Brian Sexton v. Panel Processing, Inc. ( 2014 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 14a0095p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
BRIAN SEXTON, ┐
Plaintiff-Appellant, │
│
│ No. 13-1604
v. │
>
│
PANEL PROCESSING, INC. and PANEL PROCESSING OF │
COLDWATER, INC., │
Defendants-Appellees. │
┘
Appeal from the United States District Court
for the Eastern District of Michigan at Bay City.
No. 1:12-cv-10946—Thomas L. Ludington, District Judge.
Argued: January 28, 2014
Decided and Filed: May 9, 2014
BEFORE: SUTTON, McKEAGUE and WHITE, Circuit Judges.
_________________
COUNSEL
ARGUED: William A. Pfeifer, ISACKSON, WALLACE & PFEIFER, P.C., Alpena, Michigan,
for Appellant. Donald H. Scharg, BODMAN PLC, Troy, Michigan, for Appellees. Stephen A.
Silverman, UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for Amicus
Curiae. ON BRIEF: William A. Pfeifer, ISACKSON, WALLACE & PFEIFER, P.C., Alpena,
Michigan, for Appellant. Donald H. Scharg, Steven J. Fishman, David A. Malinowski,
BODMAN PLC, Troy, Michigan, for Appellees. Stephen A. Silverman, UNITED STATES
DEPARTMENT OF LABOR, Washington, D.C., for Amicus Curiae.
SUTTON, J., delivered the opinion of the court, in which McKEAGUE, J., concurred.
WHITE, J. (pp. 16B29), delivered a separate dissenting opinion.
1
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_________________
OPINION
_________________
SUTTON, Circuit Judge. The Employee Retirement Income Security Act prohibits an
employer from retaliating against an employee “because he has given information or has testified
or is about to testify in any inquiry or proceeding relating to [the Act].” 29 U.S.C. § 1140.
When Brian Sexton made a one-time unsolicited complaint to his employer about alleged
violations of the Act, did that amount to “giv[ing] information . . . in any inquiry?” We think not
and hence affirm.
I.
Panel Processing makes floor panels. Brian Sexton worked as a general manager in its
facility in Coldwater, Michigan, and served as a trustee for the company’s employee retirement
plan. In 2011, Sexton and another trustee, Robert Karsten, campaigned on behalf of two
employees running for the company’s board of directors. The employees won the election, but
the board refused to seat them on the ground that it would violate the company’s bylaws, which
limited the number of inside directors. At the same time, the board removed Sexton and Karsten
as trustees of the retirement plan.
Two days later, Sexton emailed the chairman of the board:
I believe that your actions . . . in refusing to seat [the employees] as directors of
the company and removing Rob Karsten and me as Trustees of the [retirement
plan] are violations of ERISA and the Michigan Corporations Business Act and
other state and federal laws. I plan to bring these violations to the attention of the
U.S. Department of Labor and Michigan Department of Licensing and Regulatory
Affairs unless they are immediately remedied.
R. 9-13 at 2. Neither the chairman nor anyone else responded to the email, and Sexton took no
further action. About six months later, the company fired Sexton from his job as a general
manager.
No. 13-1604 Sexton v. Panel Processing, Inc. et al. Page 3
Sexton sued the company in Michigan state court for violating the State’s Whistleblower
Protection Act and for breaching his employment contract. One might think that, when a
Michigan plaintiff sues a Michigan defendant under Michigan law in a Michigan court, the case
would stay there. But the company invoked complete preemption, a doctrine that converts state
law claims “within the scope of [ERISA’s] civil enforcement provisions” into federal claims.
Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 66 (1987). Under this banner, the company
recharacterized Sexton’s state whistleblower claim as an ERISA claim. See 29 U.S.C. § 1140. It
then removed the transfigured lawsuit to federal court.
Once in federal court, Sexton did not challenge the company’s removal of the case or its
use of complete preemption. Sexton and Panel Processing instead litigated the case as though
Sexton had raised a claim under ERISA. The district court granted summary judgment to the
company on this ERISA claim, and it declined supplemental jurisdiction over Sexton’s breach-
of-contract claim.
II.
