Stiltner v. Beretta USA Corp ( 1996 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
JAMES E. STILTNER,
Plaintiff-Appellant,
v. No. 94-1323
BERETTA U.S.A. CORPORATION,
Defendant-Appellee.
Appeal from the United States District Court
for the District of Maryland, at Baltimore.
J. Frederick Motz, Chief District Judge.
(CA-92-3507-JFM)
Argued: September 27, 1995
Decided: February 2, 1996
Before ERVIN, Chief Judge, RUSSELL, WIDENER, HALL,
MURNAGHAN, WILKINSON, WILKINS, NIEMEYER,
HAMILTON, LUTTIG, WILLIAMS, and MICHAEL, Circuit
Judges, and PHILLIPS, Senior Circuit Judge, sitting en banc.
_________________________________________________________________
Affirmed by published opinion. Judge Hamilton wrote the majority
opinion, in which Judges Russell, Widener, Wilkinson, Wilkins, Nie-
meyer and Williams joined. Judge Luttig wrote a separate opinion
concurring in the judgment. Senior Judge Phillips wrote an opinion
concurring in part and dissenting in part in which Chief Judge Ervin
and Judges Hall, Murnaghan and Michael joined. Judge Motz did not
participate in this case.
_________________________________________________________________
COUNSEL
ARGUED: Christy Concannon, BAPTISTE & WILDER, P.C.,
Washington, D.C., for Appellant. Jerrold Alan Thrope, GORDON,
FEINBLATT, ROTHMAN, HOFFBERGER & HOLLANDER, Balti-
more, Maryland, for Appellee. ON BRIEF: Roland P. Wilder, Jr.,
Susan Boyle, BAPTISTE & WILDER, P.C., Washington, D.C.; Marc
H. Rifkind, SLEVIN & HART, P.C., Washington, D.C., for Appel-
lant. Gregory S. Reynolds, GORDON, FEINBLATT, ROTHMAN,
HOFFBERGER & HOLLANDER, Baltimore, Maryland, for Appel-
lee.
_________________________________________________________________
OPINION
HAMILTON, Circuit Judge:
Appellant, James E. Stiltner (Stiltner), appeals an order granting
summary judgment in favor of his former employer, Beretta U.S.A.
Corp. (Beretta), on Stiltner's ERISA and state law claims against
Beretta. A divided panel of this court affirmed the summary judgment
as to Counts I, II, and IV of Stiltner's complaint, but vacated and
remanded as to Count III of the complaint. See Stiltner v. Beretta
U.S.A. Corp., No. 94-1323 (4th Cir. January 18, 1995) (designated for
publication, but not reported). On Beretta's suggestion, we vacated
the panel decision and reheard the case en banc . Having considered
the briefs and the arguments of the parties, we now affirm in toto the
district court's grant of summary judgment.
I.
On November 21, 1988, Stiltner began working as a tool room
supervisor for Beretta, a Maryland arms manufacturer. Frank
Valorose, a Beretta employee, helped Stiltner obtain the job. Valorose
had been Stiltner's manager at Stiltner's former job with FN Manu-
facturing (FN).
Stiltner's initial employment status was that of an independent con-
tractor. Although he was not entitled to the fringe benefits that regular
employees received, Stiltner received free housing from Beretta, as
well as an allowance to pay for his COBRA coverage under FN's
health insurance plan.1
_________________________________________________________________
1 Under the Consolidated Omnibus Budget Reconciliation Act
(COBRA), employers must offer terminated employees the option of
2
On February 28, 1989, Beretta offered Stiltner a job as a regular
employee. The terms of the offer were described in a letter given to
Stiltner by Peter Axelrod, Beretta's human resources manager. Stilt-
ner and Axelrod reviewed the letter together, and Stiltner signed the
letter to indicate that he found the terms of the offer acceptable.
Among the benefits described in the letter were the following:
Medical Insurance: Company paid hospitalization and medi-
cal insurance for you and your dependents . . . .
Long Term Disability: Pays 60% of salary after six months
of disability (after one year of employment). Payable to age
70.
(J.A. 83). Axelrod agreed to make Stiltner's regular employment date
retroactive to November 21, 1988, for purposes of his eligibility for
vacation and benefits.
Stiltner enrolled in two welfare benefit plans that Beretta provided
for its employees. The first of these plans, Beretta U.S.A. Health Plan
# 501 (the Health Plan) provided group health insurance for all full-
time employees and their eligible dependents. The Health Plan pro-
vided that coverage would cease at the end of the month in which an
employee stopped active work on a full-time basis.
The second plan, Beretta U.S.A. Life and Disability Plan # 502 (the
Disability Plan), provided long-term disability benefits to full-time
employees who became disabled after one year of employment. At
the time Stiltner enrolled, American Bankers Life Assurance Com-
pany (American Bankers) provided the coverage under this plan.
American Bankers issued a disability plan insurance policy that
expressly excluded coverage for disabilities caused by pre-existing
conditions. Although the certificate of insurance/benefits booklet that
American Bankers issued to participants in the disability plan clearly
disclosed this pre-existing condition limitation, the summary plan
description then in effect for the disability plan (the original SPD) did
_________________________________________________________________
continuing coverage under the employer's group health plan. 29 U.S.C.
§§ 1161, 1163(2).
3
not. Stiltner claims that he did not receive a copy of the certificate of
insurance/benefits booklet until after he became disabled.
In February 1990, Beretta changed the insurer of its disability plan
to the Guardian Life Assurance Company of America (Guardian). The
Guardian policy, like the American Bankers policy, had an express
pre-existing condition limitation. The new certificate of insur-
ance/benefits booklet issued by Guardian clearly disclosed the pre-
existing condition limitation. Beretta sent copies of the new booklet
to participating employees, along with a memo entitled "Summary
Plan Description Supplement to Certificate for the Beretta U.S.A.
Health and Welfare Plans" (the SPD Supplement). The SPD Supple-
ment stated that "[t]his supplement and your certificates of insur-
ance/benefits booklets constitute the Summary Plan Description as
required by [ERISA]." (J.A. 566). Stiltner claims that he did not
receive a copy of either the new certificate of insurance/benefits
booklet or the SPD Supplement until after he became disabled.
Stiltner suffered from a heart condition when he began working for
Beretta. On February 6, 1990, he had a heart attack. After the heart
attack, he worked sporadically until June 9, 1990. Since that date, he
has not worked for Beretta or anyone else because of his heart prob-
lems.
To assist Stiltner in filing a disability insurance claim, Beretta sent
Stiltner the new Guardian certificate of insurance/benefits booklet, the
original SPD for the Disability Plan, and the SPD Supplement for that
plan. Stiltner applied to Guardian for long-term disability benefits
under the Disability Plan, and to the Social Security Administration
for Social Security disability benefits. Guardian denied Stiltner's
claim because his disability arose out of a pre-existing condition.
Beretta attempted to help Stiltner in several ways. First, Beretta
wrote Guardian, urging it to reconsider its decision to deny Stiltner's
claim for disability benefits. Second, although it was clear that Stilt-
ner would never be able to return to work after June 9, 1990, Beretta
kept paying Stiltner his full salary until October 1990, when Stiltner
began receiving Social Security disability benefits. Third, despite a
provision in the Health Plan stating that coverage would end when he
ceased active work on a full-time basis, Beretta kept paying Stiltner's
4
health insurance premiums while Guardian was considering his claim
for disability benefits.
In June 1992, Guardian informed Stiltner that its decision to deny
his claim for long-term disability benefits was final. Subsequently,
Stiltner demanded that Beretta pay him more than $330,000 in long-
term disability benefits. He claimed that he was entitled to the bene-
fits under the terms of his employment contract and the Disability
Plan, regardless of the exclusions in the insurance policies. Beretta,
which was still gratuitously paying Stiltner's health insurance premi-
ums, refused Stiltner's demand. Stiltner then informed Beretta that he
intended to assert an ERISA claim for long-term disability benefits
and offered to settle that claim for approximately $332,000. Although
Beretta did not believe it was legally obligated to pay Stiltner the dis-
ability benefits, it offered to pay him $3,000 and to continue paying
his health insurance premiums for an additional 18 months, if he
would agree to release it from all liability arising from his claim for
disability benefits. Beretta added that if Stiltner refused to accept this
settlement, it would cease paying any further health insurance premi-
ums on Stiltner's behalf.2
Stiltner filed this action against Beretta, raising four claims. In
Count I of his complaint, Stiltner alleged that he was entitled to
recover long-term disability benefits from Beretta under ERISA
§ 502(a)(3), 29 U.S.C. § 1132(a)(3), because the original SPD for the
Disability Plan did not mention the pre-existing condition exclusion.
