Blowing the whistle: protection for employees who informally report ERISA violations.
I. Introduction II. Background A. ERISA Generally B. Section 510: Anti-Retaliation Provision C. Circuit Split: Whether Section 510 Includes Unsolicited, Internal Complaints 1. Fifth and Ninth Circuits: Unsolicited, Internal Complaints Included Under Section 510 a. Ninth Circuit Includes Unsolicited, Internal Complaints Within ERISA Protection b. Fifth Circuit Includes Unsolicited, Internal Complaints Within ERISA Protection 2. Second, Third, and Fourth Circuits: Unsolicited, Internal Complaints Excluded Under Section 510 a. Fourth Circuit Excludes Unsolicited, Internal Complaints From ERISA Protection b. Second Circuit Excludes Unsolicited, Internal Complaints From ERISA Protection c. Third Circuit Excludes Unsolicited, Internal Complaints From ERISA Protection III. Analysis A. Means of Reporting ERISA Violations That Do Not Risk Retaliation B. State Law Remedies to Retaliation C. Section 510 Remedies to Retaliation D. Does State Law or ERISA Provide Greater Protection? E. Consequences of the Circuit Split and Their Impact on Future Corporate Behavior F. Likely Resolution of the Issue by Future Circuits IV. Recommendation A. Benefits of Including Unsolicited, Internal Complaints Outweigh the Consequences of Exclusion B. Courts Should Protect the Important Interests of the Secretary of Labor V. Conclusion
Suppose Employee A works for Corporation X. During the course of her work, she thinks she discovers her employer violating various provisions of the Employee Retirement Income Security Act (ERISA) (1) regarding an employee benefit plan. Employee A then contacts the Department of Labor's Employee Benefits Security Administration and files a complaint reporting the violations. A formal investigation ensues looking into the merits of Employee A's complaint. It is clear that ERISA prohibits corporation X from firing or otherwise taking punitive action against Employee A in retaliation for her act as a whistleblower. (2)
Now, suppose Employee B also works for corporation X and similarly discovers what she suspects to be ERISA violations. Employee B is not absolutely certain a violation has occurred, or if corporation X is even aware of the potential problem. She is hesitant to file a formal complaint without more information. Instead, Employee B decides to bring the suspected ERISA violations to the attention of her supervisor, who assures her that corporation X will deal with the problem.
Because Employee B reported the violation within the company rather than to an outside enforcement agency, the complaint was internal. Additionally, since corporation X did not seek out the information from Employee B, the complaint was unsolicited. Within a week of her complaint, Employee B's supervisor fires her. Having always been a good employee with no previous problems, Employee B suspects her discharge was in retaliation of her unsolicited, internal complaint. Employee B brings a wrongful discharge action against Corporation X under Section 510 of ERISA--the provision giving protection to whistleblowers. (3) The district court dismisses the claim, saying Section 510 does not protect unsolicited, internal complaints such as the one she made.
Employee B then brings a wrongful discharge action under state law. unfortunately for Employee B, the state court dismisses her claim as well because the state law does not contain an express statement of public policy in favor of protecting unsolicited, internal reports of suspected statutory violations. Although she was merely trying to contribute to the enforcement of ERISA, Employee B finds herself jobless with no remedy under either ERISA federal law or state law.
Congress intended Section 510 to be a crucial method for enforcing the terms of ERISA (4)--but did they mean for it to include unsolicited, internal reports of ERISA violations? This is the issue currently causing a split in the circuit courts. While three circuits (5) feel that Congress never intended this breadth of protection, two other circuits (6) have held that Congress did in fact intend to protect those in situations similar to Employee B.
This Note details the current circuit split on the issue of whether Section 510 of ERISA protects unsolicited, internal complaints and will recommend how the split should be resolved. Part II explains Congress's purpose in enacting ERISA and Section 510, in addition to discussing the specific cases in each circuit relating to this issue. (7) Part III analyzes state law (8) and Section 510 remedies (9) available to victims of retaliation and which remedies afford the greatest protection. (10) In addition, Part III predicts the consequences of both sides of the circuit split, how these consequences will affect future corporate behavior, (11) and how future circuits will likely decide the issue. (12) Finally, Part IV recommends how future circuit courts and the Supreme Court should resolve the issue and why. (13)
In order to determine whether Congress intended to protect unsolicited, internal reports of ERISA violations, it is important first to understand Congress's purpose behind enacting ERISA and its whistleblower provision. Parts A and B examine this purpose, in addition to exploring the interplay between ERISA federal law and state law. Part C then discusses the logic behind each decision within the circuit courts that have addressed the issue.
A. ERISA Generally
Congress enacted the Employee Retirement Income Security Act (ERISA) in 1974. (14) ERISA sets federal standards for private pension and health care plans. (15) Congress found regulating the increasing number of employee benefit plans to be within the national public interest. (16)
As the number of private pension plans grew rapidly, Congress found their regulation to be minimal and ineffective. (17) Congress desired "to promote interests of employees and their beneficiaries in employee benefit plans" and "to ensure that plans would be subject to uniform body of benefit law." (18) Congress designed ERISA to effectuate this intent by establishing "standards for the administration of retirement plans" and giving "participants in retirement plans access to the federal courts to ensure appropriate remedies and sanctions." (19) Stated broadly, ERISA's purpose is to protect the employment relationship that gives rise to pension rights. (20)
The statute defines the employee benefit plans covered under ERISA to include employee pension plans and employee welfare plans. (21) An employee pension plan includes a plan, fund, or program that "(i) provides retirement income to employees, or (ii) results in a deferral of income by employees for periods extending to the termination of covered employment or beyond." (22) An employee welfare plan includes any plan that "provides benefits such as healthcare benefits or long-term disability plans." (23) Essentially, a pension plan provides retirement benefits, while a welfare plan provides fringe benefits such as health insurance. (24) The exceptions to ERISA's broad scope include coverage of plans established or maintained by government entities, churches, unfunded excess benefit plans, plans for nonresident aliens maintained outside of the United States, and plans solely regarding workers' compensation, unemployment, or disability laws. (25) ERISA "impos[es] participation, funding, and vesting requirements on pension plans. It also sets various uniform standards, including rules concerning reporting, disclosure, and fiduciary responsibility, for both pension and welfare plans to regulate employee benefit plans." (26)
Due to the interstate nature of employee benefit plans, (27) ERISA expressly supersedes any state law related to the employee benefit plans the Act covers. (28) Under its general preemption provision, ERISA forecloses any related state law claim in either federal or state court. (29) A state law relates to an ERISA subject matter, and is thus preempted, if it has a broad connection to the ERISA plan, even if the effect of such connection is indirect. (30) The same is true even if the state's substantive requirements are consistent with those in ERISA. (31) In addition, ERISA impliedly preempts state action claims of wrongful discharge because such claims directly conflict with an ERISA cause of action. (32) Even if ERISA does not expressly preempt such claims, they conflict with the clear congressional intent to make ERISA the exclusive remedy. (33)
This congressional intent is relevant in statutory interpretation of ERISA as well. Statutory interpretation should typically begin by examining the statute's language, as the plain meaning of the statute's language is assumed to be indicative of congressional intent. (34) However, courts have found that when interpreting ERISA they need not rely only on the literal meaning of the statute, but should also look to the statute's intent. (35) Additionally, because ERISA is a remedial statute, it "should be liberally construed in favor of protecting the participants in employee benefit plans." (36)
B. Section 510: Anti-Retaliation Provision
Section 510 of ERISA, codified as Section 1140 in the U.S. Code, (37) provides an anti-interference provision which states: "It shall be unlawful for any person to discharge, fine, suspend, expel, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan ... or for the purpose of interfering with the attainment of any [such] right...." (38) Congress enacted this section to prevent "unscrupulous employers from discharging or harassing their employees in order to keep them from obtaining vested pension benefits." (39) For this reason, Congress viewed this section of ERISA as crucial to preserving the benefits and protections that the statute's landmark reform produced. (40)
This section includes an anti-retaliation provision, otherwise known as a whistleblower provision, which provides: "It shall be unlawful for any person to discharge, fine, suspend, expel, or discriminate against any person because he has given information or has testified or is about to testify in any inquiry or proceeding relating to this chapter...." (41) Courts have stated that this provision of Section 510 is "clearly meant to protect whistleblowers." (42) This whistleblower provision, however, has given rise to controversy. (43)
C. Circuit Split: Whether Section 510 Includes Unsolicited, Internal Complaints
