Circuit Judge Terence T. Evans died on August 10, 2011, and



did not participate in the decision of this case, which is being

resolved by a quorum of the panel under 28 U.S.C. § 46(d).

In the

United States Court of Appeals

For the Seventh Circuit

No. 10-2272

MYLA NAUMAN, JANE ROLLER,

and MICHAEL LOUGHERY,

Plaintiffs-Appellants,

v.

ABBOTT LABORATORIES and HOSPIRA, INC.,

Defendants-Appellees.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 04 C 7199—Robert W. Gettleman, Judge.

ARGUED JUNE 6, 2011—DECIDED FEBRUARY 3, 2012

Before KANNE, EVANS , and SYKES, Circuit Judges.



SYKES, Circuit Judge. Abbott Laboratories decided to

“spin” its Hospital Products Division (“HPD”), creating

a separate company called Hospira. Prior to the spin,
2 No. 10-2272

HPD employees had access to Abbott’s pension plan.

After the spin, however, HPD employees became employees of Hospira, which did not offer a pension plan

but instead offered an enhanced 401(k) plan with an

employer-matching provision. The terms of the spin

included reciprocal no-hire policies, meaning that for

two years post-spin, Abbott would not hire Hospira

employees or retirees, and Hospira would not hire

Abbott employees or retirees. Thus, when HPD employees ceased employment with Abbott and became

employees of Hospira, their nonvested pension rights

in the Abbott plan were eliminated. In addition,

retirement-eligible HPD employees were effectively

prevented from retiring from Abbott before the spin

to begin collecting an Abbott pension, then joining

Hospira.

The named plaintiffs here represent a certified class

of Abbott employees terminated (though reemployed

by Hospira) as a result of the spin. They alleged that

Abbott violated § 510 of the Employee Retirement

Income Security Act (“ERISA”) by using the spin and the

no-hire policy to get rid of unwanted pension liability.

They also claimed that Hospira used the no-hire policy

to deter HPD employees from exercising pension

benefits before the spin. Finally, they alleged that

Abbott breached its fiduciary duty by failing to

disclose prior to the spin that Hospira would not offer

pension benefits. After a nine-day bench trial, the district court entered judgment for Abbott and Hospira

on all counts. The plaintiffs appealed.
No. 10-2272 3

We affirm. The § 510 claims failed because Abbott and

Hospira did not act with the requisite intent to interfere

with the plaintiffs’ pension benefits. The district judge

specifically found that employee benefits played no role

in the decision to spin HPD and implement the no-hire

policy, and these findings are not clearly erroneous. The

breach-of-fiduciary-duty claim failed because Abbott

had nothing to do with the Hospira benefits plan and

because Abbott reported truthfully to HPD employees

that their benefits might change after the spin. These

findings, too, are supported by the evidence.

I. Background

Abbott Laboratories is a major pharmaceuticals

company with headquarters in northern Illinois. Its

Hospital Products Division (“HPD”), while well established and profitable, was resource intensive and had

a slow growth rate, whereas Abbott preferred high

growth. On the advice of several financial advisors,

Abbott determined that HPD and Abbott would be

worth more separate than together. So Abbott decided to

“spin” HPD, meaning that HPD would become its own

company, to be called Hospira, with each Abbott shareholder receiving pro rata shares of the new company.

Abbott approved the spin in June 2003 and announced

it publicly two months later. The spin would take place

on April 30, 2004, and Hospira would be live the next

day. In the announcement Abbott stated that HPD employees would remain on Abbott’s various benefits

plans until the spin. After the spin the new Hospira
4 No. 10-2272

employees would continue to receive the same benefits

through a transitional plan set up by Abbott but managed

by Hospira until the end of 2004. At that point Hospira

employees would receive benefits through a not-yetcreated Hospira plan, which Hospira management

would design post-spin.

