Source: https://law.justia.com/cases/federal/appellate-courts/F2/933/231/36090/
Timestamp: 2020-02-24 20:24:19
Document Index: 146097588

Matched Legal Cases: ['§ 1140', 'art:\n29', '§ 1140', 'art, 719', '§ 1140', '§ 1132', '§ 1140', '§ 1140']

Robert Douglas Conkwright, Plaintiff-appellant, v. Westinghouse Electric Corporation, Defendant-appellee, 933 F.2d 231 (4th Cir. 1991) :: Justia
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Robert Douglas Conkwright, Plaintiff-appellant, v. Westinghouse Electric Corporation, Defendant-appellee, 933 F.2d 231 (4th Cir. 1991)
US Court of Appeals for the Fourth Circuit - 933 F.2d 231 (4th Cir. 1991) Argued Jan. 10, 1991. Decided May 14, 1991
On summary judgment, the non-moving party is entitled to have his evidence as forecast assumed, his version of that in dispute accepted, and the benefit of all favorable inferences. Charbonnages de France v. Smith, 597 F.2d 406, 414 (4th Cir. 1979). We view the summary judgment motion in that light, and we apply the same standard as the district court and determine for ourselves whether there are any genuine issues of material fact that must be resolved by a finder of fact. Fed. R. Civ. P. 56; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986).
In an age discrimination case, a plaintiff must prove that "but for" his employer's discriminatory intent, he would not have been fired or laid off. Lovelace v. Sherwin-Williams Co., 681 F.2d 230, 238 (4th Cir. 1982). A plaintiff can meet this burden either through direct or indirect proof, or by invoking the Title VII, McDonnell Douglas scheme of proof. See McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S. Ct. 1817, 36 L. Ed. 2d 668 (1973); Goldberg v. B. Green & Co., 836 F.2d 845 (4th Cir. 1988).
* Under that proof scheme, the prima facie case in an age discrimination reduction-in-force case requires proof that the claimant who is in the protected age group was discharged or demoted, was performing his job at the time of discharge at a level that met his employer's expectations, and that either persons outside the protected class were retained in the same position, or that Westinghouse did not treat age neutrally in selecting the claimant for layoff. EEOC v. Western Elec. Corp., 713 F.2d 1011, 1015 (4th Cir. 1983).
Westinghouse management had to cut employees due to the loss of the DIVADS contract. A large number of persons across the company were cut. In choosing whom to lay off, it relied on an ostensibly neutral, merit-based system, its internal rating system. That system generated a list of names of those who were the "lowest rated." Management then adjusted this list to avoid hurting disproportionately minorities or those nearing vesting or retirement, an action that surely does not suggest a pretextual basis for Conkwright's termination. See McDaniel v. Mead Corp., 622 F. Supp. 351, 358-59 (W.D. Va. 1985); see also part III, infra (discussing plaintiff's ERISA claim). Conkwright's name was appropriately on the ratings system list; his ratings put him in the lowest rated category. That co-workers and direct managers may have thought he did a good job, or that he did not "deserve" the ratings or did not "deserve" to get laid off, is close to irrelevant.4 The system Westinghouse used was objective and facially fair, even if it, like all human endeavors, was imperfectly administered.
Conkwright also contends that he has enough direct and circumstantial evidence to create a genuine issue using ordinary proof principles. Proof that a plaintiff was treated unfavorably because of his age can come from direct evidence or "circumstantial evidence, including but not limited to proof of the claimant's general qualifications, from which the inference of age discrimination may rationally be drawn independently of any age presumption." Cline v. Roadway Express, Inc., 689 F.2d 481, 485 (4th Cir. 1982) (footnote omitted). Proof of claimant's general qualifications is important in any discharge claim, because "with performance established as satisfactory, there is no reasonable expectation for the challenged action but age discrimination." Lovelace, 681 F.2d at 244. But proof of general qualifications is less relevant in a reduction-in-force claim because someone has to be let go. Indeed, three someones had to be let go--and two of those chosen were in their 30's.
* Conkwright also seeks damages under Sec. 510 of ERISA, 29 U.S.C. § 1140, on the ground that Westinghouse intentionally sought to deprive him of rights in its pension plan. Section 510 states in pertinent part:
29 U.S.C. § 1140. Conkwright contends that Sec. 510 gives fully vested employees a cause of action against an employer who acts to prevent accrual of additional benefits. We agree.
