ERISA Retaliation Claims: Avoiding Potential Employer Pitfalls
Most employers and human resources professionals are well aware of the various federal discrimination statutes, including Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, and the Age Discrimination in Employment Act. Less well-known are the employee protections found in Section 510 of the Employee Retirement Income Security Act of 1974 (ERISA). Section 510 prohibits an employer from discriminating against an employee (1) in order to prevent the employee from receiving ERISA-protected employment benefits or (2) in retaliation for the employee's use of his employment benefits.
If an employer provides health insurance, long- or short-term disability benefits, pension plans, or other benefits to its employees, then those benefits may be protected by ERISA. Section 510 states that it is unlawful for an employer to "discharge, fine, suspend, expel, discipline, or discriminate against" an employee for exercising his ERISA-protected benefits or in order to interfere with an employee's use of ERISA-protected benefits.
Section 510 claims can arise in a number of scenarios and are often filed in connection with other employment claims. For example, if an employer terminates an employee after learning that the employee is about to incur significant medical bills on the employer-sponsored healthcare plan, then the employer may see an ERISA Section 510 claim, in addition to any disability or FMLA discrimination claims. Similarly, if an employer terminates an employee whose pension benefits are close to vesting, the employer may see an ERISA Section 510 claim, in addition to a possible age discrimination claim.
ERISA Section 510 claims may also arise when an employer:
Attempts to reclassify employees as independent contractors, who would not be entitled to benefits (see In re Allstate Ins. Co., 400 F.3d 505, 506 (7th Cir. 2005)); Closes a plant with the alleged motivation of depriving employees of benefits (see Crawford v. TRW Automotive U.S...
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