The U.S. Court of Appeals for the Federal Circuit on Wednesday upheld the dismissal of a class action lawsuit against the Department of Energy asking that full pension benefits be reinstated for up to 500 people who worked at the Hanford Site in Washington state.
The ruling addressed a case filed in 2016 by plaintiffs who worked for Lockheed Martin Services Inc., which was formed to perform work at Hanford and elsewhere.
The appeals court agreed with the U.S. Court of Federal Claims decision in September 2017 that plaintiffs had not established that DOE entered into an implied contract with them to continue full pension benefits when the workers were transferred to Lockheed Martin Services as part of a largely failed local economic development plan established in 1996.
Plaintiffs had their potential pension benefits reduced and lost their retirement health and life insurance benefits under the Hanford Multi-Employer Pension Plan (MEPP) when a new prime contract was awarded to Fluor in 1996 for cleanup at the former plutonium production complex. The contract proposal included an economic diversification plan to award work to new “enterprise companies” to help support them as they solicited work beyond Hanford. The goal was to make them permanent parts of the economy in the nearby Tri-Cities and reduce the community’s dependence on Hanford.
As Westinghouse’s contract expired and environmental remediation transitioned to Fluor, many Westinghouse workers became Fluor employees, retaining the same Hanford benefits they had with their former employer. But about 2,000 Westinghouse and Westinghouse subcontractor workers were assigned to enterprise companies. They would no longer accrue years-worked toward their traditional Hanford pension amount calculation, they were told. These workers said they were barred from applying for other Hanford work if they did not accept enterprise company assignments.
Most of the enterprise companies failed to acquire significant non-Hanford work, with some folding within two years. Many of their workers were absorbed back into the traditional Hanford workforce and were again eligible for full MEPP retirement benefits. However, Lockheed Martin Services continued to provide information technology and other services at the DOE site for about two decades. Some workers continued to do the same Hanford work at the same desks with the same co-workers as they had before they were transitioned from Westinghouse to Lockheed Martin Services.
The MEPP was established by Westinghouse at DOE’s direction with the intent of adding each new contractor at Hanford to the plan to provide continuity of pension benefits for workers, according to plaintiffs.
However, DOE is not listed as a party to the MEPP, according to the appeals court. “Nothing in the MEPP indicates intent by the government to be privy of contract with Lockheed’s employees,” the decision says. The government funds Lockheed and other employers to manage Hanford, but there is no evidence that the government intended to be contractually obligated to Lockheed’s or other employers’ workers, whether through the MEPP or by other means, it adds.
Attorney Douglas McKinley, of Kennewick, Wash., who filed the 2016 class action lawsuit, also filed a similar, broader class action lawsuit for employees of all Hanford enterprise companies in the U.S. Court of Federal Claims in 2018. The lawsuit said damages would be proved at trial, but estimated damages at $100 million. The case was put on hold pending the outcome of the appeal in the 2016 case. McKinley did not respond immediately to a request for comment this week.
