Retirement Heist: how companies plunder and profit from the nest eggs of American workers

Vic Washington thought he had one more chance to qualify for disability benefits when the NFL and the players’ union adopted a new disability plan with more flexible rules in 1993. But the NFL trustees denied his claim, providing no explanation. When Washington appealed again, the league plan hired private investigators to question his neighbors, friends, minister, and ex-wife, seeking evidence that his injuries were exaggerated and that he’d held a paid job. It scrutinized his income tax returns for evidence he’d held a job. He had not.

Washington had moved to Phoenix, where he’d played once in a college game, against Arizona State University; his mother was in a nearby nursing home. He joined the local Black Republican group and was a volunteer minister in a local Baptist church.

Finally, in 1998, the NFL plan offered Washington $400,000 to settle his longstanding disability dispute, and he accepted it, taking advice from a former player turned attorney, who was unfamiliar with ERISA law and didn’t know that the NFL had just lost a critical Court of Appeals case in the Eighth Circuit in Minneapolis. A judge had ruled in favor of an ex-player who, like Washington, was denied football disability benefits because he had more than a single injury. “To require that a disability result from a single, identifiable football injury when the relevant plan language speaks of ‘a football injury while an active player’ is to place undue and inappropriate emphasis on the word ‘a.’ ” The judge concluded that the NFL’s decision to deny benefits was “arbitrary and capricious.”

When Washington later learned of the earlier case, he felt like he’d been duped into taking the settlement, and sued the league, asking a court to set aside his settlement on the ground that the NFL had breached a fiduciary duty by not telling him of the other decision five years earlier.

A STRONG DEFENSE

Washington was up against a tough team. To tackle players who file disability claims, the NFL has long relied on Groom Law Group, a Washington, D.C., law firm whose ranks include former officials from the Labor Department, the Treasury, and other agencies.

Groom’s star player in these football disputes is Douglas Ell, who has handled—and won—most of the NFL’s disability suits since 1994. Like other lawyers who defend plans, he said the trustees are only doing what the plan required to protect resources for everyone. “A lot of people say, ‘The evil NFL denies disability benefits,’ but that’s not the issue,” said Ell. “It’s whether the person met the terms of the plan.” There’s a reason the law gives the trustees the power to overrule the league’s own doctors. Without the legal protections ERISA provides employers, he said, they’d have to lower the benefits they pay, because they’d be paying ineligible claims. “The people running the plans shouldn’t be secondguessed by judges. We want to pay the player, not the lawyers.”

With Ell heading the NFL’s defense, the league has enjoyed an impressive winning streak in the courtroom. Of more than twenty lawsuits filed by retired players in the decade before Washington filed his suit, all but four were initially decided in favor of the NFL plan, and of those four, two were reversed on appeal.

Taking on the NFL, Washington faced a well-funded foe, as do most employees or retirees who challenge a pension decision: ERISA allows plan administrators to use pension assets to pay for fees associated with running the plans; these include fees to record keepers, investment managers, consultants, and . . . lawyers. Thus, the defense pockets are very deep. The NFL paid Groom Law Group $2.9 million from its pension assets in 2008, and roughly $25 million over the prior decade, though not all of that was for defense work. Former players, who may have little or no income other than Social Security disability benefits, usually crash into a wall when they try to find an attorney to represent them.

Like most people who initially flail about looking for legal help with their pensions, the players contact lawyers they pull from the Yellow Pages or Internet ads, oftentimes personal injury lawyers unfamiliar with the boggling quirks of the federal law—as evidenced by the fact that they often file the claims in state court, where they have a brief life.