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Employment – ERISA — delegation

By: WISCONSIN LAW JOURNAL STAFF//July 31, 2012//

Employment – ERISA — delegation

By: WISCONSIN LAW JOURNAL STAFF//July 31, 2012//

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United States Court of Appeals For the Seventh Circuit

Civil

Employment – ERISA — delegation

A disability insurer can delegate its decisionmaking to a third party.

“At common law, delegation is not allowed for personal-services contracts: if the Lyric Opera hires Plácido Domingo to sing Hoffmann, he can’t send Neil Shicoff in his stead, even though many opera buffs consider Shicoff the better interpreter of that role. See Restatement (Third) of Agency §3.04(3) and comment c (2006). The group policy is not a personal-services contract, however; Aschermann has no interest in who, precisely, makes the decision. Like any other corporation, Lumbermens can act only through people. It must designate someone, or some group, to evaluate applications for disability benefits; Aschermann has no right to choose who among Lumbermens’ staff evaluates her application. By delegating this function to Aetna, Lumbermens has not done anything fundamentally different from choosing a particular working group within its internal hierarchy. That Aetna proceeds as an independent contractor on behalf of Lumbermens, rather than as an employee of Lumbermens, is of no moment under the common law or any of ERISA’s provisions.”

Affirmed.

12-1230 Aschermann v. Aetna Life Ins. Co.

Appeal from the United States District Court for the Southern District of Indiana, McKinney, J., Easterbrook, J.

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