Source: http://openjurist.org/417/f3d/133/edes-v-verizon-communications-inc
Timestamp: 2014-04-24 19:40:00
Document Index: 469599478

Matched Legal Cases: ['§ 1001', '§ 502', '§ 1102', '§ 502', '§ 510', '§ 510', '§ 1140', '§ 510']

417 F3d 133 Edes v. Verizon Communications Inc | OpenJurist
417 F. 3d 133 - Edes v. Verizon Communications Inc	Home417 f3d 133 edes v. verizon communications inc
417 F3d 133 Edes v. Verizon Communications Inc 417 F.3d 133
Ronald R. EDES, Kevin Lyons, John Parsons, Plaintiffs, Appellants,v.VERIZON COMMUNICATIONS, INC., et al., Defendants, Appellees.
Plaintiffs-appellants Ronald R. Edes, Kevin Lyons, and John Parsons appeal the dismissal of their claims against Defendants-appellees Verizon Communications, Inc., et al., under the Employee Retirement Income Security Act of 1974, 29 U.S.C § 1001-1461, as amended ("ERISA"). Plaintiffs allege that Defendants violated ERISA by relegating them to the payrolls of third-party payroll agencies, thereby: (1) wrongfully denying them benefits under ERISA plans; (2) interfering with their attainment of plan participation rights; (3) breaching fiduciary duties owed to them; (4) failing to meet ERISA's minimum participation standards; and (5) using arbitrary, unwritten plan eligibility criteria. We affirm the district court's decision to dismiss each of these claims pursuant to Fed.R.Civ.P. 12(b)(6).
As alleged in the complaint, Plaintiffs were hired by GTE Service Corporation ("GTE"), a business unit of GTE Corporation (now Verizon Communications, Inc.), to work in its Danvers, Massachusetts, office in or around April 1994. Although Plaintiffs were hired directly by GTE, each was told to sign on with one of two independent payroll agencies, FISC Inc. or BeneTemps Inc., who issued Plaintiffs' paychecks during the entire period of their employment with GTE. Plaintiffs received no paychecks or benefits from GTE during their tenure. In all other respects, Plaintiffs were treated like "regular," full-time GTE employees. In particular, Plaintiffs received the same training, performance reviews, and access to GTE facilities as other employees; were invited to corporate functions, staff meetings, and committee service just as other employees were; and were explicitly instructed to identify themselves to outsiders as "GTE employees" rather than as temporary employees. In short, according to the complaint, Plaintiffs were "thoroughly integrated in GTE's workforce."
On October 10, 2001, Plaintiffs filed a putative class-action complaint in federal district court against Verizon Communications, Inc. (formerly GTE Corporation), seven named GTE ERISA benefits plans and their administrators and fiduciaries,1 and "GTE John Doe Unknown Plans 1-10." Plaintiffs alleged, on information and belief, that because eligibility to participate in GTE's ERISA plans was "expressly limited to employees who were paid directly by a participating business unit," Defendants had violated their rights under ERISA and state common law.
On February 20, 2002, Defendants moved to dismiss each of Plaintiffs' claims pursuant to Fed.R.Civ.P. 12(b)(6), arguing, inter alia, that their claims of interference with attainment of participation rights and breach of fiduciary duty were time-barred and their state common-law claim preempted. After a hearing on the motion, the court stayed discovery but did not stay automatic disclosure, noting that Defendants had yet to disclose the plans' actual language. On September 19, 2002, the court issued an order denying Defendants' motion to dismiss without prejudice to its renewal "once the precise language of the terms of eligibility is produced." In October 2002, Defendants submitted an attorney declaration with exhibits stating that they had disclosed plan documents to Plaintiffs in May and June 2002. After the court permitted Plaintiffs to take a deposition to determine when the relevant eligibility criteria had been included in GTE's ERISA plans, Defendants filed a memorandum in further support of their motion to dismiss in January 2003. Plaintiffs filed a memorandum in further opposition to the motion.2
On July 25, 2003, the district court issued a memorandum and order granting Defendants' motion to dismiss the complaint. The court held that Plaintiffs' claims of interference with plan participation rights and breach of fiduciary duty were time-barred and that their state common-law claim was preempted by ERISA. Edes v. Verizon Communications, Inc., 288 F.Supp.2d 55, 59, 61-62, 64 (D.Mass. 2003). The district court also concluded that Plaintiffs otherwise failed to state claims for which relief could be granted. Id. at 58-59, 64. Plaintiffs timely appealed.3
We review de novo a district court's decision to dismiss a complaint pursuant to Rule 12(b)(6), "accepting all well-pleaded facts as true and drawing all reasonable inferences in favor of the plaintiff." Clorox Co. P.R. v. Proctor & Gamble Commercial Co., 228 F.3d 24, 30 (1st Cir.2000). A "complaint is properly dismissed only when the allegations are such that `the plaintiff can prove no set of facts to support [the] claim for relief.'" Id. (quoting Rockwell v. Cape Cod Hosp., 26 F.3d 254, 260 (1st Cir.1994)). "Granting a motion to dismiss based on a limitations defense is entirely appropriate when the pleader's allegations leave no doubt that an asserted claim is time-barred." LaChapelle v. Berkshire Life Ins. Co., 142 F.3d 507, 509 (1st Cir.1998).