While it may be clear that Congress intended this section to protect whistleblowers, (44) it is unclear who should fall under that title. (45) Specifically, the confusion comes from interpreting the crucial provision of Section 510 to determine what kinds of violation reports are included in the statute's "inquiry or proceeding" language. (46) The circuit courts are divided on this issue. (47) Currently, three circuits have held that an "inquiry or proceeding" in Section 510 of ERISA does not include unsolicited, informal complaints to management. (48) By contrast, two circuits have held that Section 510 of ERISA protects employees' unsolicited, internal complaints. (49)
1. Fifth and Ninth Circuits: Unsolicited, Internal Complaints Included Under Section 510
The Fifth and Ninth Circuits are the two circuits that have decided to include unsolicited, internal complaints within ERISA protection. (50) The Ninth Circuit did so in Hashimoto v. Bank of Hawaii. (51) The Fifth Circuit decided to include such complaints in Anderson v. Electronic Data Systems Corp. (52)
a. Ninth Circuit Includes Unsolicited, Internal Complaints Within ERISA Protection
The Ninth Circuit was the first to decide the issue of whether ERISA Section 510 includes unsolicited, internal complaints with the case Hashimoto v. Bank of Hawaii. (53) In that case, Hashimoto, a Bank of Hawaii employee, had complained to other bank employees on several occasions about the bank's potential or actual violations of ERISA's reporting requirements, disclosure requirements, and fiduciary standards. (54) Following these complaints, the bank discharged Hashimoto from her employment, and Hashimoto filed a wrongful discharge action under Hawaii's Whistle Blower Protection Act. (55) Hashimoto argued that the bank would not have discharged her from employment but for her objection to these ERISA violations. (56) The lower court found that ERISA preempted Hashimoto's claim under Hawaii state law and did not provide protection from retaliation. (57) As a result, the lower court granted summary judgment to the bank. (58) Hashimoto then appealed to the Ninth Circuit Court of Appeals. (59)
The Ninth Circuit, in examining whether ERISA preempted the state law, turned to whether Hashimoto's complaints fit within the "inquiry or proceeding" language of Section 510. (60) They found that the ERISA whistleblower provision applies to an employee in Hashimoto's position because such unsolicited, internal complaints to management would naturally be the first step an employee would take in giving information or testifying about a potential or actual ERISA violation. (61) If these complaints would prompt an employer to terminate the employee raising the problem, then the process of giving information or testifying would be cut off at its start. (62) As the Ninth Circuit Court put it, "the anticipatory discharge discourages the whistle blower before the whistle is blown." (63) Upon finding that Hashimoto's claim was covered by ERISA--thus preempting the state claim--the Ninth Circuit Court remanded for recharacterization as an ERISA claim under Section 510. (64)
b. Fifth Circuit Includes Unsolicited, Internal Complaints Within ERISA Protection
The Fifth Circuit was the second circuit to decide the issue in Anderson v. Electronic Data Systems Corp., and chose to follow the lead of the Ninth Circuit. (65) In that case, Anderson filed, among other things, a state common law wrongful discharge action against his former employer Electronic Data Systems (EDS). (66) Anderson claimed a fellow EDS employee encouraged him to commit illegal acts, including violations of ERISA provisions governing pension plans. (67) After refusing to commit such illegal acts, Anderson reported these incidents to management and was subsequently demoted and discharged. (68) Anderson claimed he would not have been demoted and discharged but for his refusal to commit illegal acts, including violations of ERISA, and reporting these incidents to management. (69) The trial court granted EDS's summary judgment motion and Anderson appealed to the Fifth Circuit Court of Appeals. (70)
The Fifth Circuit closely examined Ingersoll-Rand v. McClendon, which stated, among other things, that allowing ERISA plan participants and beneficiaries to obtain remedies under state law would undermine the policy choices reflected in including certain remedies under the federal scheme. (71) The court found this, and the fact that both Anderson's claim and the Ingersoll-Rand case hinged on the existence of a pension plan, persuasive indicia that Section 510 of ERISA covered Anderson's claim. (72) Essentially, the court found that Anderson's claim related to a subject matter covered by ERISA, and that any wrongful discharge claims under state law would conflict with ERISA's enforcement provisions. (73) As a result, because Anderson's unsolicited reports of ERISA violations to management met the language of Section 510, the court concluded that ERISA preempted the state law claims. (74)
Following this ruling, Anderson petitioned the Supreme Court for writ of certiorari. (75) Anderson's petition asked the Court to find that ERISA did not preempt his state law wrongful discharge claim. (76) The petition argued that Anderson's claim was too remotely and tenuously related to ERISA to support a finding that the action "related to"--and was thus preempted by--ERISA, (77) nor did the claim present a substantial federal question. (78) In addition, Anderson's petition argued that his claims did not fall within the scope of ERISA Section 510 or Section 502(a), the civil enforcement provision. (79) The Court denied the petition for writ of certiorari. (80)
2. Second, Third, and Fourth Circuits: Unsolicited, Internal Complaints Excluded Under Section 510
The Second, Third, and Fourth Circuits are the three circuits that have decided to exclude unsolicited, internal complaints from ERISA protection. (81) The Fourth Circuit did so in King v. Marriott International Inc. (82) The Second Circuit decided to exclude such complaints in Nicolaou v. Horizon Media Inc. (83) Finally, the Third Circuit excluded unsolicited, internal complaints from ERISA protection in Edwards v. A.H. Cornell & Son, Inc. (84)
a. Fourth Circuit Excludes Unsolicited, Internal Complaints From ERISA Protection
The Fourth Circuit was the next circuit to confront the issue, and broke with the previous holdings of the Ninth and Fifth Circuits in King v. Marriott International Inc. (85) While King was an employee with Marriott International, she questioned some decisions her superiors were making, fearing they violated ERISA. (86) King complained about these potential ERISA violations to her coworkers, superiors, and two in-house attorneys. (87) In doing so, King objected verbally and in writing, and even requested an opinion letter about the matter from one of Marriott's in-house attorneys. (88) Following these complaints and other disagreements at work, King was fired. (89) King brought a wrongful discharge claim under state law against Marriott, claiming that she was discharged for complaining about and for refusing to violate ERISA. (90) The District Court granted Marriott's summary judgment motion, and King appealed to the Fourth Circuit Court of Appeals. (91)
In deciding whether King had a claim under ERISA, the court looked at the scope of the phrase "inquiry or proceeding." (92) The court looked to a very similar provision in the Fair Labor Standards Act (FLSA), (93) where they previously decided that the term "proceeding" did not include the making of an intra-company complaint, but referred only to administrative or legal proceedings. (94) Because King only complained about potential violations, and was never involved in any formal proceeding, her cause of action did not fall within Section 510, and ERISA did not preempt her state law claim. (95) In addition, the Fourth Circuit court expressly disagreed with the logic and holdings of the Fifth and Ninth Circuits. (96) The court found the Fifth Circuit's logic to be shallow and incomplete, while it disagreed with the Ninth Circuit's conclusion that Section 510 can be "fairly construed" to include unsolicited, internal complaints. (97)
b. Second Circuit Excludes Unsolicited, Internal Complaints From ERISA Protection
Two years later, the Second Circuit ultimately came to the same conclusion as the Fourth Circuit in Nicolaou v. Horizon Media Inc., finding that ERISA does not protect informal, internal reports of potential violations. (98) The Second Circuit, however, was the first circuit to actually address the issue in the context of a suit brought under ERISA rather than state law. (99) While Nicolaou was working for her former employer, Horizon Media, she discovered that the company was underfunding its 401(k) plans. (100) She brought this to the attention of management, who never addressed the issue. (101) She then took further action and contacted an attorney for Horizon, who conducted his own inquiry and confirmed her allegations of abuse. (102) After meeting with Horizon's president to express her concerns, Horizon notified Nicolaou that she was being replaced. (103) Nicolaou then brought action under Section 510 of ERISA, alleging that she was demoted and dismissed for reporting Horizon's ERISA violations. (104) The District Court dismissed Nicolaou's claim for failing to state a cause of action under ERISA, and she appealed to the Second Circuit Court of Appeals. (105)
In addressing the issue, the circuit court compared the language of Section 510 with the analogous whistleblower provision of the FLSA, as the Fourth Circuit had done in King. (106) The court recounted their previous decisions about the FLSA, which held that the whistleblower provision did not apply to retaliation in response to internal complaints. (107) In addition, these previous decisions had found no distinction between this provision of the FLSA and Section 510 of ERISA. (108)
