Guidry v. Sheet Metal Workers National Pension Fund

Curtis Guidry (plaintiff) served as the chief executive of the Sheet Metal Workers International Association, Local 9 (union) (defendant). Guidry also served as a trustee of the union’s pension fund (fund). Due to his various positions, Guidry was eligible to receive benefits from three different pension funds. An audit of the union’s accounting, however, revealed that Guidry had embezzled hundreds of thousands of dollars. Eventually, prosecutors charged Guidry with embezzlement; he pleaded guilty and began serving a jail sentence. While in prison, Guidry sued two of the pension plans for which he was eligible, claiming that they had wrongfully refused to pay him benefits. The union then intervened in the action. The funds claimed that Guidry’s criminal actions had forfeited his benefits rights or, alternatively, that if Guidry still had a right to the benefits, they should be given via a constructive trust to the union from which he had embezzled funds. Applying § 203 of the Employee Retirement Income Security Act of 1974 (ERISA), which provided that retirement benefits under a pension plan were nonforfeitable, the district court concluded that Guidry had not forfeited his right to receive benefits. Although ERISA also contained a prohibition on assignment or other alienation of pension benefits, the court then concluded that a constructive trust would be appropriate to allow the union to recover the funds. The court noted that ERISA had to be read consistently with other federal labor laws that sought to combat union corruption. It would make little sense, the district court held, to allow Guidry to collect his benefits from the fund that was supported by the union from which he stole money. The Tenth Circuit affirmed, and the United States Supreme Court granted certiorari.