PUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

J OSEPH D. G RIGGS , Plaintiff-Appellant,

v. No. 99-2508 E. I. D U P ONT D E N EMOURS &

C OMPANY , Defendant-Appellee.

J OSEPH D. G RIGGS , Plaintiff-Appellant,

v. No. 99-2607 E. I. D U P ONT D E N EMOURS &

C OMPANY , Defendant-Appellee. Appeals from the United States District Court for the Eastern District of North Carolina, at Wilmington. James C. Fox, District Judge. (CA-98-17-7-F)

Argued: September 28, 2000

Decided: January 9, 2001 Before WILKINS, WILLIAMS, and TRAXLER, Circuit Judges.

Affirmed in part, vacated in part, and remanded by published opinion.

Judge Traxler wrote the opinion, in which Judge Wilkins and Judge

Williams joined.

COUNSEL ARGUED: Michael Murchison, MURCHISON, TAYLOR & GIB-

SON, L.L.P., Wilmington, North Carolina, for Appellant. Raymond

Michael Ripple, E.I. DUPONT DE NEMOURS & COMPANY, Wil-

mington, Delaware, for Appellee. ON BRIEF: Donna L. Goodman,

E.I. DUPONT DE NEMOURS & COMPANY, Wilmington, Dela-

ware; Gardner G. Courson, MCGUIRE, WOODS, BATTLE &

BOOTHE, L.L.P., Atlanta, Georgia, for Appellee. OPINION TRAXLER, Circuit Judge:

Joseph Griggs brought an action against his former employer E.I. DuPont de Nemours & Company ("DuPont") under section 502(a)(3)

of the Employee Retirement Income Security Act ("ERISA"), see 29

U.S.C.A. § 1132(a)(3) (West 1999). Griggs claimed that DuPont

breached its fiduciary duty by leading Griggs to believe that he was

eligible for a tax-deferred lump sum distribution of early retirement

benefits under DuPont's Temporary Pension System and then failing

to notify Griggs when DuPont learned that Griggs's election to

receive such a distribution was not permitted by federal tax laws.

Instead, DuPont made the distribution directly to Griggs which

resulted in an immediate tax and defeated the reason that Griggs

elected to retire early. The district court concluded that DuPont

breached its fiduciary duty but held that ERISA does not provide the

relief that Griggs seeks. We agree that, under these circumstances,

DuPont breached its duty as an ERISA fiduciary. However, we con-

clude that Griggs is not necessarily without a remedy under ERISA,

and we remand for the district court to explore the issue further. I. DuPont serves as the administrator for its Pension and Retirement

Plan ("the pension plan"), a tax-qualified defined benefit pension plan

under the Internal Revenue Code ("tax code"), see 26 U.S.C.A. § 401(a) (West Supp. 2000), and ERISA, see 29 U.S.C.A. § 1002(2),

  (35) (West 1999). DuPont also administers a qualified contribution

plan known as the Savings and Investment Plan ("SIP"). The SIP is

a retirement savings vehicle akin to a 401(k) plan through which an

employee's benefits accumulate on a tax-deferred basis.

In 1993, DuPont amended the pension plan to create a program

called the Temporary Pension System ("TPS"). According to DuPont,

TPS was designed to assist DuPont employees who were leaving their

jobs at DuPont, but not necessarily retiring. A participant in TPS was

entitled to one month of pay for every two years of service, not to

exceed one year's salary, in addition to any other benefits from the

pension plan to which the participant might be entitled. The TPS ben-

efit could be received as either a lump sum payment or as an addi-

tional amount added to the employee's regular monthly pension

payment. Benefits under TPS, however, were not universally avail-

able to DuPont employees at all times. Instead, TPS benefits were

offered to employees for a limited "window" period, and the decision

to make TPS benefits available occurred on the regional level.

Griggs was a long-time employee of DuPont. He began his

employment in 1962 and eventually became operations manager for

DuPont's nylon fibers division. Griggs was serving in this capacity

when he elected early retirement in 1994. During the year or so pre-

ceding Griggs's retirement, DuPont was closing one of its nylon

plants and, as a result, decided that a workforce reduction was neces-

sary. It was Griggs's understanding that because of the decreased

need for employees, DuPont decided to make TPS benefits available

to employees in the nylon division as an incentive to retire early.

DuPont, however, disputes that the purpose of TPS was to encourage

early retirement; rather, the essential aim of TPS was "to provide tran-

sition assistance as employees move from a career with DuPont to a

career elsewhere." J.A. 175.

Whatever the primary aim of TPS, everyone agrees that TPS bene-

fits were made available in 1994 to a group of DuPont employees that

included Griggs. And, given his long-term service, Griggs was among

those employees who would be entitled, in addition to his regular pen-

sion, to a TPS benefit equivalent to a full year's salary.

Initially, Griggs was reluctant to consider leaving his position with DuPont and retiring early. Griggs was not being forced out of

DuPont, and there is nothing before us that suggests Griggs was being

pressured to accept the TPS offer. In May 1994, however, Griggs

received a written communication from DuPont providing details

about TPS that caused him to reevaluate whether he should retire

early. For Griggs, what really made the TPS offer attractive was the

option to receive his full TPS benefit in a lump sum that could be

"rolled over" from the pension plan into his SIP account with DuPont

or another qualified vehicle where it would grow on a tax-deferred

basis. In its description of the TPS program, DuPont explained that

TPS provides a benefit from the Pension and Retirement

Plan [ ] in addition [to the] other pension benefit[s] that you

are currently eligible to receive. The additional benefit is as

follows:

One month of pay for every two years of service. Pay to

include base pay, Shift Differential pay, Sunday Premium,

scheduled overtime pay and any incentive compensation

award made in the previous twelve months. The minimum

benefit is equal to two months' pay, the maximum is twelve

months' pay. This additional TPS benefit may be taken as a lump sum,

or may be added to the monthly payments under an immedi-

ate or deferred pension. If taken as a lump sum, all or part

of the lump sum can be rolled into the DuPont Savings and

Investment Plan (SIP), or any qualified IRA, within 60 days.

