Ordinary-Meaning Rule Defines “Trade or Craft” as Manual/Artistic Skill and Limits ERISA Deference to the Administrator’s Stated Reasons

Introduction

In Clyde Rombach, III v. Plumbers Local Union No. 27 Pension Fund, the U.S. Court of Appeals for the Third Circuit affirmed a district court’s summary judgment in favor of a plan participant, holding that the Plan’s suspension of early-retirement benefits was improper under ERISA. The core dispute centered on whether the participant’s post-union employment as a Senior Project Manager constituted work “in a trade or craft utilized in the [plumbing and pipefitting] industry” for purposes of the Plan’s benefit-suspension clause.

Two themes animate the decision. First, as a matter of ERISA administrative law, the court refused to defer to the Plan’s determination because the Plan failed to articulate any meaningful interpretation of the ambiguous term “trade or craft” or to explain its decision—triggering de novo judicial review and foreclosing reliance on post-hoc rationales. Second, applying the Plan’s own instruction to use ordinary meanings, and looking to contemporaneous dictionaries, the court held that “trade or craft” requires manual or artistic skill; a professional, office-based Senior Project Manager role does not qualify. The court also enforced ordinary appellate preservation rules, deeming forfeited the Plan’s requests for remand and its challenges to the scope of relief because those arguments were not raised below.

Although designated not precedential, the opinion provides clear guidance to ERISA plan administrators and litigants on: (1) preserving deference by giving reasoned, record-based explanations; (2) using the ordinary-meaning canon and anti-surplusage to construe plan terms; and (3) preserving remedy arguments at the trial level.

Summary of the Opinion

The Plan suspended Mr. Rombach’s early-retirement benefits because he continued working at W.G. Tomko, Inc. as a Senior Project Manager, asserting that such work was “in a trade or craft utilized in the industry.” The parties agreed the “industry” and “geographic area” prongs of the suspension clause were met; the dispute was limited to the “trade or craft” prong.
Standard of review: While the Plan conferred discretionary authority on the administrator, the court withheld deference because the Plan failed to interpret the ambiguous “trade or craft” term and offered only a tautology; thus, the court reviewed de novo.
On the merits: Invoking the Plan’s ordinary-meaning clause and contemporaneous dictionaries, the court held that “trade or craft” requires manual or artistic skill. The Senior Project Manager position operated in a professional office setting and did not require such skills, so it was not a “trade or craft.”
Structural support: The Plan’s litigating position equating “trade or craft” with “occupation” would render the Plan’s separate “industry” criterion superfluous—contrary to interpretive principles—further undermining the Plan’s reading.
Remedies: The Plan forfeited (a) its argument that the district court should have remanded for a new benefits determination and (b) its challenge to the instruction to “reverse the financial and any other impact” of the suspension, because it failed to present these arguments to the district court.
Holding: The Third Circuit affirmed the district court’s order reinstating benefits and awarding prejudgment and post-judgment interest and directing the Plan to reverse the impacts of suspension.

