Magazine article HRMagazine

Sale of Division Did Not Violate ERISA

Magazine article HRMagazine

Sale of Division Did Not Violate ERISA

Article excerpt

Apsley v. Boeing Co., 10th Cir., No. 11-323 (Aug. 27, 2012).

A trial court did not err in dismissing claims by former Boeing Co. employees who alleged that the company interfered with employees' pension rights by selling a division to Spirit AeroSystems Inc., the 10th U.S. Circuit Court of Appeals ruled.

Under the Employee Retirement Income Security Act (ERISA), it is illegal for an employer to take an adverse action against an employee for the purpose of preventing that employee from attaining rights under a benefit plan. In cases related to the sale of a business or a reduction in force, employees must establish that the employer's desire to block employees from benefits was a determinative factor in the employees' selection for termination.

In 2005, Boeing sold its threelocation Wichita Division to Spirit. Pursuant to the sale, Boeing terminated the Wichita Division workforce of more than 10,600 employees. Spirit rehired 8,354 of those employees, relying on Boeing's managers to identify the most skilled and flexible employees for Spirit to hire.

Spirit rehired a lower percentage of workers over the age of 40 than had been present in the original employee pool. The average workforce age went from 48. …

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