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Washington Update 
 

SHRM Nets Two Supreme Court Victories 
4/26/2013   
 
 

On April 16, the U.S. Supreme Court issued decisions in two cases, Genesis HealthCare Corp. v. Symczyk and U.S. Airways, Inc. v. McCutchen.  In both cases, the Court took the position SHRM advocated in its amicus briefs filed with the Court.

Genesis HealthCare Corp. v. Symczyk

In Genesis HealthCare Corp. v. Symczyk, the question before the Court was whether a case brought under the Fair Labor Standards Act (FLSA) became moot when the employer offered to settle the case and pay the sole plaintiff all back wages plus court fees and costs.  The Court of Appeals had sent the case back to the district court to assess whether additional parties could be found to join the suit.  The Supreme Court, in a 5-4 decision, ruled that the “suit was appropriately dismissed for lack of subject-matter jurisdiction.”

Over the past 10 years, employers have seen a nearly 300 percent increase in litigation under the FLSA.  In its amicus brief, SHRM argued that the Court of Appeals decision would “further exacerbate the significant burden already placed on employers who have been subjected to an exponential increase in private FLSA litigation.”  The decision is a “win” for HR professionals and employers, enabling them to avoid costly litigation through early settlement of FLSA cases without exposure to costly collective actions.

U.S. Airways, Inc. v. McCutchen

In another critical case, U.S. Airways, Inc. v. McCutchen, the Supreme Court’s 5-4 decision held that the equitable remedies section of the Employee Retirement Income Security Act (ERISA) does not authorize courts to rewrite the contractual language of an employer’s health plan.

A U.S. Airways employee used employer-provided health coverage to pay for treatment after a car accident and then brought suit against the other driver and recovered damages.  U.S. Airways sought reimbursement for the health plan, which was granted by the district court.  The Third Circuit Court of Appeals, however, overturned the decision, ruling that requiring the employee to reimburse the plan violated rules of equity.
 
SHRM, in its amicus brief, argued that employers need to rely on their health plan terms not being overridden in individual cases by the courts.  SHRM has participated in previous cases, successfully arguing that equitable relief under ERISA is only “appropriate” if it is consistent with the plan terms.

This case reinforces the ability of HR professionals to rely on an employee benefit plan’s written terms without fear of exposure to unpredictable liabilities on a case-by-case basis.

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