Hilton Retirees Push to Reopen $146 Million Deal

WASHINGTON (CN) – Complaining that more than 40 percent of a settlement fund remains untouched, a lawyer told the D.C. Circuit on Wednesday that the Hilton hotel group has kept thousands in the dark about retirement benefits.

The case before the federal appeals court this morning stretches back to 1998, when a class of hotel employees accused Hilton of violating a federal law governing employee benefits. 

After a judge ordered Hilton to change its plan and compensate the employees who had lost out, it was estimated Hilton would have to pay out more than $146 million spread around to 20,692 people.

The District Court withdrew from supervising the case in 2015, but class counsel Stephen Bruce told the D.C. Circuit this morning that the hotel chain has flubbed its responsibility to find employees who are entitled to money.

The lawyer said more than 8,700 people still haven’t been paid, leaving $80 million in retirement benefits on the table. 

Hilton still faces an injunction from the case, but Bruce said the District Court’s withdrawal from the case has made it exceedingly difficult for the class to remedy any violation.

Telling the D.C. Circuit that it can intervene, Bruce said the class needs a court order forcing Hilton to show its work on locating people entitled to payment.

But Chief Judge Merrick Garland pushed back, asking if Bruce could point to any precedent where a circuit court ordered a district court to reinsert itself in a similar proceeding that it already wrapped up. 

Bruce offered no such example when pressed.

Garland and Judge Robert Wilkins also both talked up the benefits of the injunction against Hilton, saying any violations could put the company in contempt.

Bruce demurred, saying that route would face “tremendous” pushback and that the lack of court-ordered reporting from Hilton would make proving contempt difficult.

Jonathan Youngwood, an attorney with Simpson Thacher & Bartlett, argued on behalf of Hilton Wednesday. Contending that Bruce missed his chance to raise his claims, Youngwood said the judge’s decision to withdraw jurisdiction was reasonable since the court eventually needed to step out of the case.

“The court’s involvement in this needs to end,” Youngwood said Wednesday.

Youngwood assured the court Hilton is working toward paying as many people as it possibly can, and that the reporting sought by Bruce is far too granular.

While Bruce’s argument stretched 30 minutes past the time allotted him for argument, Youngwood was before the court for a relatively brief time. He faced some questions from Judge Cornelia Pillard, who pressed him on Hilton’s efforts to locate people under the original order.

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