By Alec F. Cerqueira, of Segal McCambridge Singer & Mahoney
Two former NFL players recently filed a federal class action complaint in the United States District Court in Washington, D.C. against the National Football League, the National Football League Players’ Association (“the Players Association”), and the medical board. The complaint stems from the recent NFLPA’s Collective Bargaining Agreement’s (CBA) decision to cut total and permanent disability benefits from an estimated 400 to 900 former NFL players.
The complaint is brought by Aveion Cason and Donald Vincent Majkowski, two former NFL players, under Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. §§ 1001 et seq., and Section 301 of the Labor Management Relations Act (“LMRA”), 29 U.S.C § 185, on behalf of a Class of Total and Permanent (T&P) disabled former NFL players, who were participants in the Bert Bell/Pete Rozelle NFL Players Retirement Plan, Amended and Restated as of April 1, 2014 (“the Retirement Plan”), and the NFL Player Disability and Neurocognitive Benefit Plan, Amended and Restated as of April 1, 2019 (“the Disability Plan”) (collective “the Plans”). The action is brought against the fiduciaries of the Plans to declare unlawful contractual violations of the Plans, as well as to declare fiduciary misrepresentation to the Plan through its communications about the benefit amendments. The action seeks to remedy the breaches of the Players Association’s 2020 Collective Bargaining Agreement (2020 CBA).
The complaint further provides that the fiduciaries of the Plans have an obligation to fairly administer the Plans for players in the Class and to act with the duty of loyalty and duty of care in providing T&P disability benefits under the Plans. However, the complaint alleges that the Defendants violated the language of the Plans and violated their fiduciary duties under ERISA by failing to disclose and inform all members of the Class of the “substantially negative consequences” that the amendments to the Plans would create, therefore obstructing Class members’ ability to properly gain votes against the 2020 CBA. Further, as a result of these substantial reductions in the vested benefits, the complaint alleges that the Defendants have violated the terms of the Plan and breached their fiduciary duties under ERISA.
Collective Bargaining Changes to the Total and Permanent Disbaility Recipients
Under the previous NFL Collective Bargaining agreement, eligible players were entitled to benefits between $50,000 and $135,000 per year, with no offset for any Social Security disability benefits received. Additionally, eligible T&P disability players are “payable for life” and the Plans created a vested right to lifetime T&P disability for former NFL players, their surviving spouses, and their dependents.
The new 2020 CBA includes reductions in the amount of T&P disability benefit recipients by the value of their Social Security disability benefits. The complaint alleges that this reduction will result in members of the Class losing approximately 20 percent of their fixed income. A March 5, 2020 version of the 2020 CBA included that only players who receive disability benefits from the Disability Plan after Jan. 1, 2015 saw their monthly Disability Plan T&P reduced by the amount they received form Social Security, and those who received T&P disability benefits initially prior to Jan. 1, 2015 were not subject to the new Social Security offset. However, the approved March 15, 2020 CBA did apply the Social Security offset to those receiving T&P disability benefits initially prior to Jan. 1, 2015. Plaintiffs argue that the parties did not intend or expect that Defendants could unilaterally change the terms of T&P disability benefits after the Class members had already started receiving the benefits.
Plaintiffs also argue that the changes to the language of T&P disability benefits prior to Jan. 1, 2015 were done “without player knowledge, without following procedures for modification of the CBAs, and without an additional player vote.” The complaint alleges that the NFLPA responded that the language in the 2020 CBA does not create substantive change and did not require a vote. Plaintiffs argue that the change is substantive, as it impacts 400 to 900 former NFL players on T&P disability benefits.
Further, the 2020 CBA would require re-evaluation of those already in paid status under the “whole person” evaluation process. This move rescinds the automatic Social Security approval for T&P disability benefits for the Disability Plan starting on April 1, 2024. Under the current CBA, player can be deemed disabled by the Social Security Administration under SSDI or SSI. Plaintiffs contend that this provision was implemented after Congressional Hearings on the NFL’s reluctance to find their former players disabled using “neutral” physicians and the whole-personal evaluation. The 2020 CBA’s “whole-person” test states that players receiving benefits under the Disability Plan based on Social Security determination submitted prior to April 1, 2024 “shall be re-evaluated under the whole-person evaluation process” to determine further eligibility, and that players that are determined not to meet the requirements for T&P benefits “shall have their benefits terminated.”
Plaintiffs suggest that the omitted material information harmed the Plaintiffs and the class two-fold: (1) by improperly influencing active players to vote in favor of the disability amendment, and (2) by impeding the ability of the Plaintiffs and members of the Class from mobilizing to influence the vote by the active players against the proposed 2020 CBA.
Civil actions may be brought under ERISA if a participant falls under one of the categories within ERISA § 502(a). Plaintiffs argue that relief is unavailable under ERISA § 502(a)(1)(B)—section that allows recovery of benefits due to a participant or beneficiary under the terms of the plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan—because the terms of the Disability and Retirement Plan reflected in the 2020 CBA, “do now or will include the terms of the amendments.” Therefore, Plaintiffs believe ERISA § 502(a)(3) is better suited for a claim challenging the validity of the amendments. Under ERISA § 502(a)(3), a participant, beneficiary, or fiduciary my seek “to enjoin any act or practice which violates any provision of [ERISA] or the terms of the plan,” or “obtain other appropriate equitable relief (i) to redress such [ERISA] violations or (ii) to enforce any provisions of [ERISA] or the terms of the plan.”
Finally, Plaintiffs allege that the plan fiduciaries failed to disclose material information about the T&P disability benefits. According to the complaint, under ERISA § 404(a)(1), plan fiduciaries are required to discharge his or her duties with respect to a plan solely in the interest of the participants and beneficiaries and (A) for the exclusive purpose of (i) providing benefits to the participants and their beneficiaries; and … (B) with “care, skill, prudence, and diligence.” This includes the duty of loyalty and prudence under ERISA § 404(a)(1)(A) and duty to disclose and inform under ERISA § 404(a)(1)(B). Plaintiffs contend that those duties also include the duty not to misinform, affirmative duty to inform when he or she knows silence might be harmful, and duty to provide complete and accurate information to participants and beneficiaries.
Critics of the change to T&P disability benefits under the 2020 CBA would see more obstacles for former players to overcome to receive the benefit in an already challenging process. Finally, many believe that the proposed changes create a financial hindrance on former players and their families already struggling with life after football.
See full complaint: Aveion Cason et al. v. National Football League Players Association et al., case number 1:20-cv-01875, in the U.S. District Court for the District of Columbia.