Critical to the success of the spin was retaining the

roughly 15,000 HPD employees at Hospira. As a result

and consistent with external advice, Abbott: (1) prohibited

HPD employees tapped for Hospira from transferring

within Abbott; (2) announced that for two years after

the spin, Abbott would not hire anyone who left

Hospira; and (3) announced that for two years after the

spin, Hospira would not hire anyone who left Abbott.

The question then arose whether an exception would be

made for retirement-eligible HPD employees. Specifically, could these employees retire from Abbott, begin

receiving their pensions, and then join Hospira? Ultimately, Abbott announced pre-spin that this would not

be possible. This decision was made for several reasons.

First, Abbott’s tax advisors believed it would violate

tax law and therefore cause the relevant benefits plans

to lose their tax-deferred status. Another reason had to

do with productivity: Some employees receiving both a

pension and a salary for the same job might not work

as hard.

Even more critical to the success of the spin was retaining certain HPD executives at Hospira. Retention

bonuses are common in these circumstances. Abbott’s

benefits plan offered a valuable retiree medical program,
No. 10-2272 5

providing medical benefits to vested employees even

after leaving Abbott. Pre-spin, it was unknown whether

Hospira would offer a similar benefit, which was unsettling to five key HPD executives who were not yet

vested in the plan. To allay their concerns and provide

a retention incentive, Abbott simply gave the executives

retention bonuses in an amount equal to their expected

future medical claims.

After the spin Hospira approved a benefits plan that

did not offer pension or retiree medical benefits. Instead,

the Hospira plan offered an enhanced 401(k) plan with

generous employer-matching provisions.

HPD-turned-Hospira employees Myla Nauman,

Jane Roller, and Michael Loughery filed this lawsuit on

behalf of themselves and a proposed class of employees

whose employment at Abbott was terminated as a consequence of the spin. They alleged four counts: (I) Abbott

carried out the spin transaction to interfere with the

benefits of HPD employees in violation of § 510 of

ERISA; (II) Abbott designed the no-hire policy to interfere with the benefits of HPD employees in violation

of § 510 of ERISA; (III) Hospira designed the no-hire

policy to interfere with the benefits of HPD-turnedHospira employees in violation of § 510 of ERISA; and

(IV) Abbott and Hospira breached fiduciary duties under

ERISA by failing to disclose material information about

the Hospira benefits plan. The district court certified a
6 No. 10-2272

The class for Counts I, II, and IV was defined as “[a]ll employ- 1

ees of Abbott who were participants in the Abbott Benefit

Plans whose employment with Abbott was terminated . . . as a

result of the spin-off.” For Count III a subclass was certified

and defined as class members “who were eligible for retirement under the Abbott Benefit Plans on the date of their

terminations.” Only Loughery represents the subclass.

class, dismissed Count IV against Hospira because the

1

alleged fiduciary breach occurred prior to its existence,

and denied the parties’ cross-motions for summary judgment. After a bench trial, the court found for the defendants on all claims, entering comprehensive findings of

fact and conclusions of law, which we will discuss in

more detail below.

II. Discussion

The plaintiffs appeal from a judgment entered after a

bench trial; we review factual findings for clear error

and legal conclusions de novo. Kelley v. Chi. Park Dist., 635

F.3d 290, 295 (7th Cir. 2011). A factual finding is clearly

erroneous “only if we are firmly convinced after we

review all of the evidence that a mistake has been

made.” United States v. Hill, 645 F.3d 900, 907 (7th Cir.

2011).

A. ERISA § 510

Section 510 of ERISA, titled “Interference with protected

rights,” states in relevant part:
No. 10-2272 7

The plaintiffs challenge the district court’s conclusion, based 2

on Gross v. FBL Financial Services, Inc., 557 U.S. 167 (2009), that

§ 510 requires but-for causation. Gross interpreted the Age

Discrimination in Employment Act, but we have applied its

reasoning in other contexts. See, e.g., Serafinn v. Local 722,

597 F.3d 908, 915 (7th Cir. 2010) (Labor Management Reporting

and Disclosure Act); Serwatka v. Rockwell Automation, Inc., 591

F.3d 957, 961-62 (7th Cir. 2010) (Americans with Disabilities

Act); Fairley v. Andrews, 578 F.3d 518, 525-26 (7th Cir. 2009)

(§ 1983 First Amendment). In Fairley we said that “unless

(continued...)

