For those interested in the impact of MetLife v. Glenn, don’t miss this unpublished Eleventh Circuit opinion issued September 10th in the case of Frankie White vs. the Coca-Cola Bottling Company. In that case, the court dealt with the issue of whether the Benefits Committee which was the plan administrator for the long-term disability plan was operating under a conflict of interest. The Committee had been given the important Firestone discretionary authority to interpret plan provisions and there was a provision in the plan which the court held created a conflict with other provisions of the plan, requiring interpretation or resolution of the conflict. The court held that the Benefits Committee was not operating under a conflict of interest in interpreting the plan provision and resolving the conflict since benefits were being paid from a trust that was funded through periodic contributions so that the company incurred “no immediate expense as a result of paying benefits.” The court cited the case of Gilley v. Monsanto Co., Inc., 490 F.3d 848, 856 (11th Cir. 2007) as authority, in which the court had stated that a company is not under a conflict of interest in such cases even though the company “is responsible for replenishing the funds of the trust.”

While the case is important for a number of reasons (which I could spend all morning discussing, but unfortunately do not have time for), please note this very important language which provides support for the importance of engaging counsel in assisting plan fiduciaries who are given the important task of interpreting plan language:

The committee reasonably interpreted the proviso clause to make it consistent with the summary plan description, . . past practices. . . and the other provisions of the plan. The summary plan description clearly explains the reduction of benefits if a participant receives benefits from other sources and provides an arithmetical example of the offset. The committee determined that it had been the established practice. . .to permit an offset below 60 percent of a participant’s average compensation. . There is no requirement that an administrator. . seek independent counsel in interpreting and administering an ERISA plan,” but seeking counsel establishes the “evenhandedness of [the] decision-making process” because it contributes to “informed and knowledgeable decisions . . . in interpreting the Plan.” Thiokol, 231 F.3d at 835. The committee retained and followed the advice of outside counsel regarding both the offset and recoupment provisions.

(By the way, unpublished opinions can now be cited as authority in federal courts. Read about the Supreme Court’s adoption of amendments to the Federal Rules of Appellate Procedure here, here and here.)

Update: Roy Harmon discusses the case in detail here.