008: Agreement Reached in AT&T Pension Calculation Lawsuit.
Attorneys for a class of participants in the AT&T Pension Plan today announced an agreement to settle a class action lawsuit filed in 2003 under which the AT&T Pension Plan will pay a total of $16 million to settle a claim that it miscalculated the pension benefits owed to some non-bargained (management) retirees of certain AT&T companies who retired under a 2000 early retirement window known as the Enhanced Pension and Retirement Program. The federal court lawsuit in Washington, D.C., Wagener, et al. v. SBC Pension Benefit Plan-NonBargained Program, Civ. Action No. 03-00769 (D.D.C.) (RCL), alleged that the Plan (since renamed the AT&T Pension Plan), incorrectly omitted pay earned for work performed during an averaging period used as one component in the calculation of retirees' pensions for retirees entitled to one of several pension options.

Dec 16, 2009: AT&T, BellSouth sued for $1B in overtime.
AT&T Inc. is being sued in federal court for allegedly withholding up to $1 billion in overtime wages from more than 5,000 of the company’s managers throughout the country. The suits allege AT&T violated the Federal Fair Labor Standards Act and California state laws by carrying out a company-wide policy to wrongfully misclassify thousands of its level one managers as exempt from overtime wages.

May 16, 2011: Supreme Court rules in favor of plaintiffs in Pension Class Action Lawsuit.
The Supreme Court held that the District Court has the authority to award additional pension benefits to remedy the misleading statements in CIGNA’s Summary Plan Description. The Court also held that each plan participant does not need to individually prove how he or she detrimentally relied on CIGNA’s misstatements to obtain that relief. The Court is expected to issue an order in the next 30 days that will formally send the case back to the District Court to apply the standards set forth in its decision. On May 23, 2011, the Supreme Court also granted Plaintiffs’ petition for certiorari about obtaining appropriate relief for CIGNA’s misleading ERISA “Section 204(h)” notice and its representations about providing “comparable benefits” under the cash balance plan. These issues will also be sent back to the District Court to reconsider the appropriate relief.

For further details, see the text of the Supreme Court ruling, a Wall Street Journal article about it, and the Pension Rights press release.

Background: A New Haven federal court judge had ruled on Feb 20, 2008 that CIGNA misled its employees about a switch to a new pension plan which cost hundreds of millions of dollars in retirement benefits for thousands of workers. The decision in the 2001 class-action case, issued by Judge Mark R. Kravitz, concerns CIGNA's conversion from a traditional pension plan with defined benefits to a "cash balance" plan, starting in 1998. On October 6, 2009, the court of appeals upheld Judge Kravitz's decision against CIGNA for violating ERISA's disclosure rules and his decision ordering limited remedies for those violations. On January 4, 2010, both parties filed petitions for certiorari asking the Supreme Court to review the court of appeals’ decision (the plaintiff employees have asked the Supreme Court to direct the court of appeals and Judge Kravitz to consider more complete remedies for the violations). The final papers related to those petitions were filed on February 16, For further info, see CIGNA Pension Plan Class Action Lawsuit

EEOC Complaint

The EEOC filed a complaint in August 2009 concerning AT&T's practice of not rehiring people who went out on VRIP and other force reduction programs. The Complaint says that this is part of a pattern of age discrimination. The EEOC attorney who is handling the case is Louis Graziano. His email address is louis.graziano@eeoc.gov, telephone number is 212-336-3721. The official complaint is here.

Aug 5, 2010: in Manhattan federal court, the EEOC has proposed a settlement of the nearly year-old lawsuit, and both sides held "substantive settlement discussions" in a June 30 mediation session. Another session is set for August 10.