In Ladouceur v. Credit Lyonnais, No. 07-4040-cv (2nd Cir. 2009), the plaintiffs brought a case under ERISA, on the grounds of breach of fiduciary duty, claiming that the employer must operate its pension plan in the manner it represented to the plaintiffs. The district court found no evidence of this representation in writing, and granted summary judgment against the plaintiffs.
In June of 2000, the plaintiffs met with Credit Lyonnais’s Human Resources Director to discuss the impact of an upcoming merger between their current employer (a Credit Lyonnais subsidiary) and Credit Lyonnais on their salaries and pension benefits. The plaintiffs alleged that, at this meeting and at later times, Credit Lyonnais orally agreed to calculate the funding requirements for the plaintiffs’ pension benefits from the date the plaintiffs began to work for the current employer (as early as 1987), rather than the date they would begin to work for Credit Lyonnais after the merger (in 2001). No written documents confirm this agreement. The plaintiffs became employed by Credit Lyonnais during 2001 as a result of the merger, but left this employment later in the year. In 2002, Credit Lyonnais informed the plaintiffs that the funding requirements for their pension benefits would be calculated based on the date in 2001 that they started working for Credit Lyonnais. The plaintiffs filed this suit in 2004, on the grounds of breach of ERISA fiduciary duty, stemming from Credit Lyonnais’s representation that the funding requirements would be calculated based on the date (again, as early as 1987) that they started work with their pre-merger employer.
The Court faced the question of whether an alleged oral promise that purports to change a pension plan, which is subject to ERISA, can support a claim for breach of fiduciary duty under ERISA. The Court said that such oral promises are unenforceable under ERISA and therefore cannot vary the terms of an ERISA plan or otherwise give rise to a claim of breach of fiduciary duty under ERISA. As such, the Court upheld the district court’s summary judgment against the plaintiffs.