J AMAL

J . KI FAF I , individually

and on behalf of all others similarly

situated, Plaintiff,
v. HI L TON HO TEL S RETI REMENT PL AN, et al. , Def

endants. UNITED STAT ES DIS TRICT COURT

F OR THE DIS TRICT OF COLUM BIA

Civil Action No. 98-1517 ( CKK)

MEMORAN DUM OP INION (September

7, 2010) This action is broug ht by

Plaintiff J amal J. Kifafi, on beha lf of himself and similarly situated individuals, to recove r for violations of the Employ ee Re tirement Income Sec urity Act of 1974, as ame nded (“ ERI SA”), 29 U.S.C. § 1001, et seq. , in the Hilton Hotels Retirement Plan (the “ Plan”). De fenda

nts are the Plan, the individual members of the Committee of the Plan, the Hilton Hotels Corporation, and individual Hilton officer s or direc tors (collec tively , “De fenda nts” or “H ilton”). On May

15, 2009, this Court gra

nted-in-pa

rt Plaintiff’s motion for summary judgme nt, finding that Defe ndants had violated ERI SA’s anti-bac kloadingprovision, 29 U.S.C. § 1054(b)( 1)(C), a

nd had violated the Plan’ s vesting pr ovisions with respect to the rights of four
cer tified subclasses. See Kifafi v. Hilton Hotels Retirement Plan , 616 F. Supp. 2d 7 (D.D .C. 2009) ( Kifaf i III ). Having f

ound that Def

endants violated ERI SA, the Court reque sted that the parties submit briefs r eg ardingthe equitable r elief a ppropriate to remedy

the violations. Pl aintiff filed a [211] Brief on E quitable Relief, to which D efe ndants filed a [219] R esponse B rief on Equitable Relief, a

nd Plaintiff filed a [223] Reply Brief on Equitable Re lief. De fenda nts havefiled a [224] Mot ion for L eave to File Sur-Reply on Equitable Relief a

nd for Expert Discove ry

in Advanc e of Reme dies Hea ring , to which Plaintiff has filed a n Opposition, and Defe ndants have filed a Reply
. The pa rties’ brie fs on equitable r elief r efle ct a number of sig nificant disagree ments about the prope r scope of equitable relief that should be order ed by the Court. The pa

rties have filed competingproposals to reme dy the bene fit acc rual a

nd vestingviolations previously found by the Court, and the par

ties also dispute how ea ch par ty ’s proposal should be a

pplied to the cer

tified classes. This Memor andum Opinion sets forth the Court’s r uling a s to a number of

the issues disputed by

the par ties. Howeve r, a f

inal order of equitable relief

cannot be issued until the parties f urther c onfer

about the prope r mea

ns of implementing this Court’s ruling s and a he aring is held to resolve c erta in disputed factua l issues. As explained below, the Court shall g ener ally endorse Def

endants’ pr oposal for
reme dying the backloa ding violations, but the Court reje cts Def endants’ c ontention that relief should be limit ed to par

ticipants who separ ated f

rom servic e af

ter 1987. With respec t to Def endants’ f ailure to c redit union servic e for purposes of ve sting, the Court shall orde r Def endants to cr edit union but not other non-par ticipating se rvice ; the Court shall require Hilton to searc h its corporate re cords f or information relatingto class member s’ union service and permit class membe rs to submit claims based on union service not refle cted in re cords. With respe ct to Def

endants’ violation of the 1000 hours of ser vice standa

rd, the Court shall adopt the parties’ proposal to apply the 870/750 hours worke d standard w ith hours equivalenc ies but rejec t Plaintiff’s proposal to apply equivalenc ies to periods of time for which ther e ar e no re cords of hours of ser

vice. With respec t to Defe ndants’ fa ilure to cre dit the first y ear of par ticipation, the
2Court shall rejec t Plainti ff’ s proposal to cre dit participants with a year of ser vice f or the fir st y ear in which there is any

rec ord of pa

rticipatingservice . Wit h respe ct to Def endants’ f ailure to c redit leave s of abse nce, the Court shall not order a dditional discovery of cor porate rec ords as reque sted by

Plaintiff. The Court dec lines to order a dditional discovery of Hilton’s rec ords except with respec t to union service, a s mentioned above . The Court also does not see the nee d to appoint a class a ction administrator to overse e the implementation of f inal relief , but the parties should deve lop a more limited mecha nism for monitoring Hilton’s implementation of
reme dies. The Court shall not approve lump sum pay ments in lieu of future be nefits owed to participa nts, nor shall it include a cy pre s provision in its final orde r. Other disputed issues of fac t, such as the a lleg ed application of unlawful equiva lencies or elapse d time methods and discrepa ncies be tween ve rsions of the Plan’s data base, sha ll be decide d at a f inal reme dies hear ing. I. BACKG ROUND The fa ctual and pr ocedur al history of this case was thoroughly discussed by

the Court in its Memorandum Opinion issued on May 15, 2009. See 616 F. Supp. 2d at 10-21. The Court incorpora tes that discussion here in and assumes fa miliarity with that opinion. Neverthe less, the Court shall briefly

summarize its prior ruling a nd the re levant bac kg round fa cts. The Hilton Hotels Retirement Plan (the “Plan”) is a define d benef it pension plan subject to ERI SA. Be nefits under the Plan acc rue a ccor ding to a formula ba sed on an e mploy ee’ s
aver ag e compe nsation and y ear s of servic e, with an of fset for the employ ee’ s Social Security benef its. See 616 F. Supp. 2d at 13-14. ERI SA preve nts employ ers f rom “ba ckloading ” bene fits, i.e., usinga bene fit acc rual for mula that postpones the bulk of an e mploy ee’ s acc rual to his later

3y ear s of servic e. Id. at 11. In order to preve nt backloading , ERI SA require s defined be nefit plans to satisfy

one of thre e alter

native minimum accr

ual rules, known a s the “3% r ule,” the “ 133 1/3% rule,” and the “ fra ctional rule.” Id. at 11-12; see 29 U.S.C. § 1054(b)(1). B eg inning in 1976 and continuinguntil 1999, the Pl an conta ined an a ccr ual sche dule that was suppose d to comply with ERI SA’s “133 1/3% rule .” 616 F . Supp. 2d at 14. In 1999, afte r this lawsuit was filed, Hilton amende d the Plan’s bene fit acc rual for mula seekingto comply

with the fra ctional rule. Id. at 16. The 1999 a mendment (Ame ndment 1999-1) a lso chang ed two unre lated aspe cts of the Plan that lower ed bene fits for par ticipants. Id. Followingbriefingon summary judgme nt, this Court held that the pre-a mendment Plan failed to c omply with any of the thre e minimum
acc rual rule s and that the pre -ame ndment Plan was re quired to comply with the 133 1/3% rule. Id. at 24. The Court c oncluded that “ the Plan’s par ticipants are entitled to rec eive the be nefits they would have a ccr

ued had the Plan complied with the 133 1/3% rule.” Id. at 24. The Court also conc luded that the 1999 ame ndment to the Plan did not mootthe ERI SA violation found by the Court. Id. at 25-28. The Court’s rulingapplies to a c ertified c lass of cur rent a nd former Hilton employ ees ( the “be nefit-a ccr ual class” ). 1 The Court also found that Defe ndants had violated ERI SA with respec t to the vesting of benef its under the Plan, i.e., the time of se rvice require d for a n employ ee to obtain a

rig ht to his
The be nefit-a ccr

ual class is def

ined as follows: 1 all former and curr ent employees of Hilton Hotels Corporation who wer e employ ed by Hilton Hotels Corporation afte r J anuar y 1, 1976 and have, or may obtain, a vested rig ht to pension benef

its from the Hilton Hotels Retirement Plan, and whose Hilton Hotels’ pension benef

its have been, or will be, reduc ed as a result of the Def endants’ failure to acc rue r etireme nt benef its at the annual ra

tes that ERI SA require s. Kifaf i v. Hilton Hotels Retireme nt Plan , 189 F.R.D. 174, 176 (D .D.C. 1999) ( Kifaf i I ). 4or her

acc rued be nefits. Employ ees who terminated a fter January 1, 1989 need f

ive year s of 2 service to become ve sted; employ ees who terminated pr ior to that date ne eded te n y ear s of service . ERI SA require s employ ers to count a ll of an employ ee’ s y ear s of servic e for calc ulating his or her year s toward ve sting, e ven if they occur prior to par

ticipation in the retireme nt plan. 29 U.S.C. § 1053(b)(1); 616 F . Supp. 2d at 12. ERI SA ge nera lly require s an employ ee w ith 1000 hours of ser

vice dur ing a

twelve- month period to be cr edited with one year of ser vice. 29 C.F .R. § 2530.200b-1. In calc ulating the 1000 hours of ser vice, the e mploy er must count not only hours worke d but also hours “duringwhich no duties ar e per formed . . . due to vaca tion, holiday , illness, incapac ity

. . . layoff, jury

duty , milit ary

duty or leave of a

bsence .” Id. § 2530.200b-2(a ). I f an e mploy er’ s exi sting re cords do not allow it to proper ly calc ulate an e mploy ee’ s hours of service , the employ er ma

y “use a permitted equiva lenc[y].” Id. § 2530.200b-3(a ). One such equivalenc y

focuse s on “hours wor

ked,” in whic h an employee who works 870 hours is cr edited with 1000 hours of ser

vice. Id. § 2530.200b-3(d)
. Be g inning in 1976 and c ontinuing until the Plan was ame nded in Dec ember 2002, Hilton applied the 1000 hour s standard f or ca lculatingemploy ees’ y ear s of servic e. 616 F . Supp. 2d at 29. By its terms, the Plan require d all periods of e mploy ment betwee n the date of hire a nd the date of termination to be take n into account, includingleave s of abse nces a nd union service
. Id.
As the Court previously

explained, vesting a

nd acc rual a

re distinct but related conc epts. 2 616 F. Supp. 2d at 10. “V esting ” conc erns whe n an employ ee ha s a rig ht to pension, where as “ac crua l” re fer s to the amount of bene fits to which an employee is e ntitled. Id. at 10-11. “B eca use ‘ve sting is tied to leng th of employ ment’ and the acc rual of be nefits ‘de pends upon participation in the plan,’ it is possi ble for e mploy ees to ‘e arn c redit towar d vestingwithout acc umulating a

ny pension bene fits.’” Id. at 11 (quoting Holt v. W inpisinger , 811 F.2d 1532, 1537 (D.C. Cir. 1987)).
5at 14. The Court found that Defe ndants had violated the Plan’s vestingprovisions with respec t to

