Exclusionary Benefits Raise Red Legal Flag

Exclusionary Benefits Raise Red Legal Flag – Brief Article

Collective bargaining agreements (CBAs) with the Teamsters since 1971 required Kroger Co. to make pension contributions to the Central States Southeast and Southwest Areas Pension Fund on behalf of its union-represented warehouse employees and truck drivers, including certain “part-time” but not “casual” employees.

In 1991, the Pension Fund concluded that Kroger had failed to make more than $200,000 in pension contributions required under the CBAs for certain part-time workers that Kroger had incorrectly considered “casual.” The Pension Fund filed suit for recovery of the unpaid contributions.

The US. Court of Appeals for the Seventh Circuit decided in favor of the Pension Fund, ruling that the workers were not “casual” employees as defined by the applicable CBAS, but were part-time employees hired by Kroger “with the hope and the expectation that they would become, each of them, full-time regular employees when an opening occurred.” The fact that part-time employees are required to bid on permanent positions is “entirely at odds with the concept of casual employment.” Rather, they are probationary employees. The U.S. Supreme Court denied review of the case. Kroger Co. v. Central States Southeast and Southwest Areas Pension Fund, 226 F.3d 903 (7th Cir. 2001), cert denied, US, No. 00-1304(4/16/01).

Impact: Employers are cautioned to carefully review any decision that excludes a group or class of employees from benefit eligibility, and to ensure that personnel policies, communications, and practices are consistent with any such decisions.

COPYRIGHT 2001 ACC Communications Inc.

COPYRIGHT 2001 Gale Group