In Count II, he alleged that he was entitled to the disability benefits
under the terms of the February 28, 1989 offer letter, which Stiltner
described as an employment contract. In Count III, Stiltner alleged
that Beretta violated ERISA § 510, 29 U.S.C.§ 1140, by stating that
it would stop paying for his health insurance coverage if he exercised
his rights under ERISA to sue Beretta for disability benefits. Finally,
in Count IV, he alleged that Beretta's refusal to pay him the disability
benefits and its threat to cut off his health insurance benefits if he did
not drop his claim for those disability benefits constituted intentional
infliction of emotional distress under Maryland law.
_________________________________________________________________
2 Beretta did not withdraw the gratuitously furnished health care bene-
fits until March 1993.
5
Stiltner also sought a temporary restraining order and preliminary
injunction to prevent Beretta from terminating his health insurance
benefits, expelling him from the Health Plan, severing his employ-
ment relationship, or otherwise retaliating against him for exercising
his rights under the Disability Plan and ERISA, pending final deter-
mination of the merits of his case. The district court denied the
motion for preliminary relief.
Stiltner appealed the district court's denial of his request for pre-
liminary relief. While his appeal was pending before this court, the
district court granted summary judgment in favor of Beretta on all of
Stiltner's claims. We, therefore, sua sponte, dismissed Stiltner's
appeal involving the denial of his request for a preliminary injunction.
Stiltner v. Beretta U.S.A. Corp., No. 93-1247 (4th Cir. March 28,
1994). Stiltner now appeals the district court's grant of summary
judgment in favor of Beretta.3
II.
In Count I of his complaint, Stiltner alleged that he was entitled to
recover long-term disability benefits from Beretta under ERISA
§ 502(a)(3), 29 U.S.C. § 1132(a)(3), 4 even though his disability was
caused by a pre-existing condition within the meaning of the exclu-
sion in the Guardian policy, because the pre-existing condition limita-
tion was not mentioned in the original SPD for the Disability Plan.
Stiltner bases this claim upon our decisions in Aiken v. Policy Man-
agement Sys. Corp., 13 F.3d 138, 140-41 (4th Cir. 1993), and Pierce
v. Security Trust Life Ins. Co., 979 F.2d 23, 27 (4th Cir. 1992), which
he says hold that representations made in a summary plan description
_________________________________________________________________
3 The panel, like the en banc court, was unanimous in rejecting Stilt-
ner's claims that Beretta violated ERISA § 502, the terms of his employ-
ment contract, and Maryland law. Judge Phillips wrote the panel
decision, which was designated for publication, but not reported. See
Stiltner v. Beretta U.S.A. Corp., No. 94-1323 (4th Cir. January 18, 1995).
We have incorporated verbatim Judge Phillips' well-reasoned analysis of
these claims in parts II, III, and IV of this opinion.
4 ERISA § 502(a)(3) permits a participant in an ERISA plan to bring
an action for "appropriate equitable relief . . . to enforce . . . the terms
of the plan." 29 U.S.C. § 1132(a)(3).
6
control over conflicting statements made in other official plan docu-
ments. The district court held that Beretta was entitled to summary
judgment on this claim, because Stiltner had failed to come forward
with sufficient evidence to permit a reasonable fact finder to find that
he had either relied upon or been prejudiced by the original SPD's
failure to mention the pre-existing condition exclusion.
We find no fault in the district court's disposition of this claim. It
is certainly true that the original SPD was inconsistent with the other
official plan documents, in that it failed to reveal the existence of the
pre-existing condition limitation. But, as the district court recognized
and Stiltner now concedes, to secure relief under ERISA based on
representations in a summary plan description that are inconsistent
with provisions of the other official plan documents, an ERISA claim-
ant must demonstrate that he either relied upon or was prejudiced by
those representations. Aiken, 13 F.3d at 141; Pierce, 979 F.2d at 27.
As the district court pointed out, the summary judgment record con-
tained undisputed evidence that Stiltner did not see a copy of the orig-
inal SPD until after he suffered the disability for which he now seeks
to recover benefits. (J.A. 286-87).5 On this record, we agree with the
_________________________________________________________________
5 In an attempt to overcome this problem, Stiltner contends that he did
come forward with evidence that members of Beretta's management
team gave him "verbal and written descriptions of the information con-
tained in [the original SPD]" when he first enrolled in the Disability Plan,
that those descriptions did not mention a pre-existing condition limita-
tion, and that he relied upon them to his detriment in failing to make
other arrangements for long-term disability insurance. Specifically, he
points to (i) deposition testimony that Valorose told him, over lunch on
the day of his initial interview at Beretta, that the benefit package he
would receive at Beretta would be "similar to" the one he had received
from his former employer, FN; (J.A. 183, 189-90) (Valorose deposition);
(J.A. 226) (Stiltner deposition); and (ii) evidence that Axelrod told him,
both in the February 28, 1989 offer letter and in his oral discussions of
the terms of that letter, that he would receive long-term disability bene-
fits after one year of employment, without indicating that there was a
pre-existing condition limitation on those benefits.
As did the district court, we find this evidence to be singularly lacking
in probative value. In the first place, we do not think that Stiltner could
reasonably have interpreted any of the alleged representations by
7
district court that Stiltner failed to carry his burden of coming forward
with sufficient evidence to permit a reasonable fact finder to find that
he had relied upon or been prejudiced by the inaccuracy in the origi-
nal SPD, which is an essential element of his claim for relief under
Aiken and Pierce.6 We therefore conclude that the district court did
not err in entering summary judgment for Beretta on Stiltner's claim
for disability benefits under ERISA § 502.
III.
In Count II of his complaint, Stiltner alleged that Beretta had
breached the terms of its February 28, 1989 offer letter, which he
characterized as a contract of employment, by refusing to pay him the
disability benefits he sought. Stiltner alleged that because the letter
stated that Beretta would provide Stiltner with long-term disability
insurance that "pays 60% of salary after six months of disability (after
one year of employment)," without mentioning a pre-existing condi-
tion limitation, it imposed upon Beretta a legally enforceable obliga-
tion to pay him long-term disability benefits if he became disabled
_________________________________________________________________
Valorose or Axelrod as descriptions of the content of the original SPD,
since none of them made any reference to that document. In addition, we
do not think an ERISA claimant can be said to have"relied" upon an
SPD that he has never seen, in the sense required by Aiken and Pierce,
simply because he has relied upon informal oral and written summaries
of its contents made to him by the employer's agents. Cf. Coleman v.
Nationwide Life Ins. Co., 969 F.2d 54, 60 (4th Cir. 1992) (plan partici-
pant not entitled to recover benefits to which she was not entitled under
plain language of plan itself, simply because she claimed that plan
administrator had made informal oral and written representations to her
indicating that she would receive such benefits, where the alleged modi-
fications to the plan were not implemented in conformity with the plan's
formal amendment procedure), cert. denied, ___ U.S. ___, 113 S. Ct.
1051 (1993); Singer v. Black & Decker Corp., 964 F.2d 1449, 1453-54
(4th Cir. 1992) (Wilkinson, J., concurring).
6 In light of this conclusion, we need not address Beretta's alternative
argument that Stiltner cannot maintain an Aiken/Pierce claim based on
the original SPD because it was superseded by the SPD Supplement
before he became disabled.
8
after one year of employment, whether or not the disability in ques-
tion was caused by a pre-existing condition.
