United States Court of Appeals 

For the First Circuit 

No. 18-2127 

MARCO MARTINEZ, 

Plaintiff, Appellant, 

v. 

SUN LIFE ASSURANCE COMPANY OF CANADA, 

Defendant, Appellee. 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF MASSACHUSETTS 

[Hon. Leo T. Sorokin, U.S. District Judge] 

Before 

Torruella, Lipez, and Kayatta, 

Circuit Judges. 

R. Joseph Barton, with whom Colin M. Downes and Block & 

Leviton LLP were on brief, for appellant. 

 Mark Schmidtke, with whom Diane M. Saunders, David L. 

Schenberg, and Ogletree, Deakins, Nash, Smoak & Stewart, P.C. were 

on brief, for appellee. 

January 27, 2020 

	
- 2 - 

LIPEZ, Circuit Judge. Appellant Marco Martinez 

challenges the decision by Sun Life Assurance Company of Canada 

("Sun Life") to offset his benefits under its employer-sponsored 

long-term disability insurance policy ("the Plan") by the amount 

of his service-connected disability compensation ("Veterans' 

Benefits"). The district court found that Sun Life properly 

interpreted the language of the Plan to permit the offset and 

entered judgment for Sun Life on all counts. 

Martinez argues that the district court erred in two 

primary ways: by concluding as a matter of law that Veterans' 

Benefits unambiguously qualify as a form of "Other Income Benefit" 

covered by the Plan's offset provision, and by rejecting as a 

matter of law that Sun Life's offset determination was motivated, 

at least in part, by his military service in violation of the 

Uniformed Services Employment and Reemployment Rights Act 

("USERRA"). 

After careful review of the facts and law, we affirm. 

I. 

A. Factual Background 

 The relevant facts are undisputed by the parties. 

Martinez is a disabled veteran who suffers from multiple sclerosis. 

He was honorably discharged from the United States Army in 1992. 

In September 2010, Martinez began work for the Athens Group and 

later became a participant in its employee welfare benefit plan, 
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which included long-term disability benefits provided pursuant to 

an insurance policy issued by Sun Life and governed by the Employee 

Retirement Income Security Act of 1974 ("ERISA"). In November 

2012, when his health deteriorated, Martinez submitted a claim to 

Sun Life for long-term disability benefits. Sun Life approved his 

claim. Under the Plan, Martinez was entitled to monthly benefit 

payments calculated at sixty percent of his total monthly earnings, 

less any "Other Income Benefits." "Other Income Benefits," as 

defined by the Plan, include the following: 

Other Income Benefits are those benefits 

provided or available to the Employee while a 

Long Term Disability Benefit is payable. 

These Other Income Benefits, other than 

retirement benefits, must be provided as a 

result of the same Total or Partial Disability 

payable under this Policy. Other Income 

Benefits include: 

1. The amount the Employee is eligible for 

under: 

 a. Workers' Compensation Law; or 

 b. Occupational Disease Law; or 

 c. Unemployment Compensation Law; or 

 d. Compulsory Benefit Act or Law; or 

e. any automobile no-fault insurance 

 plan; or 

 f. any other act or law of like intent. 

. . . 

6. The disability or retirement benefits 

under the United States Social Security Act, 

or any similar plan or act, as follows: 

a. Disability benefits the Employee is 

 eligible to receive. 
- 4 - 

 After Martinez had been receiving long-term disability 

benefits under the Plan for nearly a year, he submitted a claim in 

November 2013 to the United States Department of Veterans' Affairs 

("the VA") for service-connected disability compensation pursuant 

to the Veterans' Benefits Act, 38 U.S.C. § 1110. The VA awarded 

Martinez Veterans' Benefits in January 2015, retroactive to July 

19, 2013, based on a number of health conditions caused or 

aggravated by his military service, including multiple sclerosis. 

Martinez promptly notified Sun Life that his claim for Veterans' 

Benefits had been granted. By letter dated March 25, 2015, Sun 

Life informed Martinez that his Veterans' Benefits were considered 

"Other Income Benefits" subject to offset under the Plan and, as 

a result, his monthly Plan benefits would be decreased from $2,500 

to $465. Sun Life also sought reimbursement of $32,560 for past 

overpayments. In describing Martinez's Veterans' Benefits as 

"Other Income Benefits," the letter excerpted the entire "Other 

Income Benefits" section of the Plan1 without further specifying 

which provision authorized the offset. The letter also notified 

Martinez of his right to appeal Sun Life's decision. 

 Martinez responded by asking Sun Life for clarification 

of which "Other Income Benefits" provision it relied upon for its 

decision. Sun Life referred Martinez to Sections 1.f and 6 of the 

 1 We provide the complete "Other Income Benefits" section of 

the Plan as an Appendix to this opinion. 
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Plan, quoting both Section 1 and Section 6 in full. Sun Life's 

letter bolded the language "any other act or law of like intent" 

in subsection 1.f and "or any similar plan or act" in Section 6. 

