Opinion ID: 504005
Heading Depth: 2
Heading Rank: 2

Heading: ERISA Sec. 510 (Count II)

Text: 20 Appellants contend that C-E discriminated against them in violation of ERISA Sec. 510, 29 U.S.C. Sec. 1140, by telling other employees of the second plan, while at the same time inducing appellants to retire under the first plan. Appellants assert that they would have been participants in VSIP but for C-E's fraudulent activity, and thus that they have standing as VSIP participants. The district court dismissed Count II because the court determined that appellants did in fact elect early retirement so as to become beneficiaries of the VESP plan and, because they were not participants in VSIP, they had no standing to claim that C-E interfered with their rights under VSIP. 21 ERISA Sec. 510 prohibits employers from penalizing employees with the purpose of interfering with certain benefits to which they are or may become entitled. Section 510 provides in pertinent part: 22 It shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan ... or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan.... 23 29 U.S.C. Sec. 1140 (emphasis added). 24 C-E contends that the appellants are not participants in or beneficiaries of VSIP since they voluntarily retired prior to the time VSIP existed and nothing they allege can change the fact that they were not eligible to participate in VSIP at the time it was offered. 6 Appellee's Br. at 24. C-E's contention, however, begs the question: appellants allege not just that C-E failed to inform them of the VSIP, but that C-E coerced the appellants into retiring while providing information to some other employees and thus, in essence, tricked the appellants into retiring early. If they had not been tricked, the argument continues, they would have been participants in the VSIP plan. Therefore, the issue is not whether appellants should be denied standing because they retired voluntarily, but rather, whether appellants have standing for the purposes of demonstrating that they were tricked into retiring, and thus would have been eligible for participation in VSIP. Appellants contend that but for the selective divulgence of information, they would have been members of VSIP, and, for the purposes of standing to bring an action under ERISA, should be considered as such. We agree with this contention. 25 This is not an instance where plaintiffs simply alleged that the employer did not inform the employees of a plan in development. Instead, appellants here argue that C-E induced appellants to retire under the VESP, while secretly informing some individuals of the more lucrative VSIP. 7 By its very nature, a Sec. 510 claim will often involve employees who claim that they did not receive benefits because of the employer's actions, and thus were denied an opportunity to become participants in the benefits. To require that the employees have the status of participant where they allege that the employers' acts effectively deprived them of such status would undercut the provision and cannot have been intended by Congress. 26 We therefore conclude that appellants have standing to demonstrate that they would have been participants absent C-E's actions. 8 Because of the procedural posture of the case, the appellants have not fleshed out the elements of their Sec. 510 claim, and it is not for us to do so here. 9 We note, however, that we have not determined that appellants will be able to establish a violation of Sec. 510, only that they have standing to pursue it. 10 We will therefore reverse the judgment and remand for further proceedings regarding Count II consistent with this opinion.