The district court held that Beretta was entitled to summary judg-
ment on this claim. The court thought that the claim was probably
preempted by ERISA, under Biggers v. Wittek Indus., Inc., 4 F.3d
291, 298 (4th Cir. 1993), because it "related to" the Beretta Disability
Plan. But the court found it unnecessary to decide whether the claim
was actually preempted or not. As the court explained, if the claim
were preempted, it would fail as a matter of law because it could not
be recast as a viable federal claim. The offer letter could not be
enforced as an informal ERISA plan, because it did not meet the four
requirements for a plan set forth in Donovan v. Dillingham, 688 F.2d
1367, 1373 (11th Cir. 1982) (en banc). Similarly, it could not be
enforced under a federal common-law breach of contract theory,
because no reasonable fact finder could find that the parties intended
it to impose upon Beretta an obligation to pay Stiltner long-term dis-
ability benefits above and beyond those provided by the terms of the
Disability Plan. (J.A. 14-15). Finally, even if the claim were not pre-
empted, it would still fail as a matter of law under basic principles of
Maryland contract law, for the same reason that it would fail under
federal common-law contract principles: because no reasonable fact
finder could find, on the record before it, that the parties had intended
the offer letter to impose upon Beretta a corporate obligation to pay
Stiltner long-term disability benefits beyond those provided by the
Disability Plan that Beretta maintained through its insurer.
Once again, we find no fault with the district court's disposition of
this claim. As did the district court, we think it very likely that the
claim is preempted by ERISA § 514(a), because it seeks to recover
benefits of a sort which are already provided by an ERISA plan, even
though it seeks to recover them not from the plan itself, but from the
employer directly. See Biggers, 4 F.3d at 298; Cefalu v. B.F. Good-
rich Co., 871 F.2d 1290, 1295 (5th Cir. 1989). We also agree with the
district court that if the state-law breach of contract claim is pre-
empted, it cannot be salvaged by recasting it as a statutory ERISA
claim or a federal common-law claim, because it would fail as a mat-
ter of law under either theory. The representations about disability
benefits made in the offer letter cannot be enforced as an independent
ERISA plan, because the letter does not constitute a"plan" under the
9
test set forth in Donovan v. Dillingham, 688 F.2d 1367, 1372 (9th Cir.
1982) (en banc), which this Court adopted in Elmore v. Cone Mills,
23 F.3d 855, 861 (4th Cir. 1994) (en banc). 7 Nor do the representa-
tions about disability benefits made in the offer letter give rise to a
viable claim for benefits under the federal common law of contract;
as the district court explained at some length, no reasonable fact
finder could possibly find that the parties intended them to impose
upon Beretta an obligation to pay Stiltner long-term disability benefits
above and beyond those provided by the terms of the Disability Plan
itself. Finally, even if the claim is not preempted, it would still fail
as a matter of law under Maryland law, for the same reason that it
would fail under federal common-law principles: because no reason-
able fact finder could find that the parties intended the representations
made about disability benefits in the offer letter to impose upon
Beretta a corporate obligation to pay Stiltner long-term disability ben-
efits beyond those provided by the Disability Plan that Beretta main-
tained through its insurer.
The district court did not err in entering summary judgment for
Beretta on Stiltner's contract claim.
IV.
In Count IV of his complaint, Stiltner alleged that Beretta's con-
duct in refusing to pay him disability benefits and threatening to cut
off his health insurance benefits if he did not drop his claim for dis-
ability benefits constituted intentional infliction of emotional distress
under Maryland law. The district court held that Beretta was entitled
to summary judgment on this claim on two independent, alternative
grounds: because it was preempted by ERISA, and because the con-
duct complained of was not sufficiently "outrageous" to support a
claim for intentional infliction of emotional distress under Maryland
law. (J.A. 16-17). We agree.
_________________________________________________________________
7 The offer letter does not meet at least two of the four requirements for
an informal plan under Donovan: it does not show the source of the fund-
ing for the benefits described, and it does not indicate the procedure by
which an employee can apply for and receive benefits. See Cone Mills,
23 F.3d at 861; Donovan, 688 F.2d at 1373.
10
ERISA preempts state-law claims to the extent they"relate to" any
ERISA plan. 29 U.S.C. § 1144(a). A state-law claim "relates to" an
ERISA plan, hence is preempted, "if it has a connection with or refer-
ence to such a plan," Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 97
(1983), so that state common-law tort and contract actions which are
"based on alleged improper processing of a claim for benefits under
an employee benefit plan" are preempted by ERISA. Pilot Life Ins.
v. Dedeaux, 481 U.S. 41, 48 (1987). Applying this analysis, the lower
federal courts uniformly have held that state-law claims of intentional
infliction of emotional distress which are based on the allegedly
wrongful denial or termination of benefits under an ERISA plan are
preempted by ERISA. See, e.g., Lopez v. Commonwealth Oil Refining
Co., 833 F. Supp. 86, 89-90 (D. P.R. 1993) (retired employee's state-
law emotional distress claim based on allegedly wrongful offsetting
of disability benefits by amount of social security income was pre-
empted by ERISA, because it was "directly related to the dispute con-
cerning the [retired employee's rights under] the employee welfare
benefit plan"); Lennon v. Walsh, 798 F. Supp. 845, 849 (D. Mass.
1992) (plan participant's state-law emotional distress claim based on
allegedly wrongful denial of claims for medical and disability benefits
under ERISA plan was preempted by ERISA); Thomas v. Teleme-
canique, Inc., 768 F. Supp. 503, 506 (D. Md. 1991) (discharged
employee's state-law emotional distress claim based on allegedly
wrongful accusations that she had been defrauding her employer by
collecting disability benefits from its ERISA plan to which she was
not entitled was preempted by ERISA, because "[t]he issue of
whether the alleged conduct was extreme depends upon the parties'
rights under the benefit plan"); Parisi v. Trustees of Hampshire
College, 711 F. Supp. 57, 60-62 (D. Mass. 1989) (discharged employ-
ee's state-law emotional distress claim based on allegedly wrongful
denial of claim for disability benefits was preempted by ERISA).
Stiltner attempts to distinguish these cases by arguing that his emo-
tional distress claim is not based on allegations that Beretta wrong-
fully denied or terminated benefits to which he was entitled under its
ERISA plans, but on allegations that it wrongfully denied or termi-
nated benefits to which he was entitled under his employment con-
tract. This argument is without merit. Count IV of Stiltner's complaint
asserts a state-law emotional distress claim based on Beretta's con-
duct in "refusing to pay [him] agreed-upon disability benefits and [in]
11
threatening him with discontinuance of his family health insurance
benefits to coerce him into abandoning his disability claim." Com-
plaint ¶ 39. Count IV expressly incorporates by reference paragraphs
1 through 37 of the complaint, id. ¶ 38, which in turn assert that
Beretta is obligated to pay Stiltner disability benefits under the terms
of both its Disability Plan and his employment contract. Id. ¶¶ 27, 31.
For this reason, Stiltner's claim that Beretta acted wrongfully in refus-
ing to pay him the "agreed-upon disability benefits" cannot be
resolved without reference to the Disability Plan. This in turn means
that the claim "relates to" an ERISA plan within the meaning of
ERISA's preemption clause, and is therefore preempted. See Thomas,
768 F. Supp. at 506; Lennon, 798 F. Supp. at 849; Parisi, 711 F.
Supp. at 61-62.
Even if Count IV were not preempted, Beretta would still be enti-
tled to summary judgment on it, for the conduct in question is not suf-
ficiently "outrageous," as a matter of law, to support a claim for
intentional infliction of emotional distress under Maryland law. In
Maryland, the tort of intentional infliction of emotional distress
requires proof of "extreme and outrageous" conduct by the defendant,
and conduct will be found to rise to that level only if it "go[es]
beyond all possible bounds of decency, and [is] to be regarded as
atrocious, and utterly intolerable in a civilized community." Harris v.
Jones, 380 A.2d 611, 614 (Md. 1977). Applying this test, the Mary-
land Court of Appeals has held that conduct very similar to that
alleged here -- the intentional refusal to pay medical and disability
benefits to which the plaintiff claimed entitlement under an insurance
plan -- was not sufficiently "outrageous" to give rise to a claim for
intentional infliction of emotional distress. Gallagher v. Bituminous
Fire & Marine Ins. Co., 492 A.2d 1280, 1284-85 (Md. 1985). As the
court there noted, while it is "conceivable" that the tort of intentional
infliction of emotional distress "might be committed by means of
withholding benefits," it will be "the rare case" indeed in which this
is so. Id. We agree with the district court that this is not such a case.
See Dickson v. Selected Risks Ins. Co., 666 F. Supp. 80, 81 (D. Md.
1987) (insurer's refusal to provide coverage under a liability insur-
ance policy "does not approach the level of outrageousness necessary
to sustain an intentional infliction of emotional distress claim" under
Maryland law); Barksdale v. St. Clair County Comm'n, 540 So. 2d
1389, 1391 (Ala. 1989) (employer's termination of health benefits
12
that it had been gratuitously providing to a disabled employee was not
sufficiently "outrageous" to give rise to a tort claim for intentional
infliction of emotional distress under Alabama law).