four c ertified subc lasses: (1) the y failed to c redit employ ees’ union service for pur poses of vesting ; (2) they

failed to prope rly

apply the 1000 hours standa

rd bec ause the y

kept inadequa

te 3
rec ords; (3) they

failed to c redit employ ees’ leave s of abse nce; a nd (4) they

failed to c ount the y ear in which employ ees be came participa nts in the Pl an for

vestingpurposes. 616 F . Supp. 2d at 29-32. Ac cording ly , the Court ruled that the me mbers of the se vestingsubclasses should be
awa rded the vestingcre dit to which they are entitled. II. LEGAL STANDARD Section 502(a) (1)( B) of ERI SA allows a par ticipant or bene ficiar

y to bringa civil ac tion “to re cover

benef its due to him under the terms of his plan, to enf orce his rights unde r the ter ms of the plan, or

to clarify his rights to future benef its under the ter

ms of the plan.” 29 U .S.C. § 1132(a) (1)( B) . Pursuant to this provisi on, the Court may order that participa

nts’ benef its be
rec alculate d consistent with the terms of the Plan. See F rommert v. Conk

right , 433 F.3d 254, 270 (2d Cir. 2006) (“ The re lief that the plaintiffs se ek, re calc ulation of their bene fits consistent with the terms of the Plan, fa lls comfortably within the scope of § 502( a)( 1)(B ).”) ERI SA also has a “ catc hall” provision, Section 502(a )(3) , which allows a participa nt, benef iciary , or fiducia

ry to “(A) enjoin any

act or prac tice which violate s any provision of this subchapte r or the te rms of the plan, or (B ) to obtain other a

ppropriate equitable r elief ( i) to redr ess such violations or (ii) to enf orce any provisions of this subchapter or the terms of the
Although the re w as evide nce in the r ecor d to sugg est that Hilton failed to cr edit other 3 ty pes of nonpa

rticipatingservice for pur poses of ve sting, the Court de clined to expand the scope of the subcla ss beyond employ ees’ union service for the r easons state d in that opinion. 616 F. Supp. 2d at 30 n.18. 6plan.” 29 U.S.C. § 1132(a) (3); Varity Corp. v. Howe , 516 U.S. 489, 507, 511 (1996). Where

relief is otherwise available unde r Section 502(a )(1) (B ), equitable relief under Sec tion 502(a)( 3) will not be “appr opriate.” Varity Corp. , 516 U.S. at 515. Howeve r, whe re a plan does not confor m with the require ments of ERI SA, relief unde r the c atcha ll provision may be appr opriate. The phra se “a

ppropriate equitable r elief” encompa sses those categ ories of r elief ty pically available in equity , such as injunction, mandamus, a nd restitution, but itdoes not include compensatory

or punitive damag es. See M ertens v. H

ewitt Assocs. , 508 U.S. 248, 256-58 & n.8 (1993); id. at 258 n.8 (“‘ Equitable’ r elief must mean something less than all relief .”) Thus, courts have found that equitable relief is appropriate in ERI SA case s where it places pa rticipants “in basica lly

the same f

inancial position in which they would be if the e mploy er ha d complied with the minimum require ments nece ssary for the [plan] to satisfy

the ac crua l and vesting provisions of ERI SA.” Carrabba v. Randalls Food Markets, Inc

. , 145 F. Supp. 2d 763, 770-71 (N.D. Te x . 2000), aff’d , 252 F.3d 721 ( 5th Cir. 2001) (per curia m). III. DISCUSS ION The pa rties have eac h filed brief s in support of their sepa

rate proposals for

reme dying the minimum acc rual ra

te and ve sting violations previously found by the Court. After

Plaintiff filed its Reply Br ief on Equitable Re lief, De fenda nts filed a Motion for L eave to File Sur-Reply on Equitable Relief a

nd for Expert Discove ry

in Advance of Remedies H ear ing. D efe ndants ask the Court for per

mission t o file a Surr eply , which they attache d to their motion, in order to rebut
cer tain arguments raised by

Plaintiff in his R eply

reg arding

Def endants’ pr oposed re medies. Plaintiff opposes this request, ar guing tha t Defe ndants’ motion is unti mely and that the Surre ply
mere ly restate s arg

uments that were or could have bee n raised in De fenda nts’ Response B rief on
7Equitable Relief. While the Court notes that surre plies are g ener ally disfavore d, Plaintiff’s Reply Br ief doe s contain deta iled criticisms of Def endants’ pr oposals as we ll as a supplemental decla ration fr om its ex pert, to which D efe ndants should be per mitted to respond. Moreove r, Plaintiff has failed to identify any prejudice suffe red by

any delay in filing, which occ urre d

4 while the par

ties were in mediation. There fore , the Court shall g rant De fenda nts’ motion for leave to file a Surre ply , and the Court shall consider the Surreply

in ruling on the appropr iate equitable r elief. Wit h respe ct to Def

endants’ r equest for

discovery

in advanc e of a

reme dies hea

ring , the Court ag ree s with Pl aintiff that discove ry is not warra

nted at this time. The Court has not yet deter mined that there are materia l fac tual issues in dispute that require a reme dies hea

ring
. Cf. United States v. Mic rosoft Corp. , 253 F.3d 34, 101 ( D.C. Cir. 2001) (holdingthat courts must conduct a n evidentiar

y hear ing to r esolve disputed fa ctual issues in deter mining appr opriate relief ). The pa rties have submitt ed sepa rate proposals for

equitable r emedies that rely on the decla rations of e x perts who disagree about the propr iety of the other

party ’s proposals unde r ERI SA. This Court shall m ake a leg al rulingabout what e quitable re lief is appropr iate base d on its prior decision as to liability , relying on f acts that a re not in dispute. The Court shall then hold
a re medies hea

ringto resolve a

ny fac tual disputes as to methodology , if nec essar y . Acc ording ly , the Court shall deny

Def endants’ motion for e x pert discove ry . The pa rties agree that all relief

should be provided in the f orm of bene fits to be provided from Hilton’s tax-qualified plan. Howe ver, the parties disagree reg ardingthe bene fit calc ulations that should be requir ed to re medy the minimum accrua l rate a nd vestingviolations previously
Def endants’ motion was f

iled 63 day s after

Plaintiff’s Reply

Br ief wa s filed. 4 8found by

the Court. The Court shall addr ess ea ch of the ir proposals below. A. Reme dies for the Minimum Acc rual Rate Violation The pa rties agree that the ca

use of the unla

wful “ba ckloading ” of be nefits under the Plan 5 is the fac t that the Plan’s benef it formula includes a

n offse t for Social Secur ity benef its that is disproportionately

larg e duringan employ ee’ s ear ly y ear s of plan par

ticipation. Gener ally speaking , the Plan’s bene fit formula provide s that the amount of bene fits payable at retireme nt ag e is equa l to 2% of the e mploy ee’ s aver ag e monthly compensation (as def

ined by the Plan) 6 multipl ied by

the number of

year s of servic e for

that employ ee, minus an of fset for “Integ rate d Be nefits,” whic h includes, inter alia , an estimate of the Social Secur ity

benef its that the worker will rece ive at re tirement. See Hilton Hotels Retirement Plan (As Amende d and Restated Effe ctive January

1, 1987), De cl. of Jonathan K. Young wood, Ex. B (“1987 Plan” ) § 4.1. Thus, 7 8 the amount of be nefits an e mploy ee a ccr ues ea ch year

under the Plan depends in par t on his estimated Social Secur ity benef its. Due to the pay

ment structure of the Social Sec urity prog ram, the Plan’s offse t for Social Secur ity pay ments is relatively

high dur ing a

n employ ee’ s ear ly

y ear s and re latively

low duringthe employ ee’ s later year s. The re sult is t hat the ac crua l rates during

In discussing the reme dies for be nefit-a ccr ual class, the Court r efe rs to the Plan in effe ct 5 prior to the 1999 ame ndment, unless otherwise note d. The pa rties agree that for wor

kers who se parated from se rvice prior to 1982, the rate is 6 1.5%. The 1987 Plan wa s actua lly signe d on Dec ember

29, 1994 and made eff

ective a s of 7 J anuar y 1, 1987. The Plan def

ines “I ntegrate d Be nefits” a s including 50% of the e stimated primary Social 8 Security benef it that will be available to the e mploy ee a t retireme nt based on the e mploy ees’ ear nings. See 1987 Plan at 19. “Integ rate d Be nefits” may also include c erta in amounts earne d under othe r pension plans or pr og rams. See id. at 19-20. 9the ea

rly y ear s of the Plan ar e ver

y low compar ed to later

y ear s, violating the 133- 1/3% rule. The pa rties agree that for pur

poses of re medy

ing the backloa ding violations in the Plan, the maxim um annual ac crua l rate unde r the Plan is 1.91% of the e mploy ee’ s aver ag e monthly compensation (“AMC”). To comply with the 133 1/3% rule, the a nnual ac crua l rate in a

ny 9 g iven y ear

cannot be more than 133 1/3% of the annua l acc rual rate in any previous year . There fore , the minimum accrua l rate a llowable under the Plan is 1.91% divided by 133 1/3%, which is 1.4325%. 1 0 Plaintiff’s proposed r emedy , stated most simpl y , is to increase the bene fits paid to participa nts so that any

annual a ccr

ual ra te below 1.4325% will be raised to 1.4325% , and all annual a ccr

ual rates at or a

bove 1.4325% r emain uncha ng ed. Plaintiff’s ac tuarial e x pert, Claude Poulin, has calculate d a sche dule of re vised bene fits for member s of the bene fit-ac crua l class based on this proposed r emedy . Plaintiff’s proposal ca lls for participa nts to rece ive a “ base benef it increa se” that varies ba sed on the year the par ticipant separ ated f

rom the Plan, with
cer tain adjustments. See Pl.’s Br., De cl. of Claude Poulin (“Poulin Dec l.”) ¶¶ 5-18. Mr. Poulin contends that diff

ere nt base be nefit amounts ar e nec essar y to acc ount for cha

ng es in the Social Security wag e base and sche dule ea ch year . See Pl.’s Reply , Supp. Decl. of Claude Poulin (“Supp. Poulin Decl.”) ¶ 23. Ac cordingto Mr. Poulin’s calculations, 22,015 participa nts who are