Martinez then submitted a formal appeal of Sun Life's decision, 

asserting various reasons for the exclusion of Veterans' Benefits 

as "Other Income Benefits" under the Plan, including that such 

benefits are not "compulsory" under Section 1.d. 

 In its letter denying Martinez's appeal, Sun Life again 

quoted the entire "Other Income Benefits" section of the Plan and 

stated: 

Other Income Benefits are defined by the 

policy, as noted above. Specifically, Veteran 

Benefits would be considered disability or 

retirement benefits under the United States 

Social Security Act, or any similar plan or 

act or any other act or law of like intent. 

You are receiving Veteran Benefits due to a 

service connection for multiple sclerosis with 

the loss of use of both feet. You are 

receiving Long Term Disability benefits 

because of your multiple sclerosis diagnosis. 

Because you are being paid Veteran Benefits, 

as a result of your disability, the Veteran 

Benefits are considered Other Income. 

The letter cited a number of federal cases supporting its decision, 

including Holbrooks v. Sun Life Assurance Co. of Canada, 570 F. 

App'x 831 (10th Cir. 2014), which held that service-connected 

disability benefits are awarded under a "Compulsory Benefit Act or 

Law" pursuant to the same policy language as set forth in the Plan. 
- 6 - 

See id. at 835. After receiving Sun Life's letter denying his 

appeal, Martinez filed the instant action. 

B. Procedural History 

 Martinez's complaint asserts seven counts: Count I 

alleges discrimination based on service in the military in 

violation of USERRA, 38 U.S.C. § 4311; Count II seeks benefits 

pursuant to ERISA, 29 U.S.C. § 1132(a)(1)(B); Count III alleges 

that Sun Life breached its fiduciary duty in violation of ERISA, 

29 U.S.C. § 1104(a)(1)(A), (B), and (D); Count IV alleges cofiduciary liability in violation of ERISA, 29 U.S.C. § 1105(a); 

Count V alleges violation of the Veterans' Benefits Act, 38 U.S.C. 

§ 5301(a); Count VI seeks declaratory and injunctive relief under 

ERISA, 29 U.S.C. § 1132(a)(3), and 28 U.S.C. §§ 2201-02; and Count 

VII alleges knowing participation in a fiduciary breach by a nonfiduciary in violation of ERISA, 29 U.S.C. § 1132(a)(3). Sun Life 

filed a motion to dismiss, see Fed. R. Civ. P. 12(b)(6), which the 

district court denied without prejudice, instructing the parties 

to compile and file the administrative record regarding Martinez's 

ERISA benefit claim (Count II). After Sun Life submitted its 

complete claim file and applicable policy documents, Martinez 

moved for discovery on Count II. The district court denied the 

motion, stating that Martinez had not "overcome the strong 

presumption against discovery" in ERISA cases. 
- 7 - 

 Sun Life then filed a motion for summary judgment on 

Count II, arguing that Martinez's Veterans' Benefits are "Other 

Income Benefits" and thus subject to offset as a matter of law 

because he receives them pursuant to a "Compulsory Benefit Act or 

Law" and "an act or law of like intent" to Workers' Compensation 

Law, both of which it contended are unambiguous terms within the 

Plan. In granting the motion, the district court held that the 

term "Compulsory Benefit Act or Law" unambiguously includes 

Veterans' Benefits like those awarded to Martinez. The court did 

not address the additional argument that Martinez's Veterans' 

Benefits also are awarded under "an act or law of like intent" to 

Workers' Compensation Law. 

 The district court then ordered the parties to file a 

joint report proposing a plan for resolving the remaining issues 

in the case. The parties proposed treating Sun Life's previously 

filed motion to dismiss as a motion for judgment on the pleadings. 

After briefing on the motion was complete, the court granted 

judgment for Sun Life on all remaining counts. The court held 

that Sun Life did not violate USERRA because Martinez's military 

status was not a motivating or substantial factor in the 

application of the "Other Income Benefits" provision of the Plan. 

The court found that "the plain language of the Plan does not 

distinguish between service members and non-service members;" 

rather, the Plan uniformly permits Sun Life to offset benefits 
- 8 - 

received from third parties for the same disability, including 

Social Security disability benefits, which Martinez was also 

receiving and which had also been deducted from his Plan benefits. 

The district court also found that its prior ruling on Count II, 

concluding that Martinez's Veterans' Benefits were plainly 

included in the "Compulsory Benefit Act or Law" section of the 

Plan, compelled the conclusion that Sun Life did not breach any 

duties under ERISA as a fiduciary (Count III), a co-fiduciary 

(Count IV), or a non-fiduciary (Count VII) when it determined that 

Martinez's Veterans' Benefits were "Other Income Benefits" subject 

to offset.2 This appeal followed. 

II. 

We begin with Martinez's ERISA claims, first addressing 

his appeal of the district court's summary judgment for Sun Life 

on Count II and then its dismissal of the other ERISA counts. 

A. Standards of Review 

We review both a grant of summary judgment and a 

dismissal based on the pleadings de novo. Stamp v. Metro. Life 

Ins. Co., 531 F.3d 84, 87 (1st Cir. 2008) (summary judgment); Mass. 