Because this benefit is paid from the Pension Trust, in

some cases taking the lump sum without rolling it over will

cause you to incur an early payment excise tax. If that

applies to you, a tax gross up allowance will be paid to off-

set any overall addition to your taxes.

J.A. 186. This was general, form language that was provided to all

potential participants in TPS. Other than this May 1994 communica-

tion, DuPont did not make any representations to Griggs concerning

the tax implications of his decision to take a lump sum distribution,

nor did Griggs request any information from DuPont regarding the

potential tax impact on him individually.

After receiving DuPont's written description of TPS benefits,

Griggs opted for early retirement and elected to receive his TPS bene-

fit in a lump sum, believing that he could roll it over into the DuPont

SIP without incurring immediate tax liability. In July 1994, Griggs

received a written statement indicating that, if he were to apply for

TPS benefits, the amount of his lump sum distribution would be

$132,900, which is about what he expected.

On August 1, 1994, Griggs applied for TPS benefits and filled out

an application form for a lump sum payment of his TPS benefit. On

the form, Griggs elected to receive "a lump sum payment of the addi-

tional pension benefit amount payable under Section XII of the Pen-

sion and Retirement Plan." Griggs was presented with various options

for the form his lump sum payment would take; he selected the

"ROLLOVER SETTLEMENT" which indicated Griggs's desire to

"rollover [his] total lump sum benefit in accordance with the deposit

information in Section 5." In turn, Griggs indicated in Section 5 of the

application that the "[d]eposit is to be made to: SIP (fixed income)."

The reverse side of the application form contained instructions for

completing the lump sum payment application. With respect to the

lump sum election, the form instructed that "[y]ou have elected a

lump sum payment pursuant to Section XII of the Pension and Retire-

ment Plan. In making this election, you understand that it is YOUR

responsibility to obtain independent financial and tax advice." Griggs

concedes that he sought no such independent tax advice.

Griggs officially retired in late September 1994, and in October

DuPont sent Griggs a notice indicating that DuPont was preparing to

process his pension payments "in accordance with [his] election." J.A. . DuPont, however, did not honor Griggs's election to roll over his

lump sum payment into the SIP plan, even though DuPont had said

in its description of the TPS program that this could be done. In fact,

as early as July 1994 Ð before Griggs even submitted his TPS lump

sum payment application Ð calculations performed by DuPont

showed that section 415 of the tax code would not permit Griggs to

roll over his entire TPS benefit into the tax-deferred SIP account.

These calculations were apparently performed during the process of

providing Griggs with an estimate of the lump sum amount he could expect to receive if he participated in TPS. No one informed Griggs,

however, that there was a possibility that the tax code would not per-

mit the entire lump sum to be paid from a qualified plan (like

DuPont's pension plan) and that any portion not paid from a qualified

plan could not be rolled over and would be taxed immediately. 1

After Griggs submitted his lump sum payment application in

August 1994, DuPont performed additional calculations required by

section 415 of the tax code and determined that various limits

imposed by section 415 barred Griggs from electing to roll over his

entire TPS distribution into the SIP or an Individual Retirement

Account. During this process, DuPont generated internal reports

warning that Griggs was not eligible for the TPS election he made.

By mid-September 1994, approximately two weeks before Griggs

officially retired, DuPont had been put on notice by its internal calcu-

lations that most, if not all, of Griggs's lump sum distribution could

not be rolled over into the SIP. Griggs was never advised of this criti-

cal fact. Griggs remained unaware of any problem with his election

until he received a check in mid-November 1994 for approximately

$133,000, his full TPS benefit. Because of the limits imposed by sec-

tion 415 of the tax code, DuPont paid Griggs's lump sum payment not

from the pension plan but from its Pension Restoration Plan, a non-

qualified plan. As a result, Griggs was not able to roll the payment

into the SIP and was forced to pay a tax of approximately $50,000.

As DuPont later explained, section 415 of the tax code

limits the amount of pension benefits that can be paid to certain

highly-compensated individuals by tax-qualified pension plans

such as the DuPont Pension and Retirement Plan. When the final

calculation of Mr. Griggs' pensions benefit was made, it was

clear that Section 415(e) of the Internal Revenue Code applied,

and, because only distributions from tax-qualified plans can be

rolled-over, none of Mr. Griggs' pension distribution could be

rolled over.

Compliance with Section 415 of the Code is not discretionary.

Compliance is necessary to maintaining the tax-qualified status

of both the DuPont Pension and Retirement Plan and the SIP. J.A. 205. Therefore, DuPont paid Griggs his TPS benefit from DuPont's

non-qualified Pension Restoration Plan, resulting in a fully taxable distri-

bution.

Griggs sued DuPont in North Carolina Superior Court for negligent

misrepresentation. Griggs alleged that DuPont made an offer of early

retirement to him, using "an incentive lump sum payment in the

amount of one year's salary" as an inducement. J.A. 11. The com-

plaint further alleged that DuPont falsely represented that Griggs's

"lump sum benefit could be `rolled over into the DuPont Savings and

Investment Plan (SIP), or any qualified IRA, within 60 days' thereby

avoiding significant tax liability." J.A. 11. Griggs asserted that he suf-

fered tax liability because "DuPont negligently failed to exercise rea-

sonable care and competence in obtaining or communicating . . .

information" relating to "Griggs' ability to roll the lump sum benefit

into a qualified plan and thereby avoid taxes." J.A. 12.