The maximum acc rual rate is somewhat less than 2% beca use the Social Sec urity

offse t 9 will alway s be g reater than zero ( and in this case, the parties a g ree , it will alway s be at lea st .09% of AMC). For participa nts who separ ated be fore 1982, Def endants c ontend that the maximum 1 0 acc rual rate was 1.41% , requiringa minimum accr ual ra te of 1.0575% in or der to c omply with the 133 1/3% rule. Plaintiffs a g ree that the maxim um rate is no hig her tha n 1.5% but have not stated whe ther they

ag ree with Defe ndants’ 1.41% f igur e. 10curr ently

vested should re ceive benef it increa ses to reme dy

the bac kloadingviolation. Poul in Dec l. ¶ 22. Plaintiff relies on a complex set of schedules a nd adjustments to ensure that e ach participa nt’s benef its are a djusted acc ording ly
. Def endants’ pr oposed re medy is simpl er a

nd rathe r more e leg ant. Def endants propose amendingthe bene fits formula by capping the Social Secur ity

offse t at .5676% of AMC, ther eby mathematica lly

ensuringthat the annua l acc rual rate neve r fa lls below the requir ed minimum of 1.4325%. Under

this approac h, Plan participants will rec eive a n incre ase if, a s a re sult of the 1 1 orig inal offse t, they

rec eived a

benef it that was less than what would have a ccr ued had the Plan
ensure d that the annua l acc rual ra te could not fa ll below 1.4325% duringthe first 25 y ear s of service
. Def

endants propose providingthese pa rticipants with “true up” pay ments to remedy 1 2 the def iciencie s to date and inc rea se their a nnuity pay ments g oing f

orwa rd. Howe ver, Def endants note that not all participants will rec eive a n incre ase unde r their pr oposed re medy beca use some par

ticipants would not have a ccr ued hig her be nefits eve n if they had a minimum annual a ccr

ual rate of 1.4325% dur ing the ir first 25 y ear s of servic e. See Def s.’ B r. at 9. Many of these pa

rticipants, Def

endant a rgues, “outgrow” the bac kloadingthat occur s duringtheir ea rly y ear s of servic e. See id. at 14-15. Some other highly paid par ticipants never

had annua l acc rual rate s of less than 1.4325%. Id. at 12-14; De cl. of I an H. Altman ( “Altman De cl.”) , Ex . 2 (Chart 2C). Although the y

sound simil ar, the parties’ proposals ar e distinctly differ ent. Plaintiff’s
For participa nts who terminated be fore 1982, Def endants propose cappingthe offse t at 1 1 .4425% of AMC. The be nefits formula c hang es slightly afte r 25 y ear s of servic e, and the parties’ 1 2 proposals ac count for this cha ng e. 11proposal esse ntially fre ezes the Plan’s existi ngacc rual rates and then se eks to add be nefits to
ear ly y ear s until t he minimum annual acc rual rate re ache s 1.4325%. B y contra st, Defe ndants’ proposal cha

ng es the be nefits formula in a way that shifts benefits ac crue d in later year s to earlier y ear s. The re sult is t hat under Def endants’ pla

n, the annua l acc rual rate dec rea ses slightly during some later year s to make up for the fa ct that there are highe r ac crua l rates in ea rly y ear s. This happens pur ely

by mathematica l operation of Defe ndants’ modified be nefits formula. In his Reply , Plaintiff argues that De fenda nts’ proposed r emedy

does not satisfy

the 133 1/3% rule be cause it employ s an “a vera g e rate of a ccr

ual” methodolog y

that is ex plicitly

reje cted by ERI SA regulations. See Pl.’s Reply Br . at 5-11. Plaintiff (a

nd his ex pert, Mr. Poulin) point to an example in the Tre asury Regulations in which the rate of ac crua l is 2% for the f irst five y ear s, 1% for the next five y ear s, and 1.5% f or ea ch followingy ear . See 26 C.F.R. § 1.411(b)- 1(b)( 2)(iii) (Example 3). Althoug h the ave rag e rate of a ccr ual under such a sc heme “ is not less rapidly than ratably ,” it never

theless fa ils the 133 1/3% rule bec ause 1.5% is more than 133 1/3% of the lowe st rate, 1%
. Id. Howeve r, De fenda nts’ proposed solution caps the Socia l Security offse t so as to ensure that the minimum acc rual rate in any g iven y ear

is never le ss than 1.4325% (or 1.0575% for pa

rticipants who sepa

rate d befor e 1982). The ref ore, it does not, in fa ct, re ly on an “a vera g e rate of a ccr

ual” methodolog y . Plaintiff also relies on the I RS’s Technica l Advice Memorandum ( “TAM” ) issued in 2002, which a naly zed the Plan and found that it failed to comply with the 133 1/3% rule be cause the initial rate of a ccr ual under the Plan is ge nera lly .71%. See Supp. Poul in Decl., Ex. 4 (TAM). Plaintiff ar gues that the IRS’s analy sis contradicts Def endants’ a ssertion that some hig hly paid par ticipants never

had rates of ac crua l below 1.4325%. See Pl.’s Reply at 8-9. How ever , Def

endant’ s expert, I an Altman, cor rec tly explains
12that the I RS’s analy sis was based on Socia l Security calc ulations in 1996, which cannot be applied re troac tively

to prior y ear s when de terminingcompliance with the 133 1/3% rule. See Supp. Ex pert Repor

t of I an Altman ¶ 5. Plaintiff’s criticism of De fenda nts’ proposal is founded on his viewthat beca use the Plan violated the 133 1/3% rule , ever y Plan participant must be owe d some reme dy . But the backloa ding violation in the Plan does not af fec t all participants equa lly . As the Court explained in its decision on liabili ty , The primary purpose of [m inimum acc rual rate s] is to preve nt attempts to defe at the objectives o f t he minimum vesting provisions by providing undue “bac kloading ,” i.e., by providing inordinately low rate s of accrua l in the employ ee’ s ear ly y ear s of service when he is most likely to le ave the firm and by conce ntratingthe ac crua l of benef its in the employ ee’ s later y ear s of service when he is most likely to rema in with the firm until retireme nt. Langman v. Laub , 328 F.3d 68, 71 ( 2d Cir. 2003) (quotingH.R. Rep. No. 93-807 (1974) ). Thus, by preve nting the ba ckloading of bene fits, ERI SA protects employees who work only a short period fr om vesting w ith only a minimal amount of ac crue d benef its. See H

oover v . Cumberland, Maryland Area Team sters Pens. Fund, 756 F.2d 977, 982 n.10 ( 3d Cir. 1985). But employ ees who stay ed in the Plan for a longe r per iod of time eventua lly acc rued those be nefits that wer e denie d to them in earlier y ear s of servic e. The term “ba ckloading ” is quite appropr iate to expl ain this phenomenon, as the be nefits that did not acc rue in e arly y ear s of servic e ar e loaded into the bac k end of a n employ ee’ s y ear s of servic e. As Hilton descr ibes it, longe r-ter m employ ees “ outgr ow” the violation of the 133 1/3% rule that would have af fec ted them if they had sepa rate d in ear ly

y ear s. Thus, althoug h Hilton’s proposed re medy provides additional benef its to workers who we re shor tchang ed bec ause the y

terminated a fter a

relatively brief pe riod

13of ser

vice, it does not provide a dditional benefits to longe r-ter m worker s who made up a ny initial defic iency

throug h their long evity

with Hilton. That is not t o say that there was no ERI SA violation with respect to these longe r-ter m worker s. But those wor kers suff ere d no decr ease in benef its as a re sult of the violation and there fore are not entitled to equitable re lief. See M ertens , 508 U.S. at 256-58 & n.8 (holdingthat equitable r elief unde r ERI SA does not include compensatory

damag es to fully

reme dy all injuries). Indeed, a s Hilton point s out, such worke rs
are not even a

part of the benef

it-acc rual c lass, which is limit ed to employ ees whose bene fits “have been, or

will be, reduc ed as a

result of the D efe ndants’ fa ilure to ac crue retire ment benef its at the annua l rates that ERI SA require s.” Plaintiff’s proposa l improperly provides a w indfall to many of these pa

rticipants whose be nefits wer e not re duced by backloa ding. There fore , the Court endorse s Hilton’s proposed re medial bene fits formula, which is easie r to implement and prope rly compensates individuals whose bene fits were reduc ed as a result of De fenda

nts’ failure to comply

with the 133 1/3% rule. The Court shall require the parties to re calc ulate bene fits for the be nefit-a ccr ual class ba sed on De fenda nts’ formula a

nd attempt to resolve a

ny disagree ments about the spec ific amounts owed to pa rticular c lass members. The Court must also addre ss Defe ndant’s conte ntion that equitable re lief should be limit ed to Plan participa

nts who separ ated f

rom servic e af

ter De cembe r 29, 1994 (or , alternatively , J anuar

y 1, 1987). De fenda

nts argue that this is appropriate beca use the Plan did not expli citly provide for

compliance with the 133 1/3% rule until an ame ndment was sig ned on Dec ember

29, 1994 (and ma de re troac tive to J anuar y 1, 1987). In essenc e, then, De fenda nts ask the Court to provide no re medy for 6096 pa

rticipants whose be nefits wer e ca lculated unde r an 14unlawfully backloa ded plan. Tha

t is not an equitable re sult. I t is true that Plan participants could not have r elied on the Plan’s pur ported c ompliance with the 133 1/3% r ule until the 1994 amendment wa s signe d. Howeve r, the pre -ame ndment Plan did not comply with anyof the thre e minimum acc rual tests under ERI SA, and it is appropriate for the Court to re form the Plan so as to comply with ERI SA. See Carrabba v. Randalls Food Mk ts., Inc. , 145 F. Supp. 2d at 773 (“D ue to the abse nce of

an ac crua l method in the plan, the cour t is called upon to selec t for use in the ca lculations of the aw ards to be ma de to the par ticipants ag ainst defe ndant one that, in equity , most appropriate ly

rec og nizes the objectives of the [plan] in an ERI SA context.”) The 1994 amendment e x plicitly

adopted the 133 1/3% rule, a nd it did so wit hout substantially chang ing the benef its formula that exist ed pre viously
. By contra st, when Hilton amende d the Plan in 1999 to 1 3 comply with the fra ctional rule, it made substantial modifications to the benef its that would be paid to participa

nts. 616 F. Supp. 2d at 16. The pa rties have never

urg ed the Court to consider the 3% rule
. Id. at 11 n.2. For these re asons and the r easons state d in the Court’s prior dec ision on liability , the Court finds it is appropriate to c onform the pr e-a mendment Plan to the 133 1/3% rule, includingparticipa

nts who separ ated be fore 1987. B. Reme dies for Vesting Violati ons The pa rties have filed sepa

rate proposals to reme dy

the vestingviolations previously found by the Court. Unfortunately , the par ties have a g ree d on littl e, and the number of disputes
The be nefits formula in the 1976 Plan pr ovided that the norma l retireme nt benef it is 1 3 equal to 1.5% of

an employee’ s final ave rag e ea rning s multi plied by

his y ear s of servic e, minus his I nteg rate d Be nefits. See Hilton Hotels Retirement Plan (As Amende d and Restated E ffe ctive J anuar y 1, 1976), De cl. of Jonathan K. Young wood, Ex. A (“1976 Plan”) § 4.1. The benef its formula in the 1987 Plan is virtually the same, e x cept with a 2% rate and slig htly altere d definitions for the input var iables. See 1987 Plan § 4.1. By contra st, the 1999 Amendment signific antly

altere d this benefits formula so a s to comply with the fra ctional rule. 15rema ined to be re solved by the Court is substantial. The Court shall address what appea r to be the par ties’ larg est disag ree ments reg ardingvestingreme dies. 1. Remedies for

