An appeals court has found that the Department of Energy has no obligation to provide full pension benefits to some Hanford nuclear reservation workers who filed a class action lawsuit.
The U.S. Court of Appeals for the Federal Circuit this week upheld a September 2017 decision by the U.S. Court of Federal Claims, throwing out the lawsuit.
The lower court found that DOE was not obligated to offer Hanford workers continued full pension and retirement benefits after they were required to switch from one employer to another in a 1996 contracting change.
The appeals court said it found no evidence that the federal government, which ordered a past contractor to establish a Hanford-wide pension plan, had an obligation to contractor employees to make sure they continued to be covered by the plan.
The class action suit was filed in 2016 on behalf of as many as 500 former employees of Lockheed Martin Services Inc., which previously provided information technology and other services at Hanford.
Peter Turping, a former Lockheed Martin Services worker and the lead plaintiff in the case, told the Herald that plaintiffs and their attorney, Douglas McKinley of Kennewick, were weighing their options and deciding what to do next.
Second $100 million lawsuit
McKinley also filed a second class action lawsuit on similar grounds in 2018, but expanded it to employees not only of Lockheed Martin Services at Hanford but also for employees of other similar Hanford “enterprise companies” created in 1996. He estimated damages at $100 million.
The case has been on hold pending a decision in the appeal in the 2016 case.
Both cases have sought to restore full Hanford pension benefits that workers lost in a largely failed economic development plan when one major Hanford contract expired and a new contractor was named.
Typically when new contractors are named, Hanford employees of the previous contractor are switched to the new contractor and retirement benefits continue uninterrupted under the Hanford Multi-Employer Pension Plan.
That did not happen in 1996, when about 2,000 Hanford workers were assigned to new “enterprise companies” when Fluor won the contract for environmental cleanup at Hanford previously done by outgoing contractor Westinghouse.
Diversifying the Tri-City economy
Fluor had proposed that “enterprise companies” be formed and given some Hanford work to help stabilize them as they developed nonHanford business lines that would allow them to become permanent Tri-City companies. The goal was to reduce the local economy’s reliance on Hanford.
The companies were launched using employees of the previous Hanford contractor, Westinghouse, and its subcontractors.
But the enterprise companies were no longer considered part of Hanford, and the years of service that figured into their workers’ pensions under the Hanford-wide pension play were capped in 1996.
Fellow workers who transferred from Westinghouse to Fluor continued to accrue full Hanford pension benefits without interruption, and, unlike workers assigned to enterprise companies, retained their retirement medical and life insurance benefits.
Some workers who were transferred to Lockheed Martin Services maintained that they continued to do the same Hanford work at their same desks alongside workers transferred to Fluor.
Within two years, some of the enterprise companies had folded and many of their workers were reabsorbed into the Hanford workforce with full pension benefits.
But Lockheed Martin Services continued to provide information technology service at Hanford for about two decades.
20-year legal battle
Through those years Lockheed employees and employees of other enterprise companies have unsuccessfully pursued many avenues to regain lost pension and other retirement benefits, before filing lawsuits.
They met with state and federal elected and nonelected officials. They appealed pension payouts. They filed ethics reports with DOE and Lockheed and contacted the DOE Office of Inspector General. They also made their case with news reporters and in letters to the editor in the Tri-City Herald.
The appeals court found that the Hanford sitewide retirement plan, although formed at the direction of DOE, was created by Hanford contractors for the benefit of contractors.
DOE reimburses contractors for pension plans, but has ordered them phased out for many new workers over the last decade.
The federal government, the defendant in the lawsuit, was not a direct party to the Hanford-wide retirement plan, the appeals court said. The federal government was not obligated to Lockheed’s employees, it said.