On appeal, Sexton does not contest the district court’s application of complete
preemption to Sexton’s claim or otherwise attempt to resurrect his claim under Michigan’s
Whistleblower Protection Act. Under our case law, true enough, the doctrine of complete
preemption goes to the subject matter jurisdiction of the court. Mikulski v. Centerior Energy
Corp., 501 F.3d 555, 565 (6th Cir. 2007) (en banc). But we are satisfied, just as the parties and
the district court were satisfied, that the company properly invoked the doctrine here.
III.
Sexton (supported by the Secretary of Labor) instead takes aim at the district court’s
rejection of his claim under ERISA. The relevant law says in relevant part: “It shall be unlawful
for any person to discharge, fine, suspend, expel, or discriminate against any person because he
has given information or has testified or is about to testify in any inquiry or proceeding relating
to [the Act].” 29 U.S.C. § 1140. Both parties take as a given (for now) that the company fired
Sexton because of his email to the chairman of the board.
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All matters of interpretation begin with text; some end there. The text of this provision
takes us well down the way of ending this dispute. No one claims that Sexton sent the email in
the context of a “proceeding.” And no one claims that the email amounted to testimony—that he
“testified” or was “about to testify” in an “inquiry” or “proceeding” by sending the email. That
leaves the possibility that the email amounted to “giv[ing] information . . . in any inquiry.” We
have no problem with the idea that, by sending the email, Sexton was “giv[ing] information.”
But, as Sexton and the Secretary concede, the statute demands not just the limitless “giv[ing]” of
“information.” It requires that the information be given in an “inquiry”—“any” inquiry, to be
sure, but an inquiry all the same. “Inquiry” might mean an official investigation, as in “Earl
Warren led an inquiry into the assassination of President Kennedy.” Or it might mean a question
or a request for information, as in “The advocate answered the judge’s inquiry.” See Bryan A.
Garner, A Dictionary of Modern Legal Usage 317 (2d ed. 1995). We need not decide whether
§ 1140 uses “inquiry” in the former sense, in the latter sense, or in both senses. Under either
definition, no inquiry occurred. Sexton did not send the email in connection with an official
investigation. And he did not send the email in response to a question or request for information.
Even what we might call a nunc pro tunc theory of “giv[ing] information . . . in any inquiry”
would not aid Sexton. For even after he sent the email, no one asked him any questions about
the subject of the email, and no investigation involving him ever occurred. As the text of the
email confirms, this was nothing more than a complaint accompanied by a threat: Sexton
demanded that the company change course and threatened action if it did not. The email neither
asks nor answers a question. That is not “giv[ing] information . . . in any inquiry.”
This interpretation not only respects the meaning—indeed accounts for the broadest
possible meaning—of these terms, but it also respects the different ways Congress has dealt with
retaliation in the work place. Congress has enacted roughly forty anti-retaliation laws, see Jon O.
Shimabukuro et al., Cong. Research Serv., R43045, Survey of Federal Whistleblower and Anti-
Retaliation Laws (2013), and they tend to include two distinct types of prohibitions. The first
protects employees who oppose, report or complain about unlawful practices. See, e.g.,
29 U.S.C. § 218c(a) (Consumer Financial Protection Act) (“provided . . . information relating to
any violation”); id. § 215(a) (Fair Labor Standards Act) (“filed any complaint”); 42 U.S.C.
§ 2000e-3(a) (Title VII) (“opposed any . . . unlawful employment practice”). The second
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protects employees who participate, testify or give information in inquiries, investigations,
proceedings or hearings. See, e.g., 29 U.S.C. § 218c(a) (Patient Protection and Affordable Care
Act) (“assisted or participated . . . in . . . a proceeding”); id. § 2615(b) (Family and Medical
Leave Act) (“given . . . any information in connection with any inquiry or proceeding”); 42
U.S.C. § 12203(a) (Americans with Disabilities Act) (“participated in any manner in an
investigation, proceeding, or hearing”).
Most anti-retaliation laws include both types of clauses. See, e.g., 6 U.S.C. § 1142(a)
(National Transit Systems Security Act); 7 U.S.C. § 26 (Commodity Exchange Act); 15 U.S.C.
