Owen v. Macy’s, Inc., 175 Cal. App. 4th 462 (2009)
Lisa Owen worked as a sales associate at Robinsons-May until it was acquired by Macy’s in August 2005. In January 2006, employees at the Arcadia store where Owen worked were informed that the store would close by April. After the store closed on March 18, 2006, Owen received her final pay, which included no…
Introduction
On May 18, 2009, the Internal Revenue Service (the “IRS”) issued new proposed regulations that allow plan sponsors of Internal Revenue Code (“Code”) Section 401(k) or 403(b) safe harbor plans to reduce or suspend non-elective contributions mid-year if they are experiencing a “substantial business hardship.” Prior to the proposed regulations, a plan sponsor could suspend non-elective contributions under a safe harbor plan only by terminating the plan. The proposed regulations apply to both traditional safe harbor plans and those that qualify as “qualified automatic contribution arrangements” (QACAs), a type of automatic enrollment plan introduced under the Pension Protection Act of 2006 for plan years beginning in or after 2008. The proposed regulations mirror current regulations that allow sponsors of plans with safe harbor matching contributions to reduce or suspend such contributions mid-year.
Plan sponsors may rely on the proposed regulations immediately (i.e., effective for amendments adopted after May 18, 2009) pending issuance of final regulations. If the final regulations are more restrictive than the proposed regulations, the final regulations will only apply prospectively.
In a 7-2 decision, the United States Supreme Court has held that AT&T did not violate the Pregnancy Discrimination Act (“PDA”) when it based its calculation of employees’ pensions in part on a pre- PDA accrual rule that treated pregnancy leave less favorably than other forms of disability leave. AT&T Corp v. Hulteen, No. 07-543 (May 18, 2009). The Court’s decision reversed the Ninth Circuit and confirmed the presumption that discrimination statutes will not be applied retroactively.
Background
Plaintiffs were Noreen Hulteen and three other AT&T employees who had taken pregnancy leave before April 29, 1979, the effective date of the PDA. At the time they took leave, AT&T based employee pension benefits on a seniority system (i.e., a system based on length of service) that provided less service credit for pregnancy leaves than it did for other forms of temporary disability leave. When the PDA took effect, AT&T changed its system and began to provide full service credit for pregnancy leaves. It did not, however, retroactively adjust the accrued service credits of Plaintiffs or any other employees who previously had taken pregnancy leave. Therefore, when those employees retired, they received an overall pension amount that was less than it would have been if AT&T had afforded full service credit to their pre-PDA pregnancy leaves.
Plaintiffs and their union filed suit against AT&T in the Northern District of California alleging discrimination on the basis of sex and pregnancy in violation of Title VII of the Civil Rights Act of 1964, as amended by the PDA. Plaintiffs argued that it was unlawful for AT&T, in the present day, to apply a seniority-based pension system that incorporated antiquated pre-PDA accrual rules that had differentiated on the basis of pregnancy. Doing so, Plaintiffs contended, carried forward the old service credit differential so as to produce a disparate effect in the amount of the pension benefits of employees who had taken pre-PDA pregnancy leave. The district court agreed, holding that AT&T had engaged in unlawful pregnancy discrimination, and the Ninth Circuit, en banc, affirmed. Because the Ninth Circuit’s decision directly conflicted with rulings from other circuits, the Supreme Court granted certiorari to resolve the circuit split.
Schachter v. Citigroup, Inc., 159 Cal. App. 4th 10 (2008)
During his employment, David B. Schachter, a former securities salesperson for Salomon Smith Barney, participated in Smith Barney’s voluntary Capital Accumulation Plan, which allowed him to direct Smith Barney to pay him five percent of his total compensation in the form of restricted stock; the stock was purchased at a 25% discount below its…
Pacific Gas & Elec. Co. v. WCAB, 114 Cal. App. 4th 1174 (2004)
Clifford Bryan filed a workers’ compensation claim against Pacific Gas & Electric Company (PG&E) after he was forced to leave work in October 2001 due to the stress of his job in interacting with customers who did not like the company and due to the financial problems affecting PG&E during that…
Black & Decker Disability Plan v. Nord, 538 U.S. 822 (2003)
Kenneth L. Nord was employed by a Black & Decker subsidiary as a material planner in a job classified as “sedentary” because it required up to six hours of sitting and two hours of standing or walking per day. Nord consulted with a physician about hip and back pain from which he had…
Oracle Corp. v. Falotti, 319 F.3d 1106 (9th Cir. 2003)
Oracle Corporation terminated the employment of Pier Carlo Falotti, a senior executive of the company who was based in Switzerland, four months before he was scheduled to vest in stock options that were worth more than $85 million. Oracle filed this action in federal court seeking a declaration that Falotti was neither entitled to…
Winterrowd v. American General Annuity Ins. Co., 321 F.3d 933 (9th Cir. 2003)
Three commissioned sales employees were laid off after their employer’s parent company was acquired by American General Corporation. As commissioned salespeople, the employees were not eligible for severance benefits under the employer’s Job Security Plan. However, the employees were offered and did agree to accept a different severance package in exchange…
Opinion of Att’y Gen. Bill Lockyer, No. 02-213, 2003 WL 174019 (Jan. 24, 2003)
In this opinion, the California Attorney General determined that employees who are residents of and employed in California are not entitled to the employment-related benefits established under California Military & Veterans Code § 395.05 for leaves of absence occasioned by service in another state’s militia. The Attorney General observed that…
Alexander v. Codemasters Group Ltd., 104 Cal. App. 4th 129 (2002)
Craig Alexander alleged breach of contract against Codemasters (a United Kingdom-based computer game company) for its failure to provide Alexander (a former executive with the company) with options to purchase 35,000 shares of Codemasters’ stock at an exercise price of $3.25 per share. In its successful motion for summary judgment, Codemasters asserted that…
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