Improper Termination Procedures May Provide Evidence of Pretext in Support of a Claim for Interference With an Employee Benefit Under ERISA
Monday, July 21, 2008
Contributed by: Joel Griffith
In a recent Eighth Circuit case, a former employee brought suit against his former employer for, among other claims, an interference with a health insurance benefits claim under section 510 of the Employee Retirement Income Security Act (ERISA). Fitzgerald v. Action, 521 F.3d 867 (8th Cir. 2008). Section 510 of ERISA makes it unlawful for an employer to discharge or otherwise discipline a "participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan..." To prove a section 510 claim, the plaintiff must show a specific intent to interfere with a benefit. In this case, the employee alleged that he informed his employer that he intended to have surgery and was terminated only a few days later. The lower court granted summary judgment to the employer after finding sufficient evidence of nondiscriminatory reasons for termination and the plaintiff appealed.
On appeal, the plaintiff argued that the employer's inconsistent explanations for termination present evidence of pretext. The initial reason for termination was a "lack of work," however, the employer later stated that the termination was a result of an "accumulation of his employee misconduct and specifically over his abuse of restroom privileges and break time." The court held that the varying explanations given by the employer for terminating the employee raise a fact question as to whether the termination was pretextual.
The plaintiff then argued that the employer's failure to follow company policy was further evidence of pretext. The employer's normal policy was to give verbal warnings to employees in violation of a company rule, then to give a written warning. An employee would only be terminated after he or she received three written warnings. However, the plaintiff had not received three written warnings, and the employer admitted the plaintiff was terminated in violation of policy. The court concluded that this was additional evidence of pretext.
Finally, the court determined that evidence of pretext existed in the more lenient treatment of other employees and the temporal proximity between the plaintiff's notification of surgery and the employer's decision to terminate. The court concluded that questions of fact remained on the issue of pretext, and it reversed and remanded the lower court's grant of summary judgment.
This case should remind employers that they must strictly follow company procedures when terminating an employee.
This column is published for informational purposes only. It should not be construed as legal advice and is not intended to create an attorney client relationship. The views expressed are those of the author and do not necessarily reflect the views of the author's law firm or its individual partners.