The Second Circuit made the point of noting, however, that Section 510 of ERISA was considerably broader in scope than the similar provision of the FLSA. (109) The court found that the term "inquiry" is indicative "of an intent 'to ensure protection for those involved in the informal gathering of information.'" (110) While "inquiry" under Section 510 refers to any request for information, the court found that the term "proceeding" refers to "business before a court, agency, or other official body." (111) The court indicated that in order for an inquiry to fall within Section 510 of ERISA, the company would have to solicit the inquiry, stating that Nicolaou's action would fall within the protection of Section 510 if Horizon's president had been the one to suggest her meeting. (112) The court remanded to resolve these factual ambiguities. (113) In addition, the court found that its interpretation was not in conflict with the Fourth Circuit's holding in King. (114)
c. Third Circuit Excludes Unsolicited, Internal Complaints From ERISA Protection
The Third Circuit recently decided the issue in Edwards v. A.H. Cornell & Son, Inc., and followed the rationale of the Fourth and Ninth Circuits to conclude that Section 510 of ERISA does not protect unsolicited, internal complaints. (115) During her employment with A.H. Cornell, Edwards claimed to have discovered that the company was engaging in a number of ERISA violations. (116) Upon discovery of these violations, Edwards complained to management. (117) The company terminated Edwards shortly thereafter, who alleged her termination was a result of these unsolicited, internal complaints about the ERISA violations. (118) Edwards then filed a wrongful discharge and anti-retaliation claim under Section 510 of ERISA. (119) Following the logic of Nicolaou, (120) the District Court found that Edwards' objections were not part of a Section 510 "inquiry or proceeding," and therefore dismissed her case for failure to state a claim. (121) Edwards appealed the decision to the Third Circuit Court of Appeals. (122)
The court began its analysis by determining whether Section 510 has a plain and unambiguous meaning. (123) The court found the term "inquiry" to mean "a request for information," emphasizing that a voluntary complaint fails to meet the solicitation requirement of this term. (124) The court clarified that this included only inquiries made by the employer, not inquiries made by the employee. (125) Relying on the Black's Law Dictionary definition of "proceeding," the court defined it as "the regular and orderly progression of a lawsuit" or "the procedural means for seeking redress from a tribunal or agency." (126) Using these definitions, the court found that Edwards' complaint did not fall under an "inquiry or proceeding" within the meaning of Section 510. (127)
The court held, like the court in King, (128) that "'inquiry or proceeding' is limited to more formal actions." (129) In addition, the court found it persuasive that Congress could have used broader language to convey more protection when writing the anti-retaliation provision of ERISA, and declined to do so. (130) Furthermore, the court found, like the King (131) court, that the Fifth Circuit failed to examine the statutory language in detail, and that the Ninth Circuit focused more on a fair outcome than on clear statutory language. (132) The court emphasized that only if the statute were unambiguous--which it found it was not--would it construe the provision in favor of plan participants and beneficiaries or speculate about legislative intent. (133)
Finally, the Third Circuit compared the anti-retaliation provision of Section 510 to analogous provisions in the FLSA (134) and the Clean Water Act (CWA). (135) In regards to the FLSA, the court found that because the statutes are different in language and breadth, any conclusion that the FLSA protects unsolicited, internal complaints "does not require a parallel conclusion" under ERISA. (136) Similarly, even though the court had previously found the term ambiguous in regards to the CWA anti-retaliation provision, the court found that its previous decision was limited to the context of that case. (137) Given these findings, the court decided to base its decision on the plain meaning of Section 510 rather than on prior case law about the FLSA or the CWA. (138)
This Part first explores how employees should report actual or suspected ERISA violations to avoid the risk of their employers retaliating against them. (139) Next, it examines what remedies an employee facing retaliation from internal, unsolicited complaints may have under state law, (140) compared to the remedy under ERISA Section 510. (141) Additionally, this Part discusses the potential impact these developments may have on employers' future behavior. (142) Finally, this Part predicts how future circuits will decide the issue. (143)
A. Means of Reporting ERISA Violations That Do Not Risk Retaliation
It seems logical that if an employee, in the course of her work, were to discover that her employer had committed or was committing ERISA violations, that her first course of action would be to bring such violations to the attention of her superiors. (144) Even if not considered an inquiry or proceeding, such actions may be the necessary trigger that must occur before an inquiry or proceeding will take place. (145) However, if she happens to reside in the Second, Third, or Fourth Circuit, she risks being discharged or facing other punitive action, without the protection of ERISA's anti-retaliation provision. (146) If employees may no longer use unsolicited, internal complaints or objections to report ERISA violations without the risk of retaliation, then what options do they have left for reporting ERISA violations?
Following the logic of the Second, Third, and Fourth Circuit Courts of Appeals, the employee would have to act in a way that fits the courts' definitions of an "inquiry or proceeding." (147) Specifically, she would need to file a formal complaint (148) that the employer would recognize as instituting an administrative or legal proceeding. (149) In essence, the employee would be unable to resolve the issue informally, by discussing the details surrounding alleged violation with the plan administrator, without first reporting a formal complaint to the appropriate law enforcement agency (150)--the Department of Labor's Employee Benefits Security Administration. (151) Alternatively, the employee must wait until the employer requests information about the violation from her. (152)
B. State Law Remedies to Retaliation
Should a court find that Section 510 of ERISA does not include unsolicited, internal complaints, it will dismiss claims of this nature for failure to state a claim upon which relief can be granted. (153) This, however, does not mean that the employer or former employee bringing the claim is completely without remedy; it simply means that the ERISA law will not govern the claim. (154) Instead, the employee must bring the claim under state law, to the extent that the laws in her state support such a claim. (155) Generally, with at-will employment, an employer may terminate his employee at any time and without cause. (156) However, many states have made exceptions to this general rule of at-will employment, allowing for wrongful discharge causes of action. (157)
When King v. Marriott International, Inc. was remanded to the circuit court, King amended her complaint to include only a state law wrongful discharge claim. (158) The circuit court entered summary judgment in favor of Marriott International, finding that King's wrongful discharge claim was not viable under state law and that ERISA preempted the claim. (159) King then appealed her case to the Court of Special Appeals of Maryland. (160)
Under Maryland law, to recover in a wrongful discharge action, the employee must prove: (1) she was discharged; (2) her discharge violated a clear mandate of public policy; and (3) there is a nexus between the employee's conduct and the employer's decision to fire the employee. (161) The Maryland court focused its attention on whether King's discharge was a violation of public policy. (162) Maryland recognizes a violation of public policy only when the employee has been fired for refusing to violate the law or the legal rights of a third party, or for exercising a specific legal right or duty. (163) In addition, "the public policy must be reasonably discernible from statutory or constitutional mandates," demonstrated by a "preexisting, unambiguous, and particularized pronouncement" by law or judicial decision "directing, prohibiting, or protecting the conduct in question so as to make the Maryland public policy on the topic not a matter of conjecture or even interpretation." (164)
The court relied on the Maryland Court of Appeals plurality decision in Wholey v. Sears Roebuck, (165) recognizing that public policy protects employees who report corporate wrongdoings to outside authorities, but not employees who report the same wrongdoings to internal authorities like supervisors. (166) The King court found that while Maryland public policy generally recognizes that a fiduciary must serve the interests of the beneficiary, it does not protect "a fiduciary who makes an internal complaint of corporate wrongdoings to co-workers and supervisors." (167) In addition, the court found that neither ERISA nor the state law King relied on contained an express statement of public policy in favor of protecting an employee making an internal objection on the grounds of a suspected violation of a fiduciary duty. (168) Therefore, the court held that King "failed to identify a sufficiently compelling public policy mandate to support her claim of wrongful discharge," (169) and affirmed the circuit court's grant of summary judgment against King. (170) Because they discovered that no state law claim existed, the court did not examine the circuit court's finding that ERISA preempted such a claim. (171) In essence, the Fourth Circuit's holding that ERISA does not protect unsolicited, internal complaints left King--and other employees terminated for their unsolicited, internal complaints about ERISA violations--without a remedy, under either federal or state law. (172)
C. Section 510 Remedies to Retaliation
Claims brought under ERISA may lead to a different result than those brought under state law wrongful discharge causes of action. (173) Section 502(a) provides ERISA's civil enforcement mechanism. (174) Section 502(a)(3) provides, in pertinent part:
A civil action may be brought--(3) by a participant ... (A) to enjoin any act or practice which violates any provision of this subchapter or term of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan. (175)
Section 502(a) is the exclusive remedy vindicating Section 510 rights. (176)
