Document: 520 U.S. 510117 S.Ct. 1513137 L.Ed.2d 763 INTER-MODAL RAIL EMPLOYEES ASSOCIATION, et al., Petitionersv.ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY, al. No. 96-491. Supreme Court of the United States Argued March 17, 1997. Decided May 12, Syllabus * As employees respondent Santa Fe Terminal Services, Inc. (SFTS), a wholly owned subsidiary The Atchison, Topeka and Railway Co. (ATSF), individual petitioners were entitled, among other things, to pension, health, welfare benefits under SFTS-Teamsters Union collective bargaining agreements. resulting benefit plans subject Employee Retirement Income Security Act 1974 (ERISA). Ultimately ATSF bid work being done by In-Terminal Services (ITS) terminated SFTS who declined continue employment with ITS. ITS-Teamsters pension less generous than plans. Petitioners filed suit, alleging that terminations violated §510 ERISA, which makes it unlawful "discharge . [plan] participant for purpose interfering attainment any right such may become entitled plan. '' (Emphasis added.) District granted respondents' motion dismiss. Concluding only prohibits interference rights are capable "vesting,'' Appeals reinstated petitioners' claim benefits, but affirmed dismissal their do not vest. Held: Appeals' holding bars vested is contradicted §510's plain language, whose use word "plan'' all forecloses position. ERISA defines include an "employee plan,'' 29 U.S.C. §1002(3), even though exempted from its stringent vesting requirements, see §1051(1). Had Congress intended confine protection "vested'' rights, could have easily substituted "pension plan'' or "nonforfeitable right'' "any right.'' flexibility employer enjoys unilaterally amend eliminate plan, Curtiss-Wright Corp. v. Schoonejongen, 514 73, 78, 115 1223, ----, 131 94, does justify departure language. Such helps employers avoid complicated administration increased cost plans, encourages them offer more at outset, since they can reduce should economic conditions sour. Section 510 counterbalances this requiring follow plan's formal amendment process, thus ensuring "circumvent provision promised benefits.'' Ingersoll-Rand McClendon, 498 133, 143, 111 478, 485, 112 474. Any tension might exist between employer's power participant's product careful balance competing interests, type "absurd glaringly unjust'' result, Ingalls Shipbuilding, Director, Office Workers' Compensation Programs, 519 117 796, 804, 136 736, would warrant On remand, first opportunity evaluate remaining arguments, including argument eligible receive plan time discharged and, thus, cannot state claim. Pp. ____-____. 80 F.3d 348, vacated remanded. O'CONNOR, J., delivered opinion unanimous Court. Richard E. Schwartz, petitioners. Cornelia T. L. Pillard, Washington, DC, as amicus curiae, special leave James D. Holzhauer, Chicago, IL, respondents. Justice O'CONNOR 1 (ERISA), 88 Stat. 895, "discharge, fine, suspend, expel, discipline, discriminate against beneficiary [of employee plan] plan.'' §1140. Ninth Circuit held term defined in ERISA. We disagree. 2 former was responsible transferring cargo railcars trucks ATSF's Hobart Yard Los Angeles, California. While employed SFTS, retirement Railroad 1974, 1312, amended, 45 §231 seq., agreements involving Teamsters Union. provided workers through ERISA's comprehensive regulations. 3 In January 1990, entered into "Service Agreement'' same "inter-modal'' had previous 15 years without contract. Seven weeks later, exercised terminate newly formed Agreement opened up competitive bidding. Respondent successful bidder, ITS terminated. ITS, unlike obligated make contributions Account Act. also fewer agreement SFTS. Workers continued "lost benefits'' "suffered substantial reduction 350 (C.A.9 1996) (per curiam). 4 sued respondents ATSF, Central California, "discharg[ing]'' "for right[s] which'' "become entitled'' adopted pursuant agreement. See App. Pet. Cert. 29a, Complaint, ¶33. remained employer, contended, been assert claims least until gave rise those expired. substitution however, precluded asserting relegated According petitioners, "interfer[ed] attainment'' "right'' §510. Respondents moved dismiss these claims, motion. 5 part reversed part. 348 (1996). court concluding ""protects participants termination motivated desire prevent vesting.''' Id., 350-351 (quoting 474 (1990)). But benefits. "Unlike benefits,'' observed, "welfare vest.'' F.3d, 351. noted, "employers remain free [welfare] plans,'' "employees no present "right' future, anticipated benefits.''' Ibid. (emphasis internal quotation marks omitted). Because "existence [a] prerequisite section relief,'' concluded did cause action certiorari resolve conflict Courts on issue,** 504, 395 (1996), now vacate decision below remand. II 6 language noted above, §1140 added). both "an [and] specifically exempts plan[s]'' includes because "vest'' (at insofar concerned), Congress' clause applies rights. §1002(2), "plan,'' "nonforfeitable'' right, §1002(19), draws distinction not. 7 sponsor enjoy some circumstances not, apparently thought, It true itself "does regulate substantive content welfare-benefit plans.'' Metropolitan Life Ins. Massachusetts, 471 724, 732, 105 2380, 2385, 85 728 (1985). Thus, unless contractually cedes freedom, see, e.g., Adcox Teledyne, Inc., 21 1381, 1389(CA6), cert. denied, 513 871, 193, 130 126 (1994), "generally reason time, adopt, modify, [its] pla[n].'' 1228, 94 (1995). 8 accident; recognized "requir[ing] ancillary seriously complicate increase S.Rep. 93-383, p. 51 (1973). Giving If locked initially offered, "they err side omission.'' Heath Varity Corp., 71 256, 258 (CA 7, 1995). Co., U.S., S.Ct., 485 (citing 93-127, pp. 35-36 (1973); H.R.Rep. 93-533, 17 (1973)). short, " promises credible.'' Heath, supra, 258. An may, course, retain unfettered alter promises, so must procedures set forth §1102(b)(3) (requiring "provide procedure amending plan''); 1228 (observing "cognizable [under ERISA] company [amend permissible manner''). Adherence "increases likelihood proposed amendments, fairly serious events, given consideration deserve.'' 82, 1230. process be undermined if apply "informally'' one time. abolish against'' beneficiaries [their] To sure, when acts purpose, case making fundamental business decisions, actions barred where triggers §510, most surely Shipbuilding 736 (1997), 9 argue nevertheless applied "vest,'' protects employee's cross "threshold eligibility'' Brief & 18. words, respondents, has already "attain[ed]'' her "right[s]'' subsequent taken cannot, definition, "interfer[e]'' "attainment right[s]'' discharged, approach evaluating argument, others presented us, we allow consider matters 10 therefore judgment remand proceedings consistent opinion. 11 ordered. syllabus constitutes prepared Reporter Decisions convenience reader. Detroit Timber Lumber 200 321, 337, 26 282, 287, 50 L.Ed. 499. ** Shahid Ford Motor 76 1404, 1411 (C.A.6 (holding vest not); (C.A.7 1995) (same); Seaman Arvida Realty Sales, 985 F.2d 543, 546 (C.A.11) (same), 916, 114 308, 255 (1993); McGann H Music 946 401, 408 (C.A.5 1991) (implying same), denied sub nom. Greenberg 506 981, 113 482, 121 387 (1992); Andes 70 1332, 1336 (C.A.D.C.1995) same).

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