Plaintiffs argue that the district court improperly dismissed their claim of entitlement to plan benefits under ERISA § 502(a)(1)(B), 29 U.S.C. § 1102(a)(1)(B), for lack of standing. See, e.g., Abraham v. Exxon Corp., 85 F.3d 1126, 1129 (5th Cir. 1996) ("Whether an employee has standing as a `participant' depends, not on whether he is actually entitled to benefits, but on whether he has a colorable claim that he will prevail in a suit for benefits."). The district court made no reference in its decision to standing. Rather, based on the plan documents submitted by Defendants, the court concluded that "by the terms of the plans, [P]laintiffs are not entitled to benefits because they [were] not paid directly by GTE, but instead [were] paid by temporary payroll agencies." Edes, 288 F.Supp.2d at 58 (footnote omitted).4
Plaintiffs also insist that they may proceed with their claim because they were common-law employees of GTE by virtue of their full "integrat[ion] in GTE's workforce." Whether or not this is so, the district court correctly concluded that "[t]he fact that [P]laintiffs may be common law employees is not by itself enough to state a valid claim for benefits under ERISA." Edes, 288 F.Supp.2d at 58-59. In an opinion published several months after the district court rendered its decision, a panel of this circuit reached the same conclusion, stating that a plaintiff "may have a plausible argument that he was a common law employee . . ., but it is the language of the Plan, not common law status, that controls." Kolling v. Am. Power Conversion Corp., 347 F.3d 11, 14 (1st Cir.2003).
Plaintiffs' own complaint alleges, and the plan documents submitted by Defendants confirm, that GTE's ERISA plans explicitly exclude from participation employees who were not "paid directly" by GTE, without regard for their common-law employment status.5 Plaintiffs further allege that they were in fact not "paid directly" by GTE, but by third-party payroll agencies. Because they "can prove no set of facts to support [their] claim" for benefits under the ERISA plans, Rockwell, 26 F.3d at 260, the district court properly dismissed Plaintiffs' claim under ERISA § 502(a)(1)(B).
The district court held that Plaintiffs could not state a claim for relief under this provision for two independent reasons. "First, an employer may hire employees under terms that render them ineligible to receive benefits given to other employees without violating [ERISA] § 510." Edes, 288 F.Supp.2d at 59. Plaintiffs argue that the district court's analysis ignored the language in ERISA § 510 prohibiting employers from discriminating against a participant or beneficiary "for the purpose of interfering with the attainment of any right to which such participant may become entitled" under an ERISA plan. 29 U.S.C. § 1140 (emphasis added). Plaintiffs argue that whether or not Defendants permissibly excluded them from plan eligibility at the time they were hired as off-payroll employees, Defendants failed to move them to the GTE payroll after they were hired, "for the purpose of interfering with the attainment" of participation rights to which they should have become entitled.6
We need not decide the circumstances, if any, under which employees who are ineligible for ERISA benefits at the time of hiring may state a claim under ERISA § 510, based on a defendant's failure to reclassify them, because the district court properly dismissed the claim on the alternate