In order to recover under Section 510 of ERISA, the plaintiff must prove the essential element "that an employer was at least in part motivated by the specific intent to engage in activity prohibited by [section] 510." (177) Where there is no direct evidence of the employer's motivation, (178) claims brought under Section 510 undergo a three-step burden shifting framework analysis. (179) The plaintiff must first establish a prima facie case of retaliation by proving: (1) "that she participated in a statutorily protected activity; (2) that an adverse employment action was taken against her; and (3) that a causal connection existed between the two." (180) Once the plaintiff has made out her prima facie case of retaliation, then the employer must offer "a legitimate, nondiscriminatory reason for its actions." (181) Finally, if the employer establishes the required justification, then the burden shifts to back plaintiff to prove that the employer's articulated reason is merely pretextual. (182)
The employee's burden of meeting prong (1) and proving that she participated in a statutorily protected activity would already be met if the employee lived in one of the circuits that recognizes unsolicited, internal complaints as falling within ERISA Section 510 protection. (183) Furthermore, in Dunn v. Elco Enterprises, Inc., the U.S. District Court for the Eastern District of Michigan found that although the Sixth Circuit had not yet decided the issue of whether Section 510 of ERISA protects unsolicited, internal complaints, the Sixth Circuit would likely find that ERISA protects internal complaints, therefore satisfying the requirement that the employee was part of a statutorily-protected activity. (184) Next, the employee could satisfy the requirement of showing that her employer took adverse action against her through her termination from employment. (185)
A plaintiff can establish proof of a causal connection between the employee's participation in a statutorily protected activity--her unsolicited, internal complaint--and the adverse employment action taken against her--her termination--"circumstantially by proof that the discharge followed the protected activity so closely in time as to justify an inference of retaliatory motive." (186) The closeness in time between the protected activity and the adverse action that is necessary to establish a retaliatory motive seems to be some time less than six months, although almost certainly for any time less than four months. (187) The court in Dunn found that the employee had met his burden of proving a causal connection when he was fired less than four months after engaging in the statutorily-protected activity of complaining to the company owner that the company had not deposited payroll contributions into his company-sponsored IRA Plan for the past six months. (188) Having established these three requirements, the court found that Dunn had established a prima facie case of retaliation under Section 510. (189)
Once the employee meets her burden of proving retaliation, the burden shifts to the employer "to articulate a legitimate, nondiscriminatory reason for its actions." (190) The Dunn court found that the employer had such a reason when it claimed to have terminated Dunn because of his pattern of abuse, insubordination, lack of teamwork, and inability to cooperate with other employees. (191) The company presented evidence of these assertions through employee testimony. (192) Other courts have likewise found similar reasons to constitute a legitimate, nondiscriminatory reason for termination. (193)
Where the employer is able to articulate a legitimate, nondiscriminatory reason, the burden shifts back to the employee to prove that these asserted reasons are merely a pretext. (194) The Dunn court found the employer's legitimate, nondiscriminatory reasons to be pretextual because of the evidence that Dunn was a very skilled and competent employee who regularly received merit-based pay increases, the company owner admitted that he was upset with Dunn for blowing the whistle on his ERISA violations, the company failed to take any corrective action before firing Dunn, and the company was aware of its ERISA violations before Dunn blew the whistle. (195) In addition, the court noted that because an employer's true motivations may be hard to ascertain, "'caution should be exercised in granting summary judgment once a plaintiff has established a prima facie interference of retaliation through direct or circumstantial evidence,' ... [especially where] the disputed factual issues may only be resolved by assessing the credibility of witnesses." (196) Having determined that the employer's reason for dismissal was pretextual, the court will find that the employee has fulfilled her burden of proof, and that the employer is liable to her for damages. (197)
In regards to the damages an employee would recover if she won her suit under Section 510 of ERISA, Section 510 states that Section 502, the civil enforcement provision of ERISA, controls. (198) Under Section 502(a)(3)(B)(i), the employee is entitled to appropriate equitable relief to redress her employer's violation of Section 510. (199) Courts have found that restitutionary equitable relief under Section 502(a)(3) includes back pay. (200) In Simons v. Midwest Telephone Sales and Service, Inc., (201) a district court case finding that ERISA protected an employee who brought an unsolicited, internal complaint about ERISA violations, the court awarded back pay and health care costs from the time the employee was discharged until she obtained new employment. (202)
D. Does State Law or ERISA Provide Greater Protection?
In general, it appears that Section 510 has the potential to protect employees whose employers retaliated against them for their unsolicited, internal complaints about a potential ERISA violation better than state law. (203) It is typical for a state to provide protection to whistleblowers as an extension of public policy, (204) as demonstrated in the King case. (205) Similar to the outcome in King, (206) these state whistleblower statutes typically only protect employees who report potential violations to the agency responsible for responding to the employer's misconduct--here, the Department of Labor's Employee Benefits Security Administration--and not employees who make other types of disclosures, (207) such as complaints to management. (208) In addition, currently 13 states plus the District of Columbia do not have any form of laws protecting whistleblowers. (209)
Under a Section 510 retaliation claim, if the employee is in a jurisdiction that allocates ERISA protection to unsolicited, internal complaints, her only significant burden is proving the causal connection between her termination and complaint. (210) Once she has made a prima facie case of retaliation, the courts are deferential to the employee in deciding whether to dismiss, even if the employer has established legitimate, non discriminatory reasons for the termination. (211) Given these considerations, it appears that Section 510 protection is much more expansive than the typical state law anti-retaliation claim. (212)
E. Consequences of the Circuit Split and Their Impact on Future Corporate Behavior
Proponents on both sides of the issue cite grave consequences for employers and employees as a result of the courts interpreting Section 510 either to include or exclude unsolicited, internal complaints. In an amicus curiae brief, written in response to a then-pending case (213) and requesting a rehearing following adjudication, the Secretary of Labor suggested that excluding unsolicited, internal complaints from ERISA protections will discourage the reporting of ERISA violations altogether. (214) The enforcement of ERISA relies on participants and beneficiaries to raise complaints and objections, and its anti-retaliation provision is designed to encourage employees to report potential violations. (215) If employees feel that employers would retaliate against them for reporting such potential violations with no remedy or protection, then the employees will likely find it in their best interest to remain silent. (216) Proponents of including unsolicited, internal complaints assert that this would thwart the purpose of both ERISA and of the overall anti-retaliation provision of Section 510. (217)
Furthermore, if employees only receive protection after management officially initiates an investigation, employers would have an incentive to either postpone proceedings or disregard complaints until they have terminated or otherwise retaliated against the reporting employee. (218) Management could simply fire any whistleblowers before soliciting further information about the merits of the complaint or before a formal proceeding began. (219) Proponents of including unsolicited, internal complaints argue that such a system would surely discourage employees from reporting ERISA violations, which would undermine the statute's primary enforcement mechanism. (220)
In addition to potentially discouraging the reporting of ERISA violations, the failure to give unsolicited, internal complaints ERISA protection would hurt the overall communication and efficiency within corporations. (221) Rather than risk retaliation with no remedy for bringing potential ERISA violations to the attention of management, an employee would instead be encouraged to file a formal report of potential ERISA violations with the proper law enforcement agency (222)--the Employee Benefits Security Administration. (223) In essence, this forces employees to take the drastic step of announcing possible violations to the public before attempting to resolve the problems internally first. (224) Even though the "employees affected by or involved in the day to day administration of benefit plans" are in the best position to identify potential ERISA violations, forcing them to go public with these suspicions precludes the possibility of "conducting a reasonable inquiry or proceeding into the merits of the complaints." (225) Rather than resolving the matter internally, this structure forces corporations to endure a complicated administrative process, which will inevitably slow the resolution of the matter. (226)
