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Jamal J. Kifafi, Individually, and On Behalf of All Others Similarly v. Hilton Hotels Retirement Plan

August 15, 2012

JAMAL J. KIFAFI, INDIVIDUALLY, AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
HILTON HOTELS RETIREMENT PLAN, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Colleen Kollar-kotelly United States District Judge

MEMORANDUM OPINION

This class-action litigation originated over a decade ago, challenging aspects of the Hilton Hotels Retirement Plan ("the Plan"), a defined benefits pension plan subject to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1002 et seq. Following the entry of final judgment, the Court referred the parties' dispute regarding the vesting status of certain class members to Magistrate Judge Alan Kay for a Report and Recommendation. 10/13/11 Order, ECF No. [266]. Magistrate Judge Kay issued his report on May 16, 2012, recommending that none of the remaining class members be found to have vested. Report & Recommendation ("R&R"), ECF No. [320], at 8. Presently before the Court are Plaintiff Jamal J. Kifafi's [321] Rule 72 Objections to Report and Recommendations on Vested Rights of Five Individuals. Defendants Hilton Hotels Retirement Plan, Hilton Hotels Corp., and individual board members (collectively "Defendants" or "Hilton") did not object to the R&R. Plaintiff's objections are now fully briefed and ripe for adjudication. *fn1 For the reasons stated below, Plaintiff's objections are OVERRULED and Magistrate Judge Kay's Report and Recommendation is ADOPTED for substantially the same reasons as articulated by Magistrate Judge Kay.

I. BACKGROUND

The factual and procedural history of this case has been detailed at length in the Court's prior opinions. E.g., Kifafi v. Hilton Hotels Retirement Plan, 825 F. Supp. 2d 298 (D.D.C. 2011); Kifafi v. Hilton Hotels Retirement Plan, 826 F. Supp. 2d 25 (D.D.C. 2011); Kifafi v. Hilton Hotels Retirement Plan, 736 F. Supp. 2d 64 (D.D.C. 2010); Kifafi v. Hilton Hotels Retirement Plan, 616 F. Supp. 2d 7 (D.D.C. 2009). The Court entered a final judgment after resolving the outstanding remedial issues on August 31, 2011. 8/31/11 Order, ECF No. [258], at 11. At the time of the entry of final judgment, the vesting status of twelve plan participants from the service-counting class remained in dispute. Id. at 8. The parties were ultimately able to resolve the vesting status of all but three of the participants: Cindy Reithel, S.A. Watters, and Trenna Jones. R&R at 1. Magistrate Judge Kay concluded that the Plaintiff failed to provide sufficient evidence to show the three participants had sufficient hours of service under the Plan, and therefore have not vested. Pursuant to Local Civil Rule 72.3(c), the Court now turns to Plaintiff's objections to Magistrate Judge Kay's Report.

II. LEGAL STANDARD

A. Objections to Report and Recommendation Pursuant to Local Civil Rule 72.3(b), "[a]ny party may file for consideration by the district judge written objections to the magistrate judge's proposed findings and recommendations issued under [Local Civil Rule 72.3(a)] within 14 days." The Local Rules further provide that "[t]he objections shall specifically identify the portions of the proposed findings and recommendations to which objection is made and the basis for the objection." L. Civ. R. 72.3(b). The Court "may make a determination based solely on the record developed before the magistrate judge, or may conduct a new hearing, receive further evidence, and recall witnesses." L. Civ. R. 72.3(c). This Court shall make a de novo determination as to the portions of Magistrate Judge Kay's findings and recommendations to which Plaintiff objects. Id. The Court may accept, reject, or modify Magistrate Judge Kay's report, or recommit the matter with instructions. Id. The Plaintiff has the burden to show the class members should vest by a preponderance of the evidence. Kifafi v. Hilton Hotels Retirement Plan, 736 F. Supp. 2d at 83.

B. Hours of Service for Vesting Pursuant to ERISA Per the terms of the Plan, "a Participant who has completed at least one Hour of Service on or after January 1, 1989 shall become vested" after five years of vesting service. Hilton Hotels Retirement Plan 2007 ("2007 Plan"), ECF No. [240-1], at 57. The Department of Labor's ERISA regulations define an "hour of service" (in relevant part):

(1) An hour of service is each hour for which an employee is paid, or entitled to payment, for the performance of duties for the employer during the applicable computation period.

(2) An hour of service is each hour for which an employee is paid, or entitled to payment, by the employer on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence. Notwithstanding the preceding sentence,

(i) No more than 501 hours of service are required to be credited under this paragraph (a)(2) to an employee on account of any single continuous period during which the employee performs no duties (whether or not such period occurs in a single computation period)[.]

(3) An hour of service is each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the employer.

29 C.F.R. § 2530.200b-2(a)(1)-(3). In other words, an hour of service is each hour for which

(1) the employee is paid for performance of duties; (2) the employee is paid but did not perform duties because of vacation, illness, leave of absence, etc; and (3) the employee receives back pay. Id. If a Plan participant does not have at least one hour of service on or after January 1, 1989, the ...


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