Fa ilure to Credit Union Service This Court previously

deter mined that under the terms of the Plan, Hilton was r equire d to
cre dit employ ees’ union service for pur poses of ve sting, yet it failed to do so. Def endants propose to re medy

this viol ation by

cre diting any

union service that is refle cted in the Plan
rec ords. Plaintiff, howeve r, ar gues that De fenda nts should be require d to cre dit all y ear s of nonparticipating se rvice . Plaintiff argues that it is necessa ry to cre dit all non-participating service , not just uni on service , beca use ERI SA require s that an employ er c redit all y ear s of servic e towar d vesting . Pl.’s Br. at 21. Accor dingly , Plaintiff proposes to cre dit participants with vesting service for a

ny period of time be tween the ir orig inal date of hire a ccor ding to c orporate re cords and their date of hire acc ordingto Plan recor ds. Id. at 25. Additionally , Plaintiff proposes to
cre dit participants with vestingservice for a ny period of time they

wer e employed by

a “Participating Employ er” or Aff iliate. Id. at 25-26. The Court pre viously

ruled that it would not expand Pl aintiff’s union ser vice c laim to include all “non- participa ting” service beca

use Kifa fi neve r moved to expand the scope of the subclass and the Court never cer tified a “ non-par

ticipating se rvice ” subcla ss. 616 F. Supp. 2d at 30 n.18. Havingdeclined to e x pand the c laim at the liability stag e, the Court will not do so now at the re medy

stag e. Thus, the Court agree s with Defe ndants that the objec tive of any injunctive relief should be to compensate individuals with vesting cr edit for year s of union service . The rele vant question with respe ct to the re medy , howeve r, is whether Hilton’s rec ords of union service are acc urate enoug h to be re lied upon on their own or w hether non-par ticipating se rvice
16should be used as a proxy for union ser

vice be cause the re cords a re ina dequate
. Plaintiff claims that the Plan’s rec ords of union ser vice a re not re liable bec ause the y are not coded to show union ser vice that oc curr ed bef

ore a n employ ee be came a par ticipant or af

ter an employee’ s participation ende d. See Pl.’s Reply , Supp. Decl. of A llison C . Pienta (“Supp. Pienta Dec l.”) ¶ 24. I

n other wor ds, where Plan rec ords indicate pr e- or post-participation service , Plaintiffs contend that there is no way to tell whether or

not the employ ee w as in a union position. P laintiff cites a number of e x amples of e mploy ees who serve d at unionized Hilton proper ties but whose y ear s of servic e ar e not cr edited in Plan rec ords. See Supp. Pi enta De cl. ¶ 25; Pl.’s Mot. for Summ. J ., Ex . 54 (Supp. Dec l. of Martha Ander son). These e x amples we re

1 4 found by Plaintiff based on Plan par ticipants’ re sponses to a questionnaire . Supp. Pi enta De cl. ¶ 25. Plaintiff also cites the e x ample of K ifafi, whose union service was not re flec ted in his pension rec ords. Plaintiff contends that “ Hilton has declined to produc e any corpor ate r ecor ds that would show whethe r employ ees w ere in union posit ions.” Pl.’s Reply at 30. There fore , Plaintiff argues that there are only two viable re medial options: either (1) count all y ear s of non-pa

rticipatingservice identified in the Plan’s re cords ( which would ca pture union service as we ll as some non-union servic e); or ( 2) establish a c laims procedur e to identify Plaintiff also cites the example of Dia nn McKinney , whose “ Service Date” is list ed as 1 4 “4/13/1979” but whose pa rticipation in the Plan does not beg in until 1985. See Pl.’s Mot. for Summ. J ., Ex . 66. Plaintiff argues that Ms. McKinney serve d in a union position from 1979 to 1985 and that this union service is not reflec ted in the re cords. See Pl.’s Reply at 29-30. Howeve r, Ms. McKinney ’s dec lara tion actually

states that she wa s a “f

ull-time, non-union employ ee” for Hilton from 1979 to 1986. See Pl.’s Mot. for Summ . J ., Ex . 50 (De cl. of Dia nn McKinney

) ¶ 2. The ref

ore, Ms. McK inney ’s example does not support Plaintiff’s position. There appea

r to be other

mistakes in Plainti ff’ s examples, as well. For example, at least one participa nt refe renc ed in Ms. Pienta’s supplemental de clar ation is identified as havingworke d in a non-union location. See Supp. Pi enta De cl. ¶ 25; Pl.’s Mot. for Summ. J ., Ex . 54 (Supp. Dec l. of Mar tha Ander son), Ex. E, li ne 12. 17individuals whose y ear s of servic e we re not c redited by Hilton. The first option would not be inequitable for

Hilton, Pl aintiff conte nds, beca use ERI SA alrea dy

require s all non-par

ticipating y ear s to be counted f

or vestingpurposes. See H olt v. W inpisinger , 811 F.2d at 1537. Plainti ff argues that the sec ond option would likely result in incomplete re lief for the subclass be cause of the likelihood of low response rate s. See Pl.’s Reply at 30. Although D efe ndants filed a sur reply in order to r espond to the cla ims raised in Plaintiff’s reply brief, D efe ndants failed to dire ctly addre ss the adequa cy

of Plan rec ords with respe ct to union service in light of Plaintiff’s c ited examples. Defe ndants’ expert, I an Altman, conte nds in his report that ther e ar e a numbe r of r easons why the date of

hire would pre cede the first date of service in Plan recor ds, such as a n err or in rec ordinga hire date or a period of servic e for

which benef its were e arne d and distributed bef ore a re- hire. See Def

s.’ B r., Expert Report of I an H. Altman, FSA (“ Altman Report”) at 22 n.3 & ¶ 56. Ther efor e, he a rgues that a discr epanc y betwee n a hire date a

nd service date doe s not support a claim for uncounted union ser

vice hour s. See Altman Report ¶ 56 (“ Wit hout evidence of hours wor ked as a union employ ee, it is
unrea sonable to aw ard ve sting for phantom service .”) The Court does not agree with Defe ndants that no cre dit can be a war ded for

union service wher e the r ecor ds do not ex plicitly show that an e mploy ee ha d elig ible union service . As the Court noted in its decision on liabili ty , there is evidence in the rec ord that Hilton never “kept trac k of nonpar

ticipating pr operties’ employ ees ( hours/ear ning) to give them vesting .” See 616 F. Supp. 2d at 19 (c iting Pl.’s Ex . 27 at 4 (5/9/02 Email Ex chang e betwe en V. Stoicof a nd G. Trotter) ). In light of this re cord e vidence and the e x amples cited by Plaintiff in its Reply

Br ief on Equitable Relief of

employ ees whose union servic e wa s not refle cted in the Plan’s r ecor ds, the
18Court cannot conc lude that Def endants’ pr oposed re medy —cre diting union servic e solely as ref lected in Plan re cords—is ade quate to re medy the violation found by

the Court. Howeve r, base d on the pre sent rec ord, the Court also ca nnot conclude that Plainti ff’ s proposed r emedy

—cre diting par

ticipants with vesting c redit for all y ear s of non-pa

rticipating service ref

lected in Plan re cords ( which would pre sumably include some union ser

vice a nd some other non-pa

rticipatingservice )—is an equitable result. It is not clear to the Court, base d on the parties’ submissi ons, why the Plan has re cords of

some union service but not other union service
. I t is also not clear howmany participa nts who did not have any

union service would become vested unde r Plaintiff’s propose d reme dy , makingit difficult to determine whe ther the be nefits to such per sons would be pure ly incidental to re lief for

the subclass or c onstitut e an e nd-run a round the Court’s class c ertifica tion ruling. Be cause there is uncerta inty about whethe r there are corpor ate r ecor ds that would indicate union service beyond what the Plan re cords show, the Court shall order D efe ndants to conduct a
sear ch of the ir corpor ate r ecor ds. Defe ndants shall be re quired to identify and produc e any
rec ords that demonstrate , with respec t to the potential subclass members ide ntified by Plaintiff, 1 5 whether or not those subclass membe rs had union ser vice that is not ref

lected in Plan re cords. Def endants shall be r equire d to cer tify by aff idavit that they

have c onducted a

thoroug h sear ch for a ny such re cords. Onc e that sea rch is complete , Def

endants shall administer a claims proce dure that will noti fy all subclass member s for whom union ser vice ha s not been identified that they may submit a claim if they

believe the y

have union se rvice that is not reflec ted in the
Initially , Plaintiff identified 962 participa nts who it believed would bec ome vested if 1 5 union and non-pa

rticipatingservice wer e cr edited. It appea rs that Def

endants a gree that at least 183 of these individuals should become vested. See Altman Report, Ex. 5. 19rec ords. The pa rties shall confe r re g ardingthe standar ds for c laim administration and jointly 1 6 propose a proce dure to be approve d by the Court. Def

endants shall bea

r the c ost of administeringthe claims proc edure . Alternatively , if Def endants pre fer

to avoid the costs of
sear chingcorpor ate r ecor ds and establishinga cla ims procedur e, they may ag ree to Plainti ff’ s proposal to cr edit all non-par ticipating se rvice
. 2. Remedies for

