ERISA Interference, Discrimination and Retaliation
Many employers provide their employees with benefit packages that may entitle them to severance benefits, pension benefits, or access to short-term and long-term disability leave. These employer-provided benefit plans may be subject to a federal law—the Employee Retirement Income Security Act (or “ERISA”)—that guarantees employees certain rights.
Freedom from Interference, Discrimination and Retaliation
ERISA prohibits employers from terminating, suspending, expelling, disciplining or discriminating against employees for exercising or attempting to exercise their rights under an ERISA benefits plan. Examples of unlawful conduct include:
- Terminating an employee to prevent the employee from becoming fully vested in his or her retirement benefits;
- Terminating a sick employee to prevent the employee from taking short- or long-term disability leave;
- Falsely characterizing an employee’s termination as “for cause” in order to deprive the employee of his or her severance benefits;
- Creating a hostile work environment in order to encourage a sick employee to resign and forsake his or her disability benefits.
Potential Claims for ERISA Violations
An employee who has been wrongfully denied ERISA benefits has a claim, under ERISA Section 502, to recover benefits due him or her under the terms of the ERISA plan. An employee whose ERISA rights have been interfered with, or who has experienced discrimination or retaliation for exercising his or her rights, can file a claim for violation of ERISA Section 510. In either case, damages are usually limited to the benefits the employee would have received absent the wrongful denial, discrimination or retaliation. Compensatory and punitive damages are not usually allowed in ERISA cases.
To prevail on a Section 510 claim, an employee must produce evidence that the employer specifically intended to interfere with his or her ERISA rights. Specific intent means that the employer consciously decided to interfere with the employee’s attainment of eligible benefits. Such intent can be proven with direct evidence (e.g., a statement or admission of the employer that it intended to interfere) or circumstantial evidence.
Pre-Requisites to Bringing Legal Action
An employee may be required to exhaust administrative remedies before bringing an ERISA claim. For example, if an employee claims that his or her employer wrongfully denied ERISA benefits, generally the employee must appeal that denial through administrative channels before filing a lawsuit. Failure to comply with administrative procedures could bar the employee’s ERISA claim.
For this reason, it is crucial that an employee who believes his or her ERISA rights have been violated involve legal counsel early in the process. If you believe your employer has improperly denied you ERISA benefits, or interfered with the exercise of your ERISA rights, contact the attorneys of Fried & Bonder, LLC.
