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Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73, 115 S.Ct. 1223, 131 L.Ed.2d 94, 63 USLW 4201, 18 Employee Benefits Cas. 2841, Pens. Plan Guide (CCH) P 23905J

Facts

Curtiss-Wright Corp. had maintained a postretirement health plan for employees who retired from certain facilities. In 1983, the company amended the plan to terminate health care benefits for retirees upon the closure of the facility from which they retired. The retirees sued after the company announced the closure and the termination of their benefits. The District Court found that the amendment constituted a significant change to the plan and that the plan documents did not contain a valid amendment procedure as required by ERISA, declaring the new provision void ab initio.

Curtiss-Wright Corp. had maintained a postretirement health plan for employees who retired from certain facilities. In 1983, the company amended the plan to terminate health care benefits for retirees upon the closure of the facility from which they retired.

Issue

Whether the standard provision in the Curtiss-Wright employee benefit plan stating that 'the Company reserves the right at any time to amend the plan' constitutes a valid amendment procedure under § 402(b)(3) of ERISA.

Whether the standard provision in the Curtiss-Wright employee benefit plan stating that 'the Company reserves the right at any time to amend the plan' constitutes a valid amendment procedure under § 402(b)(3) of ERISA.

Rule

Section 402(b)(3) of ERISA requires that every employee benefit plan provide 'a procedure for amending such plan, and for identifying the persons who have authority to amend the plan.'

Section 402(b)(3) of the Employee Retirement Income Security Act of 1974 (ERISA), 88 Stat. 875, 29 U.S.C. § 1102(b)(3), requires that every employee benefit plan provide 'a procedure for amending such plan, and for identifying the persons who have authority to amend the plan.'

Analysis

The Supreme Court determined that the reservation clause in Curtiss-Wright's plan adequately set forth a procedure for amending the plan by identifying 'the Company' as the entity with amendment authority. The Court reasoned that the clause satisfied the requirements of § 402(b)(3) by providing a clear mechanism for amendments, even if it lacked detailed specifications about who within the company had the authority to act. The Court emphasized that the amendment procedure's validity does not depend on the level of detail provided, as long as it establishes a workable process.

The Supreme Court determined that the reservation clause in Curtiss-Wright's plan adequately set forth a procedure for amending the plan by identifying 'the Company' as the entity with amendment authority.

Conclusion

The Supreme Court reversed the lower court's ruling and remanded the case for further proceedings to determine whether the valid amendment procedure was complied with in this instance.

The Supreme Court reversed the lower court's ruling and remanded the case for further proceedings to determine whether the valid amendment procedure was complied with in this instance.

Who won?

Curtiss-Wright Corp. prevailed in the Supreme Court, as the Court found that the reservation clause in the employee benefit plan constituted a valid amendment procedure under ERISA.

Curtiss-Wright Corp. prevailed in the Supreme Court, as the Court found that the reservation clause in the employee benefit plan constituted a valid amendment procedure under ERISA.

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