Opinion ID: 1803267
Heading Depth: 2
Heading Rank: 3

Heading: the relationship between lost future pension benefits in a wrongful discharge claim and the erisa

Text: Defendants Park West Galleries and Albert Scaglione initially argue that the award of future pension benefits in the plaintiff's wrongful discharge claim does relate to the Park West pension plan because the damages represent future pension benefits which would have accrued to the plaintiff under the plan. In fact, according to the defendants, the amended judgment entered in this case specifically identifies this portion of the plaintiff's award as for the pension. The defendants' argument would be compelling if the award of future pension benefits had been against Park West Galleries, Inc., Defined Benefit Pension Plan. There is, however, no danger of such an award in this case. The plan itself is not and never has been a party to this action. Furthermore, no trustee or administrator of the plan has been joined in a capacity as administrator or trustee. In short, the simple fact that the damage award was based in part on the terms of the plan does not place any fiscal or administrative burden upon the plan itself. This relationship to the plan is, in the words of the Shaw Court, too peripheral to trigger ERISA preemption. Shaw, supra, p 100, n 21. [12] The defendants also argue that the award of future pension benefits relates to the pension plan because the plan itself provides a remedy for the loss of future benefits in circumstances of this kind. Article VI, § 5 of the plan does provide for vested credits when an employee's employment is terminated for any reason. [13] The defendants additionally assert that the ERISA regulations, specifically 29 CFR 2530.200a-2530.200b-3, are incorporated in the Park West plan by law and would provide for the accrual of future pension credits in addition to vested credits upon the basis of a successful claim for lost wages. [14] Assuming, arguendo, that the defendants' interpretations of the plan and relevant ERISA regulations are correct, we are nevertheless forced to conclude that the ERISA preemption provision is inapplicable. The question of express ERISA preemption does not turn upon whether an alternative remedy is offered under the plan or under the ERISA. [15] Indeed, the Shaw Court implicitly acknowledged that, apart from the New York statutes, no law would preclude plan administrators from discriminating against pregnancy-related disability prior to the effective date of the Pregnancy Discrimination Act, 42 USC 2000e(k). Id., p 89. ERISA preemption instead, as discussed above, turns upon whether state law places any fiscal, administrative, or legal burdens upon the plan. In our view, the fact that the plaintiff may have had additional remedies available under the plan does not indicate that pursuit of her remedy against her employer creates a fiscal, administrative, or legal burden upon the plan itself. [16] Viewed in this light, the defendants' second argument is merely a more sophisticated version of the earlier argument that the accrual of future pension benefits relates to the plan because the award was calculated on the basis of the terms of the plan. [17] Again, we can only conclude that this relationship is too peripheral to trigger ERISA preemption. Shaw, supra . Finally, we reject the Court of Appeals reasoning that sound policy requires ERISA preemption of these damages because: The prospect of jury awards under state law for lost pension benefits is a severe disincentive to the establishment of private pension plans and inconsistent with ERISA'S express preemption of all state laws that relate to plans under its coverage. [153 Mich App 520, 527; 396 NW2d 210 (1986).][ [18] ] In our view, it is an equally plausible microeconomic hypothesis that employers buy labor at market rates and therefore would be required to substitute other, recoverable forms of compensation in the event that they elect to discontinue pension contributions. Moreover, even assuming that the economic analysis of the Court of Appeals is correct, we would find the relationship too remote to trigger ERISA preemption. Shaw, supra, p 100, n 21. Our reading of the ERISA preemption provision indicates that there must be a real, if only indirect, relationship between the challenged state law and an employee benefit plan. The relationship posited in the Court of Appeals analysis is merely hypothetical. It might similarly be posited, for example, that an increase in Michigan's minimum wage [19] would discourage the creation of pension funds by simultaneously reducing the amount of an employer's income allocable to pensions and increasing the level of benefits specified under a pension plan, [20] yet we would be loath to rule that state minimum wage law is preempted by the ERISA. Such a relationship is, in the language of the Shaw Court, simply too remote to trigger ERISA preemption. Shaw, supra . [21] We agree with the conclusion of the dissent that this wrongful discharge claim has some relationship to the Park West Defined Benefit Pension Plan. However, as made clear by the decisions of the United States Supreme Court, proper analysis of the scope of the ERISA preemption provision requires more than an inquiry as to whether state law is logically related to an ERISA plan. We reject an all-encompassing view of this legislation which would subordinate the sovereign powers of this state to the limited authority of the federal government. As the United States Supreme Court has explained: ERISA preemption analysis must be guided by respect for the separate spheres of governmental authority preserved in our federalist system. Alessi v Raybestos-Manhattan, Inc , 451 US [504] 522 [68 L Ed 2d 402; 101 S Ct 1895 (1981)]. [ Fort Halifax Packing Co, supra, 482 US 19.] In sum, our review of the defendants' arguments and the record in this case fails to show that the award of future benefits imposes an administrative, fiscal, or legal burden upon the employee benefit plan. We therefore conclude that the award of future pension benefits is not preempted under the ERISA. Finding no merit in the remaining issue raised by the defendants, we decline to discuss it in this appeal. [22]