Closing A Business Unit Creates An Opportunity To Recover Unfunded Pension Costs
Client Alert | 1 min read | 07.08.05
Although the Government has never contested that contractors with underfunded pension plans are entitled under CAS 413 to claim a lump sum adjustment for underfunded pension costs in connection with a segment closing, both the Defense Department and the Justice Department have asserted that a contractors' right to recover such costs may be limited by the standard Limitation of Costs clause, by standard contract release of claims language, and by regulatory provisions that require that pension plan contributions be made in the same year that the contractor claims pension costs. In a decision issued on July 5, 2005, in General Motors Corp. v. United States, the Court of Federal Claims rejected all of those Government arguments, only agreeing with the Government that GM will be required at some point to make contributions to its plan in an amount at least equal to the reimbursement it receives from the Government, and leaving open the possibility that contributions already made to the plan by GM since the segment closing will satisfy that requirement.
Insights
Client Alert | 3 min read | 11.21.25
On November 7, 2025, in Thornton v. National Academy of Sciences, No. 25-cv-2155, 2025 WL 3123732 (D.D.C. Nov. 7, 2025), the District Court for the District of Columbia dismissed a False Claims Act (FCA) retaliation complaint on the basis that the plaintiff’s allegations that he was fired after blowing the whistle on purported illegally discriminatory use of federal funding was not sufficient to support his FCA claim. This case appears to be one of the first filed, and subsequently dismissed, following Deputy Attorney General Todd Blanche’s announcement of the creation of the Civil Rights Fraud Initiative on May 19, 2025, which “strongly encourages” private individuals to file lawsuits under the FCA relating to purportedly discriminatory and illegal use of federal funding for diversity, equity, and inclusion (DEI) initiatives in violation of Executive Order 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity (Jan. 21, 2025). In this case, the court dismissed the FCA retaliation claim and rejected the argument that an organization could violate the FCA merely by “engaging in discriminatory conduct while conducting a federally funded study.” The analysis in Thornton could be a sign of how forthcoming arguments of retaliation based on reporting allegedly fraudulent DEI activity will be analyzed in the future.
Client Alert | 3 min read | 11.20.25
Client Alert | 3 min read | 11.20.25
Client Alert | 6 min read | 11.19.25
