Compliance Stuff

Love may fade, but beneficiary designations do not. That was the hard lesson learned in a legal dispute between a man’s estate and his ex-spouse over his retirement plan proceeds – ultimately, a federal appeals court in Chicago refused to honor a man’s attempt to remove his ex-wife as beneficiary of his retirement account and ruled that the ex was entitled to receive the entirety of the account. The decision, which was based on a legal test courts have long recognized in ERISA cases, produced a harsh outcome for the estate’s intended beneficiaries, despite the participant’s clear expression of intent. In this Insight, we’ll explain what happened in the recent 7th Circuit case and provide three takeaways for employers and retirement plan fiduciaries. What Led to the Beneficiary Dispute in the PCA Case For more than 30 years, a man worked for Packaging Corporation of America (PCA) and participated in the company’s 401(k) plan. When the participant got married in 2006, he designated his ...

May an employee assert a hostile work environment claim under the Age Discrimination in Employment Act (ADEA)? In  Blumenshine v. Bloomington School District No. 87 , the U.S. Court of Appeals for the Seventh Circuit responded affirmatively, and, in so doing, joined a number of its sister circuits that had previously recognized such a claim. This case serves as a significant reminder to employers to understand how age discrimination can manifest in the workplace and the legal standards required to prove such claims. Quick Hits The Seventh Circuit Court of Appeals joined multiple other federal courts of appeals in finding that hostile work environment claims are viable under the ADEA . As part of stating an age discrimination claim, an employee must establish that the complained-of conduct is based on his or her age. Speculative and conclusory allegations are not sufficient to support a claim of age-based harassment. Background The plaintiff was a long-tenured and “exemplary” teache...

A federal court of appeals just upheld the convictions of two workplace managers after an OSHA inspection quickly evolved into a criminal prosecution. The U.S. Court of Appeals for the 7th Circuit offered a stark warning to employers with the June 10 decision: misconduct during workplace safety inspections, especially those involving false records and statements, can lead to prison time and multi-million-dollar fines. What are the three main takeaways employers and corporate managers should take from this decision? Workplace Tragedy Leads to Federal Prosecution On May 31, 2017, an explosion at Didion’s corn milling facility in Cambria, Wisconsin, killed five workers and injured several others. In the aftermath, OSHA cited the company for more than 20 serious and willful violations and imposed $1.8 million in fines as part of a settlement agreement with the U.S. Department of Labor. However, the company’s problems were far from over. After OSHA completed its investigation, the DOL refe...