§ 78-u6(h)(1)(A) (Securities Exchange Act); id. § 2087(a) (Consumer Product Safety Act);
29 U.S.C. § 215(a) (Fair Labor Standards Act); id. § 218c(a) (Patient Protection and Affordable
Care Act); id. § 623(d) (Age Discrimination in Employment Act); id. § 660(c)(1) (Occupational
Safety and Health Act); id. § 2615(b) (Family and Medical Leave Act); 30 U.S.C. § 815(c)
(Federal Mine Safety and Health Act); 42 U.S.C. § 12203(a) (Americans with Disabilities Act);
42 U.S.C. § 2000e-3(a) (Title VII); 49 U.S.C. § 31105(a) (Commercial Motor Vehicle Safety
Act); id. § 60129(a) (Pipeline Safety Improvement Act). Many of these laws were in existence
before 1974, when Congress enacted ERISA. See the Age Discrimination in Employment Act,
the Fair Labor Standards Act, the Occupational Safety and Health Act, and Title VII.
By contrast, a few laws include only the first type of clause, the sort that protects
employees who report unlawful practices. See, e.g., 15 U.S.C. § 2651 (Asbestos Hazard
Emergency Response Act); 46 U.S.C. § 80507(a) (International Safe Container Act). And a few
laws include only the second type of clause, the sort that protects employees who participate in
inquiries, proceedings or hearings. See, e.g., 33 U.S.C. § 948a (Longshore and Harbor Workers’
Compensation Act); 42 U.S.C. § 7622(a) (Clean Air Act).
In enacting this provision of ERISA, Congress included only a clause protecting people
who give information or testify in inquiries or proceedings. Unlike most of the other laws just
cited, ERISA thus does not contain a clause protecting people who oppose, report or complain
about unlawful practices. “[W]here words differ as they differ here, Congress acts intentionally
and purposely in the disparate inclusion or exclusion.” Burlington N. & Santa Fe Ry. Co. v.
White, 548 U.S. 53, 63 (2006). A contrary interpretation would parody the presumption against
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redundancy. See Maracich v. Spears, 133 S. Ct. 2191, 2205 (2013). If clauses protecting
involvement in investigations automatically protect even complaints outside investigations,
dozens of opposing/reporting/complaining clauses across the United States Code would serve no
purpose.
Sexton, the Secretary and the dissent insist that § 1140 covers an employee’s complaints
to his employer about violations of the Act, no matter whether the employee speaks during an
investigation or in response to an inquiry. Yet this argument spurns both plausible meanings of
“inquiry,” whether the narrow one (an investigation) or the broader one (a question). This
interpretation instead reads “in any inquiry or proceeding relating to [the Act]” out of the statute.
Only then will the law protect every complaint about a violation of the Act, regardless of when
and where the employee makes it. Accepting Sexton’s invitation thus means rejecting a
foundational principle of interpretation: “It cannot be presumed that any clause in [a legal text]
is intended to be without effect; and therefore such a construction is inadmissible, unless the
words require it.” Marbury v. Madison, 1 Cranch 137, 174 (1803).
Subtracting words from the law is bad enough, but Sexton’s theory also requires us to add
words in their place. As written, § 1140 does not distinguish reports of unlawful practices from
other statements. The law covers any information or testimony, so long as it is given in an
inquiry or proceeding relating to the Act. The law protects not only the witness who testifies in a
criminal prosecution that corporate executives defrauded employees of their pensions, but it also
protects the witness who testifies at a benefits hearing that an employee has a disability. By
proposing a special rule for ERISA-related complaints, Sexton and the Secretary draw a
distinction between information about violations of the Act and other information—a distinction
found nowhere in the statute.