The district court did not err in entering summary judgment for
Beretta on Stiltner's state tort claim for intentional infliction of emo-
tional distress.
V.
In Count III of his complaint, Stiltner alleged that Beretta violated
ERISA § 510, 29 U.S.C. § 1140, by stating that it would stop paying
his health insurance premiums if Stiltner sued Beretta for disability
benefits. To validate Stiltner's claim, we would have to interpret
ERISA § 510 to preclude an employer from revoking any benefit if
the employer intended to retaliate against an employee for the
employee's exercise of ERISA rights, regardless of whether the
employer had provided that benefit gratuitously. This we refuse to do.
We hold instead that ERISA § 510 does not preclude an employer
from revoking gratuitous benefits.
A.
ERISA § 510 reads in pertinent part:
Interference with protected rights. It shall be unlawful for
any person to discharge, fine, suspend, expel, discipline, or
discriminate against a participant or beneficiary for exercis-
ing any right to which he is entitled under the provisions of
an employee benefit plan, this subchapter [ERISA Title I],
section 1201 of this title, or the Welfare and Pension Plans
Disclosure Act, or for the purpose of interfering with the
attainment of any right to which such participant may
become entitled under the plan, this subchapter, or the Wel-
fare and Pension Plans Disclosure Act.
29 U.S.C. § 1140 (emphasis added). This section prohibits two types
of discrimination by an employer. First, an employer may not dis-
criminate against an employee with the purpose of interfering with an
13
employee's exercise of certain rights. Second, an employer may not
discriminate against an employee with the purpose of interfering with
an employee's attainment of certain rights. In this case, we are con-
cerned with the first type of discrimination. Stiltner claims that
Beretta discriminated against him with the purpose of interfering with
his exercise of his right under ERISA to sue Beretta for his disability
benefits. The particular act of discrimination alleged by Stiltner is
Beretta's refusal to continue gratuitously paying his health insurance
premiums.8
To determine whether Stiltner's allegations create a cognizable
claim, we must decide whether, under ERISA § 510, an employer can
"discriminate against" an employee by revoking a gratuitous benefit.
Stiltner argues that the phrase "discriminate against" refers to any
adverse action, including the revocation of a gratuitous benefit. After
applying the settled rules of statutory construction to ERISA § 510,
we disagree.
In any case turning on statutory interpretation, our goal is to ascer-
tain the intent of Congress. See Dole v. United Steelworkers, 494 U.S.
26, 35 (1990). To accomplish this goal, we begin by looking at the
language of the statute. Adams v. Dole, 927 F.2d 771, 774 (4th Cir.),
cert. denied, 502 U.S. 837 (1991). If the language is plain and unam-
biguous, we look no further. See United States v. Ron Pair Enters.,
Inc., 489 U.S. 235, 240-41 (1989). However, if the statutory phrase
at issue is ambiguous, we may look beyond the language of the statute
to the legislative history for guidance. United States v. Irvin, 2 F.3d
72, 76 (4th Cir. 1993), cert. denied, 114 S. Ct. 1086 (1994); Adams,
927 F.2d at 774. If Congress' intent is not readily apparent from
examining the legislative history, we apply the traditional tools of
statutory construction. Adams, 927 F.2d at 774; see also Stupy v.
United States Postal Serv., 951 F.2d 1079, 1081 (9th Cir. 1991) ("The
search for legislative intent begins with an examination of the lan-
guage of the statute and then proceeds to a review of the legislative
history and the application of traditional aids of statutory interpreta-
tion.").
_________________________________________________________________
8 Beretta continued gratuitously furnishing health care benefits until
March 1993, even though Stiltner did not work after June 1990, and
Beretta continued Stiltner on salary until October 1990.
14
From the outset, we note the phrase "discriminate against" in
ERISA § 510 is ambiguous. This view is in accord with other circuit
courts that have examined the phrase. See, e.g. , West v. Butler, 621
F.2d 240, 245 (6th Cir. 1980) (relying on ERISA§ 510's legislative
history to determine whether certain conduct constitutes discrimina-
tion); see also Conkwright v. Westinghouse Elec. Corp., 933 F.2d
231, 236 (4th Cir. 1991) (examining the legislative history of ERISA
§ 510 and stating that to determine whether a claim is cognizable
under that section, "we look first to the statute itself and the intent of
Congress"). Accordingly, like other courts examining the phrase "dis-
criminate against," we must turn to the legislative history.
Turning to the legislative history of ERISA § 510, we find that it
is silent regarding whether Congress intended the revocation of gratu-
itous benefits to constitute discrimination. See S. Rep. No. 127, 93d
Cong., 2d Sess., reprinted in 1974 U.S.C.C.A.N. 4838, 4872 (noting
that ERISA § 510 was enacted "in the face of evidence that in some
plans a worker's pension rights or the expectations of those rights
were interfered with by the use of economic sanctions or violent
reprisals").
Thus, from the legislative history, it is not at all apparent that Con-
gress intended the revocation of gratuitous benefits to constitute dis-
crimination for purposes of ERISA § 510. Moreover, the silence on
this issue is some evidence that Congress did not intend such a result.
See Dewsnup v. Timm, 112 S. Ct. 773, 779 (1992) (holding that in
construing ambiguous language in the Bankruptcy Code, it is not
plausible to assume that Congress intended to create a broad new
remedy when such a new remedy is not mentioned in the Code or in
the annals of Congress).
The legislative history of ERISA § 510 does make clear, however,
that the statute was modeled on § 8(a)(3) of the National Labor Rela-
tions Act (NLRA). See West, 621 F.2d at 245 & n.4; Young v. Stan-
dard Oil, 660 F. Supp. 587, 597 (S.D. Ind. 1987), aff'd, 849 F.2d
1039 (7th Cir.), cert. denied, 488 U.S. 981 (1988); see also 119 Cong.
Rec. 30374, reprinted in Subcomm. on Labor, Senate Comm. on
Labor and Public Welfare, Legislative History of the Employee
Retirement Income Security Act of 1974, Pub. L. No. 93-406 (Comm.
Print 1976), at 1774-75 (statement of Sen. Hartke) ("The language [of
15
ERISA § 510] parallels section 8(a)(3) of the National Labor Rela-
tions Act . . . .").9
Because ERISA § 510 was modeled on NLRA § 8(a)(3), we may
look to NLRA § 8(a)(3), and the cases construing it, for guidance in
construing ERISA § 510. Under NLRA § 8(a)(3), "discrimination in
regard to hire or tenure of employment or any term or condition of
employment to encourage or discourage membership in any labor
organization" constitutes an unfair labor practice. 29 U.S.C.
§ 158(a)(3). This language is similar to the language in ERISA § 510
forbidding employers from "discriminat[ing] against" employees for
exercising any ERISA right. The "[i]ncorporation of identical or
similar language from an act with a related purpose evidences some
intention to use it in a similar vein." See Doe v. DiGenova, 779 F.2d
74, 83 (D.C. Cir. 1985) (emphasis added); see also Stribling v. United
States, 419 F.2d 1350, 1352-53 (8th Cir. 1969) (express language and
legislative construction of another statute employing similar language
and applying to similar persons may control by analogy); 2B George
Sutherland, Statutes and Statutory Construction § 53.03, at 233 (5th
ed. 1992) ("[B]y transposing the clear intent expressed in one or sev-
eral statutes to a similar statute of doubtful meaning, the court . . . is
able to give effect to the probable intent of the legislature . . . .").
Under NLRA § 8(a)(3), an employer's revocation of a gratuitous
benefit does not constitute unlawful discrimination. See, e.g., NLRB
v. Electro Vector, 539 F.2d 35, 37 (9th Cir. 1976) ("[A] bonus which
is considered a ``gift' can be withheld by the employer at will . . . ."),
cert. denied, 434 U.S. 821 (1977); NLRB v. Wonder State Mfg. Co.,
344 F.2d 210, 212 (8th Cir. 1965) ("The rule is that gifts per se . . .
are not terms and conditions of employment, and an employer can
make or decline to make such payments as he pleases . . . ."). Because
NLRA § 8(a)(3) does not prohibit the revocation of gratuitously pro-
vided benefits and Congress modeled ERISA § 510 after the NLRA,
we are reluctant to conclude that Congress intended ERISA § 510 to
prohibit the revocation of gratuitous benefits.