Violations of the 1000 Hours of Service Standard This Court previously

deter mined that Hilton violated the terms of the Plan’s ve sting provisions by

using a 1000 hours of ser

vice standa

rd whe n it failed to maintain the re cords
nece ssary to implement it. Under ERI SA regulations, when a pla n fails to keep r ecor ds adequate to determine a ll of the hours that an e mploy ee should be cre dited (which inc ludes hours for which the e mploy ee w as entitled to be pa id as well as hour s for va cation, holiday , illness, leave of abse nce, e tc.), the pla

n may use an “ equivalenc y .” See 29 C.F.R. § 2530.200b-3(a ). Unde r the “hours wor

ked” e quivalency , an employ ee is c redited w ith a y ear of ser vice if he has 870 hours worke d duringa twelve -month period (or 750 for a salarie d employ ee)
. Id. § 2530.200b-3(d)
. Alternatively , a plan may use an e quivalency

based on pe riods of employ ment, such that for

eac h month of employ

ment in which the employee w ould otherwise be cre dited with at least one hour of ser vice, the e mploy ee is c redited w ith 190 hours of servic e. Id. § 2530.200b-3(e )(1) (iv). Def endants’ pr oposed re medy calls for the 870/750 “hours wor

ked” e quivalency

to be applied in lieu of the 1000 hour s of servic e standa rd whe re a

n employ ee’ s rec ords ar e suff icient

The Court anticipates that class c ounsel may seek to obtain re cords of union service 1 6 direc tly from the unions. 20to indicate the hour s worked. Where re cords of hours worke d are unavailable (or whe re a 1 7
rec ord indicate s 500 hours of ser vice a s a plac eholder ), De fenda nts propose to use the 190 1 8 hours of ser

vice pe r month equivalenc y , and par ticipants whose hours a

re c alculate d under the 190-hour e quivalency

shall be cr edited with a year of ser vice if the y

have 870 hour s duringthe y ear (750 for salarie d employees)
. ERI SA regulations permit these equiva lencies to be used in 1 9 combination. See 29 C.F.R. § 2530.200b-3(e )(7) . Def endants’ e x pert maintains that the 190- hour equiva lency

may be used be cause the Plan has re cords that shows pa rticipants’ months of service
. See Altman Report ¶ 49. Plaintiff does not object to Def endants’ pr oposal in principle. Howeve r, Plaintiff 2 0

Effe ctive January

1, 2003, the Plan was amended so a s to enable pa rticipants to ear

n 1 7 y ear s of vestingservice under the 870/750 “hours wor ked” sta ndard f or ea ch year

in which they are ear ning year s of bene fit service
. See Pl.’s Mot. for Summ . J ., Ex . 41 (Amendme nt 2002-04) at 1. For periods in which pa

rticipants would not be ea rningy ear s of bene fit service (such a s union service ), the Plan ame ndment calls for an “e lapsed time” me thod to applied to determine vestingcre dit. Id. at 3; see 26 C.F.R. § 1.410(a) -7. Acc ordingto Defe ndants’ expert, Hilton rec orded “ 500 hours” a s a plac eholder in 725 1 8 employ ees’ rec ords to indicate that the e mploy ee w as hired mid-year or left mid-year

and did not work e noug h hours to be cr edited with a year of ser vice. See Altman Report ¶ 49. Plaintiff disputes that those participants would not have been c redited w ith a y ear of ser vice ha d their hours bee n proper ly

counted. In any

event, the pa

rties now agree that beca

use re cords of

hours of worke d wer e not ac tually kept with respe ct to these pa rticipants, an e quivalency must be used to deter mine whether

they are entitled to a y ear

of vestingservice . Acc ording ly , the Court expects Hilton to apply

a time-ba sed equiva lency to all entries with a “ 500 hours” plac eholder
. As define d in the regulations, the 190 hours per month equiva lency cre dits an employ ee 1 9 with hours of servicerathe r than hours worked . Howeve r, De fenda nts’ proposal ef

fec tively treats the equivale nt 190 hours as hours wor ked, mea ning tha t an employee ne eds only 870 (or 750) hours instead of 1000 hour s to earn a y ear of vestingcre dit. This is consistent with the example descr ibed in 29 C.F.R. § 2530.200b-3(e )(8)
. Although it wa s initi ally

unclea r as to whe ther Plaintiff supported the application of the 2 0 870/750 “hours wor

ked” e quivalency

wher e existi ngrec ords wer e suff icient to deter

mine the number of hour s worked, Plaintiff ha s clarif ied that it does not object to this standard. See Pl.’s 21contends that the Plan’s r ecor ds are inadequate or insuffic ient to apply Def endants’ pr oposal. As with his union service c laim, Plainti ff a rgues that if the e quivalencie s are applied only to the
rec ords as they

wer e kept by

Hilton, members of the subc lass will be deprive d of vestingcre dit for months of ser

vice f or which H ilton failed to keep a dequate rec ords. Ther efor e, Plaintiff proposes modifications to account for Hilton’s failure to ke ep prope r re cords of participa nts’ service . The Court shall discuss ea ch of Plaintiff’s spe cific pr oposals below. 2 1

a. Credit for time af

ter the la st recor d of ser

vice. There are some participa

nts whose last rec ord of se rvice , i.e., the last date for whic h any hours ar e re corde d, does not match up with their date of ter mination of employ

ment (“D OTE”)
. For these pa rticipants, Plaintiff proposes to have the Court presume that the employ ee ha d at least one hour

of ser vice in ea ch month betwee n the last rec ord of se rvice and the DO TE, eve n though Plan r ecor ds do not indicate any hours of ser

vice. I f the Plan re cords do not indicate any DOTE a nd there is no other explanation of an a bsence in the employ ee’ s rec ords, Plaintiff would have the Court presume that the e mploy ee w orked until the end of the last ca lendar

y ear for which ther e is any

rec ord of e mploy

ment or ea

rning s. Plainti ff would a lso seek an a udit of termination dates of

“12/31” to dete rmine whe ther they are actua l termination dates or me rely place holders in the re cords. See Pl.’s Br. at 24-25. Plaintiff provides no clea r explanation as to why

the Court should assume that there wer e Reply at 24. The Court notes that the pa rties have made it ver

y difficult to identify

the spec ific 2 1 points on which the parties a g ree or disag ree . The pa rties’ brie fs on equitable r elief la rg ely attack eac h other’s pr oposals without setting for th with clarity

why a par ticipant should or should not be awa rded ve sting c redit in a pa rticular c ircumstance . The Court has done its best to understand the major points of conte ntion and make a rulingbased on the evidenc e in the re cord. 22additional hours of ser vice f or employ ees be tween the ir last rec ord of se rvice and their date of termination of employ

ment. Plaintiff refe rs to the Plan Manual, whic h define s the termination date a s “the date the employee te rminated fr om the active sta tus (vested ter

m, retireme nt, death, etc.” ; and it say s that “[i] f the e mploy ee is still working , then this date is blank.” See Pl.’s Reply , Ex . 3 (Pension Admin. Manual) at 6; Pl .’s Reply at 18. Plaintiff appar ently conclude s that an employ ee r emains on ac tive status until t he date of termination and the ref ore should be c redited with vesting se rvice duringthat time. The re levant question, howe ver, is not whethe r the individual continued to be employe d , but whether the employ ee ha d any

additional hours of service . ERI SA defines a n “hour of

service ” as “ eac h hour for which an e mploy ee is pa id, or entitled to pay

ment.” 29 C.F.R. § 2530.200b-2( a)( 1). Thus, an e mploy ee ma y rema in on the pay roll for a period of time without having any hours of ser

vice by , for e x ample, takingunpaid leave . Plaintiff has not provided the Court with any rea sonable ba sis for pre suming that a n employ ee w orked ( or wa s otherwise e ntitled to be paid) at lea st one hour for ever y month that he
was a n employ ee. In his moti on for summary judgme nt, Plainti ff a

rgued that Hilton improperly used a 1000 hours standar d “in y ear s where its pension database contains re cords of hours.” See Pl.’s Mot. for Summ. J . at 40. Plaintiff pointed to evidence in the rec ord that Hilton had fa iled to cre dit pay afte r termination, such a s acc rued va cation and lump sum sever ance pay ments. Id. The Court ag ree d with Plainti ff in its decision on liability
. See 616 F. Supp. 2d at 30. De fenda nts’ proposal
reme dies this violation by relying instea d on the 870/750 hours worke d standard. A pplying that standard ne cessa

rily means that whe re the re a re no hour s worked by

an employ ee, the re w ill be no vestingcre dit awar ded. In other wor ds, Plainti ff c annot assume that whe reve r the Plan
23rec ords show no hours of se rvice , rec ords of hours w orked a re “ unavailable .” Plaintiff’s proposal to “a ssume” that ther e ar e hours wor ked until the end of e mploy ment wher e the Plan
rec ords show none more closely rese mbles the “e lapsed time” me thod for dete rmining ve sting
cre dit, which is an alternative to counting hour s of servic e (w ith or without equivalencie s) that does not requir e plans to kee p detailed r ecor ds of employ ee hour s. See 26 C.F.R. § 1.410(a) -7 (def ining “ elapse d time” method). As the Court previously

explained, Hilton amended the Plan in 2002 to retroa ctively apply the elapse d time method to periods of non-pa rticipatingservice . 616 F. Supp. 2d at 19-20. The Court found that this amendme nt did not mootPlaintiff’s claim that the 1000 hours standa rd had bee n violated bec ause it wa s mathematica lly possible that a par

ticipant would ear

n more vestingcre dit under an hour s standard tha n the elapse d time method. Id. at 34. Acc ording ly , the Court held that participa

nts must be awar ded vestingcre dit under an hour s standard if it would result in more c redit aw arde d than under the elapse d time method. Id. Hilton has never proposed a

pplying the elapse d time method to periods of time when e mploy ees w ere participating in the Plan (a nd their hours we re r ecor ded), a nd this Court’s rulings do not requir e it to do so. Pl aintiff’s pr oposal rese mbles a hy brid betwe en the e lapsed time method and the hours worke d standard, a s it would require H ilton to count the hours worked ( wher e ther e ar e hours shown) and c ount at least one “ presumed hour ” for ever y other month that elapse s (wher e ther e
are no hours shown). See Altman Report ¶ 44. In other wor ds, Plainti ff is trying to g et the best of both worlds by

takingthe upside of e ach me thod without the downside of either . That is not an equitable reme dy
. I t is possi ble that the Plan fa iled to rec ord hours lea ding up to the da te of ter mination of
24employ

ment and that Plaintiff’s proposa l would remedy that failure . But it is also possible (and more likely

