Lockheed Corp. v. Spink

517 U.S. 882 (1996)

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Lockheed Corp. v. Spink

United States Supreme Court
517 U.S. 882 (1996)

  • Written by Alexander Hager-DeMyer, JD

Facts

Paul Spink (plaintiff) was employed by Lockheed Corporation (defendant) and enrolled in its sponsored employee retirement plan established under the Employee Retirement Income Security Act (ERISA). To streamline operations, Lockheed amended its plan to incentivize early retirement. Both of the incentive programs offered increased pension benefits to employees who retired early, but in exchange for the increased benefits, employees were required to waive any employment-related claims they may have had against Lockheed. Spink was eligible for one of the incentive programs but declined the offer in order to preserve possible age-discrimination and ERISA claims. Spink retired with no increased benefits. Spink later filed suit against Lockheed in federal district court. Spink claimed that by providing increased benefits with a condition of waiving employment claims, Lockheed engaged in a prohibited transaction under ERISA. The district court dismissed the case for failure to state a claim, and Spink appealed to the United States Court of Appeals for the Ninth Circuit, which reversed. The court of appeals found that Lockheed used its benefit plan to purchase a significant benefit for itself, which constituted a prohibited transaction under ERISA. Lockheed appealed to the United States Supreme Court, which granted certiorari.

Rule of Law

Issue

Holding and Reasoning (Thomas, J.)

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