On the other hand, however, those in favor of following the lead of the Second, Third, and Fourth Circuits in excluding unsolicited, internal complaints from Section 510 protection warn of other consequences inherent in their opponent's stance. (227) First, they argue that inclusion would, in effect, create "tenure for all employees who deal with ERISA related issues, including bookkeepers, human resource personnel, in house counsel, and health insurance brokers, to name a few and would harm the corporation's ability to make legitimate business decisions." (228) In addition, they argue that giving protection to unsolicited workplace complaints would lead to an unlimited slippery slope regarding retaliation claims. (229) Finally, they argue that the court's failure to impose concrete limitations about which complaints qualify as protected activity will lead to a flood of litigation by disgruntled employees and a lack of corporate guidance as to when their conduct will violate Section 510. (230)
F. Likely Resolution of the Issue by Future Circuits
Currently, two circuits have decided that ERISA protects unsolicited, internal complaints, and three have decided that it does not. (231) However, recent decisions in the district courts suggest that at least two other circuit courts, the Sixth Circuit and the Eighth Circuit, will likely join with the circuits that have already decided that ERISA protects unsolicited, internal complaints. (232) The Eastern District Court of Michigan found that the Sixth Circuit would likely rule similar to the Fifth and Ninth Circuits based on its previous interpretations of ERISA and Section 510. (233) For example, the Sixth Circuit had previously held that the plain language of Section 510 "creates a cause of action based on an employer's retaliation for an employee' s exercise of a right to which she is entitled" under both the benefit plan and under ERISA itself. (234) In addition, the Sixth Circuit held that ERISA preempted a state law claim of retaliation and provided a remedy to a plan administrator who sent letters to co-fiduciary plan participants expressing concerns that proposed plan changes could violate ERISA. (235) Likewise, district courts within the Sixth Circuit have held that Section 510 of ERISA completely preempts analogous state law claims of wrongful discharge from employment, including claims brought under state whistleblower statutes. (236) Furthermore, the Sixth Circuit interpreted similar language in whistleblower provisions of the FLSA and Title VII of the Civil Rights Act to include internal complaints to management. (237) Because of these Sixth Circuit decisions, it seems unlikely that the Sixth Circuit would find that Section 510 of ERISA does not protect employees unsolicited, internal complaints. (238)
Similarly, the District Court of Minnesota found that although the Eighth Circuit had not decided the issue, (239) it was logical to infer that employees have the right to inform plan administrators of suspected violations of ERISA. (240) The district court reasoned that this inference was logical in view of employees' express authorization to sue to remedy violations of ERISA, even if ERISA does not explicitly grant employees the right to report violations to superiors. (241) When the Eighth Circuit does decide the issue, it will likely find its district court's reasoning persuasive in finding that Section 510 of ERISA protects unsolicited, internal complaints. (242) With the Sixth and Eight Circuits likely to join the Fifth and Ninth Circuits in finding that unsolicited, internal complaints are included within ERISA protection, these circuits will form a majority.
Currently, only five circuit courts have addressed the issue of whether Section 510 ERISA protection includes unsolicited, internal complaints. (243) Three of those circuits have decided that such complaints do not receive ERISA protection, leaving employees in those jurisdictions to find relief under state law, to the extent possible. (244) The growing divisions in the circuits about this issue increases the need for a clarifying ruling by the Supreme Court. (245) In order to further the purpose of ERISA, future courts faced with this issue should recognize that the protections of Section 510 extend beyond formal, management-solicited inquiries; the courts should apply the protections of Section 510 to any person raising unsolicited complaints and objections about potential ERISA violations.
A. Benefits of Including Unsolicited, Internal Complaints Outweigh the Consequences of Exclusion
The consequences of excluding unsolicited, internal complaints from ERISA protection are much more severe than the potential consequences of including such complaints. The most adverse of the potential consequences of exclusion is that it discourages employees from reporting ERISA violations. (246) Knowing they risk retaliation from their employers without the guarantee of a remedy, employees may find the best course of action to be remaining silent. If this is the course of action they choose, then Section 510 fails to fulfill its purpose of acting as the enforcement mechanism of ERISA. This possibility truly thwarts the intent of Congress, and future courts should recognize the danger inherent in this consequence.
By contrast, the potential consequences of including unsolicited, internal reports of ERISA violations within Section 510 protection are unlikely to have a great impact on corporations. While proponents of exclusion say that inclusion of informal reports will lead to de facto tenure of all employees associated with ERISA plans, this fear seems overblown. An employee who brings a retaliation claim under Section 510 still has to undergo the burden shifting process of proving a prima facie case of retaliation, followed by proof that the employer's legitimate, nondiscriminatory reasons for termination are merely pretextual. (247) The employer has an opportunity to show that it had legitimate, nondiscriminatory reasons behind its decision to terminate the employee. (248) These burdens of proof on the part of the employee hardly result in de facto tenure, and tend to prevent meritless litigation. The corporation will still be able to make legitimate business decisions--just not illegal, retaliatory decisions.
Additionally, there is little risk of corporate confusion as to what behaviors Section 510 permits. When courts find that ERISA protects unsolicited, internal reports, it draws a bright line. From that point forward, employers would know all reports of ERISA violations are immune from retaliation, rather than making judgments about what kinds of retaliation the law will allow them to get away with.
Finally, if future courts find that unsolicited, internal complaints fall within Section 510 protection, the communication within overall corporate behavior will improve. Rather than being forced to file formal complaints with the Department of Labor, employees will feel free to approach their superiors to deal with ERISA violations quietly and efficiently within the corporation. Meritless reports of violations will be eliminated more quickly, and corporations can quickly remedy unintentional oversights leading to violations. This result best serves Congress's intent of enforcing ERISA violations while protecting employees. Because Congress viewed ERISA's whistleblower protection as crucial to preserving the statute's landmark reforms, (249) future courts deciding this issue should do all that they can to preserve this protection. In order to ensure this protection, future courts should find that unsolicited, internal complaints about perceived ERISA violations fall within Section 510 protection.
B. Courts Should Protect the Important Interests of the Secretary of Labor
In addition, the Supreme Court, or next circuit court to decide the issue, should follow the urgings of the Secretary of Labor. The Secretary of Labor has written several amicus curiae briefs in support of finding that ERISA protects unsolicited, internal complaints. (250) The Secretary of Labor has primary enforcement authority of ERISA, and is interested, among other things, in promoting uniformity of law and protecting beneficiaries. (251) In addition, the Secretary of Labor has an interest in protecting the rights of employees to bring allegations of ERISA violations to the attention of management without fear of retaliation. (252) This interest comes from the Secretary's limited ability to bring ERISA actions being "greatly complemented by the independent right of participants and beneficiaries to pursue their own administrative remedies and to bring ERISA cases in court." (253) Finally, the Secretary of Labor has an interest in amicus participation as the enforcer of several other whistleblower statutes. (254) The next court to decide the issue should give these interests the weight they deserve and follow the recommendation of the Secretary of Labor to include unsolicited, internal complaints within ERISA protection.
If courts interpret Section 510 to protect unsolicited, internal reports of ERISA violations, their decisions will have broad implications for employees, corporations, and the overall enforcement scheme of ERISA. Courts should decide to make the more protective remedies of Section 510 available to employees. This will ensure that employees receive the protection they deserve for the role they play in upholding the enforcement of ERISA. Once employees are certain they will not face retaliation without a remedy, they will be more willing to report ERISA violations, both formally and informally. Rather than facing formal Department of Labor interrogations, corporations will be able to address their ERISA violations quickly and quietly. By giving unsolicited, internal complaints Section 510 protection, the courts will implement congressional intent and benefit both employees and corporations.
(1.) Employee Retirement Income Security Act of 1974 (ERISA), Pub. L. No. 93-406, 88 Stat. 829 (1974).
(2.) See infra notes 41-42 and accompanying text ("It shall be unlawful for any person to discharge, fine, suspend, expel, or discriminate against any person because he has given information or has testified or is about to testify in any inquiry or proceeding relating to this chapter....").
(3.) See infra Part II.B (describing the anti-retaliation function of Section 510).
(4.) See Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 143 (1990) (evidencing Congress's expectation that Section 510 would be instrumental in enforcing ERISA's landmark reforms).
(5.) See infra Part II.C.2 (discussing the Second, Third, and Fourth Circuits' position).