DuPont removed the action to federal court and moved to dismiss

on the grounds that Griggs's negligent misrepresentation claim under

state law was preempted by ERISA. The district court denied the

motion, relying on the Ninth Circuit's decision in Farr v. US West,

Inc. , 58 F.3d 1361 (9th Cir. 1995) ( Farr I ), which held that ERISA

did not preempt the plaintiffs' claim that their employer either fraudu-

lently or negligently misled them regarding the tax consequences of

a lump sum distribution under an early retirement program included

in the employer's pension plan. See id. at 1365-67. The Ninth Circuit,

however, revisited the issue after the Supreme Court subsequently

handed down its decision in Varity Corp. v. Howe , 516 U.S. 489

  (1996), and held that, under the reasoning in Varity , ERISA pre-

empted the state law fraud and negligent misrepresentation claims.

See Farr v. U.S. West Communications, Inc. , 151 F.3d 908, 913 (9th

Cir. 1998) ( Farr II ), cert. denied , 120 S. Ct. 935 (2000).

Not long after Farr II was issued, DuPont moved for summary

judgment, again contending that ERISA preempted Griggs's state law

negligent misrepresentation claim. 2 The district court reexamined the

preemption issue in light of Farr II and concluded that ERISA pre-

empted Griggs's claim; however, the district court properly permitted

Griggs to amend his complaint to include a claim, based on the same

facts, for breach of fiduciary duty under ERISA § 502(a)(3). See 29

U.S.C.A. § 1132(a)(3).

Griggs filed a cross-motion for partial summary judgment on the issue

of liability, which the district court denied.

In his amended complaint, Griggs alleged that DuPont was a fidu-

ciary in relation to the pension plan and had breached its fiduciary

duty to Griggs by: (1) "falsely representing to . . . Griggs that his

lump sum benefit could be rolled over into a qualified IRA or savings

investment plan"; (2) "failing to disclose to Griggs, prior to his retire-

ment, that he would not be able to roll over his lump sum payment

into a qualified plan because of the limits imposed by Section 415 of

the Internal Revenue Code, notwithstanding DuPont's knowledge that

this was the case"; and (3) "generally failing to disclose to . . . Griggs

the potential impact of Section 415 limits on his ability to roll over

his lump sum distribution." J.A. 52. Griggs sought "appropriate equi-

table and restitutionary relief, including back pay and loss of benefits

which [Griggs] lost by virtue of being induced to elect early retire-

ment, [and] reinstatement to his former position with DuPont." J.A. .

The parties agreed there were no issues of material fact requiring

a trial and made cross-motions for summary judgment on the issue of

DuPont's liability under ERISA. Additionally, DuPont sought sum-

mary judgment on the basis that ERISA did not provide the remedies

that Griggs was pursuing. The district court agreed with Griggs that

DuPont had breached its fiduciary duty; however, the court concluded

that ERISA did not provide for any of the remedies sought by Griggs

and therefore left him the victim of "a wrong without a remedy." J.A. .

Griggs appeals the district court's determination that he is without

a remedy for DuPont's breach of fiduciary duty. Alternatively, Griggs

contends that if the district court correctly held that ERISA affords

him no remedy, then the district court mistakenly concluded that

ERISA preempted Griggs's state law claim because preemption is not

appropriate when Congress fails to provide relief. DuPont cross-

appeals the district court's conclusion that it breached a fiduciary duty

under ERISA. II. Although Griggs advances his preemption argument in the alterna-

tive, asking us to reach it only if we agree with the district court that

Griggs has a viable claim but no remedy, we will address first things

first. Thus, we turn to the issue of whether ERISA preempts Griggs's

state law negligent misrepresentation claim, keeping in mind the

"`presumption that Congress does not intend to supplant state law.'"

Coyne & Delany Co. v. Selman , 98 F.3d 1457, 1467 (4th Cir. 1996)

(quoting New York State Conference of Blue Cross & Blue Shield

Plans v. Travelers Ins. Co. , 514 U.S. 645, 654 (1995)).

ERISA's broadly-phrased preemption clause provides that

ERISA's provisions "supersede any and all State laws insofar as they

may now or hereafter relate to any employee benefit plan." 29

U.S.C.A. § 1144(a) (West 1999). A state law "`relates to' an

employee benefit plan, in the normal sense of the phrase, if it has a

connection with or reference to such a plan." Shaw v. Delta Air Lines,

Inc. , 463 U.S. 85, 96-97 (1983). In fact, "ERISA pre-empts any state

law that refers to or has a connection with covered benefit plans . . .

`even if the law is not specifically designed to affect such plans, or

the effect is only indirect.'" District of Columbia v. Greater Washing-

ton Bd. of Trade , 506 U.S. 125, 129 30 (1992) (quoting Ingersoll-

Rand Co. v. McClendon , 498 U.S. 133, 139 (1990)). Of course,

"[s]ome state actions may affect employee benefit plans in too tenu-

ous, remote, or peripheral a manner to warrant a finding that the law

`relates to' the plan." Shaw , 463 U.S. at 100 n.21. But, as long as the

nexus between the state law and the employee benefit plan is not too

tangential, "a state law of general application, with only an indirect

effect on a pension plan, may nevertheless be considered to `relate to'

that plan for preemption purposes." Smith v. Dunham-Bush, Inc. , 959

F.2d 6, 9 (2nd Cir. 1992).

