Judge Rules Employee Benefits Case Against CNA Financial Corporation Will to Go to Trial, According to Meites, Mulder, Mollica & Glink

Judge Holderman of the United States District Court for the Northern District of Illinois ruled that a case against CNA Financial Corporation should to go to trial on claims that the company illegally denied severance benefits to terminated employees.



The suit is brought on behalf of 90 former members of CNA's sales force, whose division was sold to another company. These sales people continued to work until the date of the sale, not knowing that CNA had secretly amended its severance plan months before, cutting them out of more than $4 million in severance benefits. Even though the severance plan required reasonable notice of any changes, CNA's only notice was a clause inserted in the company's internal intranet posting of the plan. The court found that this was not reasonable notice and also found that members of the company's appeals committee, who had determined the notice was reasonable, had a conflict of interest. The court overturned their decision that the notification was timely.
According to Meites, Mulder, Mollica & Glink, co-counsel for the plaintiffs, this decision is groundbreaking. The court held the company's internal appeals committee to a higher standard of scrutiny because it "was acting under a potential conflict of interest." The court found a conflict because a favorable decision by the appeals committee--all of whom were company employees--could ultimately cost the company millions of dollars. The court also allowed a common law fraud claim to go to trial to determine if the company's decision not to give adequate notice was made in bad faith. Judge Holderman dismissed a claim for federal common law breach of contract. The plaintiffs brought their claims under ERISA, the Employee Retirement Income Security Act, 29 U.S.C. ss. 1001, et seq. and federal common law.
Read the entire opinion (Rosenberg, et al. v. CNA Financial Corp and the CNA Severance Pay Plan, No. 04 C 8219) at: www.mmmglaw.com/CM/CurrentCaseUpdates/Summary_Judgment_Ruling1.pdf.
According to its company literature, CNA, based in Chicago, IL, is the country's seventh largest commercial insurance writer and the 13th largest property and casualty company. CNA's insurance products include standard commercial lines, specialty lines, surety, marine and other property and casualty coverages. CNA services include risk management, information services, underwriting, risk control and claims administration.
The plaintiffs are represented by Palmer Freeman of James C. Anders & Associates, 1303 Blanding Street Columbia, SC 29202, Richard D. Ries of the Law Offices of R. Don Ries, 712 Richland Street, Columbia, SC 29201, Thomas R. Meites and Paul W. Mollica of Meites, Mulder, Mollica & Glink, 20 S. Clark Street, Suite 1500, Chicago, IL 60603, and Johanna J. Raimond of the Law Offices of Johanna J. Raimond Ltd., 321 S. Plymouth Court, Suite 1515, Chicago, IL 60604.
CNA is represented by Wilber H. Boies, Aron J. Frakes, Monica Marie Quinn and Nancy G. Ross of McDermott, Will & Emery LLP, 227 West Monroe Street, Chicago, IL 60606.
ABOUT MEITES, MULDER, MOLLICA & GLINK
Meites, Mulder, Mollica & Glink represents plaintiffs in nationwide class actions and multi-party complex litigation in federal and state courts, focusing on employment discrimination, workplace benefits, whistleblower actions, consumer rights, and securities litigation. The firm's guiding principle is to pursue cases that have a positive impact on society by advocating on behalf of classes of employees, investors, consumers, and others whose legal rights have been denied.

Contact:
Meites, Mulder, Mollica & Glink
Thomas R. Meites, 312-263-0272