Advocate Health Care Network Settlement

Welcome to the Stapleton v. Advocate Health Care Network Settlement website. This website is intended to keep Class members informed regarding the Class Action Settlement. While the District Court has approved the Notice of Proposed Settlement (the “Class Notice”) and ordered that certain documents filed with the Court be posted on this website, the content of this website is the responsibility of Plaintiffs’ Counsel and has not been approved by the Court.

The Settlement was finally approved by Court on June 27, 2018.

Background

The case involves the Advocate Health Care Network Pension Plan (the “Advocate Plan” or the “Plan”), a noncontributory defined benefit pension plan.

The lawsuit filed on March 17, 2014 alleges that Advocate denied the Plan’s participants and beneficiaries the protections of the Employee Retirement Income Security Act (“ERISA”) by improperly claiming that the Plan is a “church plan” exempt from ERISA. The lawsuit further alleges that Advocate, as the Plan sponsor, violated ERISA in a variety of ways, and, alternatively, that application of the church plan exemption to the Advocate Plan violates the Establishment Clause of the Constitution.

Defendants moved to dismiss the Complaint and the Court denied the motion to dismiss, ruling as a matter of law in favor of Plaintiffs that an ERISA-exempt “church plan” must be established by a church. Defendants appealed that decision to the Seventh Circuit Court of Appeals and then to the United States Supreme Court.  The Supreme Court ruled in Defendants’ favor, reversing the Seventh Circuit and holding that pension plans need not be established by churches in order to qualify as ERISA-exempt church plans, though they still had to satisfy other conditions. Advocate Health Care Network v. Stapleton, 137 S. Ct. 1652 (2017) (“Advocate”). While the Supreme Court’s decision on this issue went against Plaintiffs, the Supreme Court did not decide Plaintiffs’ other theories of liability and the case was returned to the District Court for further litigation.

At the request of Plaintiffs and Defendants, the Court continued further proceedings in the case to permit the parties to engage in mediation, and after extensive mediation proceedings, the parties reached a compromise with the mediator’s assistance.  A Class Action Settlement Agreement (the “Settlement Agreement”) was signed on February 16, 2018.  Judge Chang preliminarily approved the Settlement Agreement on February 26, 2018. On May 11, 2018, Plaintiffs filed a Motion for Final Approval, and a Motion for Attorneys' Fees and Expenses, and for Incentives for Named Plaintiffs. On June June 20, 2018, Plaintiffs filed a Reply in Support of their motions. The Court entered an Order and Final Judgment on June 27, 2018, finally approving the settlement and Plaintiffs' motion for attorneys' fees, expenses, and incentive awards.

The Settlement Class

On February 26, 2018, the Settlement was preliminarily approved on behalf of the following Class:

All persons who, as of the Settlement Date, are or were Plan participants, whether vested or non-vested, and their beneficiaries.

As defined in the Settlement Agreement, the Settlement Date is the date on which the Settlement has been approved by a Final Order of the Court that has become Final.

The Settlement

The Settlement resolves all claims against Defendants and applies to all past and present, vested and non-vested, participants in the Plan and their beneficiaries.

Benefits to the Settlement Class

The Settlement provides for Advocate’s corporate guarantee of accrued benefits under the Plan for a period of ten years beginning on January 10, 2018. Additionally, the Settlement provides significant non-monetary equitable consideration, in that current participants in the Plan will receive certain ERISA-like financial and administrative protections for ten years. Because the Plan is a defined benefit pension plan and not a defined contribution plan with individual accounts, like a 403(b) plan or a 401(k) plan, any amount that may be paid on account of the guarantee will be contributed to the Plan as a whole, rather than to individual Plan participants and beneficiaries. Your pension benefit will not increase as a result of the Settlement.

The Settlement also provides a different form of relief to certain former participants in the Plan whose benefits are not vested under the terms of the Plan. These former participants will not have vested rights, but the Settlement provides for a one-time payment of three hundred dollars ($300.00) each to certain former participants in the Plan who terminated employment on or after January 1, 2013, and on or before September 1, 2017, and completed at least three (3) but less than five (5) years of vesting service.

The Effective Date of the Settlement is the date on which the Court has entered its Final Order approving the Settlement and the time to appeal has expired.

The above description of the operation of the Settlement is only a summary. The governing provisions are set forth in the Settlement Agreement.

Settlement FAQs
Q: How do I know whether I am part of the Settlement Class?

