In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 05-2495

TERRANCE BERGER and DONALD LAXTON,

Plaintiffs-Appellants,

v.

AXA NETWORK LLC and EQUITABLE LIFE

ASSURANCE SOCIETY OF THE UNITED STATES,

Defendants-Appellees.

____________

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 03 C 125—Elaine E. Bucklo, Judge.

____________

ARGUED FEBRUARY 14, 2006—DECIDED AUGUST 18, 2006

____________

Before BAUER, RIPPLE and WILLIAMS, Circuit Judges.

RIPPLE, Circuit Judge. Section 510 of the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1140,

prevents employers from altering their workers’ employment status for the purpose of interfering with rights under

an ERISA-qualified benefit plan. The named plaintiffs in

this class action, two insurance salesmen, have invoked

§ 510 against their employers, AXA Network LLC and

the Equitable Life Assurance Society of the United States

(collectively, “AXA”). They allege that AXA intentionally
2 No. 05-2495

deprived them of benefits by changing the way that insurance salesmen are defined as full-time employees of the

company. The district court awarded summary judgment

to AXA on the ground that the limitation period applicable

to the plaintiffs’ claim had expired; it ruled alternatively

that the plaintiffs’ assertions failed as a matter of law. We

agree with the district court that the plaintiffs’ claim is timebarred. Accordingly, we affirm the judgment of the district

court on that ground and find it unnecessary to reach the

merits.

I

BACKGROUND

A. Facts

In this de novo review of the district court’s grant of

summary judgment to AXA, we must construe the facts in a

manner that resolves all reasonable inferences in the nonmovant’s favor. See Scaife v. Cook County, 446 F.3d 735, 738-

39 (7th Cir. 2006). Indeed, there is little dispute concerning

the basic facts. The defendants in this action, AXA Network

LLC and the Equitable Life Assurance Society of the United

States—to whom we refer collectively as “AXA”—are

insurance brokerage subsidiaries of the France-based AXA

Financial, Inc. Both subsidiaries are headquartered in New

York City and provide the same pension and welfare

benefits to their employees, agents and managers through

a number of ERISA-qualified plans. AXA maintains a

network of agency offices throughout the United States.

Each satellite office employs a staff of insurance salesmen

who work locally, selling policies to customers in their

region. The lead plaintiffs in this action, Terrance Berger

and Donald Laxton, are Illinois residents who signed on as
No. 05-2495 3

insurance salesmen with a local AXA office near Chicago in

the early 1980s. After having worked for the company for

three years, each entered into an agreement with AXA

known as the “14th Edition” contract that permitted them to

sell AXA policies as independent contractors.

AXA insurance salesmen, despite being independent

contractors, were able to participate in the company’s

ERISA-qualified plans. To become eligible, they had to be

considered an “employee” under the Internal Revenue

Code, which includes “full-time life insurance salesman” within the definition of “employee.” 26 U.S.C.

§ 3121(d)(3)(B). An IRS regulation, in turn, defines a “fulltime insurance salesman” as an individual “whose entire or

principal activity is devoted to the solicitation of life

insurance or annuity contracts, or both, primarily for one

life insurance company.” 26 C.F.R. § 31.3121(d)-1(d)(3)(ii).

This definition is a default; the employer and employee may

choose to redefine “full-time” status via contract, so long as

they act reasonably. See Brian E. Gates, Internal Revenue

Manual § 4.23.5-3 (2005).

At the time that the plaintiffs entered into their 14th

Edition contracts with AXA, the company employed

essentially an “honor system” to qualify salesmen as fulltime agents. Under this system, salesmen were asked, upon

contracting with AXA, to complete a FICA form indicating whether they intended to devote their principal business

activity to the solicitation of life insurance or annuity

policies for AXA. Assuming they answered affirmatively,

AXA then applied a presumption that agents who had

submitted an appropriate FICA form were statutory employees. When Mr. Berger and Mr. Laxton entered into 14th

Edition contracts with AXA, both indicated on their FICA

forms that they intended to devote their principal business
4 No. 05-2495

activity to selling AXA policies. AXA then relied on these

representations to qualify them as full-time agents and to

allow them to participate in AXA’s ERISA-qualified plans.

In the mid-1990s, senior management at AXA began

recommending that the company do away with the “honor

system” and no longer accept a salesman’s representation

that he was committed to selling AXA policies full-time.