_________________________________________________________________
9 Even Stiltner acknowledges that Congress modeled ERISA § 510
after NLRA § 8(a)(3).
16
Additionally, in cases involving interference with the attainment of
ERISA rights, numerous courts have limited "discriminate against,"
as used in ERISA § 510, to actions affecting the employer-employee
relationship. See, e.g., Haberern v. Kaupp Vascular Surgeons Ltd.
Defined Benefit Pension Plan, 24 F.3d 1491, 1503 (3rd Cir. 1994),
cert. denied, 115 S. Ct. 1099 (1995); see also McGath v. Auto-Body
North Shore, Inc., 7 F.3d 665, 667-69 (7th Cir. 1993) (interpreting
ERISA § 510 to encompass only discrimination in the employment
relationship); Woolsey v. Marion Labs., Inc., 934 F.2d 1452, 1461
(10th Cir. 1991) (employer's acts must affect the employment situa-
tion to create a cognizable claim under ERISA § 510). With this inter-
pretation of the phrase "discriminate against" so firmly entrenched,
we are not inclined to ascribe a second meaning to the phrase in cases
involving interference with the exercise of ERISA rights. In sum, we
hold that ERISA § 510 does not prohibit the revocation of gratu-
itously provided benefits.
B.
Our holding that ERISA § 510 does not preclude an employer from
revoking gratuitous benefits supports the public policy of encouraging
employers to offer employees gratuitous benefits. Under Stiltner's
interpretation of ERISA § 510, employers who seek to help their
employees by providing gratuitous benefits risk a lawsuit if they
revoke the benefits. Faced with the possibility that they could be
forced to continue paying benefits originally provided gratuitously,
employers may be inclined to turn a cold shoulder to the special needs
of particular employees. See Hamilton v. Air Jamaica, Ltd., 945 F.2d
74, 79 (3d Cir. 1991) ("Employers are understandably more willing
to provide employee benefits when they can reserve the right to
decrease or eliminate those benefits."), cert. denied, 503 U.S. 938(1992).
Although Congress has determined, by enacting ERISA§ 510, that
once an employer elects to include certain benefits within its employ-
ment package, it cannot revoke them with the intent to deter employ-
ees from asserting their rights under ERISA, this policy has no
application when the benefits at issue are merely gratuitous. See
Owens v. Storehouse, Inc., 984 F.2d 394, 398 (11th Cir. 1993)
("Absent contractual obligation, employers may decrease or increase
17
benefits."); Leavitt v. Northwestern Bell Tel. Co., 921 F.2d 160, 162
(8th Cir. 1990) ("ERISA is concerned with protecting contractual
benefits.") (emphasis added). The contrary interpretation urged by
Stiltner would only work to the detriment of employees.
C.
Although ERISA § 510 does not apply to the revocation of gratu-
itously provided benefits, employers cannot escape liability under
ERISA § 510 for revoking all benefits conferred on employees. In
some cases, a benefit that was originally provided gratuitously may
develop into a nongratuitous benefit. Section 510 does apply to the
revocation of a nongratuitous benefit.
A benefit may become nongratuitous, and thus be protected under
ERISA § 510, when it is provided regularly and consistently, when
the employer has a formal policy that determines eligibility for the
benefit, or when the employer refers to the benefit as an inducement
to future employees. Cf. New River Indus., Inc. v. NLRB, 945 F.2d
1290, 1294 (4th Cir. 1991) (holding, in the labor relations context,
that a one-time gift is not a condition of employment); NLRB v. Citi-
zens Hotel Co., 326 F.2d 501, 503 (5th Cir. 1964) (discussing, in the
labor relations context, factors that may determine whether a benefit
is a term or condition of employment). On the other hand, a benefit
is merely gratuitous when there is a lack of consistency or regularity
in providing the benefit and when there is no official program under
which the benefits are provided, i.e., the benefits are provided entirely
at the employer's discretion.
D.
Stiltner concedes that Beretta's payment of his health insurance
premiums after he ceased working amounted to a gratuitous benefit.
Because the benefit was gratuitous, Beretta could revoke it freely
without violating ERISA § 510.10
_________________________________________________________________
10 Beretta gratuitously paid Stiltner's health insurance premiums for
almost three years, without any indication that it intended to terminate
those benefits. In 1992, Beretta re-enrolled Stiltner in its employee health
18
E.
In summary, we can find no support for Stiltner's interpretation of
the ambiguous phrase "discriminate against" in the language of
ERISA § 510, in the legislative history of ERISA § 510, or in public
policy. His interpretation would require us to hold that an employer
that paid an employee's health insurance premiums when it unques-
tionably had no duty to do so discriminated against the employee by
refusing to continue this gratuity after the employee threatened to sue
for additional benefits. To conclude, as Stiltner does, that Congress
could have intended to punish this employer is nothing short of star-
tling. Without any indication from Congress that it intended this star-
tling result, we decline to ascribe such an intent to Congress.
VI.
For the reasons stated in this opinion, the judgment of the district
court is affirmed.
AFFIRMED
LUTTIG, Circuit Judge, concurring in the judgment:
I believe that section 510 of ERISA, 29 U.S.C. § 1140, protects
employees only against discriminatory actions that substantially affect
the employment relationship, as virtually every court of appeals to
consider the scope of this provision has concluded, see, e.g.,
Haberern v. Kaupp Vascular Surgeons Plan, 24 F.3d 1491, 1502-06
(3d Cir. 1994); Deeming v. American Standard Inc., 905 F.2d 1124,
1126-28 (7th Cir. 1990); West v. Butler , 621 F.2d 240, 245-46 (6th
_________________________________________________________________
care plan. Coverage under the plan was to remain in effect until August
1, 1993. Beretta also sent Stiltner a letter indicating that he was re-
enrolled in the health care plan as an inactive employee on leave of
absence. Normally, these facts would create a genuine issue of material
fact as to whether the payment of health insurance premiums had devel-
oped into a nongratuitous benefit. In the present case, however, Stiltner
conceded that Beretta had no obligation to continue paying his health
insurance premiums. Thus, these facts do not affect the analysis.
19
Cir. 1980), and that the cessation of wholly gratuitous benefits is not
action that properly may be understood as affecting the employer-
employee relationship. This belief, together with the fact that section
510 is modeled after section 8(a)(3) of the National Labor Relations
Act, 29 U.S.C. § 158(a)(3), which itself does not prohibit discrimina-
tion in gratuities, are sufficient in my mind to justify the majority's
holding that section 510 should not be extended to protect against dis-
crimination with respect to benefits that are wholly gratuitous. For
these reasons, I concur in the court's judgment.
I ascribe no particular significance to the fact that section 8(a)(3)
of the National Labor Relations Act includes, but section 510 of
ERISA omits, the language "term or condition of employment." It is
evident that section 510 was "modeled" after section 8(a)(3) not in the
sense that the actual language was imported into section 510, but
rather, only in the sense that Congress wished to achieve in section
510 that which it had achieved in section 8(a)(3), namely, the protec-
tion of employees against employer retaliation for the exercise of pro-
tected rights. Indeed, virtually none of the language used in section
8(a)(3) is actually used in section 510. Thus, this is not the typical cir-
cumstance where Congress actually repeated the identical language
from an extant statute in order that the subsequently-enacted statute
would be identically interpreted, in which event the omission of par-
ticular language in the later statute might well be suggestive of a dif-
ferent intent. Here, any negative implication from the absence of any
particular language in one of these provisions, and the inclusion of
that language in the other, is simply unwarranted.
PHILLIPS, Senior Circuit Judge, concurring in part and dissenting in
part:
I dissent from that part of the judgment which affirms dismissal of
Stiltner's claim of discriminatory retaliation under ERISA § 510, and
from Part V of the majority opinion which deals with that claim. Oth-
erwise, I concur.
I would hold, contrary to the majority, that Stiltner's § 510 retalia-
tion claim should not have been dismissed by summary judgment.