A "state law" includes "all . . . decisions . . . of any State." 29

U.S.C.A. § 1144(c)(1) (West 1999). Thus, in appropriate circum-

stances, state common law claims fall within the category of state

laws subject to ERISA preemption. See Ingersoll-Rand , 498 U.S. at

; Pilot Life Ins. Co. v. Dedeaux , 481 U.S. 41, 47 (1987). When a

cause of action under state law is "premised on" the existence of an

employee benefit plan so that "in order to prevail, a plaintiff must

plead, and the court must find, that an ERISA plan exists," Ingersoll-

Rand , 498 U.S. at 140, ERISA preemption will apply. Alternatively,

a state law claim is preempted when "it conflicts directly with an

ERISA cause of action." Id. at 142; see Powell v. Chesapeake & Potomac Tel. Co. of Va. , 780 F.2d 419, 422 (4th Cir. 1985) ("To the

extent that ERISA redresses the mishandling of benefits claims or

other maladministration of employee benefit plans, it preempts analo-

gous causes of action, whatever their form or label under state law.").

Generally speaking, ERISA preempts state common law claims of

fraudulent or negligent misrepresentation when the false representa-

tions concern the existence or extent of benefits under an employee

benefit plan. See, e.g. , Hall v. Blue Cross/Blue Shield of Alabama ,

F.3d 1063, 1064-66 (11th Cir. 1998) (ERISA preempted claim

that fraudulent misrepresentations regarding the scope of coverage

induced plaintiff to enroll in her employer-provided health benefits

plan); Shea v. Esensten , 107 F.3d 625, 627-28 (8th Cir. 1997) (pre-

emption applied to a state law claim for "fraudulent nondisclosure and

misrepresentation about [the plan's] doctor incentive programs" that

"limited [the participant's] ability to make an informed choice about

his life-saving health care"); Smith , 959 F.2d at 8-10 (ERISA super-

seded claim that plaintiff was induced to relocate based on his

employer's false, oral representations regarding pension benefits). In

fact, ERISA preemption is commonly understood to apply to state

common law claims that an ERISA fiduciary misrepresented the

nature or availability of retirement benefits, or failed to provide

enough information to permit the retiring beneficiary to make an

intelligent retirement decision. See, e.g. , Muse v. International Bus. Machs. Corp. , 103 F.3d 490, 493 (6th Cir. 1996) (concluding that

ERISA preempts claim that plaintiffs "would have chosen to partici-

pate in the superior benefit plan had IBM not negligently or intention-

ally misrepresented to [them] that no further early retirement plans

would be offered"); Vartanian v. Monsanto Co. , 14 F.3d 697, 700 (1st

Cir. 1994) (same); Lee v. E.I. DuPont de Nemours & Co. , 894 F.2d

, 756-57 (5th Cir. 1990) (same); see also Carlo v. Reed Rolled

Thread Die Co. , 49 F.3d 790, 791 (1st Cir. 1995) (concluding that

"ERISA preempts a state law claim of negligent misrepresentation

against an employer based upon the employer's representations

regarding the employee's prospective benefits under an early retire-

ment program").

Originally, Griggs sought relief from DuPont in state court based

on a theory of negligent misrepresentation. In considering whether

ERISA preemption applies to Griggs's claim, however, we look more

closely at the factual nature of his claim than any state law label he

applies to that claim. See Boston Children's Heart Found., Inc. v. Nadal-Ginard , 73 F.3d 429, 439-40 (1st Cir. 1996) (explaining that

a court cannot make a preemption determination solely "based on the

form or label of the law . . . . [T]he inquiry into whether a state law

`relates to' an ERISA plan or is merely `tenuous, remote, or periph-

eral' requires a court to look at the facts of [a] particular case."). The

factual essence of Griggs's claim is that DuPont did not provide any

information about the general eligibility limitations on a lump sum

rollover of the TPS benefit and then compounded the problem by fail-

ing to inform Griggs that federal tax law precluded him from rolling

it over into DuPont's SIP, despite DuPont's knowledge of this fact

prior to making the TPS distribution. According to Griggs, had he

been aware of this limitation, he would not have elected to participate

in the TPS program and would have continued working.

This claim has a sufficient "connection with or reference to"

DuPont's pension plan to warrant preemption. Shaw , 463 U.S. at 97.

Griggs contends that the terms of DuPont's written description of TPS

benefits misled him about his eligibility to elect various options under

the TPS program, and, when DuPont's internal computations revealed

that, in fact, Griggs was not eligible for his preferred TPS payment

option (and therefore would not be able to defer the taxes on his early

retirement benefit), DuPont failed to pass along this information. The

assertion concerns a core function performed by an ERISA fiduciary

Ð the provision of information about plan benefits to "permit[ ] bene-

ficiaries to make an informed choice about continued participation."

Varity , 516 U.S. at 502.

The Ninth Circuit Court of Appeals addressed a remarkably similar

set of facts in Farr II . There, a group of retired employees brought

a claim against their former employer for failing to provide complete

information about an early retirement incentive program administered

under the company's pension plan. Like DuPont's TPS offer, the pro-

gram involved in Farr II permitted participants to elect a lump sum

benefit and explained that "`[a]ll or part of [lump sum] distribution

may be rolled over to another qualified plan or an IRA . . . without

any current tax liability.'" Farr II , 151 F.3d at 911 (second alteration

in original). The retirees brought various claims, including fraud and

misrepresentation claims, based on the employer's failure to explain that only qualified portions of a lump sum payment would escape

immediate taxation. The court explained that the claims were pre-

empted because "the tax consequences of the [early retirement] plan

clearly `relate to' plan administration because they are part of the

overall mix of information relied upon by Plaintiffs in making their

decisions to participate in the plan." Id. at 913.