Instead, management proposed a new policy that tied

statutory employee status to an objective measure of annual

insurance sales. The idea was that this objective formula

more accurately measured the agents’ intent to devote their

principal business activity to selling AXA policies. The

proposal was adopted, and AXA announced that, starting

January 1, 1999, agents under 14th Edition contracts who

failed to meet a specified sales goal during the preceding

year no longer would be considered statutory employees.

The plaintiffs were alerted to this policy change by letters

from AXA headquarters, dated February 6, 1998. In 1999,

Mr. Berger failed to meet the new annual sales threshold

and lost his status as a statutory employee. Mr. Laxton met

the same fate the following year. As a result, they were no

longer eligible to participate in AXA’s benefit plans. From

1999 to 2004, several thousand other AXA agents lost fulltime status and plan eligibility as a result of the change in

policy.

B. District Court Proceedings

On January 7, 2003, Mr. Berger and Mr. Laxton filed a

three-count complaint alleging that AXA’s 1999 change in

the way it classified agents violated § 510 of ERISA, see 29
No. 05-2495 5

1 Only the ERISA count survived a motion to dismiss. The other

allegations are not before us in this appeal.

U.S.C. § 1140.1 In 2004, the district court granted the plaintiffs’ motion for certification of a class consisting of the

thousands of other insurance agents who had been reclassified by AXA and denied eligibility for benefits.

AXA then moved for summary judgment, asking the court

to dismiss the class action on the ground that the plaintiffs’

claims were time-barred or, alternatively, on the ground

that they failed as a matter of law. The district court granted

the motion. Because § 510 lacks a statute of limitations, the

court borrowed a limitations period from the law of New

York, the state that, in its view, had the most significant

relationship to the dispute. The court determined that the

most analogous claim for relief under New York law is a

claim for retaliatory discharge under the state’s workers’

compensation law; New York law bars such claims after two

years, see N.Y. Work. Comp. Law § 120. The court then

rejected the plaintiffs’ theory that each yearly denial of fulltime status started the limitations clock anew. The court

held that the plaintiffs’ claims accrued in 1998, when they

first learned of AXA’s decision to change the way it classified insurance salesmen, or, at the latest, when the policy

became effective in January 1999. In either case, the plaintiffs’ failure to institute this action until January 7, 2003,

barred their claim under the applicable two-year statute of

limitations.

The district court held, alternatively, that the plaintiffs’

grievance under § 510 failed as a matter of law. That section,

which is designed to protect the employment relationship

from being changed in ways intended to deny benefits, did

not, according to the court, apply to the present dispute. In
6 No. 05-2495

2 For instance, claims under Part 4 of ERISA, the sections

governing plan fiduciaries, expire within six years or three years,

depending on when the plaintiff knows or should know of the

fiduciary’s breach. See 29 U.S.C. § 1113. Similarly, actions under

Subtitle E, the special provisions for multiemployer plans, id.

§§ 1381-1453, must be brought within six years from when they

arose or three years from when the underlying actions were

(continued...)

the court’s view, the employment relationship between

AXA and its salesmen had not been altered by the 1999

change in policy. What had changed was that, instead of

taking an agent’s word that he was committed to selling

AXA policies full-time, AXA had chosen to employ a

concrete sales calculus in order to make the full-time

determination objective. This change, the district court

concluded, did not offend § 510.

II

DISCUSSION

We first address whether the district court correctly

determined the appropriate limitations period for an action

under § 510 of ERISA, see 29 U.S.C. § 1140. In examining this

problem, we must confront several difficult methodological

issues that have “spawned a vast amount of litigation” and

“uncertainty for both plaintiffs and defendants.” Jones v.

R.R. Donnelley & Sons Co., 541 U.S. 369, 377, 379 (2004).

A.

In enacting ERISA, Congress supplied an express limitations period for several parts of the statute;2

 it did not,
No. 05-2495 7

2 (...continued)

discovered. However, § 510, id. § 1140, was codified in Part 5 of

ERISA, “Administration and Enforcement,” to which the statute

of limitations in § 1113 expressly does not apply.

3 See Tolle v. Carroll Touch, Inc., 977 F.2d 1129, 1137 (7th Cir. 1992)

(“Congress did not provide a statute of limitations for claims

premised upon Section 510 of ERISA.”). We note, additionally,

that it is not uncommon for Congress to omit limitations periods

from federal statutes. See, e.g., Goodman v. Lukens Steel Co., 482

U.S. 656, 660-61 (1987) (discussing the omission in 42 U.S.C. §

1981); Wilson v. Garcia, 471 U.S. 261, 266-67 (1985) (discussing the

omission in 42 U.S.C. § 1983).