(6.) See infra Part II.C. 1 (discussing the Fifth and Ninth Circuits' holdings).
(7.) Infra Part II.
(8.) Infra Part III.B.
(9.) Infra Part III.C.
(10.) Infra Part III.D.
(11.) Infra Part III.E.
(12.) Infra Part III.F.
(13.) Infra Part IV.
(14.) 29 U.S.C. [section] 1001 (2006); Harvey R. Herman, ERISA Statutory Overview and Fiduciary Duties, 4 CM Report of Recent Decisions 11, 11 (2007), available at http://www.clausen.com/dir_docs/firm_pubs/253240bb-88be-4044- 81b3-f8b6046b1e0d_pdfdocument.pdf.
(15.) Employee Retirement Income Security Act--ERISA, U.S. Dep't of Labor, http://www.dol.gov/dol/topic/health-plans/erisa.htm (last visited Mar. 25, 2012) [hereinafter ERISA].
(16.) 29 U.S.C. [section] 1001(a).
(17.) S. Rep. No. 93-127, at 3 (1973), reprinted in 1974 U.S.C.C.A.N. 4838, 4839-40.
(18.) Washington Nat'l Ins. Co. v. Hendricks, 855 F. Supp. 1542, 1549 (W.D. Wis. 1994) (quoting Ingersoll-Rand v. McClendon, 498 U.S. 133, 137, 142 (1990)).
(19.) Healey v. Healey, 910 F. Supp. 249, 251 (E.D.N.C. 1996).
(20.) Deeming v. Am. Standard, Inc., 905 F.2d 1124, 1127 (7th Cir. 1990) (citing West v. Butler, 621 F.2d 240, 245 (6th Cir. 1980)).
(21.) 29 U.S.C. [section] 1002(1)(2)-(A).
(22.) Id. [section] 1002(2)(A).
(23.) Herman, supra note 14, at 11.
(24.) Jeffrey G. Sherman, Domestic Partnership and ERISA Preemption, 76 Tul. L. Rev. 373, 392-93 (2001).
(25.) ERISA, supra note 15; 29 U.S.C. [section] 1003(b)-(c).
(26.) Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 91 (1983).
(27.) S. Rep. No. 93-127, at 29 (1973), reprinted in 1974 U.S.C.C.A.N. 4838, 4865.
(28.) 29 U.S.C. [section] 1144.
(29.) Harvey v. Life Ins. Co. of N. Am., 404 F. Supp. 2d 969, 973 (E.D. Ky. 2005).
(30.) Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 139 (1990).
(32.) Id. at 142-43.
(33.) Id.; Aetna Health Inc. v. Davila, 542 U.S. 200, 209 (2004).
(34.) Kosak v. United States, 679 F.2d 306, 308 (3d Cir. 1982).
(35.) IUE AFL-CIO Pension Fund v. Barker & Williamson, Inc., 788 F.2d 118, 127 (3d Cir. 1986).
(36.) Id.; Smith v. CMTA-IAM Pension Trust, 746 F.2d 587, 589 (9th Cir. 1984); see Rettig v. PBGC, 744 F.2d 133, 155 (D.C. Cir. 1984) (stating that Congress passed ERISA with the purpose of protecting the retirement security expectations held by millions).
(37.) 29 U.S.C. [section] 1140 (2006).
(39.) Gavalik v. Cont'l Can Co., 812 F.2d 834, 851 (3d Cir. 1987) (quoting West v. Butler, 621 F.2d 240, 245 (6th Cir. 1980)), cert. denied, 484 U.S. 979 (1987).
(40.) Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 143 (1990); see S. Rep. No. 93-127, at 35 (1973), reprinted in 1974 U.S.C.C.A.N. 4838, 4871-72 (discussing congressional intent behind ERISA's enforcement provisions).
(41.) 29 U.S.C. [section] 1140.
(42.) Hashimoto v. Bank of Hawaii, 999 F.2d 408, 411 (9th Cir. 1993).
(43.) See infra Part II.C (detailing the conflict between circuits on what Congress meant Section 510 to include in its protection).
(44.) Hashimoto, 999 F.2d at 411.
(45.) See infra Part II.C (discussing the disagreement among various courts as to who Section 510 of ERISA protects).
(46.) See infra Parts II.C.1-2 (showing the various meanings the different circuits have attributed to the terms inquiry and proceeding).
(47.) See id. (discussing the division between the Fifth and Ninth Circuits and the Second, Third, and Fourth Circuits).
(48.) Infra Part II.C.2.
(49.) Infra Part II.C.1.
(51.) Hashimoto v. Bank of Hawaii, 999 F.2d 408 (9th Cir. 1993).
(52.) Anderson v. Elec. Data Sys. Corp., 11 F.3d 1311 (5th Cir. 1994).
(53.) Hashimoto, 999 F.2d at 408.
(54.) Id. at 409.
(56.) Id. at 410.
(58.) Hashimoto, 999 F.2d at 410.
(60.) Id. at 411.
(63.) Hashimoto, 999 F.2d at 411.
(64.) Id. at 412.
(65.) Anderson v. Elec. Data Sys. Corp., 11 F.3d 1311 (5th Cir. 1994).
(66.) Id. at 1312.
(68.) Id. at 1312-13.
(69.) Id. at 1313.
(70.) Anderson, 11 F.3d at 1313.
(71.) Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 144 (1990); Anderson, 11 F.3d at 1313-14.
(72.) Anderson, 11 F.3d at 1314.
(75.) Petition for Writ of Certiorari at 8, Anderson v. Elec. Data Sys. Corp., 115 S. Ct. 55 (1994) (No. 931670), 1994 WL 16099608.
(76.) Id. at 9.
(78.) Id. at 12.
(79.) Id. at 16-20.
(80.) Anderson v. Elec. Data. Sys. Corp., 115 S. Ct. 55 (Mem.) (1994).
(81.) See infra Part II.C.2 (discussing their respective treatment of such complaints).
(82.) King v. Marriott Int'l Inc., 337 F.3d 421 (4th Cir. 2003).
(83.) Nicolaou v. Horizon Media Inc., 402 F.3d 325 (2d Cir. 2005).
(84.) Edwards v. A.H. Cornell & Son, Inc., 610 F.3d 217 (3d Cir. 2010).
(85.) King, 337 F.3d at 421.
(86.) Id. at 423.
(90.) King, 337 F.3d at 422-23.
(91.) Id. at 424.
(92.) Id. at 427.
(93.) Fair Labor Standards Act (FLSA) of 1938, Pub. L. No. 75-718, 52 Stat. 1060 (1938) (codified as amended in scattered sections of 29 U.S.C.).
(94.) King, 337 F.3d at 427.
(95.) Id. at 427-28.
(96.) Id. at 428.
(98.) Nicolaou v. Horizon Media, Inc., 402 F.3d 325 (2d Cir. 2005).
(99.) Edwards v. A.H. Cornell & Son, Inc., 610 F.3d 217, 222 (3d Cir. 2010).
(100.) Nicolaou, 402 F.3d at 326.
(104.) Id. at 327.
(105.) Nicolaou, 402 F.3d at 327.
(106.) Id. at 327-38.
(107.) Id. at 328.
(110.) Nicolaou, 402 F.3d at 328-29.
(111.) Id. at 329.
(112.) Id. at 329-30.
(113.) Id. at 330.
(115.) Edwards v. A.H. Cornell & Son, Inc., 610 F.3d 217, 217 (3d Cir. 2010).
(116.) Id. at 219.
(120.) Nicolaou v. Horizon Media, Inc., 402 F.3d 325, 329 (2d Cir. 2005).
(121.) Edwards, 610 F.3d at 219.
(123.) Id. at 222.
(124.) Id. at 223.
(126.) Edwards, 610 F.3d at 223 (quoting Black's Law Dictionary 1324 (9th ed. 2009)).
(128.) King v. Marriott Int'l Inc., 337 F.3d 421, 427-28 (4th Cir. 2003).
(129.) Edwards, 610 F.3d at 223.
(131.) King, 337 F.3d at 427-28.
(132.) Edwards, 610 F.3d at 223.
(133.) Id. at 224.
(134.) Fair Labor Standards Act (FLSA) of 1938, Pub. L. No. 75-718, 52 Stat. 1060 (1938) (codified as amended in scattered sections of 29 U.S.C.).
