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July 16, 2010
Were Complaints Not ‘Formal’ Enough?
A Pennsylvania construction company employee complained that her employer was administering its healthcare plan in several ways that violated ERISA (the Employee Retirement Income Security Act). In response, the employer fired her. She sued, charging retaliation.

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What happened. “Evans” was working for A.H. Cornells, a family-owned company, when she complained to the owner and a manager that the organization’s health plan was being run unlawfully. (The opinion in this case does not tell us what her job was or how long she had been with the company.) Evans charged that the plan (a) discriminated (we don’t know what kind of bias she alleged), (b) that some employees were given falsely high premium figures, allegedly to discourage them from participating, and that (c) workers who were not U.S. citizens were enrolled under false Social Security numbers.

She was promptly fired and took the company to court. In federal district court, the employer argued that in order for complaints about ERISA violations to be protected from retaliation, they must be part of an “inquiry or proceeding” (ERISA Section 510). The judge agreed and dismissed Evans’s charge; she appealed to the 3rd Circuit, which covers Delaware, New Jersey, and Pennsylvania.

What the court said. Appellate judges first noted that a number of other circuits have considered Section 510 in order to decide the same issue—whether certain kinds of complaints are protected. They noted this split: The 5th (LA, MS, TX) and 9th (AK, AZ, CA, HI, ID, MT, NV, OR, WA) Circuits have held that the law “encompasses unsolicited internal complaints,” while the 2nd (CT, NY, VT), and 4th (MD, NC, SC, VA, WV) Circuits have ruled it does not.

The 9th Circuit ruling noted that employees complaining of ERISA violations would normally voice their claims initially to plan managers, rather than waiting for an inquiry or proceeding that might not happen. But the 4th Circuit later drew the opposite conclusion, ruling that ERISA’s antiretaliation provision resembles that of the Fair Labor Standards Act rather than those of civil rights laws. Reasoning that Congress could have stipulated broad antiretaliation provisions in the law, judges joined the 2nd and 4th Circuits in deciding that Evans’s complaints were not protected. Her case was again dismissed. Edwards v. A.H. Cornells, U.S. Court of Appeals for the 3rd Circuit, No. 09-3198 (6/24/10).

Point to remember: The U.S. Secretary of Labor filed a friend-of-the-court brief supporting this plaintiff’s case, which seems further to deepen the circuit split on this issue. We can hope that at some point, the Supreme Court will accept a case and make a decision that resolves the disagreement.

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