The U.S. Court of Appeals for the Third Circuit reversed the Delaware District Court’s 2019 decision determining that ERISA applied to a trust established for the benefit of certain domestic and personal service employees of duPont family members.

The plaintiff employee of one of the duPont family members whose employees are potential beneficiaries under the trust, argued that the trust serves as an employment benefit plan covered by the Employee Retirement and Income Security Act of 1974 (ERISA) and that compliance with ERISA was required. The trust had operated as a state law trust since its establishment in 1947 and, as time went on and as anticipated, the corpus of the trust continued to decline.

The Third Circuit ruled that the employee failed to present a connection between her employer and other family members recognized as employers, a requirement for an ERISA-protected multiple employer plan. She also failed to prove that her employer ever financially supported or maintained the trust—a key component for ERISA applicability.

The employee subsequently petitioned the U.S. Supreme Court to review whether ERISA applied to the trust—including minimum funding requirements. The Supreme Court declined to consider the case, leaving the Third Circuit’s decision in place.

One of America’s most well-known families, the duPont family has roots in gunpowder manufacturing and the now-chemical company still bears its name.

The Robinson+Cole team included Business Litigation Group member Curtis Crowther and Appellate Group chair Linda Morkan.