We conclude that Griggs's negligent misrepresentation claim,

which arises under circumstances nearly identical to those in Farr II ,

likewise falls within the expansive scope of ERISA's preemption

clause. III. DuPont does not dispute that, as the administrator of its pension

plan, DuPont is a fiduciary for purposes of ERISA when it is engaged

in the administration or management of its pension plan. See Barnes

v. Lacy , 927 F.2d 539, 544 (11th Cir. 1991) (fiduciary duty attaches

where employer "wear[s] two hats" by acting as both employer and

plan administrator); Great Lakes Steel v. Deggendorf , 716 F.2d 1101,

4-05 (6th Cir. 1983) (explaining that ERISA permits an employer

to serve as a fiduciary for its employee benefit plan). Neither does

DuPont suggest that in conveying information about TPS benefits

under its pension plan it was not acting in a fiduciary capacity. See

Varity , 516 U.S. at 502-03. Rather, DuPont disputes that it violated

any obligations imposed upon ERISA fiduciaries.

Congress intended ERISA's fiduciary responsibility provisions to

codify the common law of trusts. See Firestone Tire & Rubber Co. v. Bruch , 489 U.S. 101, 110 (1989); see also Bixler v. Central Pa. Teamsters Health & Welfare Fund , 12 F.3d 1292, 1299 (3d Cir. 1993)

("Although the statute articulates a number of fiduciary duties, . . .

Congress relied upon the common law of trusts to `define the general

scope of [trustees' and other fiduciaries'] authority and responsibil-

ity.'" (alteration in original) (quoting Central States, Southeast &

Southwest Areas Pension Fund v. Central Transport, Inc. , 472 U.S. , 570 (1985)). Under common law trust principles, a fiduciary has

an unyielding duty of loyalty to the beneficiary. See Massachusetts

Mut. Life Ins. Co. v. Russell , 473 U.S. 134, 152-53 (1985) (Brennan,

J., concurring) ("Congress intended by § 404(a) to incorporate the

fiduciary standards of trust law into ERISA, and it is black-letter trust

law that fiduciaries owe strict duties running directly to beneficiaries

in the administration and payment of trust benefits."). Naturally, such

a duty of loyalty precludes a fiduciary from making material misrep-

resentations to the beneficiary. See Varity , 516 U.S. at 506; Peoria

Union Stock Yards Co. Ret. Plan v. Penn Mut. Life Ins. Co. , 698 F.2d

, 326 (7th Cir. 1983) ("Lying is inconsistent with the duty of loy-

alty owed by all fiduciaries and codified in [29 U.S.C. 1104].").

However, a fiduciary's responsibility when communicating with the

beneficiary encompasses more than merely a duty to refrain from

intentionally misleading a beneficiary. ERISA administrators have a

fiduciary obligation "not to misinform employees through material

misrepresentations and incomplete, inconsistent or contradictory dis-

closures." Harte v. Bethlehem Steel Corp. , 214 F.3d 446, 452 (3d Cir. 0) (internal quotation marks omitted), cert. denied , 69 U.S.L.W. 6 (U.S. Dec. 4, 2000) (No. 00-609).

Moreover, a fiduciary is at times obligated to affirmatively provide

information to the beneficiary. Indeed, "[t]he duty to disclose material

information is the core of a fiduciary's responsibility, animating the

common law of trusts long before the enactment of ERISA." Eddy v. Colonial Life Ins. Co. of America , 919 F.2d 747, 750 (D.C. Cir. 0). The common law of trusts identifies two instances where a

trustee is under a "duty to inform." First, a fiduciary has "a duty to

give beneficiaries upon request `complete and accurate information as

to the nature and amount of the trust property.'" Faircloth v. Lundy

Packing Co. , 91 F.3d 648, 656 (4th Cir. 1996) (quoting Restatement

(Second) of Trusts § 173 (1959)). Second, in limited circumstances,

a trustee is required to provide information to the beneficiary even

when there has been no specific request:

Ordinarily the trustee is not under a duty to the beneficiary

to furnish information to him in the absence of a request for

such information . . . . [However,] he is under a duty to com-

municate to the beneficiary material facts affecting the inter-

est of the beneficiary which he knows the beneficiary does

not know and which the beneficiary needs to know for his

protection . . . .

Restatement (Second) of Trusts § 173 cmt. d. In sum, the duty to inform "entails not only a negative duty not to misinform, but also an

affirmative duty to inform when the trustee knows that silence might

be harmful." Bixler , 12 F.3d at 1300; accord Jordan v. Federal

Express Corp. , 116 F.3d 1005, 1016 (3d Cir. 1997) (recognizing that

"it is clear that circumstances known to the fiduciary can give rise to

this affirmative obligation [to inform] even absent a request by the

beneficiary" (alteration in original) (internal quotation marks omit-

ted)).

Griggs's claim focuses primarily on a fiduciary's duty to communi-

cate complete and accurate information to a beneficiary and to refrain

from misleading the beneficiary with respect to material facts. Griggs

contends that DuPont provided him with information that it knew was

material to his decision to accept a TPS distribution, and that upon

learning later that this important information was false with respect

to Griggs individually, DuPont breached its fiduciary duty by failing

to notify him of the inaccuracy. Specifically, the assertion is that

DuPont provided employees with an explanation of TPS distribution

options that clearly implied to them, as it did to Griggs, that a rollover

of TPS benefits could be accomplished tax free, that DuPont later

learned these rollovers could not be accomplished without the imposi-

tion of an immediate tax, and that DuPont did nothing to warn

affected employees like Griggs.

