A former Northrop Grumman employee is suing Unum Life Insurance Company of America in a quest to get her disability benefits.

Plaintiff Mary M. says that as a previous employee of Northrop Grumman, she was covered under a disability benefits policy administered by Unum.

Mary claims she had to end her employment with Northrop Grumman in May 2013 because she became unable to work due to an unspecified disability.

Mary says she filed a disability insurance claim with Unum. Unum denied that insurance claim, then affirmed its denial after Mary sought an internal reconsideration.

Having gotten a final decision on her denied disability claim, Mary is now bringing her claim to federal court.

Mary says her denied disability claim was significantly influenced by what she calls a conflict of interest under which Unum operates.

She says that Unum denied her insurance claim based on “biased information and flawed expert opinions” instead of basing their decision on substantial evidence and a principled and reasoned decision-making process.

She also notes that under Unum’s current organizational structure, it serves as claims administrator, insurer, and fiduciary of the disability benefits plan under which her disability claim was decided.

For relief, Mary is asking the court to award her back disability benefits from the date of entitlement through the date judgment is issued, plus interest, court costs and attorneys’ fees.

This disability benefits lawsuit is filed in the U.S. District Court for the District of South Carolina.

Litigating Disability Benefits Claims Under ERISA

Mary’s disability benefits lawsuit falls under the federal Employee Income Retirement Security Act of 1974, or ERISA. This law was enacted to protect private-sector employees’ pension benefits, and now it also covers certain disability benefits.

Generally, ERISA covers employer-sponsored group disability insurance policies. Other types of disability benefits policies may be covered by state laws, which can be favorable to the claimant in certain ways. But for ERISA-governed policies, the federal law preempts the state laws that would otherwise apply.

And while ERISA may have originally been intended to protect claimants’ rights, today it’s considered an insurance-company-friendly law.

For example, a California state law allows claimants who successfully appeal a denied disability claim to potentially collect punitive damages against the insurance company. The same punitive damages are available under ERISA.

Other ERISA provisions that are favorable to the insurance company have to do with the appeal procedure. Appealing a denied disability claim under ERISA means getting into federal court. But when that happens, the claimant doesn’t get the benefit of a jury trial; the hearing is all done by a judge.

Insurance companies also benefit from the application of the “arbitrary and capricious” standard of review under ERISA. Under that standard, the disability benefits denial will stand as long as there is any rational basis on which the company can base its decision.

It’s possible to get a more claimant-friendly standard of review if the claimant can show the denial was influenced by a conflict of interest – as Mary is trying to do in her own disability benefits lawsuit.

Demonstrating a significant conflict of interest can get the court to apply a “de novo” standard, under which the court reviews the claim without any deference at all to the company’s decision.