Nurses Ass'n v. N. Adams Reg'l Hosp., 467 F.3d 27, 31 (1st Cir. 

2006) (judgment on the pleadings). Because Sun Life has not 

identified any language in the Plan granting it discretionary 

 2 The district court also entered judgment on the pleadings 

for Sun Life on Counts V and VI, which Martinez did not appeal. 
- 9 - 

authority to construe the terms of the Plan, we also review Sun 

Life's ERISA benefits determination de novo. See Firestone Tire 

& Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). Where, as here, 

that determination was based solely on the construction of ERISA 

contract language, we may affirm the grant of summary judgment 

"only if the meaning of the language is clear" and "there is no 

genuine issue as to the inferences which might reasonably be drawn 

from the language." Rodriguez-Abreu v. Chase Manhattan Bank, N.A., 

986 F.2d 580, 586 (1st Cir. 1993). 

In reviewing a judgment on the pleadings, we accept the 

non-movant's well-pleaded facts as true and draw all reasonable 

inferences in the non-movant's favor. Mass. Nurses Ass'n, 467 

F.3d at 31. We will affirm a judgment on the pleadings "only if 

the uncontested and properly considered facts conclusively 

establish the movant's entitlement to a favorable judgment." 

Aponte-Torres v. Univ. of P.R., 445 F.3d 50, 54 (1st Cir. 2006). 

B. ERISA Benefits Claim 

Martinez asserts that summary judgment was improper on 

Count II based on the "Compulsory Benefit Act or Law" category of 

"Other Benefits." He argues that the district court erred by 

concluding that Sun Life provided adequate notice of its reliance 

on the "Compulsory Benefit Act or Law" provision to justify its 

offset of his Veterans' Benefits, and by finding that the phrase 
- 10 - 

"Compulsory Benefit Act or Law" unambiguously covers Veterans' 

Benefits. We address these contentions in turn. 

 1. Compliance with ERISA Notice Requirement 

Our initial task is to determine whether Sun Life's 

alleged failure to clearly disclose in its letters to Martinez 

that it relied upon the "Compulsory Benefit Act or Law" provision 

for the offset now precludes it from relying on this rationale in 

litigation. This argument is premised on ERISA's statutory notice 

provision, which requires that an insurer " provide adequate notice 

in writing to any participant or beneficiary whose claim for 

benefits under the plan has been denied, setting forth the specific 

reasons for such denial, written in a manner calculated to be 

understood by the participant." 29 U.S.C. § 1133(1). 

Sun Life's communications to Martinez complied with this 

mandate. Although Sun Life at times highlighted other rationales 

for the offset, it indicated to Martinez on multiple occasions 

that it intended to rely on the "Compulsory Benefit Act or Law" 

provision. The provision was included, albeit not emphasized, in 

Sun Life's letter in response to Martinez's request for 

clarification as to Sun Life's rationale for the offset. Likewise, 

Sun Life's final letter denying Martinez's appeal included a 

lengthy discussion of the Tenth Circuit’s Holbrooks decision, 

which relied on the "Compulsory Benefit Act or Law" provision to 

uphold an offset based on a receipt of Veterans' Benefits. Indeed, 
- 11 - 

Martinez clearly understood that the "Compulsory Benefit Act or 

Law" provision was pertinent because he addressed the alleged noncompulsory nature of Veterans' Benefits explicitly in his appeal 

letter. 

Moreover, even if Sun Life had not adequately disclosed 

its rationale to Martinez, barring Sun Life from raising the 

"Compulsory Benefit Act or Law" provision now would not be the 

proper remedy in this case. See Glista v. Unum Life Ins. Co. of 

Am., 378 F.3d 113, 130-31 (1st Cir. 2004) (explaining that under 

ERISA, courts have "an array of possible responses when the plan 

administrator relies in litigation on a reason not articulated to 

the claimant" and that "no single answer fits all cases"). We 

typically have only barred a plan from asserting defenses to 

coverage not articulated to the insured when the lack of notice 

resulted in prejudice to the insured. See Bard v. Bos. Shipping 

Ass'n, 471 F.3d 229, 241-45 (1st Cir. 2006) (barring the plan from 

relying on a rationale not clearly articulated to the insured 

because, if he had been on notice, he would have submitted 

different medical documentation); Glista, 378 F.3d at 132 (same). 

Given that this case is strictly one of contract interpretation 

-- a question of law -- and Martinez has had a full opportunity to 

present his arguments on the construction of the Plan's provisions, 

we could find no prejudice to Martinez even had Sun Life not 
- 12 - 

adequately advanced its present argument in its initial denial.3 

Accordingly, we agree with the district court's decision to 

entertain Sun Life's arguments premised on the "Compulsory Benefit 

Act or Law" provision and will consider those arguments on appeal. 

2. Meaning of "Compulsory Benefit Act or Law" 

 Next, we must determine whether the phrase "Compulsory 

Benefit Act or Law" is ambiguous. If so, pursuant to the doctrine 

of contra proferentem, the term must be construed in favor of 

Martinez, thus barring the offset of his Veterans' Benefits. See 

Troiano v. Aetna Life Ins. Co., 844 F.3d 35, 44 (1st Cir. 2016) 

(holding that ambiguous policy terms must be strictly construed 

against the insurer when its determination is subject to de novo 

review). 

