5th Circuit Reverses Ruling That Doubled Disability Pay to Former NFL Player

Takeaway: Retirement plans should not hesitate to enforce plan requirements when beneficiaries and former employees are asking for reclassification under the plan.

The 5th U.S. Circuit Court of Appeals reversed the decision of a district court that had increased the disability retirement benefits of a former NFL player from $135,000 to $265,000 per year and had awarded him more than $1 million in back pay. The appellate court found that the plaintiff failed to show a change in circumstances, as necessary under the retirement plan for him to receive the highest level of disability retirement benefits.

The plaintiff, a former NFL running back, is a participant in the NFL Player Retirement Plan. The plan is a welfare-benefit plan set up under the Employee Retirement Income Security Act (ERISA) and jointly administered by the players’ union and NFL club owners. The plaintiff’s many concussions experienced during his eight-year professional football career left him “physically, neurologically and psychologically debilitated,” the appellate court noted, and the 2005-2006 season was his last in the NFL.

In 2010, the plaintiff was first awarded disability benefits under the player retirement plan. After the Social Security Administration (SSA) found him entitled to disability benefits, the plaintiff approached the NFL plan in 2014 and sought reclassification to a higher level of benefits. The plaintiff was awarded a higher tier, but not the highest tier. He did not appeal the decision.

Court Action

Two years later, the plaintiff filed a claim to be reclassified at the highest level of disability. The NFL plan denied reclassification on several grounds, the court said, but most relevantly the absence of changed circumstances between the plaintiff’s 2014 claim and his 2016 claim. The plaintiff then sued the NFL plan in U.S. District Court for the Northern District of Texas, arguing that the plan violated ERISA when it denied his reclassification.

The district court found for the plaintiff after a bench trial. In its memorandum opinion and order, the court nearly doubled the plaintiff’s annual disability benefits (from $135,000 to $265,000) and awarded him more than $1 million in back pay.

The NFL plan appealed.

In considering the appeal, the 5th Circuit noted that there is no dispute that the plaintiff “is entitled to disability benefits under the NFL plan—the only question is what level of benefits.”

The NFL plan, according to the circuit court, distinguishes between players who were disabled in the line of duty and those who are totally and permanently (T&P) disabled. If the SSA determines that a player is eligible for disability benefits, the player is presumptively entitled to T&P status. The plan classifies T&P benefits as either active, the highest and most generous level of benefits, or inactive.

The NFL plan raised numerous challenges on appeal, the 5th Circuit noted, but it discussed only one issue, which was “dispositive: The plaintiff cannot show that changed circumstances entitle him to reclassification to top-level benefits.”

According to the appeals court, under the NFL plan, a player who has already been awarded benefits is not eligible for another category of benefits unless the player shows evidence of changed circumstances.

The court said that in his 2016 appeal to the plan’s review board, the plaintiff “acknowledged his need to demonstrate changed circumstances but did not make such a showing—or attempt to; instead, he simply asked the board to waive that requirement. He thus forfeited any claim to changed circumstances at the administrative level.”

Because the plaintiff did not show evidence of changed circumstances, as required under the plan, the appellate court said that “the absence of changed circumstances was the basis for the board’s denial, and it was not an abuse of discretion.”

In its opinion, the appellate court commended the district court for its “thorough findings” and noted that the lower court’s findings about the NFL plan’s “disregard of players’ rights under ERISA and the plan are disturbing.” The 5th Circuit also singled out the trial court judge “for her diligent work chronicling a lopsided system aggressively stacked against disabled players.” The court went on to state, however, that it also must “enforce the plan’s terms in accordance with the law.”

The appellate court reversed the district court decision and remanded the case with instructions to enter judgment in favor of the NFL plan.

Cloud v. NFL Player Retirement Plan, 5th Cir., No. 22-10710 (Oct. 6, 2023).

D.M. Fera is a freelance writer in the Washington, D.C., area.