Lettrich v. J.C. Penney Co. Inc., 213 F.3d 765 (3^rd Cir. 2000)- Lettrich, a former employee of J.C. Penney Co., sued, alleging that the company terminated a welfare plan without providing proper notice as ERISA requires.  Lettrich asserted that J.C. Penney concealed the program's termination from a majority of the program's participants by burying the notification in a sixty-page shareholders' Notice of Meeting where few, if any, employees would notice it.  The company also failed to use the effective and customary internal procedure for notification of benefit changes, and provided actual notice of the program's termination to only a select group of officers.

            The Magistrate Judge agreed that J.C. Penny provided inadequate notice, but found that "'defects in notice do not entitle an employee to receive the benefits unless the employee can show extraordinary circumstances such as bad faith by his employer or active concealment of a change in the benefits plan.'"  The District Court adopted the Magistrate Judge's recommendation and granted J.C. Penney's motion for summary judgment.

            This court reversed and remanded on the ground there was a fact issue whether J.C. Penney had "actively concealed" the termination of the plan.  The Magistrate Judge misread this court's decision in Ackerman v. Warnaco, Inc., 55 F.3d 117 (3^rd Cir. 1995), construing the concept of active concealment too narrowly.  Notwithstanding the general rule that plan amendments are valid in spite of inadequate notice, participants may recover the benefits under the plan before the amendment if they can demonstrate active concealment and detrimental reliance.