 ERISA-regulated employee benefit plans are interpreted 

according to principles of federal common law. See, e.g., 

 3 For similar reasons, we also reject Martinez's argument that 

the district court abused its discretion when it denied discovery 

on Count II before deciding Sun Life's motion for summary judgment. 

It is unclear how discovery would help elucidate the plain meaning 

of an unambiguous contract term. Martinez's reliance on Taylor v. 

Continental Group Change in Control Severance Pay Plan, 933 F.2d 

1227 (3d Cir. 1991), is inapt. The Taylor court permitted 

discovery in a different procedural posture: after finding that 

a term in an ERISA-governed severance plan was ambiguous, it 

remanded the case, instructing the district court to consider 

interpretive statements, past practices, and other evidence 

bearing on the parties' understanding of the relevant term. See 

933 F.2d at 1232-33. At the same time, the court noted that where 

a plan term is unambiguous, it may be interpreted as a matter of 

law, which is exactly what the district court did here. See id. 

at 1232. 
- 13 - 

Filiatrault v. Comverse Tech., Inc., 275 F.3d 131, 135 (1st Cir. 

2001). Under federal common law, plan language should be accorded 

its plain and ordinary meaning based on "commonsense principles of 

contract interpretation." Id. Courts may refer to dictionaries 

to help elucidate the common understanding of terms, although 

dictionary definitions are not controlling. See Littlefield v. 

Acadia Ins. Co., 392 F.3d 1, 8 (1st Cir. 2004). 

 ERISA contract language is ambiguous only "if the terms 

are inconsistent on their face" or "allow reasonable but differing 

interpretations of their meaning." Rodriguez-Abreu, 986 F.2d at 

586. The principle of reasonableness is central to our ambiguity 

analysis -- courts are not permitted to "torture language in an 

attempt to force particular results or convey . . . nuances the 

contracting parties neither intended nor imagined." Burnham v. 

Guardian Life Ins. Co. of Am., 873 F.2d 486, 489 (1st Cir. 1989). 

 Applying these principles, we agree with both the 

district court and the Tenth Circuit in Holbrooks that "[t]here is 

nothing ambiguous about the term 'Compulsory Benefit Act or Law.'" 

Holbrooks, 570 F. App'x at 835; see also Martinez v. Sun Life 

Assurance Co. of Canada, No. 16-CV-12154-LTS, 2018 WL 2163641, at 

*3 (D. Mass. Feb. 14, 2018). The ordinary meaning of "compulsory" 

is "required by a law or rule" or "having the power of forcing 

someone to do something." See, e.g., Compulsory, MerriamWebster's Dictionary Online, https://www.merriam-
- 14 - 

webster.com/dictionary/compulsory (last visited Jan. 23, 2020). 

Accordingly, a "Compulsory Benefit Act or Law" is an act or law 

that requires benefits to be paid to any applicant who meets its 

qualifying criteria. 

 Because the VA was required by law to provide Veterans' 

Benefits to Martinez once it determined his eligibility, his 

Veterans' Benefits are clearly "compulsory." Accord Holbrooks, 

570 F. App'x at 835. The statute governing basic entitlement to 

service-connected disability compensation states that "[f]or 

disability resulting from personal injury suffered or disease 

contracted in line of duty . . . the United States will pay to any 

veteran thus disabled . . . compensation as provided in this 

subchapter." 38 U.S.C. § 1110 (emphasis added). There is no room 

for discretion in this mandate. For this reason, some of our 

sister circuits have referred to Veterans' Benefits as "obligatory 

compensation for injuries to service men and women during military 

duty," Riley v. Sun Life & Health Ins. Co., 657 F.3d 739, 742 (8th 

Cir. 2011), and "nondiscretionary, statutorily mandated benefits," 

Cushman v. Shinseki, 576 F.3d 1290, 1298 (Fed. Cir. 2009). See 

also Hannington v. Sun Life & Health Ins. Co., 711 F.3d 226, 234 

(1st Cir. 2013) (stating that Veterans' Benefits are based solely 

on "diseases and injuries incurred by service personnel on account 

of their military service"). 
- 15 - 

 Ignoring this logic, Martinez asserts that a reasonable 

alternative interpretation of "Compulsory Benefit Act or Law" is 

a law that requires a third party, not the government, to pay 

benefits. Citing two Supreme Court cases that have used the word 

"compulsory" to refer to programs of this nature,4 he contends that 

the "normal use of the word compulsory suggests a third-party is 

compelled, not that one compels oneself to do something." He also 

emphasizes that the other benefits programs listed in subsection 

1 -- workers' compensation, occupational disease compensation, and 

unemployment compensation -- all involve this so-called thirdparty form of compulsion.5

 There are multiple flaws in this argument. First, 

although the Supreme Court has called certain statutes requiring 

workers' compensation and minimum standards of healthcare coverage 

"compulsory," the Court has never suggested that only those 

programs qualify as compulsory. 

