In U.S. Foodservice, Inc. v. Truck Drivers & Helpers Local Union No. 355 Health & Welfare Fund, No. 12-1108 (4th Cir. 2012), the employer, U.S. Foodservice, Inc. (“USF”), had-pursuant to a collective bargaining agreement (a “CBA”)- been making contributions to the defendant Truck Drivers & Helpers Local Union No. 355 Health and Welfare Fund (the “Health Fund”). The Heath Fund is a welfare benefit plan subject to ERISA.
At one point, USF discovered that it had been contributing to the Health Fund more than it believed was required under the CBA. The problem: USF had made contributions to the Health Fund for hours paid at an overtime rate, even though it believed that the CBA only required contributions for hours paid at a straight-time rate. USF asked the Health Fund to return the excess contributions, but the Health Fund refused to do so, on the grounds that contributions were required for all hours, at all rates. This suit ensued under ERISA and the federal common law of unjust enrichment.
In analyzing the case, the Fourth Circuit Court of Appeals (the “Court”) said that ERISA permits the return of an employer’s plan contribution that was made as the result of “a mistake of fact or law,” but only “after the plan administrator determines that the contribution was made by such a mistake.” (ERISA section 403(c)(2)(A)(ii)). The district court had ruled that the employer was entitled to return of the contributions in question. However, in this case, the plan administrator determined that those contributions were not made by a mistake of fact or law, as it interpreted the CBA to require contributions for all hours paid, without regard to whether payment was made at straight or overtime rate . The Court found that this determination was not an abuse of discretion. Accordingly the Court reversed the district court’s ruling and remanded the case back to the district court to conclude the case in accordance with the Court’s decision.