Girl Scouts of Middle TN, Inc. v. Girl Scouts of U.S.A.

In 2005, Girl Scouts of the United States (GSUSA) chartered 312 councils until it combined them into 112 councils. It merged councils that did not participate in the National Girl Scout Councils Retirement Plan with participating councils and made about 1,850 nonparticipating employees eligible for a lifetime pension benefit without having previously contributed to the Plan. In 2006, GSUSA added the Voluntary Early Retirement Incentive Plan, enabling participants to subsidize and accelerate eligibility for their pensions. Girl Scouts of Middle Tennessee (GSMT) sued, claiming that the realignment and the early retirement amendment caused GSMT to incur massive new liabilities. As of 2007, the Plan had a surplus of over $150 million, but by 2011, it had a deficit close to $340 million. GSUSA implemented an increase of its councils’ contribution rates. GSMT wanted to withdraw from the Plan and form its own retirement plan. GSUSA would not grant GSMT permission to withdraw. GSMT sued under the Employee Retirement Income Security Act, federal and state common law, and Tennessee Code 48-53-104. The district court dismissed. The Sixth Circuit affirmed. GSMT has no claim under ERISA and the court declined to create federal common law. GSMT failed to properly plead its state law claim, which would fail as preempted by ERISA. View "Girl Scouts of Middle TN, Inc. v. Girl Scouts of U.S.A." on Justia Law