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ERISA Class Action Law Suit Against Marriott International Allowed to Proceed

The Firm filed an ERISA class action law suit against Marriott International on behalf of former employees who were awarded yearly deferred stock bonus awards by which Marriott obligated itself to issue stock to employees over a ten-year period when the employees turned 65 years of age, took early retirement, became permanently disabled, or died. The purpose of these awards was to reward superior performance and to entice employees to remain with Marriott. Marriott’s obligations were set forth in documents called. “Deferred Stock Bonus Certificate[s]” and “Deferred Stock Bonus Award[s],” and Marriott issued many of these documents in the 1960s, 1970s, and 1980s. Many recipients of these awards are now turning 65 years of age and Marriott is either not issuing stock or is issuing less stock than that to which the former employees are entitled.

Marriott filed a motion to dismiss the law suit. On February 14, 2011, Judge Roger W. Titus, United States District Court Judge for the District of Maryland, denied Marriott’s motion to dismiss, thereby, allowing the case to proceed. See 50 Employee Benefits Cas. (BNA) 2013, 2011 U.S. Dist. LEXIS 14273. (Contact Mr. William H. Bode, Esq. (202-862-4100) to obtain a copy of the decision). In denying Marriott’s motion to dismiss, Judge Titus rejected Marriott’s arguments that the former employees waited too long to file the law suit, stating, “[i]f Defendants, the Department of Labor and the IRS had no reason to know that these awards were subject to ERISA until at least 2010, then surely the Plaintiffs had no reason to know that these awards were governed by ERISA until then.” 2011 U.S. Dist. LEXIS 14273, at *28.

Judge Titus also rejected Marriott’s argument that the former employees failed to exhaust their administrative remedies. Judge Titus specifically noted that Marriott “did not implement an administrative claims procedure until after the lawsuit was filed,” 2011 U.S. Dist. LEXIS 14273, at *30, and stated that “[i]f companies could wait until they were sued to establish a claims procedure, and then force litigants to go back and bring their claims through that procedure, there would simply be no incentive for them to institute an ERISA-compliant procedure in the first instance.” 2011 U.S. Dist. LEXIS 14273.

The Firm is now preparing to bring the case to trial.

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