ERISA’s Anti-Retaliation Clause Protects Unsolicited, Informal Internal Complaints

Kollman & Saucier
Kollman & Saucier

Section 510 of the Employee Retirement Income Security Act (ERISA) protects employees from being fired, and other adverse employment actions, because the employee has complained about benefit issues.  The courts interpreting this retaliation protection have differed, however, on what is considered a protected complaint.  The Seventh Circuit Court of Appeals, in George v. Junior Achievement of Central Indiana, Inc., No. 11-3291 (7th Cir. Sept. 4, 2012), held that  ERISA’s anti-retaliation provision, Section 510, U.S.C. § 1140, protects a participant’s informal complaints about plan-related issues.  This decision evens the score on the split among the federal circuits on this topic, with the Second, Third and Fourth Circuits requiring some level of “formal” action, and the Fifth and Ninth (and now Seventh) Circuits holding that informal complaints are sufficient to trigger ERISA’s protection.

In 2009, Victor George, a Vice President of Junior Achievement of Central Indiana, Inc., noticed that money withheld from his paycheck was not being deposited into his retirement account and health savings account.  He lodged complaints with various company accountants, board members and executives, including the President and CEO.  He also contacted the U.S. Department of Labor but did not file a written complaint.  He ultimately received checks for approximately $2,600 to make up for the missed deposits plus interest.

Shortly after complaining, he was terminated and filed suit against Junior Achievement alleging it violated Section 510 of ERISA, which prohibits retaliation “against any person because he has given information or has testified or is about to testify in any inquiry or proceeding relating to” ERISA.  The district court, concluding that that ERISA covered only formal proceedings, dismissed the case.  The Seventh Circuit reversed, however, relying on what it labeled a messily written, unclear statute and the recent Supreme Court decision in Kasten v. Saint-Gobain Performance Plastics Corp, 131 S. Ct. 1325, 1331 (2011), which held that when dealing with an ambiguous anti-retaliation provision, “we are supposed to resolve the ambiguity in favor of protecting employees.”  In Kasten, the Supreme Court concluded that the Fair Labor Standards Act’s anti-retaliation provision included certain categories of informal oral complaints.

In George, the Seventh Circuit ultimately concluded that the word “inquiry” could mean official action (such as a DOL investigation) just as well a question raised by an employee.  In the end, the court determined that Mr. George satisfied the Section 510 “inquiry” requirement by notifying his employer of the potential breach and his repeatedly asking how the situation would be remedied.  The Seventh Circuit’s decision continues to expand the opportunities for employees to ask questions about their benefits under the umbrella of Section 510’s protections.


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