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 . . . or for the purpose of interfering

with the attainment of any right to which such participant may become entitled under the plan . . . .

29 U.S.C. § 1140. This provision prohibits retaliation for

the exercise of plan benefits and interference with the

attainment of those benefits. But plaintiffs claiming a

violation of § 510 “must establish more than a loss of

benefits; they must demonstrate that their employers

[acted] with the specific intent of preventing or retaliating for the use of benefits.” Lindemann v. Mobil Oil

Corp., 141 F.3d 290, 295 (7th Cir. 1998). In other words,

employers must have been motivated by “a desire to

frustrate attainment or enjoyment of benefit rights.” Isbell

v. Allstate Ins. Co., 418 F.3d 788, 796 (7th Cir. 2005) (quotation marks omitted).2
8 No. 10-2272

(...continued)

a statute . . . provides otherwise, demonstrating but-for causation is part of the plaintiff’s burden in all suits under

federal law.” 578 F.3d at 525-26. The issue “turns on the language of the statute and the presence or absence of text akin

to that of Title VII which authorizes mixed-motive claims.”

Serwatka, 591 F.3d at 961. Section 510 does not explicitly permit

such claims, so on the strength of this caselaw, but-for causation is probably required. We need not decide the issue, however, because the district judge as the trier of fact specifically

found that a desire to frustrate benefits played no role in the

defendants’ actions, and that finding is not clearly erroneous.

The plaintiffs’ theory is that Abbott wanted to rid

itself of some of its pension liability so it spun HPD,

knowing that Hospira would not provide a similar

plan. On this view the Abbott no-hire policy ensured

that HPD employees could not simply return to Abbott

and retain their pension rights. But after a lengthy

bench trial, the district judge found that “employee

benefits simply had no part of [the decision to spin

HPD].” The plaintiffs have not directly challenged that

finding on appeal, and in any case, it was not clear error.

The judge supported this general finding with many

specific findings relating to witness testimony and documentary evidence. For example, the judge found that

“[e]very witness who testified at trial stated that the

spin decision had nothing to do with employee benefits,” and that “[t]he HPD spin rationale was repeatedly

documented and employee benefits was never once

mentioned as a factor in the spin decision.”
No. 10-2272 9

The plaintiffs also argued that the Hospira no-hire

policy was designed to interfere with employee benefits.

Specifically, the plaintiffs alleged that the policy was

intended to deter retirement-eligible HPD employees

from retiring from Abbott to start the flow of pension

benefits because if they did, they could not subsequently

join Hospira. But the district judge found that “[t]he nohire policy was not ‘motivated by an intention to interfere with any of the employees[’] benefits.’ ” Again, the

plaintiffs have not directly challenged that finding on

appeal, and again, it was not clear error. The judge

found that the no-hire policy was created to promote

stability and productivity at both companies post-spin;

these findings are well supported by the evidence.

On appeal the plaintiffs change course and argue that

the companies discriminated against Abbott retirees by

colluding to preclude their employment at Hospira. As

we have explained, under the no-hire policy, Hospira

would refuse to hire Abbott retirees. The companies

adopted the policy because (among other reasons) they

thought that allowing employees to collect a retirement

pension from Abbott and a full salary from Hospira for

the very same job could lead to productivity problems.

The plaintiffs assert that these facts suggest discrimination based on an invidious stereotype that retirees are lazy.

This new theory sounds like a claim of discriminatory

failure to hire, which is unusual in the § 510 context.

