Court Finds that Plan's Denial of Benefits Was Arbitrary and Capricious
If a plan provision regarding benefits is unambiguous, a court will review the plan administrator's decision regarding benefits as a matter of law. In Brown v. Workforce Stabilization Plan, No. 06-4133 (10th Cir. July 3, 2007), the court held that the plan administrator's denial of benefits was arbitrary and capricious because it conflicted with the unambiguous plan provisions regarding benefits.
The plan administrator had determined that certain union employees were not eligible for benefits guaranteed under an employee benefit plan governing employees who are laid off as the result of a company merger. The plan administrator's articulated rationale for denying the benefits was that the list of benefits available to those employees under their collective bargaining agreement did not specifically include the plan at issue. The court found that the plan administrator's decision conflicted with the plain language of the collective bargaining agreement in that the list of available benefits was not exhaustive and had language including the benefit plan at issue.