20
I
The dispute giving rise to this claim had its origins in times of
apparently exemplary employment relations between Stiltner and
Beretta. Stiltner, obviously a good and respected employee, had fallen
on hard times with a first heart attack that forced him into intermittent
work, then another attack four months later that put him in the hospi-
tal and out of work for good. While he was hospitalized, Beretta
actively sought to help him through the economic difficulties brought
on by his illness. The company first helped him process a claim for
long-term disability benefits with the insurer of its disability-benefit
plan. When the insurer initially denied the claim, Beretta urged the
insurer to reconsider. During this time, Beretta continued to pay Stilt-
ner his full salary for several months until he began to receive social
security disability benefits. And, finally, although Beretta's separate
group health insurance plan provided that its coverage normally
would end when an employee stopped active work on a full time
basis, Beretta kept Stiltner's coverage in force by paying the premi-
ums while his claim for disability benefits was pending. Beretta was
still paying them when, two years after Stiltner stopped work, the
insurer finally denied his disability benefits claim on the basis of a
preexisting condition exclusion.
At this point, the good relations between Stiltner and Beretta began
to sour. Taking the position that Beretta was liable to him under his
employment contract and Beretta's ERISA-covered disability plan for
the disability benefits its plan insurer had refused to pay, Stiltner,
through counsel, made a formal written demand upon Beretta for over
$330,000. When Beretta refused to pay, Stiltner notified Beretta that
he intended to assert an ERISA legal claim for the disability benefits,
and offered to settle that claim for around $332,000. Beretta
responded by letter in which it denied any legal obligation to pay the
disability benefits, but offered to settle Stiltner's claim by paying him
a lump sum of $3,000 and continuing to pay his health insurance pre-
miums for another eighteen months, in return for Stiltner's release of
Beretta from all claims of liability for the disability benefits. Criti-
cally, Beretta's letter threatened that if Stiltner did not accept its coun-
teroffer by a certain date, Beretta would "terminate all payments,
whether for health insurance or for any other cause, on [Stiltner's]
behalf."
21
After Stiltner had refused this offer and brought this action, Beretta
followed through on its threat and ceased paying premiums on Stilt-
ner's group health insurance plan.
Stiltner's action included the § 510 retaliation claim here in issue.
This claim, based on the provision in § 510 which makes it unlawful
for an employer "to . . . discriminate against a participant or benefi-
ciary [in an ERISA plan] for exercising any right to which he is enti-
tled under [ERISA or an ERISA plan]," alleged such discrimination
in Beretta's ceasing to pay the premiums on Stiltner's health insur-
ance policy in promised reprisal for his threatening, then bringing,
legal action to recover the disability benefits. Both the district court
and the en banc majority rightly have recognized that this provision
of § 510 is effectively an "anti-retaliation" provision of the type
found, inter alia, in § 8(a)(3) of the National Labor Relations Act
(NLRA).1 But, both courts then concluded that Stiltner's retaliation
claim failed as a matter of law on the summary judgment record: the
district court, primarily because it thought § 510 retaliatory-
discrimination must involve disparate treatment--not present here--
of comparably situated persons, J.A. 7, 126-29; the en banc majority,
because it thinks the termination of "gratuitously"-extended benefits
cannot under any circumstances constitute retaliatory-discrimination
under ERISA § 510, ante at 13 ("ERISA § 510 does not preclude an
employer from revoking gratuitous benefits"); 17 (anti-retaliation
"policy has no application when the benefits at issue are merely gratu-
itous"). By these different holdings, the district court may have
accepted that gratuitous benefits might be the subject of the § 510
retaliatory-discrimination, but only if disparate treatment were
involved, while the en banc majority apparently accepts that § 510
retaliatory-discrimination may involve singular (not disparate) forms
of adverse treatment, but that the revocation of"gratuitous" benefits
is not such a form. I think both are wrong in their interpretation of the
intended reach of this anti-retaliation provision. Because I would
reverse the district court's holding, but on grounds that also reject the
en banc majority's interpretation, I address each in turn.
_________________________________________________________________
1 In so doing, both courts properly have rejected Beretta's first line of
defense: that § 510 does not in this provision prohibit retaliation as a
form of "discrimination." See Appellee's Br. 29-36.
22
II
Neither the literal text nor the legislative history of ERISA defines
what it means to "discriminate against" a plan participant or benefi-
ciary for purposes of the anti-retaliation provision of § 510. Specifi-
cally, neither speaks to whether, as the district court held, only
disparate treatment can qualify. The legislative history of § 510 does
indicate, however, that it was patterned on the anti-retaliation provi-
sion, § 8(a)(3), of the National Labor Relations Act (NLRA) in vital
respects. See 119 Cong. Rec. 30374, reprinted in Subcomm. on Labor
of the Senate Comm. on Labor and Public Welfare, Legislative His-
tory of the Employee Retirement Income Security Act of 1974, Pub.
L. No. 93-406 (Comm. Print 1976), at 1774-75 (remarks of Senator
Hartke) ("[Section 510's] language parallels section 8(a)(3) of the
National Labor Relations Act."). For this reason, the courts properly
have looked to the § 8(a)(3) precedents in interpreting various aspects
of the parallel anti-retaliation provision of § 510. See, e.g., West v.
Butler, 621 F.2d 240, 245 & nn. 4-5 (6th Cir. 1980); Newton v. Van
Otterloo, 756 F. Supp. 1121, 1135-37 (N.D. Ind. 1991). Guidance on
the question of what it means to "discriminate against" under § 510
may be found in this way.
Section 8(a)(3) of the NLRA makes it an unfair labor practice for
an employer to encourage or discourage membership in any labor
organization "by discrimination in regard to hire or tenure of employ-
ment or any term or condition of employment." 29 U.S.C. § 158(a)(3)
(emphasis added). It is well-established that the concept of "discrimi-
nation" under this section is not limited to disparate treatment of simi-
larly situated employees, but includes any adverse action taken
against one or more employees because of their decision to engage in
protected activities. F. Bartosic & R. Hartley, Labor Relations Law in
the Private Sector 114 (2d ed. 1986); see Midstate Telephone Corp.
v. N.L.R.B., 706 F.2d 401, 406 (2d Cir. 1983) (any action taken
against an employee that "attache[s] a penalty to [protected] activity"
is "discriminatory" within the meaning of§ 8(a)(3)); N.L.R.B. v. Bor-
den, Inc., 600 F.2d 313, 320 (1st Cir. 1979); N.L.R.B. v. Jemco, Inc.,
465 F.2d 1148, 1152 (6th Cir. 1972), cert. denied, 409 U.S. 1109(1973). Retaliatory "discrimination" lies not in the fact that the
employer is treating the employee less favorably than other similarly
situated employees, but in the fact that it is treating him less favorably
23
than it would have treated him had he not engaged in the protected
activity. See Jemco, 465 F.2d at 1152 ("[The] discrimination . . . lies
in the employment benefit [being] afforded to[the employee] prior to
[his] engaging in a [protected] activity," but "denied to [him] after
[he] engaged in such an activity."). Disparate treatment in this regard
may of course be persuasive evidence of"discrimination" within the
intended meaning of § 8(a)(3), but it is not an essential prerequisite
to a finding of such discrimination. See Borden , 600 F.2d at 320. As
the Sixth Circuit has explained, a contrary holding"would lead to the
somewhat absurd result that an employer could never be found in vio-
lation of [section 8(a)(3)] so long as he was careful to treat all [simi-
larly situated] employees alike, no matter how destructive of
employee rights his conduct may be." Jemco , 465 F.2d at 1152.
The same interpretive reasoning applies to the anti-retaliation pro-
vision of ERISA § 510. Like NLRA § 8(a)(3), that provision is not
designed to require employers to treat all persons under the base-
statute's protections alike, but simply to prevent employers from
using economic leverage to discourage certain activity by those per-
sons that Congress wanted to protect. See Owens v. Storehouse, Inc.,
984 F.2d 394, 398 (11th Cir. 1993) ("[Section 510] does not broadly
forbid all forms of discrimination" in employment benefits, only dis-
crimination "designed to retaliate for the exercise of a right or to
interfere with the attainment of an entitled right.").