) that Plaintiff’s proposa l would drastically overc ompensate me mbers of the subclass by awa rdingthem vestingservice for pe riods of time in which they perf ormed no ser

vice. Unlike Plaintiff’s union service claim, Plaintiff has not eve n proff ere d examples of participa nts who should be entitled to this relief. The ref ore, the Court declines to endor se Plaintiff’s proposa l to presume that a par

ticipant had at lea st one hour of se rvice in eac h month before his date of termination of employ

ment (or, if the re is no DOT E, the end of the ca lendar

y ear). b. Credit for time betwe en the initial service date a nd the first y ear

of participation. Plaintiff also contends that its presumption of at lea st one hour of se rvice per month should apply

to participants whose “Servic e Date” r efle cted in the Plan re cords doe s not coincide with the first y ear

of par ticipation in the Plan. See Pl.’s Reply at 24. Plaintiff wants to cre dit participa nts with 190 hours for ea ch month betwee n the “Ser vice Date” ( which re flec ts the beg inning of

an employee’ s service with Hilton) and the first year of par ticipation in the Plan. Def endants’ e x pert, I an Altman, admits that “[t] he date active se rvice commence s–the ‘ser vice date’ ref lected on the plan re cords–is the c orre ct startingpoint for countingservice .” Supp. Altman Report ¶ 29. How ever , this period of time would be non-pa rticipatingservice . As explained in the previous sec tion, the Court shall only order equitable r elief w ith respec t to periods of union ser

vice.
c. Credit for time af

ter prope rties stopped re portingservice to the Plan when ac crua ls were frozen in 1996. Plaintiff claims that “it is indis putable that the Plan’s r ecor ds of hours nec essar ily stop
once a proper ty stops reportingservice to the Plan, even if the individual continues to be
25employ ed,” a nd that “much of

the re portingof ser

vice to the Plan stopped onc e bene fit acc ruals
wer e fr ozen at the end of

1996.” Pl.’s Reply

at 26. In her suppleme ntal decla ration, Allison C. Pienta claims that there are 37 individuals who have e mploy ment termination dates a fter H ilton proper ties stopped repor

ting se rvice to the Plan. See Supp. Pi enta De cl. ¶ 18. Ac cordingto Ms. Pienta, the Plan’s re cords f or these individuals show “1000” or “500” hour entrie s or no entrie s at all afte r 1996, indicatingthat the prope rty was no long er a ctually

repor ting se rvice under the Plan. Id. Howeve r, in ea ch of the four e x amples cited by Ms. Pienta in her supplemental decla ration, it appea

rs that the par

ticipants were in fac t cre dited with vesting se rvice afte r 1996, and they would not be entitled to any additional service if the 190-hour s standard w ere applied
acc ordingto Plainti ff’ s presumption of at lea st one hour ea ch month until the date of ter mination. See Supp. Pi enta De cl., Ex. Grp. 1(e). Def endants’ e x pert, I an Altman, states in his supplemental re port that proper ties only stop repor ting se rvice to the Plan when they become disassociated f

rom Hilton, such as through closure or a sale
. See Supp. Altman Report ¶ 31. At that point, Mr. Altman say s, employees a re no longe r entitled to cre dit under the Plan bec ause the proper ty is no longe r a pa

rt of Hilton. Id. There fore , he conte nds there is no re ason to cre dit vesting ser vice a fter a

proper ty stops reporting
. Id. Mr. Altman provides no e videntiary basis for this asser

tion, and Plaintiff did not have an opportunity

to rebut this contention, as it was ra ised for the first time in the supplemental re port filed with Def

endants’ Surr eply . There fore , the re cord is uncle ar a s to whether pr operties stopped repor

ting se rvice altog ether

afte r 1996 (or

any other time) or

whether Hilton failed to trac k any vestingservice duringthis ti me. Hilton’s use of “ 1000” and “ 500” hour pla ceholde rs in the re cords c ited by

Ms. Pienta sugg ests that even if exact service hours wer e not beingrepor ted
26afte r 1996, some mea sure of vestingservice was be ing c redited to pa rticipants. At this stage , beca

use Plaintiff has fa iled to identify any participa nts who were deprive d of vestingcre dit to which they wer e entitled af

ter 1996, the Court de clines to order Def endants to provide a dditional vesting c redit base d on hours of ser vice a fter 1996. d. Credit for time betwe en the c orporate hire da te and the hir e date ref lected in the Plan’ s rec ords. Plaintiff proposes that par ticipants who have ear lier orig inal dates of hir e in cor porate
rec ords than Plan re cords r ece ive year s of servic e cr edit for the time in betwe en the c onflicting dates, to be de termined a ccor ding to the a g ree d-upon equiva lencies. See Pl.’s Reply at 25. In other wor ds, where corpor ate r ecor ds show that a par ticipant was hire d on a date that is earlier than the Plan’s hire date, Plaintiff would have the Court presume that the participa nt had at lea st one hour of

service for e ach month in betwe en the c onflictingdates. Plaintiff points to a Hilton press re lease showingthat one par ticular pa rticipant wa s hired in Octobe r 1973, but Plan rec ords show a hire date of

September 1, 1975. See Pl.’s Reply at 25; Pl.’s Mot. for Summ . J ., Ex . 45. Plaintiff also points to a 1998 report on Plan data indicating that f or a numbe r of pa

rticipants, the date of hire is ea rlier than the first rec ord of e arning s. See Pl.’s Mot. for Summ . J ., Ex . 52 (Data Clean-up Projec t J uly

20, 1998) at 3. Ne ither par ty has provided a

n adequate explanation as to why there would be any

discrepa ncy in hire date s. To the extent that earlier corpor ate hire dates would ref lect ea rlier pe riods of non-pa

rticipatingservice , the Court has alre ady addre ssed this issue in the context of Pl aintiff’s union ser vice c laim. To the extent that an ear lier cor porate hire date would r efle ct a pe riod of par ticipating se rvice for whic h Hilton has failed to provide vesting
cre dit, that tim e per iod falls within the scope of the claim that Hilton failed to comply with the

271000 hours standar d by failingto keep tra ck of hour s nece ssary to implement it. Plaintiff conce des that he ha s not made any calc ulations based on discre pancie s betwee n corpor ate hire dates a

nd Plan hire date s beca

use cor porate rec ords wer e not produc ed during discovery
. See Pl.’s Reply at 25. Acc ording ly , Plaintiff has failed to identify any members of

the vestingclass who would be come ve sted if hours of se rvice wer e pre sumed betwe en the e arliest corpor ate hire date a

nd the Plan’s ea

rliest rec ord of se rvice . Rather, Plaintiff spec ulates that “the corpor ate r ecor ds of hire dates are , in fac t, likely to show additional service .” Id. I f that is the
case , it was Plaintiff’s obligation to uncover that e vidence duringdiscovery and bringit to the Court’s attention. Plaintiff’s core claim with respe ct to this subclass is that Hilt on improperly used a 1000 hour s service standard r ather than an 870/750 hours standa rd; Plaintiff now seeks to order additional discovery

to find out whether H ilton failed to count any hours of pa

rticipating service that predate the Plan’s ea rliest rec ord of se rvice . Plaintiff shall not be aff orded a second bite at the apple to expand his claim. There is no evide nce that participants ar e entitled to vesting
cre dit for the per iod betwee n the ea rliest hire date in corpor ate r ecor ds and the Plan’s hire or service date. The ref

ore, the Court shall not order Hilton to provide vestingcre dit for this period of time.
e. Unlawf ul equivalenc ies applied to salar ied employees. Plaintiff contends that Hilton has applied a n unlawful e quivalency

of 36 hours pe r we ek to cer tain salarie d employees in orde r to produce y ear s in which the hours fa ll short of 750, thus deprivingthem of y ear s of vestingcre dit. See Pl.’s Reply at 24; Supp. Pi enta De cl. ¶ 7. Plaintiff cites three examples of salarie d participa nts who would be cr edited with a year of vestingif the proper equivalenc y

wer e applied ( 45 hours per wee k of ser

vice, see 29 C.F.R. § 2530.200b283(e) (1)( ii)) to the number of wee ks of servic e indicate d by Plan rec ords. Def

endants dispute this, claimingthat these thre e par ticipants were cre dited with service based on the actua l number of hours that they

worke d, not based on a

pplication of an e quivalency
. See Def s.’ Surreply

at 21 & n.24; Supp. Altm an Report ¶ 32. Def endants point out that the number of hours cr edited for

two of the thre e individuals cited by Plaintiff is not an even multiple of 36 hours, thus ref uting Plaintiff’s contention that a 36- hour equiva lency was used. D efe ndants’ expert also cites othe r examples from the data

base sug g estingthat actua l hours wer e tra cked f or exempt employ ees. See Supp. Altman Report ¶ 32. The pa rties dispute whethe r the Plan re corde d actua l hours worke d for e x empt (i.e., sala ried) e mploy ees. I f De fenda nts are c orre ct that these pa rticipants’
rec ords show ac tual hours worke d, it is notnece ssary to apply an equiva lency , as urg ed by Plaintiff. I t is unclear why Plaintiff assumes that hours we re not ke pt for these employees. Neve rtheless, this is a disputed issue of fa ct impactingmethodology that the Court must resolve at a r emedies he aring
. f. Records f rom “Servic es Prior” ta

ble. Plaintiff contends that there are 181 individuals who, acc ordingto the “Servic es Prior” table in an e arlier

version of the databa se, should be veste d beca use they have suf ficient hours to
ear n additional y ear s of vestingcre dit. See Pienta Dec l. ¶¶ 2(A ), 4; Supp. Pi enta De cl. ¶¶ 16- 17. Plaintiff argues that these individuals’ r ecor ds of servic e we re dr opped or r evised in Hilton’s
curr ent “Ser

vices” table to show lesser year s of servic e. Ms. Pienta states in her decla ration that there wer e close to three thousand downwar d revisions to year s of bene fit service for non- 2 2
Ms. Pienta does not state that there wer e downwa rd re visions to y ear s of vesting 2 2 service
. See Pienta Dec l. ¶ 5. Ther e may have be en re ductions in y ear s of bene fit service without reducingthe y ear s of vestingservice
. 29vested pa

rticipants betwe en the “ Service s Prior” and “ Service s” tables. Pienta De cl. ¶ 5. In response , Def

