Executives Lose Bonus Plan Fight
A former company executive employee filed suit against the company for breach of contract and negligent misrepresentation arising from the company's alleged mismanagement of its deferred compensation plan for executive employees including their bonus compensation. While the parties agreed the Plan was covered by the Employee Retirement Income Security Act (ERISA), they were at odds over the application of certain sections of the Act. The company won partial summary judgment and the Sixth Circuit affirmed. The court held the Plan qualifies as an “employee pension benefit plan” under ERISA, but it is not a bonus plan as defined under the bonus plan exemption from ERISA coverage.