THE US SUPREME COURT’S DECISION
In a unanimous decision handed down in 1997, the US Supreme Court clarified that ERISA Section 510 prohibits interference with non- vested benefits, such as welfare benefits; and not just benefits that are capable of vesting, such as pension benefits. The Court’s ruling came in Inter-Modal Rail Employees Association, et al. v. Atchison, Topeka & Sante Fe Railway Company, et al.8
The lawsuit was filed by former employees of Santa Fe Terminal Services (SFTS), a wholly owned subsidiary of the Atchison, Topeka & Santa Fe Railway Company. SFTS was responsible for transferring cargo between railcars and trucks at the railway’s Hobart Yard in Los Angeles. The SFTS employees were entitled to retirement benefits under the Railroad Retirement Act, and also were entitled to pension, health, and welfare benefits under collective bargaining agreements between the company and the Teamsters union.