4 Section 1658(a) was a response to the host of “practical

problems” that arise from the practice of borrowing state statutes

of limitations to fill gaps in federal statutes. As the House Report

to § 1658(a) described, reliance on analogous state statutes

obligates judges and lawyers to determine the most analogous state law claim; it imposes uncertainty on litigants;

reliance on varying state laws results in undesirable variance

among the federal courts and disrupts the development of

federal doctrine on the suspension of limitation periods.

H.R. Rep. No. 101-734, at 24 (1990), as reprinted in 1990

U.S.C.C.A.N. 6860, 6870.

however, provide one for actions grounded in § 510.3

Section 510 also was enacted too early to permit us to apply

the default four-year federal limitations period contained in

28 U.S.C. § 1658(a). That statute functions as a catch-all

limitations period for federal causes of action that do not

have their own limitations periods.4

 The catch-all, however,

applies only to those causes of action created after 1990.

Although the Supreme Court has held that, under certain

circumstances, a new amendment to an older federal statute
8 No. 05-2495

can trigger § 1658(a), see Jones, 541 U.S. at 382, § 510 of

ERISA has not been amended since its original enactment in

1974.

Because Congress has failed to provide any statutory

direction, our inquiry must be guided by principles of

federal common law. The basic approach is well-settled.

When Congress fails to provide a statute of limitations for

a federal claim and § 1658(a) is not applicable, federal courts

must borrow the most analogous statute of limitations from

state law. See Reed v. United Transp. Union, 488 U.S. 319, 323

(1989); Teumer v. Gen. Motors Corp., 34 F.3d 542, 546-47 (7th

Cir. 1994). The Supreme Court has recognized a limited

exception to this general rule:

We decline to borrow a state statute of limitations only

when a rule from elsewhere in federal law clearly

provides a closer analogy than available state statutes,

and when the federal policies at stake and the

practicalities of litigation make that rule a significantly

more appropriate vehicle for interstitial lawmaking.

Reed, 488 U.S. at 324 (internal quotation marks omitted). The

Supreme Court also has made clear, however, that this

exception is “a closely circumscribed[,] . . . narrow exception

to the general rule,” id. at 324, and that state law remains the

“lender of first resort,” N. Star Steel Co. v. Thomas, 515 U.S.

29, 34 (1995). In any event, borrowing directly from federal

law in this case is foreclosed by our prior cases. See, e.g.,

Teumer, 34 F.3d at 546-47 (applying a state limitations period

to a claim under § 510); Tolle v. Carroll Touch, Inc., 977 F.2d

1129, 1137 (7th Cir. 1992) (same).

In Teumer, we held that “the five-year statute of limitations governing retaliatory discharge claims in Illinois

should apply to all § 510 actions in which Illinois limitations
No. 05-2495 9

5 See Teumer v. Gen. Motors Corp., 34 F.3d 542, 547 (7th Cir. 1994)

(“Because Illinois is both the forum state and the state in

which the significant events of this case took place, we will

refer to its law without resolving the difficult question of

what is the proper choice-of-law rule when selecting state

limitation periods for federal claims.”).

6 We do not believe that the Supreme Court decided this issue by

implication in North Star Steel Co. v. Thomas, 515 U.S. 29 (1995),

although one of our sister circuits appears to have thought

otherwise, see Int’l Union, United Plant Guard Workers of America

v. Johnson Controls World Servs., 199 F.3d 903, 905 (11th Cir. 1996).

(continued...)

law is to be borrowed.” Teumer, 34 F.3d at 550. However, in

Teumer, we did not have to choose between the law of

Illinois and the law of another state in borrowing a state

statute of limitations.5

 In the present case, by contrast, the

parties dispute whether Illinois or New York law ought to

supply the limitations period. Illinois is the forum state and

home to the named plaintiffs in this class action. New York,

on the other hand, is the location of AXA’s headquarters,

where the plan is administered and where the decisions at

issue in this case were made. It is also the state whose

substantive law is, by the terms of the plan, applicable to

disputes arising under that contract.