 4 See Metro. Life Ins. Co. v. Massachusetts, 471 U.S. 724, 

735 (1985); N.Y. Cent. R. Co. v. White, 243 U.S. 188, 195 (1917). 

5 In fact, workers' compensation law, occupational disease 

law, and unemployment compensation law do not all fit the same 

model of third-party coercion. For example, workers' compensation 

laws compel employers to buy insurance to compensate employees for 

work-related injuries. However, unemployment compensation laws 

compel employers to make financial contributions to a governmentcreated fund, which is ultimately paid out to unemployed 

individuals by the state. See generally 20 C.F.R. §§ 601-604.6. 
- 16 - 

Second, there is nothing in the text of the Plan to 

suggest that a "Compulsory Benefit Act or Law" must be similar in 

form to the third-party model of benefits programs enumerated 

therein. Other subsections of the Plan do include a "similarity" 

requirement -- for example, subsection 6 allows for offset of 

"disability or retirement benefits under the United States Social 

Security Act, or any similar plan or act." However, the 

"Compulsory Benefit Act or Law" provision stands alone without any 

language to link the term to the other programs included in the 

same subsection.6 

Third, by focusing on the form of the specific benefits 

plans identified -- i.e., the particular entity that is compelled 

to pay benefits to qualified individuals -- Martinez elevates form 

over substance. No reasonable reader of the Plan would look at 

the term "Compulsory Benefit Act or Law" and ponder over what 

specific type of entity is being compelled. The essence of a 

 6 Thus, contrary to Martinez's assertion, our decision in 

Hannington that Veterans' Benefits are not "similar to" Social 

Security or Railroad Retirement Act benefits, and hence cannot 

offset disability benefits payable under a Sun Life long-term 

disability plan, does not control the outcome of this case. See 

Hannington, 711 F.3d at 234. Although the plan in Hannington did 

contain a provision allowing for offset of "disability benefits 

under any compulsory benefit act or law," the insurer did not rely 

on that provision for its offset of the plan participant's serviceconnected disability benefits. Id. at 228-29, 235. As such, we 

had no occasion to opine on the application of that provision to 

Veterans' Benefits. See Glista, 378 F.3d at 128 (explaining that 

judicial review is limited to the asserted basis for the insurer's 

decision). 
- 17 - 

compulsory benefit law is that some entity -- be it an employer, 

an insurance company, or a government agency -- is required by law 

to pay the benefit to all qualified applicants.

We also reject Martinez's contention that "Compulsory 

Benefit Act or Law" must be defined in a way that it does not 

render superfluous the listing of workers' compensation law, 

occupational disease law, and unemployment compensation law in 

provisions "a" through "c" of subsection 1 of the Plan. See 

Vendura v. Boxer, 845 F.3d 477, 486 (1st Cir. 2017) (noting the 

"longstanding principle against reading plan terms to be 

superfluous"). The rule against superfluities, as a matter of 

statutory interpretation, is not unwavering -- we apply it only if 

the resulting construction is "rationally possible." See New Eng. 

Carpenters Cent. Collection Agency v. Labonte Drywall Co., 795 

F.3d 271, 282 (1st Cir. 2015). Martinez's urged construction is 

irrational because it would mean that Sun Life cannot use a generic 

description that covers the full range of compulsory benefit 

programs contemplated by the Plan if that generic description also 

encompasses certain programs that are specifically enumerated in 

the Plan. The insurer cannot anticipate every type of program 

that might justify an offset. It can supplement the itemization 

of programs with generic descriptions whose plain meaning will be 

understood by the average plan participant. 
- 18 - 

Finally, contrary to Martinez's argument, the fact that 

the entire term, "Compulsory Benefit Act or Law," is capitalized 

but not explicitly defined in the Plan's definitions section does 

not render it ambiguous.7 Though the parties dispute the reach of 

"Compulsory Benefit Act or Law," both agree that it is an umbrella 

category and does not refer to only one specific act or law. The 

phrase also appears in a list of both capitalized and uncapitalized 

terms, many of which are also undefined but connote a plain 

meaning. Where the only contested word in the phrase -- 

"compulsory" -- has a plain and unambiguous meaning, we cannot 

find the provision ambiguous simply because it is capitalized but 

undefined. 

We thus conclude that the only reasonable interpretation 

of "Compulsory Benefit Act or Law" is a law that requires benefits 

be paid to any applicant who meets its qualifying criteria. 

Martinez's Veterans' Benefits fall squarely within this 

definition.8 

 7 The cases cited by Martinez, Scottsdale Insurance Co. v. 

Torres, 561 F.3d 74 (1st Cir. 2009) and O'Neil v. Retirement Plan 

for Salaried Employees of RKO General, Inc., 37 F.3d 55 (2d Cir. 

1994), create no such per se rule. 

