A New York federal judge confirmed that 16,000 Foot Locker pension plan members were entitled to $290 million in benefits following a successful challenge to a cut in their plan. The judge entered an amended final judgment in the long-running case after the U.S. Supreme Court in February denied Foot Locker’s petition, confirming that the retailer must pay $290 million to its pension plan members in the long running Employee Retirement Income Security Act case.
Foot Locker had sought to overturn a Second Circuit Court ruling affirming the retailer owed its pension plan members after temporarily freezing their benefits and hiding the impact of changes it made to the plan. The $290 million is the value of the corrective benefits Foot Locker must pay to each class member, plus pre-judgment interest. The value of the benefits owed to the workers was calculated pursuant to a method outlined in the court’s initial 2015 order. Now that the final judgment has been entered, Foot Locker must reform its pension plan and allocate the benefits accordingly.
Plaintiffs alleged in a complaint filed in 2007 that the company hid that a 1996 shift to a cash balance benefit plan temporarily froze benefits for a swath of employees despite their continuing to pay in, which is known as wear-away.
The case is Osberg v. Foot Locker Inc. et al., case number 1:07-cv-01358, in the U.S. District Court for the Southern District of New York.