In order to determine whether Illinois or New York law

ought to supply the limitations period, we first must

identify a choice of law rule or methodology that will permit

our determination to be a principled one. The Supreme

Court has not set forth a definitive choice of law formula to

govern the selection of a limitations period. See Auto Workers

v. Hoosier Cardinal Corp., 383 U.S. 696, 705 n.8 (1966) (reserving the question).6

 However, its rulings on related issues
10 No. 05-2495

6 (...continued)

As recently as last Term, the Supreme Court recognized that this

issue has yet to be resolved. See Jones v. R.R. Donnelley & Sons Co.,

541 U.S. 369, 378 (2004) (“The practice of borrowing state statutes

of limitation also forced courts to address the frequently present

problem of a conflict of laws in determining which State statute

was controlling, the law of the forum or that of the situs of the

injury.” (internal quotation marks and alterations omitted)).

7 See, e.g., Wang Labs., Inc. v. Kagan, 990 F.2d 1126, 1128 (9th Cir.

1993) (“We decide as a matter of federal law which state

statute of limitations is appropriate.”); Gluck v. Unisys Corp.,

960 F.2d 1168, 1179 (3d Cir. 1992) (“If a statute of limitations of a

state other than the forum state were implicated in the litigation

of a federal claim, then federal, not state, choice of law principles

would govern.”); Champion Int’l Corp. v. United Paperworkers Int’l

Union, 779 F.2d 328, 332-34 (6th Cir. 1985) (holding that federal

law, rather than a state borrowing statute, should govern the

choice between the forum state’s statute of limitations and that of

another state in an action under the federal labor laws).

and the experience of our sister circuits provide helpful

guidance.

B.

We begin our journey with a principle upon which there

is no real disagreement: In fashioning a choice of law rule to

govern our quest for the most appropriate state limitations

period, our task, when the underlying claim is a federal

claim, is to fashion a federal choice of law rule.7

 This principle is really nothing more than a corollary principle to the

more general maxim that, when state law is borrowed in a

federal question suit, the choice of “which [state] law to

select is itself a question of federal law.” Resolution Trust
No. 05-2495 11

8 Subsequently, the primary holding of Chapman was overruled by the Supreme Court in Atherton v. FDIC, 519 U.S. 213

(1997). We later recognized that Chapman’s “ruling on

choice-of-law, however, presumably remains controlling precedent.” FDIC v. Wabick, 335 F.3d 620, 625 n.2 (7th Cir. 2003).

Corp. v. Chapman, 29 F.3d 1120, 1124 (7th Cir. 1994) (citation

omitted) (emphasis added). In Chapman, we explained:

What law Illinois courts would choose is . . . irrelevant.

This is not a diversity case, where Erie would require

the forum court to apply the whole law of the state,

including its choice of law principles. Klaxon Co. v.

Stentor Electric Manufacturing Co., 313 U.S. 487, 61 S. Ct.

1020, 85 L.Ed. 1477 (1941). It is a suit by a federal agency

invoking federal jurisdiction per 12 U.S.C. § 1441a(l)(1),

which says that suits to which the [Resolution Trust

Corp.] is a party “shall be deemed to arise under the

laws of the United States”. Federal law may well look to

state law for substantive principles, see United States v.

Kimbell Foods, Inc., 440 U.S. 715, 727-29, 99 S. Ct. 1448, 59

L.Ed.2d 711 (1979), but which law to select is itself a

question of federal law, as Kimbell Foods and O’Melveny

& Myers [v. FDIC, 512 U.S. 79, 114 S. Ct. 2048, 129

L.Ed.2d 67 (1994),] show. The Supreme Court in

O’Melveny & Myers did not ask what law a state court

would have selected; it approached the question as one

for independent decision.

Id.8

This general principle is easily applicable to the borrowing of a state statute of limitations to fill a gap left open in a

federal statute. Unlike when our jurisdiction is based on

diversity of citizenship, the exercise of federal question
12 No. 05-2495

9 See infra note 14.

jurisdiction does not implicate concerns of federalism and

interstate comity. “State legislatures do not devise their

limitations periods with national interests in mind.” Reed,

488 U.S. at 324 (internal quotation marks omitted); Gluck v.

Unisys Corp., 960 F.2d 1168, 1179 n.8 (3d Cir. 1992) (“A

state court or legislature does not necessarily seek to further

or even consider federal laws when it develops its choice of

law provisions.”). In federal question cases, we must ensure

only that the borrowed limitations period is compatible with

the purpose of the federal statute. In view of this general

principle, we now must evaluate several possible methodologies for determining which state’s law should apply.

