Barnett v. SKF USA, Inc.

The issue before the Supreme Court in this case concerned whether Section 514(a) of the Employee Retirement Income Security Act of 1974 (ERISA), preempted the breach of contract claim asserted by Appellees Lawrence J. Barnett, Christine Cookenback, James M. Defeo, and Madlin Laurent against Appellant SKF USA, Inc. under Pennsylvania law. Appellees were salaried, non-unionized, employees of SKF, working in its Philadelphia plant. The Company also employed hourly unionized employees at the plant. In 1991, SKF announced its decision to shut down the plant and terminate all workers. Over the course of the next year, the effect of the closing on employee retirement rights and benefits became a matter of discussion between Appellees and their supervisors. Appellees' retirement and pension rights were set forth in the an ERISA plan which SKF maintained and administered. Appellees became aware that, as a result of collectively bargaining the effects of plant closing, SKF agreed that any union worker with 20 years of service and 45 years of age, as of March 10, 1993, the date on which the collective bargaining agreement then in effect expired, would be entitled to receive an immediate and full pension (the creep provision). Two years after their employment with SKF was terminated, and prior to the submission of pension applications, Appellees commenced a breach of contract action against SKF alleging that throughout the course of their employment with the Company, they were employed under the same or better terms and conditions, including "pension eligibility," as SKF’s union workers. Upon review of the trial court record, the Supreme Court found that Appellees' claim was preempted, and accordingly reversed the Superior Court's order that affirmed the trial court's denial of summary judgment in favor of SKF.