Outside Publication

U.S. Airways, Inc. v. McCutchen: A Win for ‘‘Unambiguous’’ Plan Terms, but What About the Rest of Them?, Bender's Labor & Employment Bulletin

June 2013

Reproduced by Morgan, Lewis & Bockius with the permission of LexisNexis. Copyright 2013 Matthew Bender & Company, Inc., a part of LexisNexis. All rights reserved.

On April 16, 2013, the Supreme Court affirmed the importance of plan terms under the Employee Retirement Income Security Act (''ERISA'') — an issue that many benefits practitioners consider obvious and well settled, but one with which the courts have struggled over the last several years. Specifically, in U.S. Airways Inc. v. McCutchen, the Court considered—and rejected—the notion that equitable principles could override ''clear'' plan terms, but it went on to hold that courts could use equitable principles to construe absent or ambiguous plan provisions.

Although the facts in McCutchen involve a plan's right to reimbursement from a participant who recovers for injuries from a third-party tortfeasor, the implications of the decision are much broader. This case provides many reasons for plan sponsors to feel relief, or at least some sense of predictability.

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