Those employees waiting to vest in a qualified pension plan have a cause of action against an employer who discharges them for the purpose of blocking their vesting in the company's pension plan. See, e.g., Ursic v. Bethlehem Mines, 556 F. Supp. 571 (W.D. Pa.), aff'd in relevant part, 719 F.2d 670 (3d Cir. 1983); Folz v. Marriott Corp., 594 F. Supp. 1007 (W.D. Mo. 1984); Titsch v. Reliance Group, Inc., 548 F. Supp. 983 (S.D.N.Y. 1982). The claim raised by Conkwright, however, is one of first impression for this court, for it seeks recognition of an action by fully vested employees who claim denial not of their vested rights but of their ability to accrue additional benefits.
In considering whether Sec. 510 provides for such a claim, we look first to the statute itself and the intent of Congress. Congress adopted ERISA in order "to remedy certain defects in the private retirement system which limit the effectiveness of the system in providing retirement income security." H.R.Rep. No. 533, 93d Cong., 1st Sess. (1973), reprinted in 1974 U.S.Code Cong. & Admin.News 4639, 4639; see also Kross v. Western Elec. Co., 701 F.2d 1238, 1242 (7th Cir. 1983) ("ERISA is a remedial statute to be liberally construed in favor of employee benefit fund participants."). As part of the new regime embodied in ERISA, Congress adopted private enforcement mechanisms, through civil actions by employees in federal court, in addition to those powers given the Secretary of Labor to enforce the rights secured by the Act.
Viewed against this background, it has been recognized that the primary focus of Sec. 510 is to "prevent [ ] unscrupulous employers from discharging or harassing their employees in order to keep them from obtaining vested pension rights." West v. Butler, 621 F.2d 240, 245 (6th Cir. 1980) (discussing Sec. 510 suit to enjoin secondary picketing). But other courts looking to Sec. 510 to answer the same question we consider here have noted that though the goal of preventing discharge to block vesting of pension rights is undeniably the primary purpose of this section, there is also "room for a construction that extends section 510 protection to vested employees as well." Clark v. Resistoflex Co. Div. of Unidynamics, Corp., 854 F.2d 762, 770 (5th Cir. 1988).
Extending Sec. 510 to encompass claims brought by vested employees for denial of additional benefits comports with both the legislative language and the intent of Congress to give employees "broad remedies" for violations of pension rights. Section 510 prohibits an employer from discharging an employee "for the purpose of interfering with the attainment of any right to which such participant may become entitled" under a benefit plan. 29 U.S.C. § 1140 (emphasis added). Surely, Congress was not limiting Sec. 510 only to those rights which a participant acquires upon vesting, or it easily could have referred to "vested rights." Similarly, the statute refers to rights to which a participant "may become entitled," which is to say that Sec. 510 permits suits for interfering with rights not yet earned. We have no reason to constrict this "broad remedial" provision to only vested rights when the Act clearly contemplates suits to protect any rights implicated by employer action.
We also must take note that Sec. 510 is a companion enforcement provision to Sec. 502, 29 U.S.C. § 1132. See 29 U.S.C. § 1140 ("The provisions of section 1132 of this title shall be applicable in the enforcement of this section."). Section 502 authorizes a participant to bring a civil action "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan...." Id. Sec. 1132(a) (1) (B). In this way, Secs. 502 and 510 together protect the panoply of rights at risk in the pension context: rights about to be earned but frustrated due to unlawful employer action, benefits earned but not paid, other rights due a participant but not fulfilled, and future benefits earned but not yet due. Not to give Sec. 510 the reading we think it is due would result in giving vested employees, the most senior workers, less protection than that afforded junior workers. That is because an unvested worker discharged for the purpose of interfering with his not-yet-vested rights clearly can sue under Sec. 510, see, e.g., Ursic, supra; Folz, supra; Titsch, supra, but a worker who already has vested would be without legal recourse to protect his (additional) pension rights. As the Seventh Circuit noted, "There is no evidence that Congress intended ERISA to afford less protection to senior employees than that enjoyed by probationary or junior employees who have not qualified for coverage under particular employee benefit plans." Kross, 701 F.2d at 1243.