One possible approach would be simply to choose, in

every case, the forum state’s law as the source of the

applicable limitations period. The prime advantage of this

approach is its simplicity; neither the court nor the parties

remain in doubt concerning which state’s law ought to

apply. Certainly, predictability and ease of administration

are factors long recognized in the fashioning of any choice

of law tool. See Restatement (Second) of Conflict of Laws

§ 6(2).9

This approach is not without disadvantages, however. The

selected limitations period, drawn in rote fashion from the

forum state’s law, may have only a limited relationship to

the federal cause of action and its underlying policies. When

a state, either by statute or by case law, makes a certain

limitations period applicable to a particular state cause of

action, a conscious decision is made that the public policy of

the state ought to permit suit on that state-created cause of

action only for the length of time permitted by that limitations period. Whatever the reasons for the state’s policy on
No. 05-2495 13

how long a state cause of action ought to remain alive, those

policy concerns may not have much relevance to the

congressional policies that animate a federal cause of action

in the district court under the court’s federal question

jurisdiction. See Reed, 488 U.S. at 324; Gluck, 960 F.2d at 1179

n.8.

The force of this criticism partially is assuaged, no doubt,

by the fact that the state limitations period is linked to a

state cause of action that at least somewhat resembles the

federal cause of action. Here, for instance, the state limitations period typically borrowed in § 510 actions is the one

that applies to the state cause of action for retaliatory

discharge, a cause of action that embodies at least some of

the same protective policy concerns that are contained in

§ 510. See Teumer, 34 F.3d 547 (noting that § 510 protects

workers against “the disruption of employment privileges

to punish (i.e. retaliate for) the exercise of benefit rights”

(emphasis omitted)).

Nevertheless, we must conclude that the automatic

application of the forum state’s statute of limitations does

risk endangering federal policies by displacing them in

favor of state concerns that are driven by local geographical

factors or local interests and that are different from or

even inimical to national policy interests. “Federal law is no

judicial chameleon, changing complexion to match that of

each state wherever lawsuits happen to be commenced.”

D’Oench, Duhme & Co. v. FDIC, 315 U.S. 447, 471-72 (1942)

(Jackson, J., concurring).

A second possible approach is to fashion a choice of law

rule as a matter of federal common law by relying on the

approach to statutes of limitations set forth in the Restatement (Second) of Conflict of Laws. See Held v. Mfrs. Hanover
14 No. 05-2495

10 Section 142 provides:

Whether a claim will be maintained against the defense of

the statute of limitations is determined under the principles

stated in § 6. In general, unless the exceptional circumstances

of the case make such a result unreasonable:

(1) The forum will apply its own statute of limitations

barring the claim.

(2) The forum will apply its own statute of limitations

permitting the claim unless:

(a) maintenance of the claim would serve no

substantial interest of the forum; and

(b) the claim would be barred under the statute of

limitations of a state having a more significant

relationship to the parties and the occurrence.

Restatement (Second) of Conflict of Laws § 142.

11 See also Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 778 (1984)

(“There has been considerable academic criticism of the rule

that permits a forum State to apply its own statute of limitations regardless of the significance of contacts between the forum

State and the litigation.”).

Leasing Corp., 912 F.2d 1197, 1202 (10th Cir. 1990) (discussing

this approach). The Restatement has a special section

devoted to the selection of an appropriate statute of limitations: Section 142.10 This section was revised in 1988 to

reflect “the emerging trend” in the way courts were approaching limitations questions. See Reinke v. Boden, 45 F.3d

166, 168-69 (7th Cir. 1995). The comments to the revision

observed that, in the period after the adoption of the Second

Restatement in 1971, many courts had ceased to “characterize the issue of limitations as ipso facto procedural and

hence governed by the law of the forum.” Restatement

(Second) of Conflict of Laws § 142 cmt. e.11 Instead, these

courts had decided that a claim should not be maintained
No. 05-2495 15

12 Section 6(2) states that

the factors relevant to the choice of the applicable rule of law

include

(a) the needs of the interstate and international systems,

(b) the relevant policies of the forum,

(c) the relevant policies of other interested states and the

relative interests of those states in the determination of

the particular issue,

(d) the protection of justified expectations,

(e) the basic policies underlying the particular field of

law,

(f) certainty, predictability and uniformity of result, and

(g) ease in the determination and application of the law

to be applied.

Restatement (Second) of Conflict of Laws § 6(2).

