Another Court Allows “Benefits Interference” Claim for Terminated Employee
We reported last month on the decision by the 7th Circuit Court of Appeals in Dewitt v. Proctor Hospital in which the court allowed a claim by a plaintiff who contended that she was fired because of her husband’s high medical bills. In a similar case decided this week, the 8th Circuit Court of Appeals has allowed a claim for “interference with employee benefits.”
In Fitzgerald v. Action, Inc., Danny Fitzgerald told his employer that he was scheduled to have surgery. A short time later, he was terminated due to “lack of work.” Fitzgerald contended that he was terminated "to prevent him from receiving his healthcare insurance benefits" in violation of § 510 of ERISA. After Fitzgerald challenged the termination, the employer asserted that Fitzgerald abused restroom privileges and breaks. Fitzgerald argued that this was a change from the stated “lack of work” reason at the time of the termination.
Section 510 of ERISA makes it unlawful for an employer to discharge a participant in an employee benefit plan "for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan." 29 U.S.C. § 1140. To establish a claim for a violation of § 510, a plaintiff must show that the employer had a specific intent to interfere with the employee’s benefits, which may be shown by circumstantial evidence.
The court analyzed Fitzgerald’s case under the McDonnell Douglas framework and concluded that he produced sufficient evidence to show that misconduct may not have been the true impetus behind his termination, but rather a pretext for interfering with his insurance benefits. The evidence supporting pretext included: (1) the employer’s inconsistent explanations for the termination; (2) the employer’s failure to follow company policy; (3) more lenient treatment of another employee; and (4) the temporal proximity between when Fitzgerald notified his employer of his surgery and his termination. A copy of the decision can be read here.