Another important case recognizing a Sec. 510 claim by a fully vested employee is Dister v. Continental Group, Inc., 859 F.2d 1108 (2d Cir. 1988). That case involved a plaintiff whose "basic pension rights had vested prior to his termination." Id. at 1110. The Second Circuit nonetheless held that plaintiff could bring a Sec. 510 claim for interference with his ability to earn additional benefits, which his early termination denied him, provided that he "prove more than the single fact that his termination precluded him from vesting into the [additional benefits plan]; he must demonstrate Continental's unlawful purpose in firing him." Id. at 1111.5
For these reasons, we think that Sec. 510 should not be given a narrow reading and instead hold that Sec. 510 extends to claims by vested employees for intentional interference with their ability to accrue additional benefits. Accord Kross, 701 F.2d at 1242; Clark, 854 F.2d at 770-71 (assuming, without deciding, that Sec. 510 right to sue extends to vested employees); Nemeth v. Clark Equip. Co., 677 F. Supp. 899, 907-08 (W.D. Mich. 1987); Garry v. TRW, Inc., 603 F. Supp. 157, 162-63 (N.D. Ohio 1985). But see, e.g., Kelly v. Chase Manhattan Bank, 717 F. Supp. 227 (S.D.N.Y. 1989); Moehle v. NL Indus., Inc., 646 F. Supp. 769, 779 n. 6 (E.D. Mo. 1986); Donohue v. Custom Management Corp., 634 F. Supp. 1190, 1197 (W.D. Pa. 1986); Corum, 628 F. Supp. at 717.
In considering that question, we have first to decide whether a Sec. 510 plaintiff must prove specific intent by defendants to interfere with his pension rights. There is a division of authority on this, compare, e.g., Dister, 859 F.2d at 1111-13, and Gavalik v. Continental Can Co., 812 F.2d 834, 851 (3d Cir. 1987) (requiring specific intent), with, e.g., Furcini v. Equibank, NA, 660 F. Supp. 1436, 1442 (W.D. Pa. 1987) (specific intent not expressly required). Addressing it as a question of first impression for this court, we find the requirement of specific intent the better view. ERISA is designed to prevent harassment and firing of employees "for the purpose of interfering with the attainment of any right to which [a] participant may become entitled...." 29 U.S.C. § 1140. As the Second Circuit put it, "ERISA does not guarantee every employee a job until he or she has fully vested into a company's benefit plan." Dister, 859 F.2d at 1111. Rather, ERISA guarantees that no employee will be terminated where the purpose of the discharge is the interference with one's pension rights. Consequently, it is necessary to separate the firings which have an incidental, albeit important, effect on an employee's pension rights from the actionable firings, in which the effect of the firing on the employer's pension obligation was a motivating factor in the firing decision. Otherwise, an employee could sue under Sec. 510 for being negligently terminated, and that goes too far to vindicate the pension rights of employees. An effective way of making the necessary separation is to require plaintiffs to demonstrate specific intent on the part of the employer to interfere with the employee's pension rights. Accord Dister, 859 F.2d at 1111 ("An essential element of plaintiff's proof under the statute is to show that an employer was at least in part motivated by the specific intent to engage in activity prohibited by Sec. 510."); Vogel v. Independence Federal Sav. Bank, 728 F. Supp. 1210, 1225-26 (D. Md. 1990) (using "the more rigorous standard" of specific intent).
In reaching that conclusion, the Second Circuit cited Corum v. Farm Credit Servs., 628 F. Supp. 707, 718 (D. Minn. 1986), for the proposition that a plaintiff must show more than "lost opportunity to accrue additional benefits" to sustain a Sec. 510 claim. That is certainly correct, since, as discussed fully below, a plaintiff must show the employer's unlawful purpose in firing him. But it turns the proposition on its head to suggest that one can never sue under Sec. 510 for unlawful denial of "opportunity to accrue additional benefits." One cannot sue for additional benefits unless one shows something more than just lost opportunity--a plaintiff must show the employer's unlawful purpose. We find this reading of the Second Circuit's language the only fair reading of both its statement and its exhaustive treatment of the plaintiff's Sec. 510 claim, a treatment which would have been unnecessary had Sec. 510 not encompassed a claim by a fully vested employee. In this regard, we think Corum misinterprets the law and Kelly v. Chase Manhattan Bank, 717 F. Supp. 227 (S.D.N.Y. 1989), errs when it relies on Dister to conclude that accrual of additional benefits is not a cognizable Sec. 510 claim. See id. at 232
Plaintiff also makes a claim of abusive discharge. However, Parlato v. Abbott Labs., 850 F.2d 203 (4th Cir. 1988), holds that federal and state age discrimination laws preempt such torts. Parlato remains good law, and the claim is without merit