Analysis

Precedents Cited and Their Influence

Fleisher v. Standard Ins. Co., 679 F.3d 116 (3d Cir. 2012): Establishes that where a plan grants discretionary authority, courts generally review plan interpretations and benefits determinations under the deferential arbitrary-and-capricious standard. But even under that standard, courts may set aside decisions that are “without reason, unsupported by substantial evidence or erroneous as a matter of law” (quoting Miller). Here, Fleisher framed the deference baseline that the Plan forfeited by failing to explain its decision.
Miller v. American Airlines, Inc., 632 F.3d 837 (3d Cir. 2011): Provides the familiar articulation of the arbitrary-and-capricious standard quoted in Fleisher. The court uses Miller’s definition to underscore that even deferential review has teeth.
Gritzer v. CBS, Inc., 275 F.3d 291 (3d Cir. 2002): Critical for two propositions. First, an administrator can forfeit the benefit of discretionary deference by failing to explain its decision or articulate its interpretation of ambiguous terms—triggering de novo review. Second, courts may not uphold a denial on post-hoc rationales not contained in the administrator’s stated reasons. The court relies on Gritzer to withhold deference and to reject the Plan’s appellate rebranding of “trade or craft” as “occupation.”
Kosiba v. Merck & Co., 384 F.3d 58 (3d Cir. 2004): Reinforces the “record rule”—review is limited to the record and the actual basis given by the administrator. Invoked to refuse the Plan’s new appellate rationale.
Dwyer v. United Healthcare Ins. Co., 115 F.4th 640 (5th Cir. 2024): A persuasive out-of-circuit confirmation of the “no post-hoc rationalizations” principle in ERISA cases; cited to show broad acceptance of this bedrock rule.
Howley v. Mellon Financial Corp., 625 F.3d 788 (3d Cir. 2010): Applies the anti-surplusage principle; plan interpretations should not render other plan language meaningless. The court uses Howley to reject the Plan’s “occupation” reading because it collapses the separate “industry” criterion into the “trade or craft” criterion.
Hall v. Millersville Univ., 22 F.4th 397 (3d Cir. 2022): Sets the appellate standard of review—de novo—for the district court’s grant of summary judgment.
Barna v. Board of School Directors, 877 F.3d 136 (3d Cir. 2017): Provides the preservation/forfeiture framework, under which arguments not made to the district court are forfeited absent exceptional circumstances. Applied to deny the Plan’s remand and “scope of relief” challenges.

Legal Reasoning

1) Threshold Standard-of-Review Determination. Although the Plan conferred discretionary authority on its administrator—normally implicating arbitrary-and-capricious review—the court found two independent defects that precluded deference:

No interpretation or explanation: The administrator’s decision said, in essence, that Senior Project Manager is “a trade/craft utilized in the construction industry” because it is “a trade/craft utilized in the construction industry.” This circular statement is not an interpretation; it is a tautology. Under Gritzer, failing to articulate an interpretation of an ambiguous term and failing to explain the reasoning forfeits deference and triggers de novo review.
Post-hoc rationale barred: On appeal, the Plan recast “trade or craft” to mean “occupation.” But under Kosiba and Gritzer, courts review the actual basis stated in the administrative decision on the record. The new “occupation” gloss arrived too late and could not salvage the decision. The Fifth Circuit’s Dwyer decision is cited to emphasize the cross-circuit consensus that ERISA review polices post-hoc rationales.

2) De Novo Interpretation of “Trade or Craft.” Turning to the merits, the court applied the Plan’s own interpretive directive: except for “pay” and “compensation,” the Plan “will refer to things by their ordinary names.” Because the Plan took effect in 1999, the court consulted contemporaneous dictionaries to determine the ordinary meaning of “trade” and “craft.” Those sources consistently signaled that a “trade or craft” is an occupation that requires special manual or artistic skill. On the record, Mr. Rombach’s Senior Project Manager role “operated in a professional office environment” and did not require manual or artistic skill. Accordingly, it was not a “trade or craft,” and the suspension clause did not apply.

3) Structural (Anti-Surplusage) Reinforcement. The Plan’s litigating position that “trade or craft” equals “occupation” fails a basic structural test. The suspension clause uses three independent criteria: industry, trade/craft, and geographic area. Reading “trade or craft” as any “occupation” in the industry effectively collapses the “trade or craft” prong into the “industry” prong—making the latter unnecessary. Under Howley, interpretations that render plan language superfluous are arbitrary and implausible. This provided an additional reason to reject the Plan’s proffered reading even if it had been timely.

4) Remedies and Preservation. The district court ordered the Plan to reverse “the financial and any other impact” of the suspension, including reinstatement of benefits with prejudgment and post-judgment interest. On appeal, the Plan argued the court should have remanded and that the relief was overbroad, but it had not raised either point below. Under Barna, those arguments were forfeited; no exceptional circumstances warranted reaching them. The judgment was therefore affirmed in full.

