10-1900 Frye v. Thompson Steel Co., Inc.

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Employment
ERISA; offsets

It was not arbitrary or capricious for an ERISA plan to offset pension benefits with workers compensation benefits that the employee received.

“The Committee’s resolution of this ambiguity was not arbitrary or capricious. To prevail, Mr. Frye had to demonstrate that there was no ‘rational support in the record,’ Sellers v. Zurich Am. Ins. Co., 627 F.3d 627, 632 (7th Cir. 2010) (quotation marks omitted), for the Committee’s determination that the offset provision applies to his workers’ compensation partial disability payments. He did not carry this burden. Although Mr. Frye’s alternate interpretation was also reasonable, the Committee adopted a reasonable construction of the phrase ‘disability in the nature of a permanent disability,’ considered Mr. Frye’s contention regarding the definition of ‘disability’ in section 3.4 and communicated a rational explanation for its decision. The phrase ‘in the nature of’ suggests a broad and somewhat fluid concept of qualifying disabilities that lends itself quite naturally to payments for injuries denoted permanent partial disabilities by the workers’ compensation statute. It also could be indicative of the drafters’ intent to widen the scope of the offset provision to include disabilities that are like permanent disabilities but are not permanent in the strictest sense. The specific mention of workers’ compensation payments in section 4.8 provides further rational support for the Committee’s decision to base the offset on IWCC’s characterization of the injury. Moreover, there is no evidence that the Committee has applied the plan provisions inconsistently or that it manufactured its interpretation for the occasion. Therefore, the Committee’s decision fell within the bounds of its discretion.”

Reversed and Remanded.

10-1900 Frye v. Thompson Steel Co., Inc.

Appeal from the United States District Court for the Northern District of Illinois, Cole, Mag. J., Ripple, J.

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