(135.) Clean Water Act, 33 U.S.C. [section][section] 1251-1387 (2006).
(136.) Edwards, 610 F.3d at 224-25.
(137.) Id. at 225.
(139.) Infra Part III.A.
(140.) Infra Part III.B.
(141.) Infra Parts III.C-D.
(142.) Infra Part III.E.
(143.) Infra Part III.F.
(144.) Hashimoto v. Bank of Hawaii, 999 F.2d 408, 411 (9th Cir. 1993).
(145.) Edwards v. A.H. Cornell & Son, Inc., 610 F.3d 217, 227-38 (3d Cir. 2010) (Cowen, J., dissenting).
(146.) See supra Part II.C.2 (discussing where courts have dismissed anti-retaliation cases as not protected under Section 510 of ERISA).
(147.) Brief for the Sec'y of Labor as Amicus Curiae in Support of Appellant's Petition for Panel and En Banc Rehearing at 13-14, Edwards v. A.H. Cornell & Son, Inc., 610 F.3d 217 (3d Cir. 2010) (No. 09-3198), 2010 WL 3763786 [hereinafter Edwards 2010 Amicus Brief] (arguing in favor of including unsolicited, internal complaints within ERISA protection).
(149.) King v. Marriott Int'l Inc., 337 F.3d 421, 427 (4th Cir. 2003).
(150.) Brief for Appellant at 16, Edwards v. A.H. Cornell & Son, Inc. 610 F.3d 217 (3d Cir. 2010) (No. 093198), 2009 WL 6870703.
(151.) ERISA Enforcement, U.S. Dep't of Labor, http://www.dol.gov/ebsa/erisa_enforcement.html (last visited Mar. 25, 2012).
(152.) Edwards 2010 Amicus Brief, supra note 147, at 13-14; Garson v. HVAC Corp., No. 10-1612, 2010 WL 4484634, at *5 (E.D. Pa. Nov. 8, 2010) (holding that the language of Section 510 unambiguously includes protection for inquiries that occur at the workplace--i.e., solicited internal complaints).
(153.) See, e.g., Edwards v. A.H. Cornell & Son, Inc., 610 F.3d 217, 217 (3d Cir. 2010) (dismissing for failure to state a claim after holding that unsolicited, internal complaints do not fall within ERISA protection).
(154.) See supra Part II.A (explaining ERISA preemption of state law).
(155.) See, e.g., King v. Marriott Int'l Inc., 337 F.3d 421, 428 (4th Cir. 2003) (remanding after finding that claim was preempted by ERISA but that the employee's state law wrongful discharge claim was not entirely preempted).
(156.) See, for example, the general rule of at-will employment in Texas, discussed in Sabine Pilot Serv. v. Hauck, 687 S.W.2d 733, 734 (Tex. 1985).
(158.) King v. Marriott Int'l Inc., 866 A.2d 895, 900 (Md. Ct. Spec. App. 2005).
(161.) Id. at 901.
(163.) King, 866 A.2d at 901.
(164.) Id. at 901-03.
(165.) Wholey v. Sears Roebuck, 803 A.2d 482 (2002).
(166.) King, 866 A.2d at 904 (citing Wholey, 803 A.2d at 500-01).
(167.) Id. at 905.
(168.) Id. at 905-06.
(169.) Id. at 906.
(171.) King, 866 A.2d at 906.
(172.) See Jessica Barclay-Strobel, Shooting the Messenger: How Enforcement of FLSA and ERISA Is Thwarted by Courts' Interpretations of the Statutes' Antiretaliation and Remedies Provisions, 58 UCLA L. Rev. 521, 524, 542 (2010) (discussing situations where a terminated employee is in a jurisdiction that affords no ERISA remedy and has no state common law wrongful termination claim).
(173.) See infra Part III.D (comparing the remedies for wrongful termination available under state law with ERISA remedies).
(174.) Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 143 (1990).
(175.) Id.; 29 U.S.C. [section] 1132(a)(3) (2006).
(176.) Ingersoll-Rand, 498 U.S. at 145.
(177.) Dister v. Cont'l Grp., Inc., 859 F.2d 1108, 1111 (2d Cir. 1988).
(178.) Hamilton v. Starcom Mediavest Grp., Inc., 522 F.3d 623, 628 (6th Cir. 2008).
(179.) Simons v. Midwest Tel. Sales and Serv., Inc., 462 F. Supp. 2d 1004, 1007 (D. Minn. 2006) (citing McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-05 (1973); Jefferson v. Vickers, Inc., 102 F.3d 960, 964 (8th Cir. 1996)).
(180.) Simons, 462 F. Supp. 2d at 1007-08 (quoting Rath v. Selection Research, Inc., 978 F.2d 1087, 1090 (8th Cir. 1992)).
(181.) Id. at 1008.
(183.) See Dunn v. Elco Enters., Inc., No. 05-71801, 2006 WL 1195867, at *4 (E.D. Mich. May 4, 2006) (discussing the circuit courts that have already held that internal complaints are protected activity under Section 510).
(184.) Id. at *4-5.
(185.) Id. at *4; Simons, 462 F. Supp. 2d at 1008.
(186.) Simons, 462 F. Supp. 2d at 1008 (quoting Rath v. Selection Research, Inc., 978 F.2d 1087, 1090 (8th Cir. 1992)); see also Eckelkamp v. Beste, 315 F.3d 863, 871 (8th Cir. 2002) (affirming the district court's conclusion that plaintiff established a prima facie case of retaliation by providing evidence of the short time between his protests about management practices regarding an employee stock ownership plan and his discharge).
(187.) See, e.g., Rath, 978 F.2d at 1091 (finding that the employee could not establish a prima facie case when the length of time between his discharge and statutorily protected action was six months); see also Cooper v. City of North Olmsted, 795 F.2d 1265, 1272 (6th Cir. 1986) ("The mere fact that Cooper was discharged four months after filing a discrimination claim is insufficient to support an [inference] of retaliation."). Cf. Keys v. Lutheran Family and Children's Servs. of Mo., 668 F.2d 356, 358 (8th Cir. 1981) (stating that employee stated a prima facie case of retaliation when she was fired less than two months after reporting her employer for violations); Nguyen v. City of Cleveland, 229 F.3d 559, 567 (6th Cir. 2000) (quoting Parnell v. West, No. 95-2131, 1997 WL 271751, at *3 (6th Cir. May 21, 1997) (noting that "previous cases that have permitted a prima facie case to be made based on the proximity of time have all been short periods of time, usually less than six months")).
(188.) Dunn, 2006 WL 1195867, at *1, *7.
(189.) Id. at *7.
(190.) Simons, 462 F. Supp. 2d at 1008.
(191.) Dunn, 2006 WL 1195867, at *7.
(193.) See, e.g., Simons, 462 F. Supp. 2d at 1009 (finding that employer articulated a legitimate, nondiscriminatory reason when it argued that it fired employee because business had declined and plaintiff was the least productive employee in the company).
(194.) Id. at 1009.
(195.) Dunn, 2006 WL 1195867, at *8-9.
(196.) Id. at *9 (quoting Singfied v. Akron Metro. Housing Auth., 389 F.3d 555, 564 (6th Cir. 2004)).
(197.) Simons, 462 F. Supp. 2d at 1009.
(198.) Id. at 1009-10.
(199.) Id. at 1010; 28 U.S.C. [section] 1132(a)(3)(B)(i) (2006).
(200.) Schwartz v. Gregori, 45 F.3d 1017, 1022-23 (6th Cir. 1995); Russell v. Northrop Grumman Corp., 921 F. Supp. 143, 152 (E.D.N.Y. 1996).
(201.) Simons, 462 F. Supp. 2d at 1010.
(203.) See Trystan Phifer O'Leary, Note, Silencing the Whistleblower: The Gap Between Federal and State Retaliatory Discharge Laws, 85 Iowa L. Rev. 663, 689 (2000) (discussing the general lack of state protection for whistleblowers, and observing that only 17 of the 50 states provide a statutory cause of action protecting whistleblowers in the private sector from retaliatory discharge).
(204.) Aaron Larson, Wrongful Termination of At Will Employment, ExpertLaw (Sept. 2003), http://www.expertlaw.com/library/employment/at_will.html.
(205.) See supra Part II.B (discussing complaints that are excluded under Section 510).