8 Hence, like the district court, we need not consider Sun 

Life's alternative argument that Veterans' Benefits also 

constitute an "act or law of like intent" to "Workers' Compensation 

Law." This argument is premised on subsections 1.a and 1.f of the 

"Other Income Benefits" provision of the Plan. Specifically, 

section 1.f allows for the offset of benefits awarded under "any 

other act or law of like intent" to the previously enumerated laws, 

which include "Workers' Compensation Law" in subsection 1.a. Thus, 
- 19 - 

C. ERISA Breach Claims 

 Martinez also argues that the district court erred in 

dismissing Counts III, IV, and VII, which allege that Sun Life 

breached a fiduciary duty or participated in a fiduciary breach by 

construing the Plan to require offset of his Veterans' Benefits 

and failing to disclose that Veterans' Benefits constitute "Other 

Income Benefits." Martinez's claim for direct breach of fiduciary 

duty (Count III) is based on the Plan itself, while the claims for 

co-fiduciary (Count IV) or non-fiduciary liability (Count VII) are 

premised on the language of the Summary Plan Description ("SPD"), 

drafted by Sun Life and delivered by Martinez's employer and Plan 

sponsor, the Athens Group.9 Finding that all three claims could 

succeed only if Martinez's Veterans' Benefits were not properly 

considered "Other Income Benefits" or not clearly disclosed as 

such, the district court disposed of them in light of its earlier 

ruling that the Plan unambiguously provides for offset of Veterans' 

Benefits. 

 

if Veterans' Benefits were awarded pursuant to a law of like intent 

to workers' compensation law, Sun Life would, for that reason as 

well, be entitled to subtract them from Martinez's ERISA disability 

payment as "Other Income Benefits."

9 Thus, any primary fiduciary liability for Counts IV or VII 

would lie with the Athens Group, and Sun Life could only be liable 

as a co-fiduciary (Count IV) or a non-fiduciary who knowingly 

participated in a fiduciary breach (Count VII). 
- 20 - 

We agree that the fiduciary claims necessarily fail with 

the determination that "Compulsory Benefit Act or Law" 

unambiguously covers Veterans' Benefits. Properly construing and 

following the terms of the Plan does not constitute a breach of 

fiduciary duty.10 

Nor does the language of the SPD provide any basis for 

a claim that the Athens Group breached a fiduciary duty, such that 

Sun Life could be liable for participating in that breach as a cofiduciary or a non-fiduciary. Given that the SPD contained an 

identical definition of "Other Income Benefits" as the Plan, our 

conclusion that the Plan language was unambiguous means that we 

must also conclude that the SPD was "written in a manner calculated 

to be understood by the average plan participant." 29 U.S.C. 

§ 1022(a); see id. (further stating that a summary plan description 

"shall be sufficiently accurate and comprehensive to reasonably 

apprise such participants and beneficiaries of their rights and 

obligations under the plan"). 

 10 For similar reasons, we also reject the argument that Sun 

Life had a fiduciary obligation to affirmatively advise Martinez 

that Veterans' Benefits were subject to offset under the Plan as 

soon as it learned that Martinez was a veteran. The fiduciary 

duty to convey unrequested material information to beneficiaries 

"only arises if there was some particular reason that the fiduciary

should have known that his failure to convey the information would 

be harmful." Watson v. Deaconess Waltham Hosp., 298 F.3d 102, 

114-15 (1st Cir. 2002). In this case, there could be no 

anticipated harm, given the Plan's unambiguous inclusion of 

Veterans' Benefits within the term "Compulsory Benefit Act or Law." 
- 21 - 

 In so concluding, we reject Martinez's assertion that 

the question of whether the SPD's terms are capable of being 

understood by an "average plan participant" is a question of fact 

not appropriately decided on a motion for judgment on the 

pleadings. Our holding that the phrase "Compulsory Benefit Act or 

Law" unambiguously applies to Veterans' Benefits forecloses the 

argument that an "average plan participant" would not understand 

its meaning. Put differently, our determination that the phrase's 

meaning is unambiguous rests on the judgment that an "average plan 

participant" would read the provision as we do. See, e.g., Harris 

v. Harvard Pilgrim Health Care, Inc., 208 F.3d 274, 278 (1st Cir. 

2000) (concluding, in effect, that an "unambiguous" plan provision 

reasonably apprises the average plan participant of the plan's 

relevant terms). 

III. 

Martinez claims that Sun Life's offset of Veterans' 

Benefits discriminates against employees who have served in the 

uniformed services in violation of USERRA, 38 U.S.C. § 4311. In 

entering judgment for Sun Life on the USERRA claim, the district 

court held that Martinez had not adequately pleaded that his 

military status was "at least a motivating or substantial factor" 

in Sun Life's decision to offset his Veterans' Benefits. See 

Velázquez-García v. Horizon Lines of P.R., Inc., 473 F.3d 11, 17 

(1st Cir. 2007). On appeal, Martinez argues that the district 
- 22 - 

court misapplied both the standard of review under Federal Rule of 

Civil Procedure 12(c) and the substantive standard for violation 

of USERRA. Because both arguments turn on our conclusion that the 

phrase "Compulsory Benefit Act or Law" is unambiguous as a matter 

of law, we address them together.

