ERISA claim by non-profit employer

Posted by Matthew Garretson

Question:
Matt, I have a nurse who worked for Boys Town National Hospital. I have a document which shows them to be a non-profit entity. Is it true that a non-profit organization cannot assert and ERISA claim against the employee? Thanks in advance for your help.

-Nebraska Attorney

Answer:
As the Supreme Court noted in Sereboff v. Mid Atlantic Medical Services, 547 U.S. 356, 361 (2006), “[a] fiduciary may bring a civil action under s. 502(a)(3) of ERISA ‘(A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan. 29 U.S.C. 1132(a)(3).” Therefore, to the extent Boys Town National Hospital is a fiduciary under ERISA and the claim it seeks to assert is to enforce provisions of ERISA or the terms of the ERISA Plan in issue, Boys Town National Hospital should be able to “assert an ERISA claim”, on behalf of the Plan, against this former employee/plan participant. The fact that Boys Town National Hospital may be a non-profit entity does not appear to be of any consequence to the determination of whether it is a fiduciary seeking to enforce ERISA rights. Certainly, non-profit employers and employee organizations are not exempt by that status from establishing or maintaining employee benefit plans under ERISA. What is relevant, for purposes of determining whether Boys Town is a fiduciary, is whether Boys Town exercises any discretionary authority regarding management/ administration of the Plan in issue or with respect to the disposition of said Plan’s assets. Where the plan sponsor/employer (or, for example, a plan administrator, a third-party administrator, …) maintains discretionary authority it will be considered a fiduciary to the plan. This determination, however, can only be made based upon all the facts and circumstances of the case.

Hope this helps.
-Matt