We agree with Griggs and the district court that these facts estab-

lish a breach of fiduciary duty by DuPont. In so doing, we acknowl-

edge our agreement with DuPont that it did not have "a duty to

provide [Griggs] with individualized notice of all the ways the tax

laws would impact his lump sum distribution." Brief of Appellee -

Cross-Appellant at 14. ERISA does not impose a general duty requir-

ing ERISA fiduciaries to ascertain on an individual basis whether

each beneficiary understands the collateral consequences of his or her

particular election. See, e.g. , Electro-Mechanical Corp. v. Ogan , 9

F.3d 445, 452 (6th Cir. 1993) (explaining that "a fiduciary is not obli-

gated to seek out employees to ensure that they understand the plan's

provisions"). However, an ERISA fiduciary that knows or should

know that a beneficiary labors under a material misunderstanding of

plan benefits that will inure to his detriment cannot remain silent Ð

especially when that misunderstanding was fostered by the fiduciary's

own material representations or omissions. In other words, a fiduciary

is obligated to advise the beneficiary "of circumstances that threaten

interests relevant to the [fiduciary] relationship." Eddy , 919 F.2d at

. Thus, for example, "when an ineligible person contributes to a

fund, a fiduciary has a duty to inform him of his ineligibility within

a reasonable time after the [fiduciary] acquired knowledge of that

ineligibility." Id . at 751 (alteration in original) (internal quotation

marks omitted). In the ERISA context, the recognition of a limited

fiduciary duty to inform a beneficiary of material facts in the absence

of a specific request for information from the beneficiary is not a

ground-breaking proposition. See Jordan , 116 F.3d at 1015 (explain-

ing that fiduciary has an affirmative duty to inform a beneficiary of

material facts known by the fiduciary but not the beneficiary and that

the irrevocability of a retirement benefits election may be a material

omission); Shea , 107 F.3d at 628-29 (holding that fiduciary breached

its duty under ERISA by failing to disclose to the beneficiary finan-

cial incentives discouraging preferred doctors from making referrals

to specialists Ð information that was necessary for beneficiary to

make an informed decision); Bixler , 12 F.3d at 1302-03 (reversing

grant of summary judgment to employer on beneficiary's claim that

employer breached its fiduciary duty to affirmatively inform benefi-

ciary of COBRA benefits where there was evidence that employer

knew beneficiary had unpaid medical expenses that would be reim-

bursed by an election under COBRA).

Once DuPont learned that Griggs's lump sum rollover election

would not be possible and, therefore, that Griggs was no doubt under

the mistaken belief that he was eligible to roll "all or part of the lump

sum . . . into the DuPont [SIP]" as provided in DuPont's written

description, DuPont had a duty to inform him of this development

prior to making a fully taxable lump sum distribution. As early as July

4, before Griggs even applied for TPS benefits, DuPont's employ-

ees in the pensions and benefits section learned that at least some por-

tion of Griggs's TPS distribution would not qualify for a rollover. By

September 1994, it knew that Griggs would not likely be able to exer-

cise his election to receive a tax-deferred lump sum payment at all. And, DuPont should have known that Griggs was under the impres-

sion that he could roll the entire lump sum distribution into a tax-

deferred vehicle. Thus, before DuPont distributed the TPS benefit and

tax consequences attached, it knew Ð or should have known Ð that

Griggs expected to receive the benefits of having his TPS benefit paid into a tax-deferred account but that, in fact, he was very much mis-

taken. DuPont should have informed Griggs about this before he

retired and before a fully-taxable benefit check was issued to him. As we earlier alluded, it is critical that Griggs's misunderstanding

was fostered by DuPont's TPS explanation. Had DuPont's general,

written description of the TPS payment options included a more thor-

ough explanation that federal tax law permits only qualified portions

to be rolled over, or that not every employee was eligible for this

option, we might view DuPont's duty to inform in a different light.

In this case, however, DuPont's pamphlet on TPS benefits included

no such explanation and, instead, merely indicated that the beneficia-

ries could choose whether to roll all or part of their lump sum benefit

into DuPont's SIP. We are not impressed by the admonishment

appearing on the reverse side of the TPS application form (warning

applicants to seek tax advice) since it does not explain that an appli-

cant needs to consult a tax expert to determine if he or she is even eli-

gible to make this election. 3 Also, such a warning might have more

force if DuPont, during the course of processing Griggs's application,

had not learned that Griggs's TPS distribution would not qualify for

the tax-deferred SIP. But, once DuPont actually learned that there was

a problem that threatened to cut substantially into the benefits Griggs

thought he would receive, the particular language on the back of the

application form did nothing to correct Griggs's obvious misunder-

standing. Cf. Eddy , 919 F.2d at 751 ("`A beneficiary, about to plunge

into a ruinous course of dealing, may be betrayed by silence as well

as by the spoken word.'" (quoting Globe Woolen Co. v. Utica Gas &

Electric Co. , 121 N.E. 378, 380 (N.Y. 1918) (Cardozo, J.)).

DuPont complains that it would be impractical for it to notify bene-

ficiaries like Griggs, given the vast number of pension plan partici-

pants who would potentially elect to participate in TPS or a similar

program. We do not perceive any tremendous hardship. DuPont need

not have rendered any tax advice ; rather, it needed only to notify

Griggs that, during the processing of Griggs's TPS application,

DuPont learned that the tax code may prevent him from taking the

We note in passing that even if Griggs somehow knew that his eligi-

bility for a rollover election was an issue and decided that expert advice

was necessary, Griggs's own expert could not perform the necessary cal-

culations unless DuPont first supplied the relevant data.

rollover option that he selected. 4 Armed with that information, Griggs

could have made a more informed choice about the form of payment

that he wished his TPS benefit to take or about whether he would

even participate in the TPS program. One wonders how inconvenient

carrying out such a duty to inform could be since DuPont had already

performed all of the necessary calculations.