A. USERRA Framework 

By its terms, § 4311 protects any member of the uniformed 

services from being denied "any benefit of employment by an 

employer on the basis of that membership." 38 U.S.C. § 4311(a). 

Specifically, the relevant portion of the statute provides that: 

(a) A person who is a member of, applies to be 

a member of, performs, has performed, applies 

to perform, or has an obligation to perform 

service in a uniformed service shall not be 

denied initial employment, reemployment, 

retention in employment, promotion, or any 

benefit of employment by an employer on the 

basis of that membership, application for 

membership, performance of service, 

application for service, or obligation. 

. . . 

(c) An employer shall be considered to have 

engaged in actions prohibited-- 

(1) under subsection (a), if the person's 

membership, application for membership, 

service, application for service, or 

obligation for service in the uniformed 

services is a motivating factor in the 

employer's action, unless the employer can 

prove that the action would have been taken in 

the absence of such membership, application 

for membership, service, application for 

service, or obligation for service. 
- 23 - 

Id. § 4311. Thus, for a claim of discrimination under USERRA to 

survive a motion for judgment on the pleadings, an employee must 

plausibly allege that military status was "a motivating factor" in 

the adverse action taken by the employer. See id.; VelázquezGarcía, 473 F.3d at 17. At later stages of the litigation, i.e., 

on a motion for summary judgment or at trial, if the plaintiff 

introduces evidence to substantiate his or her plausible 

allegations of discrimination, the burden then shifts to the 

employer to "prove, by a preponderance of the evidence, that the 

action would have been taken despite the protected status." 

Velázquez-García, 473 F.3d at 17 (quoting Sheehan v. Dep't of Navy, 

240 F.3d 1009, 1014 (Fed. Cir. 2001)). 

B. Application of USERRA 

 Martinez did not meet his initial pleading burden 

because his discrimination allegation is implausible as a matter 

of law.11 The simple fact that his Plan benefits were reduced by 

the amount of his Veterans' Benefits does not mean that Sun Life 

 11 In reaching this conclusion, the district court did not 

improperly credit Sun Life's assertion that its interpretation of 

the Plan was based on the policy's plain language instead of 

crediting Martinez's assertion that the interpretation was an act 

of discrimination under USERRA. Rather than crediting any 

assertions by Sun Life, the court relied on its previous holding 

that, as a matter of law, the language "Compulsory Benefit Act or 

Law" unambiguously covers service-connected disability 

compensation. This conclusion required no resolution of disputed 

facts; it was a legal conclusion based on the court's 

interpretation of the Plan's unambiguous language. See supra 

Section II.B. 
- 24 - 

was motivated, at least in part, by his status as a servicemember 

to make that reduction. By this logic, any insurance plan that 

permits benefits to be offset by service-connected disability 

benefits, whether it explicitly lists them as subject to offset or 

includes them in a generic term like "Compulsory Benefit Act or 

Law," is a per se violation of USERRA. This approach would render 

Veterans' Benefits practically untouchable by insurers like Sun 

Life, allowing veteran recipients to double-collect disability 

benefits for the same underlying condition, even where such 

collection is barred for recipients of other forms of disability 

benefits. Hence, Martinez's interpretation runs afoul of the 

statutory purpose of § 4311, which is to root out unlawful 

discrimination on the basis of uniformed service, not provide 

preferential treatment to servicemembers. See H.R. Rep. No. 103–

65(I), at 23 (1993), as reprinted in 1994 U.S.C.C.A.N. 2449, 2456 

(stating that § 4311(a) is designed to "reenact the current 

prohibition against discrimination"); Crews v. City of Mt. Vernon, 

567 F.3d 860, 862, 866 (7th Cir. 2009) (holding that a city's 

decision to stop providing a work schedule benefit to employees in 

the National Guard, which it had never provided to non-Guard 

employees, did not violate § 4311 because "USERRA does not require 

such preferential treatment"); Rogers v. City of San Antonio, 392 

F.3d 758, 768 (5th Cir. 2004) (finding "no intention" in § 4311(a) 

"to prohibit neutral labor contracts from treating employees on 
- 25 - 

military leave equally with those on non-military leave with 

respect to the loss of benefits due to absence from work"). 

Thus, the fundamental problem with Martinez's USERRA 

claim is that he does not allege any facts suggesting that Sun 

Life was motivated to apply the "Other Benefits" provision to him 

because he was receiving military-related benefits.12 Indeed, 

Martinez even concedes that Sun Life also offset his Social 

Security disability benefits because, like his Veterans' Benefits, 

they were awarded for the same disability for which he received 

Plan benefits. The only role that Martinez's military status 

allegedly played in Sun Life's decision to offset his Plan benefits 

is that the source of his "Other Income Benefit[]" was the VA. 

