ERISA Does Not Protect Opposition to Statutory Violations or Internal Complaints without a Proceeding or Inquiry

On Friday, a divided Sixth Circuit Court of Appeals affirmed the summary judgment dismissal of a “whistleblower” claim that was found to be governed, and completely preempted, by ERISA.   Sexton v. Panel Processing, Inc. , No. 13-1604 (6^th Circ. 5-9-14).  In that case, the plaintiff was terminated approximately six months after he protested the employer’s refusal to sit additional employees who had been elected to the Board of Directors and its removal of him from a trustee position with the company’s retirement plan.  He emailed the Board Chairman alleging, among other things, that his removal as a trustee violated ERISA and if not rectified, he would report the violations to the DOL.  The Company did not respond to his email and he never filed a complaint with the DOL.   He ultimately filed a wrongful discharge lawsuit, which was removed by the employer to federal court under ERISA.  The Court found that, unlike Title VII, the FLSA and other statutes, ERISA protects only an employee’s participation in a “proceeding” or “inquiry” relating to ERISA.  It does not contain an opposition clause which would protect unsolicited complaints, like the one made by the plaintiff. 

Section 1140 of ERISA provides in relevant part:

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.

The parties agreed that there was no proceeding in place.  The Court found that the “giving of information” included “any” information, including information about a claim for benefits which did not relate to alleged violations of ERISA.   The Court also concluded that there was never any “inquiry,” no matter how the term was interpreted because there was never any investigation or question posed about his allegation.  Because there was never any proceeding or inquiry made by the employer or the DOL, this anti-retaliation provision could not apply.  The Court was even reluctant to broaden the meaning of this statute to include unsolicited complaints which ultimately lead to an inquiry, investigation or proceeding.    The Court also rejected attempts to analogize this statute to Title VII or the FLSA because those statutes specifically protected an employee’s opposition to unlawful practices.   Unlike those statutes, ERISA contains additional enforcement mechanisms (such as criminal prosecution and reporting requirements) which could explain why Congress chose not to include an opposition clause for employees.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.