Fuel Smarts

Court Says Mack Didn't Violate ERISA By Not Rehiring Workers

December 08, 2000

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In a case involving former Mack employees, a U.S. District Judge has ruled that employers don’t violate the Employee Retirement Income Security Act when they choose not to rehire workers because they would then become vested in pension plans.

A suit brought by 78 former Mack workers (Williams v. Mack Truck Inc.) claimed that the company had violated ERISA rules when it refused to hire them after extensive layoffs in 1987. The employees were not vested in Mack’s pension plan at the time they were laid off. They argued that the company didn’t rehire them because it wanted to avoid greater pension liabilities.
The Judge did not dispute that claim, but said it does not constitute an ERISA violation. Because the workers weren’t vested, they were not denied benefits they had rightfully earned, he noted. “Until they are granted employment status, they have absolutely no new rights.. .and therefore cannot claim to be denied any such rights.”

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