“if it is barred by the statute of limitations of the state

which, with respect to the issue of limitations, is the state of

the most significant relationship to the occurrence and the

parties.” Id. As revised, section 142 resolves limitations

conflicts through the Restatement’s general, multi-factor

“interest analysis,” id. § 6(2),12 despite retaining “a decided

forum bias.” Eugene F. Scoles et al., Conflict of Laws 130

(4th ed. 2004).

Application of the Restatement approach to the task

before us requires a significant amount of prudence and

caution. Full-scale implementation of the Restatement

would amount to using a tool created for one task to

accomplish another. Section 142 provides that, if the forum

has a longer statute of limitations that would permit the

claim, the longer period should apply unless there is no

“substantial” forum interest and the “state having a more

significant relationship to the parties and the occurrence”
16 No. 05-2495

would bar the claim. Restatement (Second) of Conflict of

Laws § 142(2)(a), (b). This task of accommodating the

interests of two states is, of course, not the appropriate focus

of the judicial inquiry in the task before us. Our task is not

to reconcile the competing interests of Illinois and New York

but to identify the state statute of limitations that is most

compatible with the underlying policies of the federal cause

of action before us, ERISA § 510. From this perspective,

Restatement § 142 is a helpful tool in our task only insofar

as it counsels that the appropriate statute of limitations, in

certain cases, may not be that of the jurisdiction in which the

court sits, but rather one from another jurisdiction that has

a more significant relationship with the parties and with the

transaction.

Our examination of these two approaches convinces us

that neither is a totally effective tool in identifying the

appropriate statute of limitations for a claim based on

federal law. Total adherence to forum law would provide a

great deal of certainty and avoid a “trial within a trial” on

the statute of limitations issue. Certainly, “ ‘[f]ew areas of

the law stand in greater need of firmly defined, easily

applied rules than does the subject of periods of limitations.’ ”

Wilson v. Garcia, 471 U.S. 261, 266 (1985) (quoting Chardon v.

Fumero Soto, 462 U.S. 650, 667 (1983) (Rehnquist, J., dissenting)). There will be occasions, however, when the statute of

limitations of another state ought to be applied—not

because that state has a greater interest in the application of

its own law as opposed to the law of the forum—but

because application of that state’s law is more consistent

with the federal policies embodied in the substantive federal

statute. See Gluck, 960 F.2d at 1179 & n.8.

Because both of the methodologies that we have outlined are tools created for other tasks, some of our sister
No. 05-2495 17

13 The Third and Ninth Circuits have employed this approach. See

Wang Labs., 990 F.2d at 1128; Gluck, 960 F.2d at 1179.

circuits have suggested a third approach. Under this

approach, a federal court selects a statute of limitations from

the forum state’s law unless another state has more significant contacts with the dispute.13 This approach gives

adequate, indeed great, weight to the concerns of predictability, certainty and ease of administration. It also ensures at least some minimum congruence between the

policy concerns underlying the federal cause of action and

those underlying the state cause of action from which the

limitations period is borrowed.

We believe that this approach has significant merit.

However, the congruence may be truly minimal, and

therefore we hesitate to characterize forum law as the

“presumptive” choice. In our view, it is preferable to refer

to the forum’s limitations period instead as a starting

point. If another state with a significant connection to the

parties and to the transaction has a limitations period that

is more compatible with the federal policies underlying

the federal cause of action, that state’s limitations law ought

to be employed because it furthers, more than any other

option, the intent of Congress when it created the underlying right.

C.

We now must apply this approach to the case before us.

In our view, New York is the state with the most significant

relationship to the parties and to the transaction. The

occurrence at issue here was the corporate decision on the

part of AXA to alter the criterion for determining wheth-
18 No. 05-2495

14 Cf. Restatement (Second) Conflict of Laws § 192 cmt. h (noting

that, with respect to group life insurance policies, rights against

the insurer are usually governed by the law that governs the

master policy (usually the place of the corporate headquarters)

because it is “desirable that each individual insured should enjoy

the same privileges and protections”).

15 The plan’s choice-of-law provision cannot control our inquiry

for two reasons. First, it would be against the weight of precedent

to apply a broad choice-of-law provision to limitations issues

where, as here, the provision does not extend expressly

to statutes of limitations, see R.68-1, Ex.25 at 279 (“To the extent ERISA is not applicable or does not preempt state law, the

laws of the State of New York shall govern.”). See Cole v. Mileti,

133 F.3d 433, 437-38 (6th Cir. 1998); Gluck, 960 F.2d at 1179; Trs.

Operative Plasterers’ & Cement Masons’ Local Union Officers &

Employees Pension Fund v. Journeymen Plasterers’ Protective &

Benevolent Soc’y, Local Union No. 5, 794 F.2d 1217, 1221 (7th Cir.

