Lockheed Corporation v. Spink

PETITIONER: Lockheed Corporation
LOCATION: Western District Court of New York

DOCKET NO.: 95-809
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 517 US 882 (1996)
ARGUED: Apr 22, 1996
DECIDED: Jun 10, 1996

Gordon E. Krischer - Argued the cause for the petitioners
Richard P. Bress - Argued the cause for the United States, as amicus curiae
Theresa M. Traber - Argued the cause for the respondent

Facts of the case

Lockheed Corporation hired Paul L. Spink when he was sixty-one. He was excluded from participation in Lockheed's retirement program. Later changes in federal law required Lockheed to add Spink to the retirement program. Lockheed added Spink, but refused accrued benefits for the years he had worked at Lockheed before federal law changed. Lockheed also offered an increased pension benefit to employees who would retire early in exchange for their waiver of any employment claims against the corporation. Spink refused to be added without earning the extra benefits for the previous years he had worked. Spink filed suit alleging he should receive full benefits. The District Court dismissed the case for failure to state a claim. The Court of Appeals ruled in favor of Spink. It held the law applied retroactively which would cover Spink.


May a business offer early retirement benefits on the condition that an employee give up the right to sue over any job-related claim? Can the federal government retroactively apply retirement income benefit laws?

Media for Lockheed Corporation v. Spink

Audio Transcription for Oral Argument - April 22, 1996 in Lockheed Corporation v. Spink

William H. Rehnquist:

We'll hear argument now in Number 95-809, Lockheed Corporation v. Paul Spink.

Mr. Krischer.

Is that the correct pronunciation of your name?

Gordon E. Krischer:

It is, Your Honor.

Mr. Chief Justice, and may it please the Court:

This case presents two issues.

The first involves whether Lockheed Corporation breached a fiduciary duty when it amended its pension plan to provide an incentive for employees to early retire and included as one of the eligibility criteria of that amendment the requirement that employees who were voluntarily retiring sign a release of employment-related claims.

There's no dispute that that amendment that Lockheed adopted complies with the minimum benefit accrual, minimum vesting, and minimum participation standards required by ERISA, and there's also no doubt that whether participants, employees who took advantage of this increased retirement benefit, did so voluntarily, which is to say, they voluntarily did it.

It was not... it was a new benefit.

No employee who opted to choose this increased pension benefit had to give up anything he or she was otherwise entitled to prior to the existence of this benefit.

The second issue also raised by Mr. Spink in this because of his unique circumstances goes to whether the amendments made to the Internal Revenue Code, the Age Discrimination in Employment Act, and ERISA by OBRA 1986, the Omnibus Budget Reconciliation Act of 1986, should... whether Congress intended that those changes be applied retroactively.

Sandra Day O'Connor:

Mr. Krischer, may I ask you to clarify something in regard to the first question?

In your petition for certiorari you asked whether the Ninth Circuit correctly held that a pension plan sponsor can be liable for breach of fiduciary duty under ERISA when it amended the plan.

Then, in the merits brief you say when the pension plan sponsor and plan fiduciaries may be held liable, blah, blah, blah, and you appear to be raising some additional questions in the merits brief.

Gordon E. Krischer:

Well, I don't... I believe it's the same question that's being raised, Justice O'Connor, because what the Ninth Circuit held... it didn't make a big distinction between the plan sponsor and the retirement plan committee that would pay the benefits to eligible employees.

The district--

Sandra Day O'Connor:

Well, certainly the Solicitor General's brief suggests there may be substantial differences in answers to the two questions, and I just wondered whether we should confine ourselves to what you raised in the original cert position--

Gordon E. Krischer:

--I think--

Sandra Day O'Connor:

--and look to whether the plan sponsor was acting in a fiduciary--

Gordon E. Krischer:

--The first point, Your Honor, there are petitioners in this case, including the individuals who are on the retirement committee as well as the executives of Lockheed, who were sued in their executive capacity because they adopted or had the company adopt the amendment.

But you're correct, the Solicitor General has raised, really for the first time, a distinction possibly between implementation of a lawfully amended plan with a lawful amendment on the one hand and whether actually adopting the amendment on the other are separate issues.

Now, in this case the Ninth Circuit didn't make that distinction and, indeed, I think respondent in their opposition doesn't make that distinction.

They call it a false distinction, because whether it's analyzed as a question of plan implementation or whether it's analyzed as a question of plan amendment, the key issue in this case on the first issue is, does it violate any substantive requirement of ERISA--

David H. Souter:

--Well, excuse me, I thought that wasn't it.

I thought the question was whether it violated a fiduciary responsibility.

It is entirely possible that the plan sponsor might violate no fiduciary responsibility and yet violate some substantive bar to that particular amendment, and I thought we only had the first question in front of us.

Gordon E. Krischer:

--The... well, I think both... if you certainly want to limit yourselves to the first question, the Court can do it, but I believe that both questions should subsume--

Antonin Scalia:

Was there--

Gordon E. Krischer:

--and the overall question is--

Antonin Scalia:

--It depends on how you want to argue the case.