DOL: Call Me Maybe – As I May Not Answer Due to the Shutdown

Gone fishing (blue)

Those with ongoing investigations or litigation involving the federal Department of Labor (DOL), possibly arising from fiduciary liability concerns related to employee benefit plans (such as pension plans, including 401(k) plans and welfare benefit programs) – may be interested in knowing the status of these events in light of the federal government’s shutdown.

DOL website: Shutdown Message

Categorical Warning

As a general matter, it should be understood that the fact that the federal government is largely closed for business does not in itself change any relevant statutes of limitations (time limitations for bringing claims) and doesn’t automatically freeze or stay ongoing litigation. When there are potential government agencies involved in a claim (like the DOL), then an agency-by-agency review is necessary to determine what activities will continue during the federal shut-down.

Investigating Investigations

three-part series on the effects of the government shutdown

The Government Shutdown

If there is an ongoing or pending investigation, this will likely come to a standstill, as the staff of the Employee Benefits Security Administration (EBSA) that performs investigations under the Employee Benefit Income Security Act (ERISA) has been largely furloughed: effectively reducing staff from 986 down to 46.

The remaining staffers will focus on excepted activities arising from:

  1. Possible criminal activities under ERISA
  2. Situations where immediate action is necessary to prevent imminent threat to property (in this case, the property reference will generally be plan assets)
  3. Situations involving the threat to human life where medical benefits may be (improperly) denied in life-threatening situations.

Litigation (Holds)

Matters currently being litigated will likely be affected, as the staff of the Solicitors Office within the DOL has been reduced by 90%, from 728 down to 71.

If the dispute is before a federal Administrative Law Judge, the matter would be at a standstill as the office is reduced from 122 staffers down to zero.

As they put it, “all nonessential functions will be suspended.” With the office handling roughly 6,000 matters a year (including but by no means limited to ERISA fiduciary cases), a prolonged federal shut-down could have serious consequences for both the claimants and defendants.

Meanwhile, we understand that most staffers with mobile devices provided by the government, have been instructed not to answer their phones (unless it’s their boss calling)…

About Ann Longmore

Ann is Executive Vice President of Willis' Executive Risks practice. Based in New York, she has been with the compa…
Categories: Executive Risk, Health and Group Benefits | Tags: , ,

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