Court Opinion

ID: 3031994
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:46:59.273608+00
Date Added: 2024-06-11T11:48:15.137951
License: Public Domain

United States Court of Appeals
                          FOR THE EIGHTH CIRCUIT
                                 _____________

                                 No. 02-2328MN
                                 _____________

Hubert Back,                         *
                                     *
            Appellant,               *
                                     *
     v.                              * On Appeal from the United
                                     * States District Court
                                     * for the District of
Danka Corporation; Danka Office      * Minnesota.
Imaging Company; and Danka           *
Corporation Severance Pay Plan,      *
                                     *
            Appellees.               *
                                ___________

                            Submitted: March 14, 2003
                               Filed: July 14, 2003
                                ___________

Before WOLLMAN, RICHARD S. ARNOLD, and SMITH, Circuit Judges.
                         ___________

RICHARD S. ARNOLD, Circuit Judge.

       Hubert Back, the plaintiff in this case, worked for twenty-seven years for
Danka Corporation, one of the defendants, and its corporate predecessors, Eastman
Kodak Company and IBM. In 1997, Mr. Back suffered a work-related injury to his
shoulder. He filed a claim for workers' compensation benefits. He never returned to
active employment. Mr. Back brings this action against Danka and related entities.
Two claims are presented on this appeal: wrongful withholding of severance pay, in
violation of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§
1001 et seq., and retaliatory discharge, in violation of Minn. Stat. § 176.82.

       The District Court granted defendants' motion for summary judgment. As to
the ERISA claim, the Court held that Mr. Back had not exhausted his administrative
remedies. He never filed a written application for benefits, as required by Article
5.5(a) of Danka's severance-pay plan. The retaliatory-discharge claim was dismissed
on the ground that the plaintiff had not produced sufficient evidence of a causal
connection between his claim for workers' compensation benefits and his discharge.
We affirm in part and reverse in part.

       As to the ERISA claim, it is undisputed that Article 5.5(a) of Danka's
severance-pay plan (assuming for the moment that this plan is the applicable
governing document) requires applicants for severance pay to file a written
application for benefits. Mr. Back never did this. He says, and it is also undisputed,
that he was never informed either that this remedy existed, or that he would be
required to invoke it. Defendants agree that Mr. Back was never given a copy of the
Danka severance-pay plan, nor did he receive a Summary Plan Description. The
District Court observed, however, that, after filing this action Mr. Back was fully
informed of internal plan remedies, and yet made no effort to pursue them. For this
reason, in the view of the District Court, the doctrine of exhaustion of remedies
barred the action, and the ERISA claim was dismissed. (Presumably, this dismissal
would be without prejudice, leaving Mr. Back with the option of asserting an internal
claim under Article 5.5(a) and, if the claim did not succeed, returning to court with
a new action under ERISA.)

      The doctrine of exhaustion of administrative remedies serves important
purposes. It enables an employer, or its plan, to obtain full information about a claim
for benefits, to compile an adequate record, and to make a reasoned decision. The
process is of substantial benefit to reviewing courts, because it gives them a factual

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predicate upon which to proceed. Nonetheless, we respectfully disagree with the
District Court's holding in this case. Danka's failure to inform Mr. Back of the
available and required internal remedy was a violation of ERISA. 29 U.S.C.
§ 1022(b). We have held that in similar circumstances the exhaustion doctrine does
not apply. See Conley v. Pitney Bowes, 34 F.3d 714, 717-18 (8th Cir. 1994).
Certainly Danka is now fully informed of the details of Mr. Back's claim, and some
substantial consequence should follow from Danka's failure to apprise Mr. Back of
the exhaustion requirement. Accordingly, the dismissal of the ERISA claim will be
reversed, with suggestions for further proceedings that will be outlined at the end of
this opinion.

        As to the retaliatory-discharge claim, we agree with the District Court that no
evidence of a causal connection sufficient to create a genuine issue of material fact
was forthcoming. Mr. Back makes two main arguments in support of his position.
He says that his employment was terminated shortly after he filed for workers'
compensation benefits, in the same month, as a matter of fact.1 Adverse employment
action shortly after the filing of a claim is certainly some evidence of causation, but
it is not sufficient standing alone, nor does plaintiff say that it should be. Plaintiff
points, in addition, to notes that he took of a conversation with his supervisor over the
telephone on October 21, 1997. The notes include the following: "terminated over
phone + you're on w/c — we're having cutbacks + you're one of the cutbacks."
Assuming that the note accurately reflects the conversation, as we must in the present
procedural posture of this case, the note does not justify a reasonable inference that
the termination occurred on account of the filing of the claim for workers'

      1
        As late as November 1999, more than two years after the accident that forced
Mr. Back to leave work, Danka asked him to sign an employment-termination
affidavit identifying his last day of employment as March 1, 1999. Plaintiff refused
to sign this document. For purposes of this appeal, we take the facts in the light most
favorable to the plaintiff, and, therefore, assume that termination occurred in October
of 1997, shortly after the filing of the claim for workers' compensation benefits.

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compensation, as opposed to a good-faith reduction in force. The fact that the
plaintiff was on workers' compensation benefits was mentioned, but this could easily
have been the supervisor's attempt at some sort of consolation, and the "cutback"
receives equal mention. We agree with the District Court that the evidence of a
causal connection is insubstantial.

       As to the retaliatory-discharge claim under Minnesota law, the dismissal is
affirmed. As to the ERISA claim, the dismissal is reversed, and the cause remanded
for further proceedings. We suggest that the District Court should first determine
whether Mr. Back's case is governed by Danka's Severance Pay Policy or by the
Kodak plan, the plan that was in effect when Mr. Back was employed by that
predecessor company. For this purpose, it will be necessary to determine when the
discharge occurred, and whether it occurred as a result of the elimination of the
plaintiff's position.2 In proceeding further with the case, the District Court should
keep these suggestions in mind, after receiving and considering, of course, the parties'
positions as to what further proceedings are appropriate.

      Affirmed in part and reversed in part, with suggestions.

      2
       The Severance Pay Policy found in Danka's Employee Handbook contains the
following provision:

             Special note to former Kodak employees:
             For 18 months after the acquisition closing, any former
             Kodak employee hired as a direct result of the Kodak OI,
             KIS and CES acquisition whose positions [sic] is
             eliminated will be paid severance based on his/her
             respective division's Termination Allowance Plan in effect
             as of Dec. 31, 1996. From July 1, 1998 forward, all former
             Kodak employees whose positions are eliminated will be
             paid in accordance with the above severance pay
             guidelines.

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It is so ordered.

A true copy.

      Attest:

               CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.

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