Employee Relations Law Journal
"Split Circuits: The Accidental Amendment"
Do the terms of a corporate purchase agreement, in which the purchaser agrees with the seller to provide certain benefits to continuing employees, amend an employee benefit plan governed by the Employee Retirement Income Security Act of 1974 (ERISA)?The circuit courts disagree and the US Supreme Court has denied certiorari in a case that could have provided guidance on this important question. The First and Third Circuits have held that corporate purchase agreements did not amend the respective employee benefit plans. By contrast, the Fifth Circuit, in Evans v. Sterling Chemicals, Inc., held that the language in the asset purchase agreement amended the purchaser's retiree pension plan.