Supreme Court Will Hear Intel Bid to Limit Retirement-Plan Suits
(Bloomberg) — The U.S. Supreme Court agreed to use an appeal by Intel Corp. to consider tightening the deadlines for lawsuits over the investments made by worker retirement plans.
Sulyma, who worked at Intel from 2010 to 2012, had access to electronic documents describing the investments more than three years before he sued. But he says he doesn’t recall reading those documents and didn’t learn about Intel’s hedge-fund and private-equity investments until they became the subject of news reports in 2015, the year he sued in federal court in California.
A U.S. employee-benefit law gives workers three years to sue after they have “actual knowledge” of an alleged violation. In letting Sulyma’s suit move forward, a federal appeals court said that provision “means what it says.”
“If Sulyma in fact never looked at the documents Intel provided, he cannot have had ‘actual knowledge of the breach’ because he cannot have been aware that imprudent investments were made and that other Intel fiduciaries were failing to monitor or remedy that imprudence,” the three-judge panel said.
A different federal appeals court reached the opposite conclusion in 2010, saying employees don’t get more time just because they failed to read documents that were available to them.
In its appeal, Intel said that “the concept of actual knowledge is broad enough to encompass situations in which the plaintiff possesses the necessary information without any need for further inquiry.”
The company said the ruling in its case could have dangerous consequences for employers that sponsor retirement plans.
“A plaintiff can simply assert that he did not read the relevant plan documents, or simply that he cannot recall whether he saw them,” the appeal argued. “Plan administrators will have no ready means of disproving that assertion.”
Sulyma, whose suit seeks class-action status, urged the court not to hear the appeal.
“If someone receives a book as a present and does not read it, they do not have ‘actual knowledge’ of what the book is about,” he argued.
The Supreme Court is also planning to hear a retirement-plan clash involving International Business Machines Corp. during the nine-month term that starts in October. IBM is urging the court to require more specific allegations of wrongdoing before workers can sue over a drop in an employer’s stock price.
The new case is Intel v. Sulyma, 18-1116.