Retirees of former Hanford Site contractor Lockheed Martin Services Inc. have petitioned the full U.S. Court of Appeals for the Federal Circuit to hear their appeal of a U.S. Court of Federal Claims decision in a class action lawsuit against the Department of Energy.
In early February, a three-judge panel of the appeals court upheld the earlier dismissal of the lawsuit.
Plaintiffs want full pension benefits reinstated for up to 500 people who have worked at DOE’s Hanford Site in Washington state. The case was filed in 2016 by plaintiffs who had been employed by Lockheed Martin Services, which was formed to work at the nuclear cleanup site and other locations.
The appeals court panel agreed with the 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 from other firms to Lockheed Martin Services as part of a largely failed local economic development plan established in 1996.
The petition for a rehearing filed, by plaintiffs’ attorney Douglas McKinley on Feb. 22, argues that DOE ordered a previous cleanup contractor, Westinghouse Hanford Co., to establish the Hanford Multi-Employer Pension Plan (MEPP) for Hanford contractors before the Westinghouse contract expired in 1996. Because the government authorized the contractor to establish the pension plan and controls which contractors are part of the plan, the government is bound to honor the plan, according to plaintiffs.
Plaintiffs argue that their case should be reheard by the full court because the issue requires an answer to an important, precedent-setting question: “When the government establishes an agreement between a government contractor and their employees that includes a provision giving the employees rights that are intended to survive the government’s termination of the contractor, if the government also holds the exclusive control over enforcement of the provision is the government thereby also bound to the provision?”
Plaintiffs had their potential pension benefits reduced and lost their retirement health and life insurance benefits under the MEPP when a new prime Hanford cleanup contract was awarded to Fluor in 1996. The contract proposal included an economic diversification plan to award some work to new “enterprise companies” to help support them as they solicited non-Hanford work. 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 work transitioned to Fluor in 1996, many Westinghouse workers became Fluor employees, retaining the same Hanford benefits they had with their previous employer. But about 2,000 Westinghouse and Westinghouse subcontractor personnel were assigned to enterprise companies. They no longer accrued years-worked to count toward their traditional Hanford pension amount calculation, they were told.
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 Hanford MEPP retirement benefits. However, Lockheed Martin Services provided information technology and other services at Hanford for about two decades.
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 site workers, according to plaintiffs.
However, DOE is not listed as a party to the MEPP, the appeals court decision said. “Nothing in the MEPP indicates intent by the government to be privy of contract with Lockheed’s employees,” the judges wrote. 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, the decision said.
