St Clare’s Hospital Retirees Win Damages in Pension Fight

It’s a sad reality that too often Catholic institutions deny their employees their just rights, and do so with impunity because our cherished First Amendment freedoms prevent the federal government from sanctioning them. We hear about this most often when Catholic schoolteachers or adjunct faculty seek to organize in unions. Employees of Catholic hospitals enjoy the protections of the National Labor Relations Board – but their pensions are not regulated by the ERISA (Employee Retirement Income Security Act) laws that protect other private sector workers.

ERISA requires most employers to set aside sufficient funds in advance in a trust to pay workers’ retirement benefits, so if the company goes bankrupt the workers still get their pension. But in 2017 the Supreme Court ruled that religious hospitals are not necessarily bound by ERISA, and administrators of Catholic hospitals have been known to fill their employees’ pension accounts with IOUs. In the event of a bankruptcy, dedicated hospital workers are left holding the bag, and the bag is empty.

That’s what happened at St Clare’s Hospital in the Diocese of Albany. The hospital closed in 2008 with a badly underfunded pension plan. In 2019 the pension fund ran out of money and more than 1,100 nurses, EMTs, orderlies and others lost their much-needed pension checks. The workers filed a civil suit against the St. Clare’s and several officers of the corporation, including recently retired Bishop Scharfenberger. Last week a jury awarded $54.2 million in civil damages to the defrauded workers. Bishop Scharfenberger, assigned 10% of the liability, promptly filed for bankruptcy himself.

For more on the story, read this account in the National Catholic Register.