Fourth Circuit Affirms Termination of Retiree Welfare Benefits Where Plan Reserved Right to Amend or Terminate

In Fitzwater v. Consol Energy, Incorporated, No. 24-2088, 2026 WL 595435 (4th Cir. Mar. 3, 2026), the Fourth Circuit affirmed a district court’s rulings largely in favor of CONSOL Energy after the company terminated retiree welfare benefits, holding that the employer did not violate ERISA by ending benefits where plan documents clearly reserved the right to amend or terminate the plan.

The case arose after CONSOL provided retiree medical and related welfare benefits to coal miners through an ERISA-governed plan. Employees became eligible for retirement benefits after reaching age 55 and completing ten years of service. Although the company distributed written plan materials containing reservation-of-rights clauses allowing it to modify or terminate benefits at any time, several retirees testified that company representatives had told them their benefits would last for life.

In 2014, CONSOL announced it would terminate retiree benefits. Employees already retired would continue receiving benefits temporarily, while certain employees who retired immediately were offered a limited continuation of benefits. The company later accelerated the termination date and offered some retirees prorated transition payments. Several retirees sued, asserting ERISA claims including breach of fiduciary duty and discrimination based on “claims experience.”

The Fourth Circuit first affirmed the district court’s refusal to certify a class. The retirees’ appellate arguments failed to address the district court’s reasoning, and the plaintiffs had abandoned the theory underlying one of their proposed classes. The court also upheld summary judgment rejecting the ERISA discrimination claim. While ERISA prohibits eligibility rules based on health status factors such as claims experience, the retirees produced no evidence that CONSOL acted with discriminatory intent. Instead, the record showed the company relied on a permissible distinction between active and retired employees when structuring transition payments.

Finally, the court affirmed the district court’s mixed ruling following a bench trial on breach of fiduciary duty. ERISA fiduciaries may not materially mislead participants, and equitable relief may be available when participants detrimentally rely on such misrepresentations. The district court found that two retirees proved they relied on misleading assurances that benefits would last for life and awarded equitable relief reforming their benefits accordingly. However, the remaining plaintiffs failed to establish detrimental reliance, often because the evidence showed they were aware that the company retained the right to terminate benefits.

Because the district court properly applied ERISA principles and its factual findings were supported by the record, the Fourth Circuit affirmed the judgment in full.