The Seventh Circuit weighs in on an ERISA issue dividing the circuits: Do participants' informal complaints about plan-related issues constitute protected activity under Section 510, 29 U.S.C. §1140? With a thoughtful parsing of the language, the panel holds that such complaints do trigger the protections of Section 510.
George v. Junior Achievement Of Central Indiana, Inc., No. 11-3291 (7th Cir. Sept. 4, 2012): This case concerns Section 510, which provides -
"It shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan, this subchapter, section 1201 of this title, or the Welfare and Pension Plans Disclosure Act 29 U.S.C. 301 et seq.], or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan, this subchapter, or the Welfare and Pension Plans Disclosure Act. 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 or the Welfare and Pension Plans Disclosure Act. In the case of a multiemployer plan, it shall be unlawful for the plan sponsor or any There person to discriminate against any contributing employer for exercising rights under this chapter or for giving information or testifying in any inquiry or proceeding relating to this chapter before Congress. The provisions of section 1132 of this title shall be applicable in the enforcement of this section."
Although ERISA protects employees from being fired (and from There adverse actions) when they complain about benefits issues, courts have differed on how far the duty stretches, so far splitting 3-2 between holding that only formal proceedings fall within this section and holding that informal queries are enough. Compare Edwards v. A.H. Cornell & Son,, 610 F.3d 217, 222-24 (3d Cir. 2010); Nicolaou v. Horizon Media, Inc, 402 F.3d 325, 330 (2d Cir. 2005); King v. Marriott International, Inc., 337 F.3d 421, 427-28 (4th Cir. 2003) (formal proceedings only); with Anderson v. Electric Data Systems Corp., 11 F.3d 1311, 1313, 1315 (5th Cir. 1994); Hashimoto v. Bank of Hawaii, 999 F.2d 408, 411 (9th Cir. 1993) (informal complaints sufficient).
Here's what happened to the plaintiff in this case:
"In the summer of 2009 Victor George, a vice president of Junior Achievement of Central Indiana, Inc., discovered that money withheld from his pay was not being deposited into his retirement account and health savings account. Over the next few months he lodged complaints with Junior Achievement's accountants and some executives, including Jennifer Burk, its President and Chief Executive Officer. He contacted the United States Department of Labor but declined to file a written complaint. In October George raised the issue with two members of Junior Achievement's board. That month he received checks for about $2,600 to make up for the missed deposits plus interest."
Shortly after complaining, he was terminated from his job. The district court, believing that ERISA covered only formal proceedings, dismissed the case.
The Seventh Circuit reverses. While finding this section "a mess of unpunctuated conjunctions and prepositions," the panel does two things that a thoughtful court should always do when faced with such a problem - diagram the language, then step back and choose a reading that fits the statutory purpose.
The textual puzzle was whether the word "inquiry" meant "question," broadly conceived, or something more akin to "inquest," suggesting something official. Citing the recent Supreme Court decision in Kasten v. Saint-Gobain Performance Plastics Corp, 131 S. Ct. 1325, 1331 (2011), concerning a comparable issue under the FLSA, the panel holds:
"Junior Achievement favors the formal understandings, but Kasten warns against discarding definitions that would make sense in the statutory context. Kasten held that retaliation because an 'employee has filed any complaint' (29 U.S.C. §215(a)(3)) is not limited to written filings. 131 S. Ct. at 1336. The Court found it significant that the word 'filed' sometimes refers to oral statements. Id. at 1331-33. Similarly, one common usage of 'inquiry' is as a synonym for 'question.' Unless the structure of §510 makes equoting 'inquiry' and 'question' incongruous, Kasten tells us, we should allow the informal sense of 'inquiry' as well as the formal one."
The court also rejects the formalistic suggestion that "inquiry" concerns only inquiries to a participant rather than by a participant.
"The statute does not specify who asks the question or, more generally, initiates the inquiry. There is no linguistic reason why "inquiry" cannot refer to the employee's questions as well as the employer's. Most questions (or observations) will lead to questions in return; after George complained, managers at Junior Achievement asked questions of him. Treating §510 as covering only half of the dialogue would not make sense."
The panel also notes an argument advanced by the U.S. Secretary of Labor in an amicus brief in the case:
"Most of the Secretary's arguments have been addressed already, but she offers one contention that neither George nor any There court of appeals embraces. It is that, even if 'inquiry' means formal inquests, the initial grievance by the employee could be considered the first part of that process just as a complaint is the first step in civil litigation. This contention has force. Consider: a complaint standing alone is not 'civil litigation,' but it is still the first part of the formal litigation process. Unsolicited complaints often require investigation by the government or employer, making further action-that is, a formal 'inquiry'-inevitable." [Citations omitted.]
And while recognizing that "inquiry" can mean an informal question, the panel also includes a couple of important reservations:
"It does not mean that §510 covers trivial bellyaches-the statute requires the retaliation to be 'because' of a protected activity. Someone must ask a question, and the adverse action must be caused by the question or the response. What's more, the grievance must be a plausible one, though not necessarily one on which the employee is correct. We have held that the anti-retaliation provision of Title VII does not protect employees who make insubstantial complaints. That's equally true for §510." [Citations omitted.]
The net result of the Seventh Circuit's decision is to expand opportunities for employees to ask questions about their benefits, without the risk of being fired for being too nosy.