The Court has certified this case as a class action for settlement purposes only. You are a member of the Settlement Class if, as of the date on which the Final Order approving the Settlement becomes Final, you are or were a participant in the Plan, whether vested or nonvested, or the beneficiary of such a participant.

Q: How will the Settlement be distributed?

Because the Plan is a defined benefit pension plan and not a defined contribution plan with individual accounts, like a 403(b) plan or 401(k) plan, the guarantee, if ever paid in the future, will be contributed to the Plan’s trust fund as a whole, rather than to individual Plan participants and beneficiaries. Your pension benefit will not increase as a result of the Settlement. You will remain entitled to the benefit you have accrued pursuant to the Plan’s terms, and under the Settlement, for ten years, the Plan cannot be amended to reduce your Accrued Benefit. The Settlement also provides significant non-monetary equitable consideration, in that current participants in the Plan will receive certain ERISA-like administrative protections, including access to certain information, for ten years.

If you are a member of the Settlement Class with more than three years but less than five years of service with Advocate, and you terminated employment on or after January 1, 2013, and on or before September 1, 2017, you will not have a vested pension benefit, but you will receive the one-time cash payment of $300.00 described above.

Members of the Settlement Class do not need to do anything in order to obtain the benefits and protections provided by the Settlement in this case.

Q: What does the Settlement provide?

Under the proposed Settlement, Advocate has agreed to provide significant protections for the Plan that will remain in place for a period of ten years beginning January 10, 2018.  First, Advocate guarantees that the Plan Trust will have sufficient funds to pay the level of accrued benefits stated in the Plan.  Second, amendment or termination of the Plan will not reduce participants’ accrued benefits.  Third, if the Plan is merged with or into another plan in that time period, participants will be entitled to the same or greater benefits than they were before the merger. 

The Settlement also includes equitable provisions which mimic certain provisions of ERISA concerning plan administration, available information (including a plan summary and statements of participants’ account balances), and the Plan’s claim review procedure.  These provisions are also in place for ten years. 

The Settlement also provides for a one-time payment of three hundred dollars ($300.00) each to certain former participants in the Plan who do not have any vested rights in the Plan, who terminated employment on or after January 1, 2013, and on or before September 1, 2017, and completed at least three (3) but less than five (5) years of vesting service.

The Effective Date of the Settlement is the date on which the Court has entered its Final Order approving the Settlement and the time to appeal has expired.

The above description of the operation of the Settlement is only a summary. The governing provisions are set forth in the Settlement Agreement.

Q: What if I do nothing?

If you do nothing and you are a Class Member, you will participate in the Settlement as described above in this Notice if the Settlement is approved.

Q: Can I exclude myself from the Settlement?

You do not have the right to exclude yourself from the Settlement. For settlement purposes, the Action was certified under Federal Rule of Civil Procedure 23(b)(1) and/or 23(b)(2) (non-opt-out class) because the Court determined the requirements of that rule were satisfied. Thus, it is not possible for any of the members of the Settlement Class to exclude themselves from the Settlement. As a member of the Settlement Class, you will be bound by any judgments or orders that are entered in the Action for all claims that were or could have been asserted in the Action against Defendants or are otherwise included in the release under the Settlement. The Court resolves the issues for all Class Members.

Although members of the Settlement Class cannot opt-out of the Settlement, they can object to the Settlement and ask the Court not to approve the Settlement.

Q: How will the lawyers be paid?

Prior to the Fairness Hearing, Class Counsel will apply for an award of attorneys’ fees and expenses, and incentive awards for the Named Plaintiffs. The total amount that Class Counsel will seek for fees, expenses, and incentive awards will not exceed $1.25 million. Advocate will be responsible for payment of this amount. Any payment of attorneys’ fees, expenses, and incentive awards to Named Plaintiffs will not reduce the amount of the guarantee or the one-time payments to be made to certain Class members whose benefits are not vested.

To date, Class Counsel has not received any payment for their services in prosecuting this case on behalf of the Settlement Class, nor have Class Counsel been reimbursed for their out-of-pocket expenses. The fee requested by Class Counsel would compensate all of Plaintiffs’ counsel for their efforts in achieving the Settlement for the benefit of the Settlement Class and for their risk in undertaking this representation on a contingency basis. The Court will determine the actual amount of the award.

Contact

If you are a Settlement Class member and you have questions regarding the Settlement, please contact Class Counsel at (888) 684-6672 or via email.

Please do not contact the Court. Its personnel will not be able to answer your questions.