Sexton and the Secretary propose a textual detour around these problems: Because
“complaining” sometimes means “challenging,” “challenging” sometimes means “questioning,”
and “questioning” sometimes means “inquiring,” it follows that a complaint is an inquiry. But
this line of reasoning could transform all manner of things into inquiries—everything from the
Peloponnesian War (the Spartans challenged, hence questioned, Athenian supremacy) to the
Boston Tea Party (the protesters challenged, hence questioned, British taxes). And it could
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transform complaints into all manner of things—everything from a whisper (complaining means
grumbling, grumbling means murmuring, murmuring means whispering) to a shout (complaining
means bewailing, bewailing means crying, crying means shouting). Not unlike the children’s
game of telephone, this approach risks converting the ultimate message into something quite
different from the original message—indeed sometimes into the opposite message. An approach
to interpretation that exponentially blurs meaning is not apt to help in the fair interpretation of
statutes. In the end, the overlap between “complain” and one meaning of “question” and the
overlap between a different meaning of “question” and “inquiry” do not transform “complain”
into “inquiry.”
Sexton persists that it would be strange for the law to protect an employee who reports a
violation when asked a question in the context of an inquiry or proceeding but not an employee
who reports a violation on his own initiative. Yet this result looks strange only if one assumes
that Congress passed § 1140 in order to protect people who disclosed violations of the Act. If
one instead starts with the premise that Congress passed § 1140 to prevent interference with
inquiries and proceedings, the distinction between statements made in an inquiry and statements
made outside an inquiry makes sense. As shown, Congress opted to protect employees in many
ways in the context of investigations and unprompted complaints, some that may appear
underinclusive and some that may appear overinclusive. When Congress picks one approach or
the other in a given statute, that does not give a court license to rewrite the law—here by
crossing “in any inquiry or proceeding” out of § 1140. Denying this point means condemning as
absurd dozens of federal anti-retaliation clauses that limit their attention to inquiries, proceedings
or investigations.
The Secretary offers a variation on this theme. Section 1140, he says, at least protects an
employee whose complaint prompts an investigation, because giving information that leads to an
inquiry counts as giving information “in” that inquiry. And it would be odd, he adds, for the law
to deny an employee protection from retaliation merely because the employer later chooses not
to conduct an investigation—meaning that § 1140 must cover all complaints, whether prompted
by an inquiry or not. The first problem with this argument is that a disclosure that prompts an
inquiry does not occur “in” that later inquiry. Deep Throat’s disclosures led to a congressional
No. 13-1604 Sexton v. Panel Processing, Inc. et al. Page 8
investigation of Watergate, but one would not say that Deep Throat gave information in Senator
Ervin’s inquiry. Otherwise, all disclosures or complaints would occur “in” an inquiry or
proceeding, so long as the employee subsequently filed a lawsuit—the later “proceeding” or
“inquiry” in which the disclosure would occur. The second problem with this argument is that,
even if we could bend the statute this far, we could bend it no farther. Saying that § 1140 covers
complaints that lead to an inquiry at least leaves some role for the phrase “in any inquiry or
proceeding.” Saying that it covers all complaints whatsoever—even when no inquiry results, as
in this case—erases words from the statute.
The risk of unusual results, moreover, would not disappear even if we adopted the theory
offered by Sexton and the Secretary. The law as written contains a sensible limitation on the
information that enjoys federal protection: The information must be conveyed “in any inquiry or
proceeding relating to [the Act].” Erasing that limit leaves a law that protects anyone who has
“given information”—a boundless phrase that covers everything from giving tax advice to giving
score updates on a World Cup soccer match. We could try to overcome this problem by limiting
our reconfigured statute’s coverage to information that relates to the Act. But that does not help
much, because a law protecting anyone who has “given information relating to the Act” would
still protect the professor denied tenure because all of his law review articles concern ERISA.
We could try to sidestep this problem too by limiting our doubly reconfigured statute’s coverage
to disclosures about violations of the Act. But this takes us too far in the opposite direction,
because now we have taken away federal protection from the witness who testifies at a benefits
hearing about an employee’s disability. All of these problems disappear if we honor the
boundaries that the statute already contains.
