Alessi v. Raybestos-Manhattan, Inc.

451 U.S. 504 (1981)

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Alessi v. Raybestos-Manhattan, Inc.

United States Supreme Court
451 U.S. 504 (1981)

Facts

Raybestos-Manhattan, Inc. and the General Motors Corporation (companies) (defendants) had pension plans that were governed by the Employee Retirement Income Security Act of 1974 (ERISA). Under the plans, the pension benefits during retirement were reduced by any workers’-compensation benefits received by eligible employees. Several retired employees (plaintiffs) had received workers’-compensation benefits that led to reductions in their pension benefits under the plans. New Jersey had a law that expressly prohibited reducing retirement pension benefits by the amount of workers’-compensation benefits an individual received. The employees sued the companies, claiming that the companies violated the New Jersey law. After removal to federal court, the district courts concluded that the plans were unlawful under both the New Jersey law and ERISA. As to the New Jersey law, the courts concluded that ERISA did not preempt the law and that the plans’ reduction provisions violated the state law. As to ERISA, the courts also concluded that the plans violated a provision in ERISA that prohibited forfeiture of accrued benefits. The court of appeals reversed, holding that ERISA preempted the New Jersey law and that ERISA’s forfeiture provision did not prohibit the reductions. The employees appealed.

Rule of Law

Issue

Holding and Reasoning (Marshall, J.)

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