Justices Back Wal-Mart in Deadline Dispute
(CN) - In a victory for Wal-Mart, the Supreme Court ruled Monday that the company's three-year deadline for suing to recover employee benefits is enforceable.
The high court unanimously voted to uphold the 2nd Circuit's dismissal of a claim for long-term disability benefits filed by Julie Heimeshoff, a former senior public relations manager for Wal-Mart Stores Inc.
Heimeshoff stopped working on June 8, 2005, after being diagnosed with lupus and fibromyalgia.
She filed her claim with Hartford Life & Accident Insurance Co., the administrator of Wal-Mart's employee plan, on Aug. 22.
Hartford ultimately denied her claim on Nov. 26, 2007, after hearing conflicting opinions from several doctors.
On Nov. 18, 2010 -- almost three years later -- Heimeshoff sued Hartford in federal court under the Employee Retirement Income Security Act of 1974 (ERISA).
Though ERISA does not set a deadline for suing to recover benefits, the company's plan does.
Wal-Mart and Hartford moved to dismiss, arguing that their policy bars employees from suing more than three years after proof of loss is required.
A federal judge, and later the 2nd Circuit, found this contractual deadline reasonable and dismissed Heimeshoff's appeals.
The Supreme Court upheld those decisions Monday.
"Absent a controlling statute to the contrary, a participant and a plan may agree by contract to a particular limitations period, even one that starts to run before the cause of action accrues, as long as the period is reasonable," Justice Clarence Thomas wrote for the unanimous court.
Thomas noted that Hartford's internal review process usually takes about a year, leaving the participant with two years to file suit. Though the process took longer in Heimeshoff's case, she still had a year in which to sue.
"We cannot fault a limitations provision that would leave the same amount of time in a case with an unusually long internal review process while providing for a significantly longer period in most cases," Thomas wrote.
The justices concluded that "the parties' agreement should be enforced unless the limitations period is unreasonably short or foreclosed by ERISA."
"The limitations period here is neither."