Court Held BNSF Did Not Interfere with Railworkers’ Pension Benefits

Employees in Chicago and the Midwest often find themselves making difficult decisions with regard to compensation and pension benefits in jobs. Sometimes you must sacrifice lucrative benefits for either better job security, more money, or to even have a job at all. Employers are constantly looking for ways to save money, and sometimes even customers of your employer may look for ways to save money. Recently, a local Teamsters union challenged actions taken by BNSF Railway Company as unlawfully interfering with union members’ protected benefits under ERISA. Teamsters Local Union 705 v. BNSF Ry. Co., 2011 U.S. Dist. LEXIS 12750 (N.D. Ill. Nov. 3, 2011).

BNSF cancelled a service contract with Rail Terminal Services, and shortly after Rail Terminal Services discontinued its operations. BNSF then hired many of the former employees of Rail Terminal Services to perform essentially the same work they had done before. The difference was that Rail Terminal Services was subject to a collective bargaining agreement, and the employees were receiving pension, health, and other benefits through the union plan. But when BNSF hired them, it did not provide the same level of benefits, thereby reducing its cost.

The Court held this was not an unlawful interference with the employees’ benefits. BNSF’s cancellation of the service contract was lawful. Not to say that the action taken by BNSF could never be an unlawful interference with benefits, but in this case the Teamsters did not offer any evidence that BNSF intended to interfere with the benefits.

If you have questions about your employee benefits rights, speak with a lawyer concentrating in ERISA.