This interpretation of the term "discriminate" in § 510's anti-
retaliation clause is also consistent with the established interpretation
of the same term in similar anti-retaliation provisions in other federal
employment statutes. Both Title VII and the Age Discrimination in
Employment Act contain provisions that make it unlawful for an
employer to retaliate against individuals for attempting to enforce
those statutes against it.2 Like§ 510, both of these provisions forbid
_________________________________________________________________
2 See 42 U.S.C. § 2000e-3(a) (making it unlawful for employer "to
discriminate against any of his employees . . . because he has opposed
any practice made an unlawful employment practice by[Title VII] . . .
or . . . made a charge, testified, assisted, or participated in any manner
in an investigation, proceeding, or hearing under[Title VII]") (emphasis
added); 29 U.S.C. § 623(d) (making it unlawful for employer "to
discriminate against any of his employees . . . because such individual
24
employers to "discriminate against" individuals for engaging in cer-
tain protected activity, but do not define the phrase "discriminate
against." Both are consistently interpreted, however, to forbid an
employer to take any kind of adverse action against an individual
because he has engaged in the protected activity, even in the absence
of evidence that it has treated him less favorably than other similarly
situated individuals. See, e.g., Passer v. American Chem. Soc., 935
F.2d 322, 331-32 (D.C. Cir. 1991) (employer's cancellation of special
symposium in employee's honor could constitute actionable "discrim-
ination" under ADEA's anti-retaliation clause, where done with spe-
cific intent to retaliate against him for asserting age discrimination
claim against it); Ross v. Communications Satellite Corp., 759 F.2d
355, 365 (4th Cir. 1985) (any "adverse employment action"). Because
the anti-retaliation provision at issue here uses the same "discriminate
against" language as those other provisions, and was enacted after
them, we may presume that Congress intended it to have the same
basic meaning. See Kimbro v. Atlantic Richfield Co., 889 F.2d 869,
881 (9th Cir. 1989) (looking to case law under Title VII's anti-
retaliation provision for guidance in interpreting§ 510's anti-
retaliation provision), cert. denied, 498 U.S. 814 (1990). See gener-
ally Cannon v. University of Chicago, 441 U.S. 677, 696-99 (1979).
I would therefore hold, at odds with the district court, that the mere
fact that Beretta's termination of health insurance premium payments
did not involve disparate treatment in relation to comparably situated
other plan beneficiaries did not defeat Stiltner's anti-retaliation claim
as a matter of law.
III
As earlier indicated, in affirming the district court's dismissal by
summary judgment of Stiltner's § 510 retaliation claim, the en banc
majority does not rely, as did the district court, on the notion that an
employer cannot "discriminate against" an ERISA plan participant or
_________________________________________________________________
. . . has opposed any practice made unlawful by[the ADEA] . . . or . . .
has made a charge, testified, assisted, or participated in any manner in an
investigation, proceeding, or litigation under [the ADEA]") (emphasis
added).
25
beneficiary for retaliatory purposes except by disparate treatment in
relation to comparably-situated others. The court instead affirms on
the basis that an employer does not "discriminate against" a plan par-
ticipant or beneficiary by revoking "gratuitously" extended benefits
even if for retaliatory purposes. See ante at 13, 14 (issue stated as
"whether, under ERISA § 510, an employer can ``discriminate against
an employee [sic] by revoking a gratuitous benefit'"); 17 (holding
stated as being "that ERISA § 510 does not prohibit the revocation of
gratuitously provided benefits").
Such a narrow interpretation of the intended meaning of the phrase
"discriminate against" in application of § 510's anti-retaliation provi-
sion is simply wrong. It is not dictated by the statutory text nor by
§ 510's legislative history and it is wholly at odds with the clear pur-
pose of this and related anti-retaliation provisions.
As the en banc majority concedes, the statutory text is ambiguous
on the question whether an employer can "discriminate against" a
plan participant or beneficiary in violation of§ 510's anti-retaliation
provision by revoking "gratuitously"-provided benefits. Ante at 13,
14. And, as the court also concedes, § 510's legislative history gives
no express guidance on the question. Ante at 14. Nor is there any
direct circuit interpretive precedent available. We therefore have only
the bare text, "discriminate against a participant or beneficiary for
exercising any right to which he is entitled under[ERISA or an
ERISA plan]" and the general purposes of this and comparable anti-
retaliation provisions as that may be revealed in legislative history
and judicial interpretations of such comparable provisions.
Though the statutory text is ambiguous on the specific question,
two aspects of the full text are critical in assessing the general purpose
of § 510's anti-retaliation provision. The first is that the class pro-
tected from retaliatory action is that of plan "participants and benefi-
ciaries," a class that is not limited to current employees. The second
is that the term "discriminate against" is facially open-ended. As
developed in Part II of this opinion, it is not limited to conduct involv-
ing disparate treatment. Nor is it otherwise expressly or implicitly
qualified or limited by its context. Hence, as written, it appears to sig-
nify any form of significant adverse action against a protected person
taken for retaliatory purposes.
26
That this is the intended broad meaning is borne out by the legisla-
tive history which indicates that the purpose of§ 510's anti-retaliation
provision was to prevent employers who maintain ERISA plans from
using economic leverage to intimidate participants and beneficiaries
under those plans from exercising their ERISA given rights to enforce
the plans' terms. See S. Rep. No. 93-127, 93d Cong., 2d Sess. (1973),
reprinted in 1974 U.S. Code Cong. & Admin. News 4838, 4872 (Sec-
tion 510 was enacted "in the face of evidence that in some plans a
worker's pension rights or the expectations of those rights were inter-
fered with by the use of economic sanctions). If what is being prohib-
ited is the use by ERISA-plan employers of any form of economic
leverage calculated to chill or prevent exercise of ERISA-given rights,
it must be a matter of no consequence that the subject of the leverage
might be a benefit that has been "gratuitously" provided. What is pro-
hibited is coercion by economic leverage, and this may as well be
effected by conditioning the continuance of a "gratuity" on foregoing
the exercise of a protected right as by terminating a presumably other-
wise enforceable benefit. Indeed, given the added risk of doing the
latter, coercion by the conditioned-carrot method might be the more
tempting device, hence one as surely contemplated by the statute.
This interpretation--that prohibited retaliatory discrimination
under § 510 may be effected by terminating"gratuitous" benefits--
finds support in decisions so interpreting the ADEA's comparable
anti-retaliation provision, 29 U.S.C. § 623(d). See Passer v. American
Chemical Society, 935 F.2d 322, 330-31 (D.C. Cir. 1991) (employer's
cancellation of special symposium honoring claimant in retaliation for
exercising protected right under ADEA actionable under anti-
retaliation provision, notwithstanding a "mere gratuity"); Cohen v.
S.U.P.A., Inc., 814 F.Supp. 251, 259-61 (N.D.N.Y. 1993) (employer's
retaliatory termination of health benefits being gratuitously provided
to laid-off employee actionable under ADEA's anti-retaliation provi-
sion).
IV
Presumably because of the considerations just discussed, no court,
so far as I am aware, has until now held that an employer's retaliatory
cutting off of "gratuitously"-provided benefits cannot ever be found
a violation of § 510's anti-retaliation provision.
27
The en banc majority purports to find such decisions in two
sources, but both are flatly inapposite.
First, the court relies on two decisions, NLRB v. Electro Vector,
539 F.2d 35 (9th Cir. 1976), and NLRB v. Wonder State Mfg. Co., 344
F.2d 210 (8th Cir. 1965), which, construing § 8(a)(3) of the NLRB,
have held that an employer's retaliatory withholding of "gifts" does
not violate that particular anti-retaliation provision. While, as indi-
cated, it is quite proper to rely on decisions interpreting provisions of
§ 8(a)(3) that are comparable to those in§ 510, ante at 15, these deci-
sions do not do that. Section 8(a)(3) expressly limits the retaliatory
employer conduct that it prohibits to "discrimination in regard to hire
or tenure of employment or any term or condition of employment." 29
U.S.C. § 158(a)(3) (emphasis supplied). These decisions are simply,
and properly, pointing out that "gifts" (unless they have been regular-
ized to the status of entitlements) are not "conditions of employment,"
hence not prohibited means of retaliation under§ 8(a)(3). But, § 510
contains no such express or implicit limitation or qualification on the
kinds of retaliatory discrimination that it prohibits. Nor is its protec-
tion limited, as necessarily is that of § 8(a)(3), to employees. These
§ 8(a)(3) decisions therefore do not speak at all to the issue whether
§ 510 prohibits the retaliatory revocation of"gifts" or "gratuities" to
ERISA-plan participants and beneficiaries.