1986). Second, the plaintiffs’ claim does not arise out of the

plan itself. Rather, it is an action for interference with the

employment status of the salesmen that in turn ends up denying

(continued...)

er an employee ought to be considered a full-time insurance

salesman. That change was made by AXA management in

New York and documented by evidence and by witnesses

in New York. Moreover, the decision was applicable to all

AXA’s salesmen, not simply to those in Illinois. Although

the named plaintiffs reside in Illinois, other members of the

class reside in states other than Illinois. Thus, Illinois is

simply a spoke rather than the hub of this lawsuit.14 Additionally, although not dispositive to our decision today, it is

not entirely irrelevant that the plan chose New York law to

govern non-ERISA disputes arising out of the document.

Although the choice of law clause does not apply directly to

the problem before us,15 its presence serves as strong
No. 05-2495 19

15 (...continued)

them benefits under the plan. The plan’s contractual choice-oflaw provision cannot control a claim under § 510 that is by

definition extra-contractual.

evidence of the parties’ “justified expectations,” see Restatement (Second) of Conflict of Laws § 6(2), that New York law

would fill in the necessary gaps in federal ERISA law.

We recognize, of course, that Illinois, as the forum state

and home to the named plaintiffs, has some connection with

this action. Indeed, the comments to Restatement § 142

recognize that, at least in state court litigation, the decision

of which state’s law to apply “becomes difficult in situations

where, although the forum is not the state of the most

significant relationship to important issues in the case, some

forum interest would be served by entertainment of the

claim,” as, for example, “where the domicil of the plaintiff

is in the state of the forum.” Id. § 142 cmt. g. However, the

comments go on to say that, “[i]n such a situation, the forum

should entertain the claim only in extreme and unusual

circumstances.” Id. This latter statement, made by the

Restatement authors in the context of state conflicts jurisprudence, seems even more important in the context of ERISA,

where uniformity of treatment among beneficiaries is a

primary concern. See generally Pilot Life Ins. Co. v. Dedaux,

481 U.S. 41, 56 (1987) (discussing the legislative history of

ERISA on the need for uniformity of treatment). Indeed,

were we to follow the plaintiffs’ theory to its logical end,

this class action would be governed by a “crazy quilt” of

limitations periods and the federal interest in uniformity

would be rendered nugatory. Doe v. Blue Cross & Blue Shield,

112 F.3d 869, 874 (7th Cir. 1997). We conclude therefore that

application of New York limitations law to the present
20 No. 05-2495

dispute better serves the federal policies at issue in this case

and should displace the law of the forum.

D.

Now that we have selected New York law as the source of

the applicable limitations period, we must “ ‘characterize

the essence of’ the federal claim in question and find the

most analogous cause of action.” Teumer, 34 F.3d at 547

(citing Wilson, 471 U.S. at 267-70). In Teumer, we held that

allegations similar to the ones set forth in this complaint

most resembled the tort of retaliatory discharge under

Illinois law, which, like § 510, encompasses “discharges that

either retaliate against or interfere with the exercise of

favored rights.” Teumer, 34 F.3d at 549 (emphasis in original). Noting that § 510 protects workers against the “disruption of employment privileges to prevent (i.e. interfere

with) the vesting or enjoyment of benefit rights,” we

concluded that the Illinois tort of retaliatory discharge

captured “ ‘the essence of’ the federal claim in question” and

was therefore “the most analogous cause of action.” Teumer,

34 F.3d at 546-47 (emphasis in original) (quoting Wilson, 471

U.S. at 267-70).

Like Illinois, New York has a retaliatory discharge

cause of action, contained in New York Workers’ Compensation Law § 120. Section 120 provides in pertinent part:

It shall be unlawful for any employer or his or her

duly authorized agent to discharge or in any other

manner discriminate against an employee as to his or

her employment because such employee has claimed or

attempted to claim compensation from such employer,

or because he or she has testified or is about to testify in

a proceeding under this chapter and no other
No. 05-2495 21

valid reason is shown to exist for such action by the

employer.

Any complaint alleging such an unlawful discriminatory practice must be filed within two years of the

commission of such practice. . . .