(206.) King v. Marriott Int'l Inc., 866 A.2d 895, 906 (Md. Ct. Spec. App. 2005).
(207.) ERISA Enforcement, supra note 151.
(208.) Larson, supra note 204.
(209.) State Whistleblower Laws, Nat'L Conference of State Legislatures (Nov. 2009), http://www.ncsl.org/?tabid= 13390.
(210.) Supra Part II.C.
(211.) See Dunn v. Elco Enters., Inc., No. 05-71801, 2006 WL 1195867, at *9 (E.D. Mich. May 4, 2006) (instructing courts to exercise caution
in dismissing once the employee has established a prima facie case).
(212.) See supra notes 203, 208-09 (explaining where state law remedies for wrongful discharge often fall short).
(213.) Edwards v. A.H. Cornell & Son, Inc., 610 F.3d 217 (3d Cir. 2010).
(214.) Brief for the Sec'y of Labor as Amicus Curiae in Support of Appellant for Reversal at 10, Edwards v. A.H. Cornell & Son, Inc., 610 F.3d 217 (3d Cir. 2010) (No. 09-3198), 2009 WL 6870704 [hereinafter Edwards 2009 Amicus Brief].
(215.) Id. at 10.
(216.) See id. at 9-10 (arguing that construing Section 510 to exclude unsolicited, internal reports of ERISA violations would thwart Congress' intent to encourage whistleblowing as a means of enforcing ERISA).
(218.) Id. at 10.
(219.) Edwards 2009 Amicus Brief, supra note 214, at 10.
(220.) Edwards 2010 Amicus Brief, supra note 147, at 12-13.
(221.) See infra notes 222-26 and accompanying text (explaining why it is advantageous to employers to resolve complaints internally rather than through a formal reporting process).
(222.) Brief for Appellant at 16, Edwards v. A.H. Cornell & Son, Inc., 610 F.3d 217 (3d Cir. 2010) (No. 093198), 2009 WL 6870703.
(223.) ERISA Enforcement, supra note 151.
(224.) Jorgenstown v. Prudential Ins. Co. of Am., 852 F. Supp. 255, 263 (D.N.J. 1994).
(225.) Edwards 2010 Amicus Brief, supra note 147, at 13.
(227.) See Brief for Appellee, Edwards v. A.H. Cornell & Son, Inc., 610 F.3d 217 (3d Cir. 2010) (No. 09-3198), 2009 WL 6870705 at *14 (arguing the dangers of including unsolicited, internal complaints within Section 510).
(230.) Id. at *15.
(231.) See supra Part II.C (discussing the circuit court decisions on the issue of whether Section 510 of ERISA protects unsolicited, internal complaints).
(232.) See infra notes 233, 239, and accompanying text (explaining the recent district court trends to include unsolicited, internal complaints within Section 510 protection).
(233.) Dunn v. Elco Enters., Inc., No. 05-71801, 2006 WL 1195867, at *4 (E.D. Mich. May 4, 2006).
(234.) Id. (quoting Schwartz v. Gregori, 45 F.3d 1017, 1021 (6th Cir. 1995)).
(235.) Id. (citing Authier v. Ginsberg, 757 F.2d 796, 798-800 (6th Cir. 1985), cert. denied, 474 U.S. 888 (1985)). In Authier, the Sixth Circuit Court of Appeals determined that a fiduciary's compliance with his duties under ERISA is a protected activity, and that ERISA governs any wrongful discharge claims relating to these duties. Authier, 757 F.2d at 802. In so holding, the court relied on Congressional intent of uniform enforcement of ERISA under federal law, which would be thwarted if such claims could be brought under state law--creating diversity in the enforcement of ERISA. Id.
(236.) See, e.g., McSharry v. Unumprovident Corp., 237 F. Supp. 2d 875, 881 (E.D. Tenn. 2002) (agreeing with and following the line of case law set forth in Anderson and Hashimoto).
(237.) Dunn, 2006 WL 1195867, at *5 (citing Moore v. Freeman, 355 F.3d 558 (6th Cir. 2003); Booker v. Brown & Williamson Tobacco Co., 879 F.2d 1304, 1313 (6th Cir. 1989)).
(238.) Dunn, 2006 WL 1195867, at *4-5.
(239.) See Rath v. Selection Research, Inc., 978 F.2d 1087, 1089 (8th Cir. 1992) (recognizing that whether Section 510 of ERISA protects informal, internal complaints is an open issue and choosing to not address the issue); Langlie v. Onan Corp., 192 F.3d 1137, 1141 (8th Cir. 1999) (acknowledging that "whether Section 510 protects informal complaints" is an open issue and refusing to resolve the issue); Eckelkamp v. Best, 201 F. Supp. 2d 1012, 1032 n.36 (E.D. Mo. 2002) (refusing to address the issue of whether unsolicited, internal complaints are protected within Section 510 of ERISA, but instead assuming for purposes of the Section 510 cause of action that these complaints are protected).
(240.) Simons v. Midwest Tel. Sales and Serv., Inc., 462 F. Supp. 2d 1004, 1008 (D. Minn. 2006) (citing McLean v. Carlson Cos., 777 F. Supp. 1480, 1484 (D. Minn. 1991)) (finding that an employee was exercising a right provided to her under ERISA and engaging in a statutorily protected activity when she complained about her employer's failure to make legally required ERISA plan contributions in a letter to her company's president).
(242.) In addition to the District Court of Minnesota, the District Court of Nebraska and the Eastern District of Missouri within the Eighth Circuit have now found it logical to infer that Section 510 protects unsolicited, internal reports of ERISA violations. McKnight v. Brentwood Dental Group, Inc., No. 8:04CV642, 2007 WL 2066440, at *4 (D. Neb. July 17, 2007); Eckelkamp v. Beste, 201 F. Supp. 2d 1012, 1032 (E.D. Mo. 2002). In fact, when the Eckelkamp case went to the Eighth Circuit on appeal, the Eighth Circuit affirmed the district court without upsetting its inference of Section 510 protection. Eckelkamp v. Beste, 315 F.3d 863, 871 (8th Cir. 2002).
(243.) See supra Part II.C (discussing the circuit court decisions on the issue of whether Section 510 of ERISA protects unsolicited, internal complaints).
(244.) See supra Part III.B (discussing remedies available under state law wrongful discharge causes of action).
(245.) David Angueira & David Conforto, Without a Remedy: The Massachusetts Whistleblower's Brush With ERISA, 39 Suffolk U. L. Rev. 955, 974-75 (2006); see also Petition for Writ of Certiorari, supra note 75, at 8.
Rule 10 of the Revised Rules of the Supreme Court of the United States provides in part that a Petition for a Writ of Certiorari may be granted when a state court or a United States Court of Appeals has decided an important question of federal law which has not been, but should be settled by this Court....
(246.) Edwards 2009 Amicus Brief, supra note 214, at 10.
(247.) See supra Part III.C (explaining the burden shifting process of a Section 510 claim).
(248.) See notes 190-93193 and accompanying text (discussing what qualifies as legitimate, nondiscriminatory reasons for termination).
(249.) See S. Rep. No. 93-127, at 35 (1973), reprinted in 1974 U.S.C.C.A.N. 4838, 4871-72 (discussing congressional intent behind ERISA's enforcement provisions).
(250.) See generally Brief for the Sec'y of Labor as Amicus Curiae in Support of Appellant for Reversal, Nicolaou v. Horizon Media Inc., 402 F.3d 325 (2d Cir. 2005) (No. 03-9186), 2004 WL 3525515 [hereinafter Nicolaou Amicus Brief] (arguing that the court should find that Section 510 of ERISA protects unsolicited, internal complaints); Edwards 2009 Amicus Brief, supra note 214 (same); Edwards 2010 Amicus Brief, supra note 147, at 13-14 (same).
(251.) Nicolaou Amicus Brief, supra note 250, at 1.
(252.) Edwards 2009 Amicus, supra note 214, at 1.
(254.) Id. at 2.
Emily M. Balch, J.D. Candidate, The University of Iowa College of Law, 2012; B.A., B.S., Iowa State University, 2009. I would like to thank and dedicate this Note to my family for their unwavering support and encouragement.
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|Author:||Balch, Emily M.|
|Publication:||The Journal of Corporation Law|
|Date:||Mar 22, 2012|
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