endants do not provide a

n explanation for these discr epanc ies and state that they need mor e information from Plaintiff to determine its claim. See Altman Report ¶ 54. Def endants do state that they revie wed 80 r ecor ds for pa rticipants whose sole c laim is based on “Servic es Prior” r ecor ds and dete rmined that 38 of those pa rticipants should be vested f or a varie ty of re asons. Id. In her suppleme ntal decla ration filed with Plaintiff’s Reply , Ms. Pienta provides documentation for

four pa rticipants who appe ar to have additional year s of vestingservice in “Servic es Prior” r ecor ds but which are not refle cted on c urre nt Plan recor ds. See Supp. Pi enta Dec l., Grp. 1d. These y ear s of servic e appe ar to be afte r date s of termination in 1996. Def endants do not addr ess this issue in their Surreply . Ba sed on the re cords pr esente d to the Court, it appear s that the individuals identified by Plaintiff should be entitled to additional vestingcre dit. However , beca use there is no ex planation from De fenda nts for the discr epanc y

in the re cords, the Court is re luctant to make a findingwith respec t to these individuals. I f Hilton has made downwar d revisions to a par ticipant’s y ear s of vestingservice duringthe pende ncy of this li tigation, it i s require d that there be a va lid reason f or doingso. To the extent that Pl aintiff can ide ntify

y ear s of vestingservice for pa rticipants re flec ted on ea

rlier r ecor ds, the Court expects Hilton to credit the par ticipant with those y ear s of vestingservice unless it provides a valid explanation for any

chang e in the re cords. The Court shall resolve a ny discrepa ncies during
a re medies hea

ring
. g . Elapsed time. Plaintiff contends that Hilton has fa iled to count actua l hours for c erta in participants,
30relying instea d on an ela psed time method that has lef t some participants with fr actional year s of vestingservice
. See Pienta Dec l. ¶ 2(A) ; Supp. P ienta De cl. ¶ 9. Plaintiff conte nds that there a re at least 218 pa

rticipants who should be ve sted when the ir hours ar e counte d proper ly with equivalenc ies instead of usingthe elapse d time method. Defe ndants’ expert, I an Altman, revie wed the 124 pa

rticipants whose sole c laim was in this subclass and dete rmined that 96 should be vested. See Altman Report ¶ 53. Thus, De fenda nts ag ree that hours should be counte d for pa rticipants. In her suppleme ntal decla ration, Ms. Pienta identifies a numbe r of a dditional participa nts who appea

r to be e ntitled to vesting cr edit See Supp. Pi enta De cl., Grp. 1b. Def endants fa il to address these a dditional ex amples in their Surre ply . There fore , the Court expects Defe ndants to cre dit participants for se rvice based on the hours re flec ted in the Plan
rec ords and the pr oper e quivalencie s, not the elapsed time method.

3. First Ye ar of

Participation Plaintiff proposes that “the first y ear of par ticipation shall be counted f or vestingin all
case s (eve n if the re corde d number of hour s of servic e is low or zero).” Pl.’s Br. at 26. As this Court previously

explained, an employ ee be comes a participa nt in the Plan only

upon meeting the Plan’s minimum eligibility require ments, which includes c ompleting 1000 hour s of servic e within the 12-month period followinghis date of hire or duringany subsequent plan year . 616 F. Supp. 2d at 32. Accor dingly , the Court found that “H ilton’s application of this first y ear provision is inex tricably

intertwined with Hilton’s violations of the 1000 hours standar d.” Id. Be cause an employee doe s not become a Plan participant until he has obtaine d the nec essar y hours for a

y ear of ser vice, Plaintiff’s r equest is, on its face , tautologic al. Howe ver, the Plan
rec ords appe ar to show that some pa rticipants have low numbers of hour s of servic e duringtheir

31first y ear

of par ticipation. These pa

rticipants have less than the re quisite number of hours during the first y ear

that is marked “ P” for pa rticipatingservice . Plaintiff contends that there are over 1300 individuals who have not bee n cre dited with a year of vestingservice for this first y ear of participation and who would bec ome vested if the y wer e g iven this credit. See Pl.’s Reply at 26. Def endants dispute Plaintiff’s interpr etation of the “ P” code in Plan re cords, notingthat the “P” indicates only

that the hours of se rvice are participating se rvice , not that the employ ee is a par ticipant. See Def

s.’ Surreply

at 22; Supp. Altman Report ¶ 34. Def endants point to the Plan Manual, whic h shows that the “P” c ode is one of thr ee c odes used to indicate that service is participating se rvice
. See Pl.’s Reply , Ex . 3 (Pension Admin. Manual) at 22-23. I t is clear f rom the Plan Manual, a s well as fr om the Plan rec ords that have been pr ovided by the par ties, that the “P” code does not automatica lly indicate that a

n employ ee is a

Plan participant. As the Court noted in its decision on liabilit y , an individual only become s a par

ticipant when he has met the minimum hours re quirements for elig ibilit y . There fore , a par ticipant should not automatically be
cre dited with a y ear

of vestingservice for the f irst y ear in which he ha s any

hours of pa

rticipating service
. 4. L eave s of Absenc e This Court previously

found that Hilton had violated the Plan by failingto properly

cre dit employ ees’ leave s of abse nces f or purpose s of vesting . Plaintiff has identified 99 individuals who should be vested ba sed on leaves of a bsence s in Pl an re cords that we re not c redited, a nd Def endants have agree d to vest those 99 individuals. See Def s.’ B r. at 35. How ever , Plaintiff also contends that ther e ar e lea ves of a bsence in corporate re cords that we re not tra nsmitt ed to the Plan, and Plaintiff urg es the Court to compel De fenda nts to disclose corporate re cords
32showingleave s of abse nces. See Pl.’s Br. at 26-27; Pl.’s Reply at 34-35. The only

example 2 3 cited of a n individual who was not cre dited with vesting se rvice for a leave of abse nce is Mr. Kifaf i, whose leave of a

bsence was not re flec ted in Plan rec ords. See Pl.’s Reply at 34; 616 F. Supp. 2d at 15. Plainti ff a lso points t o documents showinghow Hilton coded va rious leave s of absenc e in cor

porate rec ords (e .g ., maternity , milit ary , disability) that ar e not re flec ted in the Plan
rec ords. See Pl.’s Mot. for Summ . J ., Ex . 29 (De cl. of Mar tha L . Ander son & H ilton Human Resource s Employ ee Ma ster Data Dictionar y ). Def endants do not direc tly

addre ss Plainti ff’ s claim that corpor ate r ecor ds would show additional leave s of abse nce not r efle cted in Plan re cords. How ever , Plaintiff has failed to demonstrate that corpora

te re cords would be likely to show additional leave s of abse nce that would result in the vestingof additional member s of the subcla ss. As the Court noted above with respe ct to alleg ed discrepancie s betwee n corpor ate hire dates a nd Plan hire date s, it was Plaintiff’s obligation to obtain evidence of violations during discove ry , not to merely raise the possibili ty

of additional violations. Defe ndants have conce ded that it is proper, ba sed on the Court’s prior ruling , to cre dit vesting ser vice f or leaves of a

bsence s identified in Plan rec ords. I t is too late at this stage of the litigation for Plaintiff to seek re cover y for a dditional violations for which it has no direc t evidence
.

5. Fixing “Revisions” to the Plan Database Plaintiff argues that the Court must take ce rtain steps to “re verse Hilton’s revisions of
Plaintiff contends that “[l] eave s of abse nce be fore participation beg an and a fter it ende d 2 3 are never rec orded in the Plan’s r ecor ds.” Pl.’s Reply at 34. Howe ver, be cause the Court shall not be orde ringrelief

with respec t to non-participatingservice (except for union service ), any omissions duringthis ti me per iod are immaterial. 33rec ords” since 2002. See Pl.’s Br. at 27. Specifica lly , Plaintiff argues that Hilton has applied

forf eiture c odes to individual recor ds based on the imprope r application of break-in-ser vice r ules, causingsome individuals to los e cr edit for year s of vestingservice to which they are entitled. Id. Additionally , Plaintiff contends that Hilton has mistakenly remove d other year s of vestingservice and misapplied the Plan’s 10-year vestingrule to par

ticipants with at least one hour of ser vice afte r 1988, whe n a 5-year vestingrule wa s adopted. Id. at 27-28. De fenda nts contend that Plaintiff has failed to pr ovide any basis for this claim and that the Court’s order does not preve nt Hilton from revisingthe Plan rec ords to fix err ors in the pension data base. D efs.’ Br . at 31. The pa rties’ brie fs on equitable r elief do not provide an ade quate ba sis for this Court to make a ny rulingreg ardingDef

endants’ c hang es to Plan rec ords. It is P laintiff’s burde n to show that the par

ticular e quitable re lief it seeks is appr opriate, a nd Plaintiff has failed to show tha t Def endants have misapplied the bre ak-in-se rvice rules or the Plan’s vestingrules to the detr iment of any members of

the vestingsubclasses. Ac cording ly , the Court declines to a dopt Plainti ff’ s proposed r emedy

at this tim e with re spect to De fenda nts’ revisions to the Plan databa se. C. Collection of Plan Data and Corporate Rec ords Plaintiff contends that in order to remedy

the violations of the Plan previously found by the Court, the Court must order Hilton to produce additional corpor ate r ecor ds relatingto the Plan. See Pl.’s Br. at 29-30. Specifica lly , Plaintiff seeks to compel the pr oduction of cor porate personne l rec ords of (a ) orig inal dates of hir e; (b) le aves of absenc e; (c ) marital r ecor ds; (d) employ ment with former

