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“You can't retaliate against me by firing me after I sent an e-mail expressing my belief that you violated federal and state laws,” said Douglas, a manager for a manufacturing company.
“Your termination was warranted and not protected,” replied Jean, the company's legal counsel.
FACTS:A general manager of a floor-panel manufacturing company served as a trustee for the company's employee retirement plan. The general manager and another trustee campaigned for two employees to be placed on the board of directors.
The two employees won the election, but the company did not place them on the board because doing so would violate company bylaws that limit the number of inside directors on the board, it said. The general manager and trustee also were removed as retirement-plan trustees.
The general manager e-mailed the chairman of the board, stating his belief that by removing him from his role as retirement-plan trustee and by denying the employees a place on the board, the board of directors violated the Employee Retirement Income Security Act and other federal and state laws. He said in the e-mail he would reveal these violations to the Labor Department and state department of licensing and regulatory affairs if the issue was not resolved.
The general manager received no response to his e-mail and did not follow up regarding his claims.
The company fired the general manager six months later. The general manager sued the company in state court for violating the state's whistleblower act and for breach of his employment contract. The company requested that the general manager's state-law claim regarding ERISA be moved to federal court, which it was.
A federal court ruled in favor of the company on the general manager's ERISA claims. On appeal, the general manager claimed that his termination and dismissal from the role of trustee was a violation of ERISA because Section 510 of the statute should apply to all complaints, including single complaints such as his had been.
ISSUE: Can termination after a single complaint generate a claim of retaliation under ERISA?
DECISION: The appeals court affirmed the district court ruling that the general manager's termination after he made one complaint threatening to report ERISA violations was not considered retaliation under section 510 of ERISA.
The court split on whether Section 510 requires a formal proceeding or inquiry to protect an ERISA-related complaint.
“All matters of interpretation begin with text; some end there,” the court said. ERISA prohibits employers from retaliating against an employee who has “given information or has testified or is about to testify in an inquiry or a proceeding relating to [the Act],” it said.
The general manager did not submit the e-mail as information in a proceeding or as testimony, the court said. The only other possibility is that the e-mail could be seen as “giv[ing] information in an inquiry,” which could be an official investigation or a question or request for information, it said.
No inquiry occurred under either definition because the general manager's e-mail did not prompt an investigation nor did he send the e-mail as a request for information, the court said.
The court majority accepted the Seventh Circuit ruling in George v. Junior Achievement of Cent. Ind., Inc., which held that informal complaints are protected by Section 510 but that the complaint must ask or answer a question, which the court determined the general manager's e-mail complaint did not do (Sexton v. Panel Processing, Inc.,2014 BL 129865, 6th Cir., No. 13-1604, 5/9/14).
The court's minority opinion said that Kasten v. Saint-Gobain Performance Plastics Corp. counsels the court to examine the purpose and functions of the law when interpreting an arguably ambiguous provision. In this case, the dissent would have found that an informal internal complaint was protected by the statute and that the employee couldn't be fired in retaliation for making such a complaint.
POINTERS:The Labor Department supervises compliance with ERISA's reporting and disclosure and prohibited transaction rules. The department promulgates regulations in areas such as crediting of service to plan participants, fiduciary-conduct standards and reporting and disclosure rules.
Employers may not discharge or discriminate against current or former employees for filing complaints of employer discrimination, initiating or causing to be initiated antidiscrimination proceedings or testifying in antidiscrimination proceedings under the Equal Pay Act. Employee complaints of employer discrimination under the act include written and oral complaints. The content and context of such complaints must be sufficiently clear and detailed to be understood by reasonable employers as an assertion of rights protected by the act and a call for those rights to be protected, as decided in Kasten.
For more information, see Compensation & Benefits Library's “Prohibited Forms of Discrimination” chapter.
This analysis illustrates how courts resolve pay-related disputes. The names and dialogue are fictitious.
To contact the editor responsible for this story: Michael Baer at firstname.lastname@example.org
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