Impact and Practical Implications

Administrator explanations are indispensable: Plan administrators with discretionary authority must articulate both their interpretation of ambiguous terms and the reasons applying that interpretation to the claimant. Tautologies or bare conclusions can forfeit deference and invite de novo judicial review.
The record rule is real: Courts will not credit post-hoc rationales advanced in litigation. Administrators should ensure that any interpretive gloss appears in the actual denial or suspension notice and is supported by the administrative record.
Ordinary meaning and contemporaneous dictionaries: Where a plan directs the use of ordinary meanings, courts may consult contemporaneous dictionary definitions pegged to the plan’s effective date. For multiemployer building-trades plans, this opinion signals that “trade or craft” is ordinarily limited to occupations requiring manual or artistic skill. White-collar or professional office roles—even in the same industry and employer—may fall outside suspension clauses keyed to “trade or craft.”
Anti-surplusage drafting lesson: If a plan intends “trade or craft” to sweep more broadly (e.g., to capture managerial, supervisory, or administrative roles), it should say so explicitly. Otherwise, courts are likely to read each prong of a suspension clause to do distinct work and avoid interpretations that collapse them.
Preservation of remedy arguments: Parties must raise remand requests and any objections to the scope of relief in the district court. Failure to do so can lock in retroactive benefit awards and interest without further administrative proceedings.
Non-precedential but persuasive: While the opinion is not precedential under the Third Circuit’s I.O.P. 5.7, its reasoning is likely to be persuasive within and beyond the Circuit, particularly on (a) the necessity of reasoned explanations to preserve deference, (b) the bar on post-hoc rationalizations, and (c) the ordinary-meaning/contemporaneous-dictionary method of construing plan terms.

Complex Concepts Simplified

Arbitrary and capricious review: A deferential standard applied when a plan grants discretionary authority to its administrator. Courts uphold decisions that are reasoned and supported by substantial evidence and law. But they can set aside decisions that are irrational, unsupported, or legally erroneous.
De novo review: A non-deferential standard under which the court decides the issue afresh. Triggered here because the administrator failed to interpret the ambiguous term and failed to explain its decision.
Post-hoc rationalization: A new reason offered during litigation that was not part of the original administrative decision. ERISA courts typically disregard these, reviewing only the actual reasons stated on the record.
Anti-surplusage: An interpretive principle counseling that contract terms should be read so that each provision has independent meaning and effect, avoiding readings that make other provisions redundant or meaningless.
Forfeiture (vs. waiver): Forfeiture occurs when a party fails to raise an argument in a timely manner; courts generally will not consider it later on appeal. Waiver is the intentional relinquishment of a known right. The Plan’s failure to raise remand and scope-of-relief arguments below resulted in forfeiture.
Early-retirement benefit suspension clauses: Provisions allowing a plan to suspend payments if a retiree engages in specified kinds of post-retirement work (here, reemployment in the same industry, in a trade or craft used in that industry, within the same geographic area).
Prejudgment vs. post-judgment interest: Prejudgment interest compensates for the time value of benefits wrongfully withheld before judgment; post-judgment interest compensates for delay after judgment until payment.

Conclusion

The Third Circuit’s decision delivers two principal messages. First, ERISA plan administrators retain deference only when they earn it: by interpreting ambiguous terms and clearly explaining their reasoning on the record. Tautologies and silence risk de novo review and reversal. Second, when a plan directs the use of ordinary meanings, courts will hew to contemporaneous dictionary definitions and avoid readings that render contract language surplusage. Applying those principles, “trade or craft” in this Plan means work requiring manual or artistic skill, which excludes an office-based Senior Project Manager. The court also reinforces routine but crucial preservation rules: remedial objections must be raised in the district court.

For plan sponsors and administrators, the opinion underscores the importance of clear drafting—especially when restricting post-retirement work—and meticulous, reasoned administrative decisions. For participants and practitioners, it provides a roadmap for challenging suspensions based on ambiguous plan terms and for ensuring full remedial relief when administrators fall short.