{"id":1077,"date":"2012-08-24T10:42:54","date_gmt":"2012-08-24T14:42:54","guid":{"rendered":"http:\/\/www.miblaw.com\/lawschool\/?p=1077"},"modified":"2012-08-24T10:54:34","modified_gmt":"2012-08-24T14:54:34","slug":"yates-v-hendon","status":"publish","type":"post","link":"http:\/\/www.miblaw.com\/lawschool\/yates-v-hendon\/","title":{"rendered":"Yates v. Hendon, 541 US 1 (2004)"},"content":{"rendered":"

Facts: <\/strong>Yates, the sole shareholder and president of Raymond B. Yates, M.D., P.C., a professional corporation, set up and participated in an ERISA-protected profit sharing plan for the corporation. Personal creditors filed an involuntary bankruptcy petition under Chapter 7. Just three weeks before bankruptcy was filed against him, Yates paid $50,467 into the ERISA profit sharing plan. ERISA has an anti-alienation provision which protects the Plan\u2019s assets from transfer or attachment. The Bankruptcy Trustee sought the $50,467 that Yates had paid into the profit-sharing plan to be allocated to Yates\u2019 creditors.<\/p>\n

Procedural History: <\/strong>The Bankruptcy Court ruled in favor of the Trustee because it determined that Yates was \u201ca self-employed owner of the professional corporation that sponsored the pension plan,\u201d and therefore, Yates could not \u201cparticipate as an employee under ERISA.\u201d<\/p>\n

Issue: <\/strong>Whether Yates, the working owner of a business, can qualify as a \u201cparticipant\u201d in a pension plan covered by the Employee Retirement Income Security Act (ERISA).<\/p>\n

Holding: <\/strong>Yes, Yates can qualify as a participant in the ERISA plan as long as the plan covers one or more employees other than the business owner and his or her spouse.<\/p>\n

Reasoning: <\/strong>Although ERISA did not helpfully define \u201cemployee,\u201d the Court did not look to common-law agency principles to determine whether Yates was an employee as it did in Clackamas Gastroenterology Associates v. Wells<\/a><\/em>. Instead, the Court determined that \u201cERISA\u2019s text contains multiple indications that Congress intended working owners to qualify as plan participants. Because these indications combine to provide \u201cspecific guidance,\u201d there is no cause in this case to resort to common law.\u201d Under ERISA, a working owner may have dual status<\/em>; <\/em>Yates can be an employee and an employer. In addition, ERISA was enacted against a backdrop of IRC provisions that permitted corporate owners to participate in tax-qualified plans.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Facts: Yates, the sole shareholder and president of Raymond B. Yates, M.D., P.C., a professional corporation, set up and participated in an ERISA-protected profit sharing plan for the corporation. Personal creditors filed an involuntary bankruptcy petition under Chapter 7. Just three weeks before bankruptcy was filed against him, Yates paid $50,467 into the ERISA profit … <\/p>\n

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