Court dismisses coverage action

Petroleum News Alaska Staff

The Atlantic Richfield Co. said April 7 that the Federal District Court in Los Angeles recently dismissed a class action lawsuit brought by 13 individuals claiming entitlement under certain ARCO benefit plans.

In the suit, plaintiffs located in Alaska, California and Texas asserted that ARCO and its subsidiaries had misclassified the plaintiffs, who performed services for ARCO pursuant to contractual arrangements with third parties, as “leased employees,” and that, as a consequence of the wrongful classification, the plaintiffs were impermissibly denied eligibility for benefits under ARCO’s plans.

The district court ruled that, even if plaintiffs could establish that they were common law employees of ARCO, ARCO’s plans explicitly exclude common-law employees who are defined as leased employees under company policy. Since plan terms legally may exclude common law employees from participation pursuant to a “leased employee” exclusion, the court concluded that the plaintiffs were excluded regardless of their alleged status as common law employees.

This ruling follows denials by appellate courts of similar claims brought by leased employees against Coca-Cola, Exxon and Mountain States Telephone and Telegraph Co.