In Farr II the Ninth Circuit rejected an employer's claim that it sat-

isfied its fiduciary duty to inform when it provided a substantially

similar Ð but even more thorough Ð written explanation of its early

retirement benefit options. In Farr II , U.S. West sent a written over-

view of its early retirement incentives program to employees who

were eligible to participate. The overview contained a section entitled

"`Tax Considerations Affecting Choice of Distribution'" that identi-

fied tax provisions "relevant to the choice between taking the pension

benefits in a lump sum or in a series of monthly installments." Farr

II , 151 F.3d at 911. The overview warned eligible employees that the

tax implications of the distribution of benefits were complicated and

admonished potential participants to consult with a tax advisor.

Finally, the overview explained that part or all of the lump sum pay-

ment "`may be rolled over to another qualified plan or an IRA within

days without any current tax liability;'" but "[t]he booklet did not

say that only qualified portions of the lump sum distributions could

be rolled over, and that everything else would be taxed." Id. 5 The

plaintiffs, long-time employees of U.S. West, decided to participate

in the early retirement program, and opted to receive their early retire-

ment benefits in a lump sum. They attempted to roll the lump sum

distribution into their individual accounts, only to discover that just

qualified portions of their distributions could be rolled over. Thus, the

plaintiffs incurred a significant and immediate tax. Or, DuPont could have explained that the TPS rollover option was not

automatically available to all employees and that the tax code limited the

ability of some highly-compensated employees to enjoy this option.

However, U.S. West provided a telecast to employees addressing the

early retirement program. The program indicated that only "a `qualified

portion of the lump-sum distribution' could be rolled over into an IRA,"

but did not elaborate further. Farr II , 151 F.3d at 912.

The plaintiffs contended that U.S. West breached its fiduciary duty

pursuant to ERISA § 404 "by providing them with incomplete, false,

and misleading information regarding the tax consequences of their

lump sum distributions." Id. at 912. The Farr II panel agreed that U.S. West had breached its fiduciary duty by failing "to provide suffi-

ciently detailed information" to put the plaintiffs on notice of the

potentially adverse tax consequences and, generally speaking, who

might be affected. See id. at 915. The court concluded that U.S. West

should have explained to employees the difference between

excess lump sum benefits that cannot be "rolled over" into

IRAs and are therefore subject to immediate taxation and

qualified benefits which can be "rolled over" without imme-

diate taxation. [U.S. West's] fiduciary duties also required

[it] to explain more specifically what categories of employ-

ees would be likely to be affected by the § 415 limitations,

such as employees expecting larger amounts of financial

benefits. With this information, individual employees would

be alerted that they themselves might face adverse tax con-

sequences and could make informed decisions about

whether they needed to seek professional tax advice.

Id. 6 The Farr II court made clear, however, that U.S. West's duty to

inform did not extend to "individualized notice of all the ways the tax

laws would impact each of [the plaintiffs'] individual distributions."

Id. DuPont has tried to frame the issue as whether it had a duty to give,

on its own initiative, individualized notice to Griggs of all of the

potential tax consequences of his election Ð an idea that Farr II

rejected. As previously stated, we view the issue differently. Griggs

decided to retire early because he believed he could receive a substan-

tial lump-sum benefit that, according to DuPont's written description,

could be rolled over into his SIP account on a tax-deferred basis, and

Ultimately, the court determined that ERISA did not provide a rem-

edy for the wrong suffered by the plaintiffs; however, the court declined

to expressly address whether reinstatement Ð the remedy that Griggs

seeks Ð is an available remedy under ERISA. See Farr II , 151 F.3d at

.

Griggs so opted. However, DuPont determined that, because of the

limitations imposed by section 415, Griggs was not eligible for the

option he selected. Thus, the question is whether DuPont had a fidu-

ciary obligation to pass this information along to Griggs before it sim-

ply distributed the money and Griggs incurred tax liability that he had

opted to avoid. We answer that question affirmatively, and conclude

that DuPont failed to discharge that duty. IV. Finally, we address the district court's conclusion that, despite

DuPont's breach of duty, Congress provided no remedy under

ERISA. Originally, Griggs sought a number of various remedies;

however, Griggs has now whittled down his claim to a single remedy.

He wishes to be returned Ð to be "reinstated" Ð to the pre-election

position he occupied prior to September 1994. Observing that rein-

statement "would require Griggs to return the TPS payment he

received, as well as any profit thereon which would have enured to

the Plan had Griggs not accepted the early retirement package," the

district court concluded that "`reinstatement' and return of the parties

to the pre-September, 1994, status quo is not feasible." J.A. 293.

Griggs seeks relief under ERISA § 502(a)(3) which provides: "A

civil action may be brought . . . by a participant, beneficiary, or fidu-

ciary (A) to enjoin any act or practice which violates any provision

of this subchapter or the terms 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."

U.S.C.A. § 1132(a)(3) (emphasis added). By this provision, Con-

gress provided individual beneficiaries with an avenue to seek equita-

ble relief for a breach of fiduciary duty under ERISA. See Varity , 516

U.S. at 507-15. The trick comes in determining what qualifies as "ap-

propriate equitable relief."

The phrase "appropriate equitable relief" encompasses "those cate-

gories of relief that were typically available in equity (such as injunc-

tion, mandamus, and restitution, but not compensatory damages)."

