Opinion ID: 448000
Heading Depth: 2
Heading Rank: 2

Heading: Second Claim: Violation of Public Policy.

Text: 36 Plaintiffs' second claim presents difficulties, however. Plaintiffs allege that Gulf, without their consent, negotiated with Thrifty over the terms of plaintiffs' future employment with Thrifty, and that Gulf joined with Thrifty to coerce them into accepting a new employment contract with Thrifty that contained terms less favorable to them than their contract with Gulf. Plaintiffs allege that, as a result of such unauthorized negotiations and such coercion, they lost both severance benefits that they had accumulated while working for Gulf, and benefits that they would have accumulated while working for Thrifty. We shall refer to the latter as prospective benefits. 37 Insofar as the second claim alleges the loss of benefits that plaintiffs had already accumulated while working for Gulf, it, like the first claim, is one for benefits under an employee welfare benefit plan and is preempted by ERISA. Insofar as it alleges the loss of prospective benefits, however, we find that it is not preempted. 38 The claim for prospective benefits does not allege the denial of benefits under a benefit plan; rather, it alleges that Gulf's tortious actions prevented the existence of such a plan in plaintiffs' employment with Thrifty. It does not allege the violation of duties created by any welfare plan; rather it alleges the violation of Gulf's duties as a past employer. The conduct giving rise to the claim was the negotiation of an employment contract which prevented the existence of an employee benefit plan. The claim does not raise any issues concerning the matters regulated by ERISA, namely, the administration, reporting, disclosure, funding, vesting, and enforcement of benefit plans. The issues raised by the claim are no different than those that would be raised by a claim that Gulf had conspired with Thrifty to force the plaintiffs to accept, for example, lower wages, a claim that would clearly not be preempted by ERISA. 39 The claim for prospective benefits is closely analogous to the claim in Freeman v. Jacques Orthopaedic and Joint Implant Surgery Medical Group, 721 F.2d 654 (9th Cir.1983). There an employee brought an ERISA action alleging that his employer fraudulently induced him to waive his right to participate in a pension plan. We held that, although the plan was covered by ERISA, the action could not be maintained under ERISA's civil enforcement provision because that provision entitles only a participant or beneficiary to bring suit. The plaintiff, having waived participation in the plan, was not a participant or beneficiary. We further held that, although the plaintiff might have been entitled under the state law of fraud to damages equal to the benefits he would have received had he participated in the plan, such damages were not themselves a benefit under a plan and therefore could not be awarded in an ERISA action. 40 Freeman controls plaintiffs' claim for prospective severance benefits. According to the allegations in that portion of their complaint, plaintiffs are not participants in, or beneficiaries of, a severance pay plan administered by Thrifty. Thrifty has no such plan and that is the heart of the matter. To preempt plaintiffs' state-law claim for prospective benefits under these circumstances would leave them without an avenue of redress for the wrongs that they have alleged. 41 We therefore hold that plaintiffs' second claim is not preempted insofar as it alleges the loss of severance benefits that plaintiffs claim they would have accumulated during the course of their employment with Thrifty were it not for Gulf's allegedly tortious behavior. 42