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News Release

EBSA Press Release: Labor Department Sues Time Warner Inc. And Executives For Excluding Workers from Pension and Health Plans [10/26/1998]

Archived News Release — Caution: Information may be out of date.

For more information call: (202) 219-8211

The U. S. Department of Labor today sued Time Warner Inc., Time Inc. and subsidiaries of Time Inc. and officials of nine corporate pension and health plans for wrongly denying coverage by the plans to hundreds of employees. The workers were misclassified as independent contractors or temporary employees and thus were denied coverage.

"We were hopeful we could settle this issue with Time Warner without suing," Secretary Herman said. "However, employers must deliver promised benefits to all eligible employees and we believe some misclassified Time Inc. employees did not receive benefits they were entitled to."

The lawsuit alleges that the plan fiduciaries -- Time Warner and the administrative committee that manages the plans -- regularly failed to identify and include all employees who were eligible to participate in the plans. The workers were not identified or informed of their right to participate in the plans and therefore were prevented from obtaining retirement and health related benefits to which they were otherwise entitled.

The administrative committee is comprised of corporate officers of both Time Warner and Time Inc. Current and former members named in the lawsuit include Carolyn K. McCandless, Paul D. Williams, Philip R. Lochner, Jr., Andra D. Sanders, John LaBarca, George Artandi, Susan Baird, Pat Mulvey, Matt Rudman, Martin D. Payson, Burt Wasserman, Michael Hayes, Kevin Sene and Richard Engle.

The lawsuit seeks a court order appointing an independent fiduciary to audit Time Inc. and account for all employees who were misclassified and prevented from participating in the plans and obtaining benefits. The lawsuit also seeks a court order requiring Time Warner and Time Inc. to compensate the misclassified employees by allowing them to retroactively apply for the benefits to which they were entitled.

The workers were employed by Time Inc., wholly owned by Time Warner, and its subsidiaries, which include Time Magazine, Sports Illustrated, Fortune, Life, Money, People, Entertainment Weekly, Time Life, Inc., Book-of-the-Month Club and Time Distribution Services. Time Inc. employs approximately 40,000 people nationwide. Time Inc. covered multiple subsidiaries and divisions for which it sponsored these nine as well as other benefit plans.

The case resulted from an investigation conducted by the New York Regional Office of the Pension and Welfare Benefits Administration into alleged violations of the Employee Retirement Income Security Act. The lawsuit was filed on Monday, October 26, 1998 in federal district court in Manhattan.

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(Herman v. Time Warner)

Archived News Release — Caution: Information may be out of date.

Employee Benefits Security Administration
October 26, 1998
Release Number