N.Y. Work. Comp. Law § 120. The Second Circuit, relying

expressly on our analysis in Teumer, held that section 120 of

the workers’ compensation law provides the closest New

York analog to a suit under § 510. See Sandberg v. KPMG Peat

Marwick, L.L.P., 111 F.3d 331, 335-36 (2d Cir. 1997). Noting

that section 120 protects against the same employer actions

as § 510, including employer interference with obtaining

benefits, our colleagues on the Second Circuit believed the

parallel between the New York statute and § 510 to be

“obvious.” Id. at 336. We agree; the plaintiffs’ therefore had

two years to institute this proceeding.

E.

Finally, we must determine what event started the

clock running on the two-year limitations period. This

question of “accrual” is decided by reference to federal

common law. See Tolle, 977 F.2d at 1138 (citing Delaware

State Coll. v. Ricks, 449 U.S. 250 (1980)). We begin our

analysis by identifying the alleged unlawful conduct that

forms the basis for the claim and then ascertaining

when this act occurred. See Tolle, 977 F.2d at 1139. After

fixing the date of the alleged unlawful act, we then determine when the plaintiffs discovered “an injury resulting

from this unlawful act.” Id. In this case, for the plaintiffs’

claims to have been timely under the applicable two-year

statute of limitations, those claims must have accrued

some time after January 7, 2001.
22 No. 05-2495

16 Finally, the plaintiffs argue that, even if they discovered the

factual basis for their claim as early as January 1999, they suffered

(continued...)

In an action under § 510, the unlawful act is the decision to interfere purposefully with a plan “participant’s

ability to collect benefits to which the participant would

otherwise be entitled or from taking actions to prevent

such a participant from collecting benefits to which he or

she may become entitled.” Id. Because an employer

can violate this prohibition before a participant has applied

for or even becomes entitled to benefits, the accrual of a

§ 510 claim turns on the discovery of the decision to interfere with benefits rather than on the eventual effect of that

decision. This was our reasoning in Tolle, in which

we rejected a plaintiff’s claim that her § 510 claim accrued

on the date that her termination went into effect instead

of on the date of the defendant’s earlier decision to terminate her. We held that “it is the decision and the participant’s discovery of this decision that dictates accrual.” Id. at

1140-41; see also Teumer, 34 F.3d at 550.

As a result, we cannot accept the plaintiffs’ contention that

“[i]t is the application of the policy to a particular plaintiff,

not the existence of the policy in the abstract, that violates

the law and causes injury to each employee.” Appellants’

Br. at 23. Here, the plaintiffs’ § 510 claim is directed at

AXA’s 1998 change in its method for determining a salesman’s full-time status. As in Tolle, the plaintiffs’ discovery

of their employer’s allegedly unlawful decision put them on

notice of a potential ERISA violation and provided the

factual basis for their claim. The clock started running at this

moment, not when the plaintiffs eventually failed to meet

their sales quotas and ultimately lost eligibility.16
No. 05-2495 23

16 (...continued)

a continuing violation each time that AXA terminated their plan

eligibility for failure to meet the new sales quotas. As authority

for this proposition, the plaintiffs rely on Bazemore v. Friday, 478

U.S. 385 (1986), a case in which black agricultural workers were

permitted to recover for a pattern of salary discrimination that

began prior to the enactment of the civil rights laws; the Court

allowed the claims because each week’s discriminatory paycheck

was considered to be a new and actionable wrong. The plaintiffs

in this case have not alleged a continuing wrong. Although the

plaintiffs may have felt the continuing effects of their ineligibility

for ERISA benefits, their allegations make clear that AXA’s

wrongful conduct, if any, involved the decision to change the way

it classified insurance salesmen. There are no allegations that,

once AXA had changed its policy, it then applied the new policy

in a discriminating manner among salesmen. The plaintiffs

therefore have alleged one violation not several, and it must be

from the date of this single violation that the plaintiffs’ time for

filing their claim began to run. Cf. Delaware State Coll. v. Ricks, 449

U.S. 250, 258 (1980) (“It is simply insufficient for [the plaintiff] to

allege that his termination gives present effect to the past illegal

act and therefore perpetuates the consequences of forbidden

discrimination.” (internal quotation marks omitted)).

Because the plaintiffs brought this action more than two

years after their claim accrued, the district court properly

dismissed the action as time-barred.

Conclusion

For the foregoing reasons, the judgment of the district

court is affirmed.

AFFIRMED
24 No. 05-2495

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—8-18-06