Who should you sue after wrongful employment benefits denial?

In Wisconsin, and throughout the country, workers are far too often denied the employment benefits that they have been promised. For example, often long-term disability benefits claims will be denied for very questionable reasons. When this happens, it is possible to stand up to fight for one’s rights, but it can be quite complicated to determine which company is responsible for the error–as the employer, insurer and plan sponsor might all be separate companies.

Recently, a woman who was formerly employed by AT&T Mobility filed a lawsuit against her employer after she was denied disability benefits and subsequently fired. It now appears that her lawsuit may have targeted the wrong defendant.

The woman was an employee at an AT&T call center when she took several months off work on a short-term disability leave. The leave had been approved by Sedgwick, a separate company that administered AT&T’s benefits plans.

The woman did not go back to work on the final day of the leave, at which point AT&T Mobility told her she had used all of the leave offered under the Family Medical Leave Act and that she needed to apply for an extension to her original leave. She applied for an extension and it was denied, at which point she was fired for not returning to work.

The woman then sued AT&T Mobility for denial of benefits under the Employee Retirement Income Security Act, but the court dismissed the claim because AT&T Mobility was not the employee benefits administrator or sponsor. Sedgwick was the administrator and parent company, AT&T, Inc., was the sponsor.

The woman appealed this decision and argued that AT&T Mobility had a history of exerting control over employee benefits decisions. The appeals court, however, disagreed and affirmed the lower court’s dismissal.

It remains unclear how this case would have been resolved had the original lawsuit targeted Sedgwick or AT&T, Inc. Many companies have their hands in employee benefits plans and decisions surrounding them, and it can be very difficult to decipher exactly which company should be held accountable for claims denials. Experienced disability benefits attorneys can help workers navigate this web and protect their disability and other employment benefits rights.

Source: Human Resources Journal,”Woman Suing for Denial of Disability Benefits May Have Sued Wrong Company,” Oct. 10, 2012


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