Key Points

  • The Tenth Circuit held that the plan's 'withdraw completely' language only bars participants from jobs classified under a collective bargaining agreement, not all work for contributing employers.
  • Denial letters that omit the deadline to sue prevent plan administrators from later invoking that deadline as a limitations defense.
  • The court joined every other circuit to address the issue in requiring plan administrators to tell participants how long they have to sue after a denial.
  • The three-year limitations period for ERISA fiduciary-breach claims requires proof of actual knowledge of the breach, not merely the ability to discover it.
  • The case was remanded to the District of Kansas for further proceedings on the revived fiduciary-duty claims of 66 participants.

The Tenth Circuit ruled Tuesday that a multi-employer pension plan cannot enforce its two-year deadline to sue because its denial letters never told participants the deadline existed, handing boilermakers a sweeping victory on early-retirement benefits and reviving breach-of-fiduciary-duty claims for 66 additional claimants.

In an opinion by Judge Robert Bacharach, the three-judge panel affirmed summary judgment for retired boilermakers who had been denied early-retirement benefits under the Boilermaker-Blacksmith National Pension Trust. The court also reversed a lower court ruling that had time-barred fiduciary claims by dozens of other participants, finding the trustees had failed to prove the claimants actually knew of the alleged misconduct.

The decision imposes a compliance requirement that plan administrators nationwide must meet: benefit denial letters must state the time limit for seeking judicial review. When they do not, the plan forfeits the limitations defense entirely.

The dispute began when members of the International Brotherhood of Boilermakers retired early and began collecting pension benefits. The trustees later determined that some of these retirees were ineligible because they had taken other jobs—even jobs unrelated to boilermaker work—for employers that contributed to multi-employer pension plans.

The boilermakers sued the pension trust, its board of trustees, and six individual trustees in the District of Kansas, claiming the plan had been misinterpreted and that they were entitled to benefits they had been denied. The case turned on what the plan meant when it said a participant seeking early retirement must withdraw completely.

The trustees argued that boilermakers had to quit all work for any company contributing to a multi-employer pension plan. The boilermakers countered that the plan only barred them from specific kinds of jobs—those classified under a collective bargaining agreement or involving direct supervision of such jobs.

Judge Bacharach agreed with the boilermakers. The plan language, the court found, renders boilermakers ineligible only when they work in particular types of jobs for particular types of employers. The plan provides that a participant must withdraw and refrain from work for employers in industries traditionally covered by collective bargaining agreements, but only in job classifications included in such agreements or involving direct supervision of those classifications.

Nothing in the plan renders boilermakers ineligible, the court wrote, "just because they go to work for a company contributing to the plan."

The court noted that the trustees' reading would leave the verb withdraw without a direct object. "But if we say that the boilermakers must completely withdraw—without further qualification—the sentence would be meaningless because we wouldn't know what the boilermakers must withdraw from," Bacharach wrote.

At oral argument, defense counsel was asked whether the prepositional phrase describing covered employment modified the term withdraw completely. According to the court, defense counsel answered that it could not. The panel found this position untenable.

"The defendants' argument lacks any basis in the plan language, which says that the boilermaker must withdraw and refrain from particular kinds of work for particular types of employers," Judge Bacharach wrote. "For example, if a boilermaker quits and joins a sporting goods store, the new job wouldn't prevent early-retirement benefits unless sporting goods stores are employers traditionally covered by a collective bargaining agreement."

The trustees had attempted to argue in district court that the plan language was ambiguous and should be construed to preserve favorable tax treatment. But the district court found they had raised the ambiguity argument too late—in a reply brief. The Tenth Circuit agreed. "Until then, however, the defendants hadn't characterized the plan language as ambiguous," the court noted. "So the district court didn't err in concluding that the defendants had raised ambiguity too late by injecting it in the reply brief."

The second major issue was whether the boilermakers' claims were time-barred. The plan imposed a two-year deadline to sue following an adverse benefit decision. A federal regulation requires that any denial letter state "the time limits" for the plan's review procedures, including "the right to bring a civil action."

The plan administrator denied the initial claims of 69 boilermakers without mentioning the two-year deadline. Citing decisions from the First, Third, and Sixth Circuits, Judge Bacharach wrote that "every circuit to address the issue has required the plan administrator to tell participants how long they have to sue following a denial of benefits."

The trustees argued they had cured the defect by including the deadline in letters denying administrative appeals. But the boilermakers pointed out that those appeal-denial letters were themselves defective—they failed to identify the specific plan section, Section 8.08, on which the denial was based. The district court had already found those letters inadequate, and the trustees did not challenge that finding on appeal.

"Absent such a challenge, defective denials of administrative appeals wouldn't obviously cure defects in the earlier decisions," Judge Bacharach wrote.

The third issue involved 66 boilermakers whose breach-of-fiduciary-duty claims the district court had dismissed as untimely. Under ERISA, a three-year limitations period applies to fiduciary-breach claims, running from when the plaintiff has "actual knowledge of the breach or violation."

The district court had started the clock when the trustees denied the claims. But the boilermakers argued that the alleged breach involved more than just the denial itself. According to the boilermakers' summary judgment memorandum quoted in the opinion, the violation included "a series of misleading statements that hid the fact that [the plan administrators] were imposing a new unwritten requirement [for receiving early-retirement benefits]" and "fraudulent concealment of the fact that the new restrictions on early-retirement benefits hadn't appeared in the plan documents."

The administrative record, the court found, contained no evidence showing when the boilermakers actually learned of this alleged misconduct. The Supreme Court's 2020 decision in Intel Corp. Investment Policy Committee v. Sulyma held that the three-year ERISA limitations period does not begin until the participant is actually aware of the breach.

The trustees argued the boilermakers could have discovered the relevant facts more than three years before suing. But the panel rejected that standard. "The three-year period of limitations is triggered by actual knowledge, not the ability to discover something," Judge Bacharach wrote.

Because the trustees offered no evidence that the 66 claimants actually knew of the alleged breaches more than three years before they sued, the district court erred in granting summary judgment on those claims.

Susan J. Martin of Martin & Bonnett in Phoenix argued for the boilermakers. Gary P. Hunt of Tucker Arensberg in Pittsburgh argued for the trustees. The Pension Rights Center filed an amicus brief supporting the boilermakers.

The case now returns to the District of Kansas for further proceedings on the revived fiduciary claims. The panel's ruling affirms that the boilermakers are entitled to early-retirement benefits and that the trustees cannot invoke the two-year limitations period.