The other decisions relied upon by the en banc majority, Haberern,
24 F.3d 1491, McGath, 7 F.3d 665, and Woolsey, 934 F.2d 1452, are
equally inapposite--for the same general reason. Each, interpreting
the discriminate-by-interference-with-attainment- of-benefits prong of
§ 510, holds that discrimination for that prohibited purpose can only
be effected by conduct that affects "the employment relationship."
None, as indicated, is interpreting the anti-retaliation prong of § 510
whose meaning is here in issue. The attainment-of-benefits prong that
they are applying is, by definition, limited to employer conduct that
affects employee participants and beneficiaries of ERISA plans by
preventing their "attainment" of ERISA benefits. As to that particular
prohibition, these decisions are simply making one of two points: that
the specific evil at which it was aimed was purposeful manipulation
of the employment relationship itself as a way of preventing employ-
ees from attaining ERISA benefits, e.g. Haberern , 24 F.3d at 1503("protects plan participants from termination motivated by an employ-
28
er's desire to prevent a pension from vesting"), or that it could not be
interpreted to apply to plan amendments alone because of an employ-
er's right as settlor to change its terms, e.g. Woolsey, 934 F.2d at 1461(plan alternation alone not actionable even if done by disparate treat-
ment).
Neither of these necessary limitations on conduct that can be con-
sidered discrimination under the attainment-of-benefits prong of
§ 510 has any application to the intended reach of the anti-retaliation
provision. The anti-retaliation provision is not concerned only with
employees, nor at all with the attainment of benefits; nor can its appli-
cation in any way interfere, if not limited, with employers' unilateral
rights to amend their plans. In consequence, these interfere-with-
attainment decisions have nothing to say about whether an employer
can discriminate against a plan participant or beneficiary by cutting
off "gratuitous" benefits for the exercise of ERISA-given rights.
V
The only other basis for the en banc court's reading of a
"gratuitous-benefit" limitation into § 510's anti-retaliation provision is
what it considers the adverse public policy consequences of failing to
do so. The court asserts that unless "gratuitous" benefits are excepted,
benign employers (presumably in significant numbers) will be chilled
from private acts of charity, while equally numerous ungrateful plan
participants will be able to convert mere charitable gratuities into
legal entitlements. Ante at 16. Those consequences, says the court,
must surely not have been intended by Congress, so that an intention
to avoid them must be read into the statute to give effect to that unex-
pressed legislative intent.3
_________________________________________________________________
3 The court actually goes beyond this and asserts that ERISA somehow
reflects an affirmative "public policy of encouraging employers to offer
employees gratuitous benefits," a policy which, it says, is supported by
its decision but would be thwarted by allowing the termination of such
benefits to be the subject of § 510 anti-retaliation claims. Ante at 17.
There is no support in either ERISA's text or in its legislative history for
the proposition that it embodies or reflects any such affirmative public
policy. The court cites passages from three opinions of sister circuits as
supporting its assertion, id., but none even remotely does so. The state-
29
Laying aside any skepticism one might have about how much of
private-charity impulses are actually at any risk in this area, there are
firm reasons for rejecting the court's public policy concerns and the
related implications of Congressional intent. The first, and most obvi-
ous, is that if these twin risks--of widespread frustrations of
employer altruism and unjust rewarding of undeserving ERISA-plan
participants--had seemed as significant to Congress as the court
assumes them to be they easily could have been avoided by simple
statutory drafting that did not occur. My hunch is that Congress never
thought of any such policy concerns or that, if it did, it thought them
too negligible to the overall operation of ERISA to warrant any atten-
tion. Certainly it never mentioned them. The plain fact is that ERISA,
on its face, and so far as its legislative history reveals, is simply indif-
ferent to the question whether employers should go beyond the law
and engage in private acts of charity to ERISA-plan participants.
Furthermore, to ascribe such weight as the court does to these con-
cerns of possible injustices in individual cases completely misreads
the fundamental purpose of this and comparable anti-retaliation provi-
sions. They are not enacted with an eye to the relative moral worth
of individual employers and those who inspire them to retaliatory
action. Their fundamental purpose is in terrorem : to impose a general
deterrence upon the impulse of employers to retaliate for the exercise
of statutory rights against their perceived interests. Sad though it be
_________________________________________________________________
ment in Hamilton, 945 F.2d at 79 that "[e]mployers are understandably
more willing to provide employee benefits when they can reserve the
right to decrease or eliminate those benefits", expresses no such general
policy; it was made in support of a narrow holding that employers can,
by appropriate action, reserve such a right. The statement in Owens, 984
F.2d at 398, that "[a]bsent contractual obligation, employers may
decrease or increase benefits" was made in the course of upholding the
right of employers to amend a plan when that right is properly reserved;
it intimated nothing about a general policy of encouraging gratuitous
benefits. The statement in Leavitt, 921 F.2d at 161-62 that "ERISA is
concerned with protecting contractual benefits" was made as an aside in
the course of holding that a plan participant may voluntarily settle a
breach-of-fiduciary claim under ERISA; neither the holding nor the
statement intimate anything about a general ERISA policy favoring gra-
tuitous benefits.
30
as a commentary on human nature, it is a fact of consequence that
Congress has found the retaliatory impulse sufficiently widespread
and sufficiently a threat to their intended operation that it has consid-
ered anti-retaliation provisions necessary to secure the integrity of all
the major employment-relations statutory schemes of recent history--
the NLRA, Title VII, the ADEA, and ERISA.
To read a gratuitous-benefit limitation into this anti-retaliation pro-
vision is flatly at odds with that general deterrent purpose. For that
further reason, it is not warranted as a judicial gloss on the statute.
VI
One final point deserves mention. It concerns the precedential
effect of the court's statutory interpretation. That interpretation effec-
tively defines the "gratuitous benefit" whose retaliatory revocation is
shielded from liability as broadly including any the employer "had no
duty" to provide. Ante at 19.4
Under that interpretation, it would be of no consequence that a par-
ticular provision of benefits, though not legally obligatory, was, how-
ever, motivated wholly or to a substantial degree by provable
economic self-interest rather than pure altruism. A purpose, for exam-
ple, to retain the services of an employee with skills not replaceable
at acceptable relative expense in the market; or a legally counselled
effort to avoid possible liability because there might be a contractual
obligation later determined not to exist; or a desire, because of trou-
bled employment relations, simply to make a gesture that might return
greater economic benefits than those conferred; and so on.
Though it would still, in my view, have been an unwarranted exer-
cise in statutory interpretation, the court would at least have been
nearer its professed aim of encouraging (or not discouraging) private
charity on the part of employers if it had required a purer variety than
simply "not compelled by duty." Tax law, in a not unrelated setting,
_________________________________________________________________
4 That this is the specific meaning of "gratuitous" in the court's inter-
pretation is evident not only from the cited reference, but from its hold-
ing that, as a matter of law, the benefits provided Stiltner were
"gratuitous" because not contractually or otherwise legally compelled.
31
might have provided a model in its definition of that which constitutes
a "gift" for tax purposes. Concerned precisely with the difficulty of
discerning raw economic self-interest behind ostensible "gifts" of one
sort or another, tax law hit upon "detached and disinterested generos-
ity" as the distinguishing mark of the true "gift." See Commissioner
of Internal Revenue v. LoBue, 351 U.S. 243, 246 (1956). Who knows
how Stiltner's claim, for example, might have fared under such a defi-
nition? Because it clearly fails as a matter of law under the court's
doubly-unwise interpretation, we will never know. We do know, how-
ever, that in this circuit from now on employers may with impunity
retaliate against ERISA-plan participants who exercise statutory
rights against their perceived interests by cutting off any benefits
being provided them, for whatever reason, just so long as they are not
legally enforceable obligations.
VII
Because it is undisputed that Beretta ceased paying Stiltner's insur-
ance premiums in specifically promised retaliation for his exercise of
an ERISA-given right to press a claim against Beretta, this constituted
discrimination in violation of § 510's anti-retaliation provision as a
matter of law. The fact that this did not involve disparate treatment
in relation to others, and the fact that Beretta was not legally obligated
to pay the premiums are irrelevant to application of§ 510's anti-
retaliation provision. Accordingly, I would vacate the district court's
dismissal of Stiltner's § 510 retaliation claim and remand for award
of an appropriate remedy.
I am authorized to state that Chief Judge Ervin, Judge Hall, Judge
Murnaghan and Judge Michael join in this concurring and dissenting
opinion.
32