ParticipatingEmploy ers/Af filiates that par

ticipated in the Plan; and (e ) employ ment rec ords for a

ny Related Companies including“Mana g ed Proper ties” that neve r participated in the Plan. Id. at 30. Plaintiff contends that such pr oduction is require d by
34Mag istrate Judge A lan Kay ’s Octobe r 31, 2001 Orde r, which r equire d production of e lectronic

databa ses and pr og rams within 30 day s. Plainti ff c ontends that Def endants have “ne ver provided” some of this information and we re oblig ed to provide it on a c ontinuing basis. Def endants a rgue that it is too late for Plaintiff to complain about De fenda nts’ alleg ed failure to produce documents pursua nt to Mag istrate Judge K ay ’s orde r. The pa rties agree that in August 2005, Hilton provided Plainti ff with a c opy of its entire pe nsion database containingdata on over 140,000 pa

rticipants. Hilton also provided an updated pension data base to Plaintiff in October 2009. The Court agree s with Defe ndants that Plaintiff should have soug ht to compel further production duringdiscovery or, alter natively , befor e the br iefingon equitable r elief w as completed. The Court has alre ady addre ssed seve ral a spects of Plaintiff’s r equest for additional
rec ords; the Court shall not order a dditional production beyond what has be en pre viously discussed. D. Appointment of a Class Action Adminis trator Plaintiff argues that the Court should appoint a Class Action Administrator to ca rry out the terms of the equitable r elief that will be ordere d by the Court. In addition to an administrator, Plaintiff would have the Court a ppoint an oversig ht committee. Plaintiff contends that a Class Action Administrator is nece ssary to ensure that corporate re cords have bee n completely produce d and ensur e that Hilton complies with the Court’s order
. See Pl.’s Br. at 35-36; Pl.’s Reply at 44-50. De fenda

nts argue that ther e is no nee d for a Class Action Administrator beca use the par ties have a lrea dy

calc ulated the be nefits to be paid to the c lass members a nd Hilton is capa ble of implementingany

reme dy order ed by

the Court. Def

endant c ontends that an administrator would be intrusive a nd remove authority

from Hilton to administer the Plan. See
35Def

s.’ Surreply

at 24. The Court is not inclined at this point t o appoint a Class Action Administrator in this
case . The Court is not convinced that a Class Action Administrator will ultim ately be nec essar

y to implement the equitable re lief in this case, which consists primarily of re calc ulated bene fits for class member s and re formation of the Plan. Ba sed on the Court’s ruling s, the parties should be able to agree on the bene fit calc ulations for ea ch cla ss member to be inc orporated in the final judgme nt. Plainti ff a

rgues that Hilton should not be trusted to implement the remedie s in this
case beca use of its history

of violations. See Pl.’s Reply at 49. The Court shar es Plaintiff’s
conce rn. De fenda

nts’ proposal does not provide for this Court’s continuingjurisdiction or establish any

protocols for monitoringcompliance . Whil e Plaintiff’s proposa l is too i ntrusive, Def endants’ pr oposal is too lax . There fore , once the rema ining issues a re r esolved at a re medies hear ing, the Court shall urg e the pa rties to jointly

propose a

more limited monitoring plan to
ensure that Def

endants c omply

with the Court’s reme dial order . This may involve regular repor ting to Class Counsel or to an indepe ndent third party monitor selected by

the par ties. E. Payme nt Provisions Under Def endants’ pr oposed re medy , class member s who are entitled to additional benef its (either be cause of the c hang e in bene fits formula or be cause they are newly

vested) sha ll
rec eive “ true up” pay

ments ref lectingbenef

its owed to them to date and inc rea sed annuity pay ments in the future r efle ctingtheir additional bene fits. See Def s.’ B r. at 9. Plaintiff does not disag ree with these aspe cts of De fenda nts’ proposal but offe rs seve ral a dditional proposals. For example, Plainti ff a

rgues that all bene fit increa ses of less than $5 pe r month should be discharg ed with a lump sum pay

ment rathe r than a

series of future be nefit pay

ments. See Pl.’s Br. at 30-32.
36Plaintiff also proposes that pre judgme nt and post-judg ment interest be a pplied at a unifor

m rate of 6%. See id. at 32-33. Plaintiff also propose s a spec ific proc edure to notify class member s of incre ased be nefit oblig ations due in the future
. Id. at 33-34. De fenda nts do not specifica lly addre ss Plainti ff’ s proposals. Wit h respe ct to Plaintiff’s sug g estion that benef it increa ses of less than $5 pe r month be discharg ed with a lump sum distributi on, it is unclear why this would be administratively cost eff ective. I f a pa

rticipant is entitled to monthly pension bene fits, Hilton already bear s the administrative cost of distributing that benef it; itwould not make sense to separate out the “incr ease d” bene fit owed due to this l itigation as a lump sum pay

ment. There may

be some administrative saving s with respec t to participants who ar e new ly vested a nd will rece ive less than $5 per

month in benefits. Howeve r, par ticipants may

pref er a n annuity to a lump sum pay ment, even if

the monthly

pay ment rec eived is small; Plainti ff’ s proposal does not conside r this possi bility . Acc ording ly , the Court is not inclined to allow a lump sum pay ment option to repla ce f uture pe riodic pay

ments. The Court has no proble m with lump s um pay ments for benef its that are pa st due, as both par ties’ proposals c ontemplate. The D.C. Circuit has he ld that prejudg ment interest on unpaid ERI SA benef its is presumptively

appropr iate. Moore v . Capital Care, Inc. , 461 F.3d 1, 13 ( D.C. Cir. 2006). Acc ording ly , the Court ag ree s with Pl aintiff that intere st should be awar ded to compensate participa nts for the time value of their be nefits, par ticularly in light of the pr otrac ted nature of this li tigation. The dec ision on how to calculate prejudg ment interest is subject to the Court’s discretion. Forman v. Korean Air Lines Co. , 84 F.3d 446, 450 ( D.C. Cir. 1996). The Court shall not decide a

n appropr iate intere st rate without input from Def endants on this issue. Acc ording ly , 37the Court shall rese rve this issue for later de termination.

Wit h respe ct to notice, Plaintiff proposes that participants who a re not immediately

due benef its be provided with notice of the orig inal and incr ease d benef it obligations and how benef its may be cla imed, including r eturn e nvelopes for participa nts to submi t additional contact information. See Pl.’s Br. at 33-34. Def endants have not ra ised any specific objections to these proce dures, a

nd the Court does not fore see a ny problems with Plaintiff’s notice proposa l. F. Cy Pres Provision Plaintiff proposes that the Court’s re medial orde r include a cy pre s provision to gove rn the distribution of benefits to class membe rs and be nefic iaries who c annot be located within three y ear s. See Pl.’s Br. at 37-38. Pursuant to § 4.11 of the Plan, if a pa rticipant or be nefic iary

cannot be located within three year s of the date on which bene fits are payable, his or he r bene fit is forf eited, althoug h it may

be re instated if a c laim is later asser ted by the par ticipant or benef iciary
. See 1987 Plan § 4.11. The cy pre s doctrine, a s used in the class a ction context, permits unclaimed f

unds to be distributed to the “next best” class, thus maxi miz ing the number of individuals compensate d. See D emoc ratic Central Comm. v. W ash. Metro. Area Transit Comm’n , 84 F.3d 451, 455 ( D.C. Cir. 1996). Gene rally speaking , cy pre

s provisions are
war rante d in situations where “ identifying, loc ating , and notifying” class member s would be difficult. See id. at 456. Her e, howe ver, the class member s have a ll been individually identified, and ther e is no evidenc e that Hilton will have diffic ulty locatingthem. Moreove r, any benef its forf eited under

§ 4.11 would rema in in the Plan fund to be paid out to other par ticipants, which is arguably the “ne x t best” cla ss. This is notthe ty pe of c ase f

or which the cy pre

s doctrine w as intended. The ref

ore, the Court shall not include a cy pre s provision in its order

of equitable
38relief

. G. Attorneys Fee

s and Ince ntive Awards Plaintiff indicates that he intends to apply for a n incentive a

war d of $50,000 for

the named plaintiff, Jamal Kifaf i, as well as f

or attorne y s’ fe es and e x penses. See Pl.’s Br. a t 37-40. The Court shall re serve any decision as to attorne y s’ fe es and inc entive aw ards until afte r a f inal judgme nt is entered in this ca se. H. Further Proce edings in this Action Ba sed on the Court’s ruling s as stated a bove, the pa

rties should confe r in an e ffor t to deter mine what issues re main disputed. To the extent there a re disputes re maining r eg ardingthe proper equitable r elief f

or the minimum accr

ual rate and ve sting violations, the Court shall require further

briefing and hold a he aringto decide disputed issues of materia l fac t. Plainti ff should identify

eac h class member

whom it believes (a

nd Def endants dispute) should be provided with additional bene fits or vestingservice , and De fenda nts shall provide a leg al and fac tual basis for the be nefit and ve sting de terminations it makes with respe ct to eac h disputed class member ’s re medy . Once the par ties have f

iled these a dditional briefs and suppor ting schedule s, the Court shall schedule a hear ing to r esolve a

ny final fa ctual disputes. This hear ing will not consider individual class member claims but class cla ims and issues impacting the methodology
. // // // //
39IV. CONCLUSION

The Court has r eviewe d the par ties’ submissions on remedies and made ruling s on the major issues conteste d by the par ties. Wi th respec t to the backloadingviolation, the Court shall g ener ally adopt Def

endants’ pr oposed re vision to t he bene fits formula but re ject De fenda

nts’ contention that re lief should only be provide d to participants who se parated from se rvice afte r 1987. Wit h respe ct to Def endants’ f ailure to c redit union servic e for purposes of ve sting, the Court shall order D efe ndants to cre dit union but not other non-pa rticipatingservice , and the Court shall require Hilton to search its cor porate rec ords for inf

ormation rela

ting to cla ss members’ union service and per mit class members to submit claims based on union servic e not ref lected in r ecor ds. Wi th respec t to Defe ndants’ violation of the 1000 hours of service standard, the Court shall adopt the par ties’ proposal to apply

the 870/750 hours worke d standard w ith hours equivale ncies but re ject Plaintiff’s proposa l to apply equivalenc ies to periods of time for which ther e ar e no re cords of hours of ser

vice. With respec t to Defe ndants’ fa ilure to cre dit the first y ear of par ticipation, the Court shall rejec t Plainti ff’ s proposal to cre dit participants with a y ear of ser vice f or the fir st y ear

in which there is any

rec ord of pa

rticipatingservice . Wit h respe ct to Def

endants’ f ailure to c redit leaves of a bsence , the Court shall not order a dditional discovery of cor porate rec ords. The Court de clines to order additional discovery

of Hilton’s
rec ords except with respe ct to union service , as mentioned a bove. At this time, the Court does not see the ne ed to appoint a c lass action administrator to ove rsee the implementation of final relief , but the parties should deve lop a more limited mecha nism for monitoring Hilton’s implementation of reme dies. The Court shall not approve lump sum pay ments in lieu of future benef its owed to participants, nor sha ll it i nclude a cy pre s provision in its final orde r. Other
40disputed issues of fac t, such as the a lleg ed application of unlawful equiva lencies or elapse d time methods and discre pancie s betwee n versions of the Plan’ s databa se, shall be de cided at a final
reme dies hea

ring . An appr opriate O rder acc ompanies this Memorandum Opinion.

Date: September 7, 2010 /s/ COLLE EN KOLLAR-K OTEL LY United States District J udg e

41