In May of this year, U.S. District Judge Sven Erik Holmes of the Northern District of Oklahoma entered an order in the case of Millsap v. McDonnell Douglas Corporation, No. 94-CV-633-H, which was reported on previously here. The outcome in the case represented only the third time that employees have prevailed on a claim that a company violated Section 510 of ERISA by closing a plant with the intent to shed employees whose benefit costs were high or who were on the verge of vesting in pensions. The court approved a $36 million settlement that would require McDonnell Douglas to compensate former employees for the pension and benefits they lost when the company shut down its Tulsa, Oklahoma plant. However, the settlement was conditioned upon the Tenth Circuit Court accepting the Court’s certification of its September 25, 2002 order denying McDonnell’s motion for summary judgment on the issue of back pay. If for some reason the Tenth Circuit had not accepted the Court’s certification, then the settlement would be void according to the May 28th Order entered by Judge Holmes.
Reliable sources have reported to me that the Tenth Circuit has indeed accepted the Court’s certification of its September 25th order. Therefore, according to the settlement entered into by the plaintiffs and defendants in the case, plaintiffs are guaranteed to receive a minimum of at least $36 million recovery in the case, even if the court’s decision is overturned on appeal.
Now the issue is whether or not the 10th Circuit will rule that an award of backpay if permissible under ERISA.