Attorney Al Gordon O'Connell Convinces an Arbitrator To Retroactively Reinstate the Employer Match to Employees' 401(k) Contributions
On February 16, 2021, UFCW, Local 1445 won an arbitration victory on behalf of the employees of Dianne's Fine Desserts in which an arbitrator ordered the Company to retroactively reinstate the employer match to employees' 401(k) contributions, which the Company had unilaterally suspended. Pyle Rome partner Al Gordon O'Connell represented the Union in the case.
The contract between the Union and the Company guarantees a 401(k) program and specifically provides for an employer match of up to 6% of an employee's annual pay. The contract article goes on to say: "If the Company chooses to change Section 401(k) plans it will provide the Union with reasonable prior notice." In August 2020, the Company told the Union that it was suspending the employer match pursuant to its right to "change Section 401(k) plans." The Union rejected the Company's action, arguing that, while the contract allowed the Company to decide which 401(k) plan to use, the Company did not have the power to eliminate the contractually agreed upon employer match.
The parties presented the case to an arbitrator, who determined that the contract language was "clear" and did not allow the Company to eliminate the match. The arbitrator rejected the Company's arguments about bargaining history, saying that such history was irrelevant because the contract language was clear on its face but that the history supported the Union's position in any event. As a result of the case, the hardworking women and men of Dianne's will have their employer match reinstated and will be made whole for the lost employer matches over the past six months.