Michael Bartolic Persuades Chicago Court to Hold Midwest Operating Engineers Pension Trustees Are Arbitrary and Capricious in Denying Disability Claims

Union employees in Chicago with pension plans that pay long term disability benefits will start receiving greater protections. There has been a trend in these union sponsored pension plans, which are governed by ERISA, to require employees to receive Social Security Disability benefits to apply for Total Disability benefits, to base their decision solely on the conclusion of a medical consultant without regard to treating physicians’ opinions, and to disregard whether the claimant has the vocational qualifications for alternative work (e.g., education, training, experience, etc.). One such plan is the Midwest Operating Engineers Pension Plan. Recently, in a case I handled, the United States District Court for the Northern District of Illinois ordered the Pension Plan to review a claim in accordance with certain standards to which the Plan Trustees had not been adhering. Travis v. Midwest Operating Engineers Pension Plan, No. 13-12 (N.D. Ill. Aug. 15, 2014).

Like with many other disability claims before the pension plan, Daniel Travis claimed and received disability benefits for being disabled from working as an Operating Engineer. Upon receiving Social Security Disability benefits, under the terms of the Plan, he was allowed to apply for All Work Disability benefits. Throughout his claims and appeals, the Plan Trustees consistently denied the claim after sending medical records out to a medical consultant, who opined Mr. Travis could work in a sedentary capacity. The Trustees, however, never identified what other occupation Mr. Travis could perform in light of his medical restrictions and his vocational qualifications, never gave an explanation for why they credited their medical consultant’s opinion over the opinions of treating physicians, and never explained why Mr. Travis could be disabled under the Social Security Act, but not disabled under the terms of the Plan.

After Mr. Travis sued for benefits under ERISA § 502, the Court ruled on the parties’ cross motions for summary judgment, holding that the Trustees of the Midwest Operating Engineers Pension Plan were arbitrary and capricious by not giving any explanation for why they credited the opinion of their file reviewing medical consultant over the opinions of the treating physicians, who physically observed Mr. Travis. They were arbitrary and capricious for not giving any explanation as to why Mr. Travis was deemed disabled by the Social Security Administration, but not disabled under the terms of the Plan. Finally, the Trustees were arbitrary and capricious for failing to take into account Mr. Travis’s vocational qualifications and failing to identify what alternative occupation Mr. Travis could perform. The Trustees could not deny benefits solely based on a conclusion Mr. Travis had the physical capability to perform sedentary work, if he lacked the qualifications to obtain such work, or if his medical restrictions precluded him from obtaining such work.

We expect this decision will dramatically change the way the Midwest Operating Engineers Pension Plan reviews disability pension claims going forward, and will result in significantly more claimants being awarded disability benefits. If you have been denied a disability pension by the Midwest Operating Engineers Pension Plan, contact a knowledgeable ERISA lawyer.