That fact alone is not enough to plausibly allege a violation of 

USERRA.13 Accordingly, we hold that the district court properly 

 12 In this respect, the cases cited by Martinez are all 

distinguishable, even though they found USERRA violations based on 

facially neutral policies. See Erickson v. U.S. Postal Serv., 571 

F.3d 1364, 1368 (Fed. Cir. 2009) (employee fired based in part on 

his "excessive use of military leave"); Petty v. Metro. Gov't of 

Nashville-Davidson Cty., 538 F.3d 431, 447-48 (6th Cir. 2008) 

(employee investigated because of concerns related to his military 

service); Velázquez-García, 473 F.3d at 17-19 & n.8 (employee 

subject to explicitly anti-military comments in the workplace). 

13 We also reject Martinez's argument that Sun Life's timing 

in notifying him that his Veterans' Benefits would be offset 

suggests a discriminatory motive. Sun Life was under no obligation 

to explain its Plan interpretation to Martinez before Martinez 

notified Sun Life that he had been awarded service-connected 

disability benefits. Where the phrase "Compulsory Benefit Act or 

Law" unambiguously covers those benefits, any earlier 

communication would have been duplicative of the Plan's plain 

language. Cf. Velázquez-García, 473 F.3d at 20-21 (finding that 
- 26 - 

granted judgment on the pleadings for Sun Life on Martinez's USERRA 

claim.14

Affirmed.	

 

an employer's delay in informing a USERRA plaintiff that his checkcashing business violated the employer's code of conduct suggested 

that its reason for firing him was pretextual, in part because the 

code of conduct provision was ambiguous and did not clearly bar 

running a check-cashing business). See also supra note 10 

(rejecting another version of this argument in a different 

context). 

14 Because we hold that Martinez failed to state a claim of 

USERRA discrimination, and thus affirm judgment on the pleadings 

for Sun Life, we do not reach Sun Life's alternative argument that 

it is not a proper defendant under USERRA, which defines an 

"employer" to include "a person, institution, organization, or 

other entity to whom the employer has delegated the performance of 

employment-related responsibilities." 38 U.S.C. § 4303(4)(A)(i). 

Rather, our analysis assumes without deciding that Sun Life is 

subject to suit under USERRA. 
- 27 - 

Appendix 

Other Income Benefits 

Other Income Benefits are those benefits provided or available to 

the Employee while a Long Term Disability Benefit is payable. 

These Other Income Benefits, other than retirement benefits, must 

be provided as a result of the same Total or Partial Disability 

payable under this Policy. Other Income Benefits include: 

1. The amount the Employee is eligible for under: 

 a. Workers' Compensation Law; or 

 b. Occupational Disease Law; or 

 c. Unemployment Compensation Law; or 

 d. Compulsory Benefit Act or Law; or 

 e. an automobile no-fault insurance plan; or 

 f. any other act or law of like intent. 

2. The Railroad Retirement Act (including any dependent 

benefits). 

3. Any labor management trustee, union or employee benefit plans 

that are funded in whole or in part by the Employer. 

4. Any disability income benefits the Employee is eligible for 

under: 

 a. any other group insurance plan of the Employer; 

b. any governmental retirement system as a result of the 

Employee's job with his Employer. 

5. The benefits the Employee receives under his Employer's 

Retirement Plan as follows: 

a. any disability benefits; 

b. the Employer-paid portion of any retirement benefits. 

(Disability benefits that reduce the Employee's accrued 

retirement benefit will be treated as a retirement benefit. 

Retirement benefits do not include any amount rolled over or 

transferred to any other retirement plan as defined in Section 

402 of the Internal Revenue Code.) 

6. The disability or retirement benefits under the United States 

Social Security Act, or any similar plan or act, as follows: 

 a. Disability benefits the Employee is eligible to receive. 

b. Disability benefits the Employee's spouse, child or 

children are eligible to receive because of the 

Employee's Total or Partial Disability unless the 

dependent benefits are paid directly to the divorced 
- 28 - 

spouse or to the children in custody of the divorced 

spouse. 

c. Retirement benefits received by the Employee. 

d. Retirement benefits the Employee's spouse, child or 

children receive because of the Employee's receipt 

because of the Employee's receipt of retirement benefits 

unless the dependent benefits are paid directly to the 

divorced spouse or to the children in custody of the 

divorced spouse. 

If an Employee's Total or Partial Disability begins after 

Social Security Normal Retirement Age, Social Security 

Retirement Benefits will not be offset if, prior to his Total 

or Partial Disability, he was already receiving Social 

Security Retirement Benefits. 

7. The amount the Employee receives from any accumulated sick 

leave. 

8. Any salary continuation paid to the Employee by his Employer 

which causes the Net Monthly Benefit, plus Other Income 

Benefits and any salary continuation to exceed 100% of the 

Employee's Total Monthly Earnings. The amount in excess of 

100% of the Employee's Total Monthly Earnings will be used to 

reduce the Net Monthly Benefit. 

9. Any amount due to income replacement or lost wages the 

Employee receives by compromise, settlement or other method 

as a result of a claim for any Other Income Benefit. 

10. Any amount the Employee receives from a voluntary separation 

of employment agreement from the Employer including severance 

pay or any other income in settlement of an employment 

contract. 

Other Income Benefits will include any amount described above which 

would have been available to the Employee had he applied for that 

benefit.