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ConAgra Retirement Plan Contributions for Laid Off Employees ERISA Class Action

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The complaint for this class action notes that certain changes were made to ConAgra Brands Retirement Income Savings Plan in 2015, at the same time as the company laid off around 30% of its workforce. The changes disadvantaged terminated employees, and the complaint claims that ConAgra wanted to save money at their expense. It brings suit under the Employee Retirement Income Security Act (ERISA).

Late in 2015, ConAgra announced that, as it sold some of its businesses, it would lay off around 30% of its employees, as part of an “efficiency plan.” Plaintiff Bart Karlson was laid off in April 2016. At the time, he was the Senior Director of Global Benefits and a member of the Administrative Committee for the retirement plan. 

The rules of the plan allowed participants to make pre- and after-tax contributions within certain limitations. They also required ConAgra to make matching contributions, up to a percentage of the participant’s compensation. 

The participants’ compensation can include payments made after termination. The complaint says, “Compensation includes payments made by the later of (i) 2.5 months after severance from employment, or (ii) the end of the calendar year that includes the date of severance, if the payment are payments that, absent a severance from employment, would have been paid to the participant while the participant continued in employment with ConAgra and are bonuses.”

In July 2016, after Karlson was terminated, the company paid him a bonus under its Management Incentive Plan (MIP). According to the complaint, ConAgra should have deferred 15% of this bonus to the retirement plan and paid matching contributions to his account as well. It did neither. 

When Karlson complained, he was told that an “administrative interpretation” had been “narrowed” to limit the meaning of the term “Eligible Employee,” so that contributions only applied to compensation paid within 2.5 months of termination. 

He appealed, asking for an explanation with language from the retirement plan’s documents and a legal opinion letter on the new “interpretation,” among other things. His appeal was rejected in a denial letter that said, in part, “The Plan was not amended because the change related to the interpretation of existing Plan language. … In 2016, administration changed to interpret ‘Employee’ more literally.” 

According to the complaint, this does not seem to explain the change in policy or the refusal of contributions relating to Karlson’s bonus. The complaint asks for recovery of benefits under ERISA and claims that the company has breached its fiduciary duty to plan participants. 

The class for this action is all current and former participants in the ConAgra Brands Retirement Income Savings Plan who separated from their employment with ConAgra Brands, Inc. or its predecessor or related entities, had a valid deferral election on or after January 1, 2015, and received a MIP bonus in or after 2015. 

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