Monday, 14 July 2003

Failure to Give Notice of Plan Requirements May Eliminate Exhaustion of Remedies Defense

In Back v. Danka Corp. (8th Cir. 7/14/03), it was conceded that Black did not submit a written application for severance pay as required by the company's ERISA plan. Neither was it disputed that he had never been given a copy of the severance plan, nor a summary plan description. When he filed suit, the lower court holding that he now knew about the requirement and still had not undertaken it, dismissed his suit for failure to exhaust administrative remedies. The Appeals Court reversed, holding that failure to give Black the notice of the requirement in advance was itself a violation of ERISA, and that there should be some "substantial consequence" for the company's failure to do so. The dismissal was reversed and sent back to the lower court for a determination on the merits.

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Nice comment !