Mertens v. Hewitt Assocs. , 508 U.S. 248, 256 (1993). In considering

what kind of remedies would typically be categorized as equitable in nature, the Supreme Court looked to "virtually identical language in

Title VII of the Civil Rights Act of 1964 . . . where the phrase `any

other equitable relief as the court deems appropriate' was held to limit

recovery to back pay, injunctions and other equitable remedies and

not to allow `awards for compensatory or punitive damages.'" Hemelt

v. United States , 122 F.3d 204, 207 (4th Cir. 1997); see Mertens , 508

U.S. at 255. The question, then, is whether the remedy Griggs seeks

Ð reinstatement to the status quo Ð is a kind typically available in

equity. We believe it is. Contrary to DuPont's suggestion, Varity provides guidance Ð

albeit general Ð on this issue. In Varity , a group of individual plain-

tiffs sought relief under section 502(a)(3) after they were defrauded

by the parent company of their employer into leaving their employ-

ment, relinquishing their medical and nonpension benefits, and trans-

ferring to another subsidiary that turned up insolvent and unable to

make good on its benefit plan. The plaintiffs argued that if not for the

breach of fiduciary duty, they would not have left their original

employer and would have been receiving benefits under its plan. See

Howe v. Varity Corp. , 36 F.3d 746, 754-55 (8th Cir. 1994). The

Eighth Circuit Court of Appeals determined that section 502(a)(3)

entitled the plaintiffs "to an injunction reinstating them as members

of [their original employer's] Welfare Benefits Plan under the terms

of that plan as it existed at the time of retirement," id. at 756, a con-

clusion that the Supreme Court affirmed, see Varity , 516 U.S. at 515.

Moreover, reinstatement is clearly among the forms of "other equi-

table relief" permitted under Title VII, see 42 U.S.C.A. § 2000e-5(g)

(providing that a court that determines that an employer has violated

Title VII may "order such affirmative action as may be appropriate"

including "reinstatement or hiring of employees, with or without back

pay . . . , or any other equitable relief as the court deems appropri-

ate"). We are aware of the significant problems that would result from

drawing analogies between ERISA and Title VII; however, for the

limited purpose of deciding what constitutes "appropriate equitable

relief" under ERISA, we are satisfied that the use of nearly identical

language in Title VII sheds light on the subject. See Mertens , 508

U.S. at 255; Hemelt , 122 F.3d at 207-08. We believe that reinstate-

ment, as a general equitable concept, is within the range of redress

permitted by the phrase "other appropriate equitable relief."

However, even if the redress sought by a beneficiary under ERISA

§ 502(a)(3) is a classic form of equitable relief, it must be appropriate

under the circumstances. For example, such relief is not "appropriate"

equitable relief "where Congress elsewhere provided adequate relief

for a beneficiary's injury" and there is "no need for further equitable

relief." Varity , 516 U.S. at 515. 7 Or, for instance, reinstatement might

not be appropriate equitable relief within the Title VII context where

circumstances have changed substantially such that reinstatement

would require removing an current employee. Cf. Spagnuolo v. Whirl-

pool Corp. , 717 F.2d 114, 121 (4th Cir. 1983) (explaining that district

court's authority to fashion equitable relief under the ADEA "does

not . . . extend to ordering the displacement or bumping of incumbent

employees.").

The district court held that ERISA provided no equitable relief for

Griggs based on the conclusion that the "return" and "reinstatement"

of the parties to their pre-election positions was "not a viable alterna-

tive." J.A. 293. The court, however, did not specifically explain why

the reinstatement or return of the parties was not a viable option and

why reinstatement would not be "appropriate" equitable relief under

ERISA § 502(a)(3), other than to point out that if Griggs were rein-

stated he would be required to return his TPS benefit. Moreover, it is

not apparent from the record whether the district court was addressing

reinstatement to Griggs's position of employment, reinstatement

under the plan such that Griggs could make another TPS distribution

option, or both. We understand Griggs's claim to encompass both

possibilities.

We are not convinced that Griggs is simply without an equitable

remedy under ERISA. Although we agree that there may well be facts

Of course, in this case Griggs's breach of fiduciary duty claim is rem-

edied under section 502(a)(3), or it is not remedied at all. Griggs cannot

recover "benefits due" under section 502(a)(1), see 29 U.S.C.A. § 1132(a)(1), because when he received his lump sum payment, he

received all that he was entitled to receive from DuPont Ð there are no

outstanding benefits. And, Griggs cannot recover under subsection

  (a)(2), see 29 U.S.C.A. § 1132(a)(2), because that provision does not

provide remedies for individual ERISA beneficiaries. See Russell , 473

U.S. at 144.

that make the return of the parties to their pre-election positions inap-

propriate, we are not able to determine why the district court found

such relief to be inappropriate, and, on this record, we are not able to

make the determination in the first instance.

Thus, we remand for further factual development with respect to

whether the reinstatement of the parties to the pre-election status quo

is appropriate. In determining whether such relief is appropriate, the

district court's consideration should be broader than the question of

whether it would be appropriate, or even possible at this point, to rein-

state Griggs to his job. The district court should also consider whether

it would be appropriate, or even possible, to return Griggs to his pre-

election position so that he could make an alternate TPS distribution

election. In either event, we note that because reinstatement is equita-

ble in nature, Griggs is not entitled to a windfall; if he is reinstated,

we agree with the district court that he must return his TPS benefit.

Indeed, Griggs concedes that he would be required to return at least

part of his TPS distribution. We will leave it to the sound discretion

of the district court to consider the subtleties that will surely arise,

including what portion of Griggs's benefit he must return if equitable

relief is appropriate, i.e. , on whom the loss occasioned by the tax lia-

bility should fall. V. In sum, we conclude that the district court properly determined that

Griggs's negligent misrepresentation claim is preempted by ERISA.

We likewise affirm the district court's determination that DuPont

breached its fiduciary duty to Griggs under ERISA. However, we

conclude that the return or reinstatement of the parties to their pre-

election positions is not necessarily an inappropriate remedy under

these circumstances, and we remand for the district court to further

develop this issue. AFFIRMED IN PART, VACATED IN PART, AND REMANDED