RICHMOND, Va. (CN) - The Sandia Corporation must defend claims filed by two former employees who say they were cheated on their pensions due a technicality in the lab's retirement plan, a federal judge ruled.
Nancy and Craig Searl worked at the research labs Sandia manages for the U.S. Department of Energy in New Mexico.
While employed by Sandia, they accepted the lab's offer to take a special leave of absence to work for the Central Intelligence Agency. The leave was initially supposed to last two years, but ultimately was extended to eight years, during which time the Searls continued to earn time-of-service credits, which would later be used to determine the amount of their pension benefits.
In their complaint, the Searls say they eventually returned to Sandia, and the institutional knowledge they gained at the CIA was used to benefit the lab.
Specifically, they say, "information obtained from the plaintiffs, Sandia was able to develop a broadly integrated data analytics initiative that provided the basis for substantial revenue."
The Searls retired from Sandia in November, 2006, and initially they received the pension payments to which they believed they were entitled. However, in April 2013, Nancy Searl as told they couple's payments were being decreased by 31 percent because of a non-duplication provision in Sandia's Retirement Income Plan.
According to Sandia, because of their leave, the Searls had effectively been credited for the same time-to-service twice.
"Sandia decreased Plaintiffs' pension payments to reflect a reduced time-of-service credit that excluded the eight-year SLOA period because Plaintiffs were also accruing time-of-service credit for their federal government pension at the same time," writes U.S. District Judge James Cacheris in his opinion.
After exhausting their administrative remedies, the Searls filed suit.
In their complaint, the couple asked the court to restore their original pension payments, and to order Sandia to include the the time-of-service credits that accrued during their leave in all future pension payment calculations. They also asked to court to order the lab to disgorge the full value of the benefit they received from the Searls once the returned to New Mexico.
Sandia filed a motion to dismiss all claims.
On review, Judge Cacheris held that Sandia's motion missed the mark in several respects.
First, he said, the company erroneously contended the Searls merely sought to recover pension benefits to which they believed they were entitled.
"But that argument oversimplifies this litigation," Cacheris wrote. "plaintiffs indeed seek to recoup the value of pension benefits they claim they are owed, but they also ask the Court for estoppel, or to be put 'in the same position [they] would have been in had [Sandia's] Representations been true."
"In other words," he continued, "Plaintiffs ask for equitable relief to not only disgorge any value Sandia improperly and unfairly received because of Plaintiffs' institutional knowledge of the CIA, but they also seek 'make-whole relief' such that they would be in the same position had Sandia not denied term-of-service credit for the eight years of SLOA. ... Thus, Sandia's first argument fails."
Cacheris summarily concluded that Sandia's second argument - that the Searls' claim should be dismissed on the grounds they sought relief not available under ERISA -- was also not persuasive.
The judge noted that the plaintiffs were seeking compensation for losses resulting from an alleged breach of fiduciary duty in addition to other equitable relief, including estoppel, which "equity courts have always possessed the power to provide."
Sandia declined to comment on the pending suit.
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