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April 30, 2002
Chevron Loses ERISA Case
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vron duped employees of its Richmond, Calif., refinery into retiring just before the oil giant offered lucrative buyout packages, according to a San Francisco federal court decision.

The court has ordered Chevron to pay the workers retroactively, according to the San Francisco Chronicle.

The newspaper says the decision strengthens the right of employees to demand complete and honest information about any plans to change their pension and retirement benefits.

"In an era when many workers are losing their safety net and their retirement security, this is a very important ruling," said Michael Ram, the San Francisco attorney who represented the Chevron employees.

Fred Gorell, a spokesman for the oil company, now known as ChevronTexaco, called the judge's opinion disappointing.

"We don't agree with his decision in favor of the plaintiffs," he said. "We are reviewing our options, one of which would be to appeal."

U.S. District Judge William Alsup has awarded six machinists, mechanics and other rank-and-file workers who retired in 1999 the additional money they would have received had they left Chevron after the company announced its retirement incentives.

The former workers deserved the award, said Alsup, because Richmond refinery manager William Steelman had responded to their questions about a possible buyout by saying, "Not at Richmond," even after he agreed to offer buyouts to certain other workers.

"Chevron actively misinformed its Richmond workforce," wrote Alsup, "by representing that a final decision had been made by Chevron when, in fact, Mr. Steelman knew or should have known that no final decision had been made."

The Chronicle says the case turned on Alsup's interpretation of the Employee Retirement Income Security Act. ERISA requires employers to become plan fiduciaries, a legal status that requires them to act in the best interests of employees - rather than, for example, in the best interests of the company - when dealing with employment plans.

In this case, explained Alsup, Chevron had two duties as a fiduciary. One was not to "actively misinform" employees about "the likely future of plan benefits." The other was to tell employees who asked that the company was giving "serious consideration" to changing benefits.

To view the San Francisco Chronicle article, click here.

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