Regardless, this case is an improper vehicle for such a

claim because the named plaintiffs did not retire from

Abbott and were in fact hired by Hospira. So the argu-
10 No. 10-2272

ment must be that the companies used the threat of discrimination—as embodied in Hospira’s no-hire policy—

o deter HPD employees from retiring. But this leads us

back to the district judge’s finding that the no-hire

policy was not motivated by an intent to interfere with

employee benefits. In short, however the argument is

framed, the fundamental problem is that § 510 requires

a specific intent, proof of which is lacking here. See

Isbell, 418 F.3d at 796; Lindemann, 141 F.3d at 295.

B. Breach of Fiduciary Duty

“A claim for breach of fiduciary duty under ERISA

is only valid against a ‘fiduciary.’ ” Baker v. Kingsley, 387

F.3d 649, 660 (7th Cir. 2004). A “fiduciary” is “a person

who exercises authority or discretion over the administration of a plan, but only when performing those functions.” Beach v. Commonwealth Edison Co., 382 F.3d 656,

658 (7th Cir. 2004) (citing 29 U.S.C. § 1002(21)(A)); see also

Pegram v. Herdrich, 530 U.S. 211, 226 (2000) (“In every

case charging breach of ERISA fiduciary duty, . . . the

threshold question is . . . whether [the defendant] was

acting as a fiduciary (that is, was performing a fiduciary

function) when taking the action subject to complaint.”).

Thus, fiduciary duties are “plan-specific.” Beach, 382

F.3d at 658.

The plaintiffs alleged that prior to the spin, Abbott

helped create the Hospira benefits plan and thus had a

fiduciary duty to disclose the Hospira plan’s details to

employees. They claimed that instead of disclosing what
No. 10-2272 11

it knew, Abbott misled employees into believing that

the Hospira plan would be similar to the Abbott plan.

The district judge made several factual findings that

defeated this claim. Specifically, the judge found that prespin, Abbott consistently told employees that Hospira

would set up its own employee-benefits plan and that

its benefits could be entirely different from Abbott’s. The

judge also found that consistent with these representations, Hospira indeed made its own decisions regarding

employee benefits after the spin. Accordingly, the

judge concluded that Abbott owed no duty to the plaintiffs with respect to the Hospira plan. Even assuming

otherwise, the judge found that Abbott committed

no breach because its communications were entirely

truthful.

The plaintiffs dispute that Hospira made its own decisions about benefits after the spin. This argument is

based on an inference they invite us to draw from

Abbot’s decision to offer executive retention bonuses. As

we have noted, several key HPD executives were paid

retention bonuses in an amount equal to the value of

Abbott’s retiree medical program, a benefit that Hospira

ultimately did not offer. The plaintiffs argue that this

evidence suggests that Abbott knew the details of the

Hospira plan before the spin took place.

But the district judge made specific findings rejecting

this exact argument. The judge found that at the time of

the bonus decisions, Hospira’s benefits plan had not yet

been created, so it was unknown whether Hospira

would offer retiree medical benefits. This was a concern
12 No. 10-2272

to the executives who were not yet vested in the retiree

medical program. Abbott’s decision to offer executive

retention bonuses was a response to this uncertainty.

That is, to offset the fears of key executives and provide

an incentive for them to remain, Abbott simply gave

retention bonuses equal to the benefits’ future value. The

judge’s findings on this point are supported by the testimony of Abbott executives and are not clearly erroneous.

Because the plan was created by Hospira after the spin

and without input from Abbott, the conclusion that

Abbott had no fiduciary duty with respect to the plan

naturally follows. See 29 U.S.C. § 1002(21)(A); Beach,

382 F.3d at 658.

Assuming the existence of a fiduciary duty, the judge

also found that Abbott committed no breach because

it did not materially misrepresent anything about the notyet-developed Hospira plan. Abbott told employees

that Hospira would create its own benefits plan after

the spin and that the Hospira plan could be entirely

different from the Abbott plan. Those statements were

entirely true; nothing in the record suggests otherwise.

AFFIRMED.

2-3-12