Sexton and the Secretary argue that their interpretation advances § 1140’s purpose of
protecting whistleblowers from retaliation. One might quibble with Sexton’s self-portrait as a
whistleblower: He did not disclose violations of the law to the public or to the authorities but
threatened to sue his employer unless it did as he demanded. But even on its own terms, this
argument falls short. A court must discern the purpose of a law “chiefly from its words,” Sturges
v. Crowinshield, 4 Wheat. 122, 202 (1819), and the words of this law—particularly when
examined in the context of other federal anti-retaliation laws—do not show that Congress meant
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to protect whistleblowers in the abstract. Section 1140 does not single out information about
violations of the law; it covers information of any genre. The claim that Congress passed § 1140
to protect people who complain about violations of the law rests on nothing more than Sexton
and the Secretary’s say-so.
Keep in mind, moreover, that Congress may have enacted this provision not so much to
protect the jobs of whistleblowers as to protect the integrity of inquiries. Section 1140’s
reference to “inquir[ies] or proceeding[s]” suggests that Congress had the latter objective in
mind. We have attributed a similar purpose to a similar clause in another anti-retaliation law.
See Booker v. Brown & Williamson Tobacco Co., 879 F.2d 1304, 1313 (6th Cir. 1989)
(discussing Title VII’s participation clause). A sense of how ERISA works shows why Congress
would pursue that objective here. The Act requires retirement plans to provide for administrative
review of employees’ claims. See 29 U.S.C. § 1133. Employees must usually exhaust internal
remedies before heading to federal court, see Miller v. Metro. Life Ins. Co., 925 F.2d 979, 986
(6th Cir. 1991), and courts often must defer to decisions made during the internal review process,
see Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 111 (1989). Given the centrality of
hearings to the administration of retirement plans, one would expect Congress to protect these
and other inquiries and proceedings. Instead of supporting Sexton’s claim, this understanding of
congressional purpose defeats it.
Turning to the Congressional Record, the Secretary unearths a snippet of Senate debate
that (he claims) analogizes ERISA’s prohibition against retaliation to Title VII’s prohibition.
The relevant statement explains that § 1140 “would provide a remedy for any person fired such
as is provided for a person discriminated against because of race or sex.” 119 Cong. Rec. 30044
(1973). The Secretary infers that, because Title VII protects complaints, so too does § 1140. But
he overlooks the reality that Title VII includes both an opposition clause and a participation
clause. Read alongside the text of § 1140, the legislative history at most shows that the drafter
modeled § 1140’s language about inquiries on the participation clause, not the opposition clause.
That does nothing to advance Sexton’s claim, because Title VII’s participation clause does not
protect unsolicited complaints. Abstract appeals to purpose and legislative history at any rate
have little value in interpreting a “precise and reticulated” statute, Carter v. Welles-Bowen
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Realty, Inc., 736 F.3d 722, 729 (6th Cir. 2013), a description that fits ERISA to a tee. In ERISA,
of all statutes, we should hesitate to add a provision the statute does not contain (a clause
protecting any employee who opposes allegedly unlawful practices) and to eliminate a limitation
that the statute does contain (“in any inquiry or proceeding”).
Shifting from purpose to policy, Sexton and the Secretary claim that their interpretation
encourages employees to report violations to their employers, and that enforcement of the Act
depends on such reports. This last claim is debatable. The Act already requires an employer to
keep records and file reports about retirement plans, 29 U.S.C. § 1059, and backs up these
requirements with criminal penalties, id. § 1131(a). Also debatable is whether the benefits of a
broader anti-retaliation rule (more reporting) outweigh the costs (more litigation and a greater
likelihood that employers will refrain from even legitimate discharges for fear of getting sued).
The prospect of improved enforcement at any rate does not by itself allow us to add new
liabilities to a statute. Cf. Alexander v. Sandoval, 532 U.S. 275 (2001); Central Bank of Denver,
N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164 (1994).
Moving on to precedent, Sexton and the Secretary argue that case law requires an
expansive interpretation of federal anti-retaliation laws and undercuts our focus on the text. Not
so. When faced with “clear language,” the Supreme Court recently explained—in a retaliation
case no less—a court may not “conclude that what Congress omitted from the statute is
nevertheless within its scope.” Univ. of Texas Sw. Med. Ctr. v. Nassar, 133 S. Ct. 2517, 2528
(2013). That is this case.
Nor does Kasten v. Saint-Gobain Performance Plastics Corp. change things. 131 S. Ct.
1325 (2011). The Fair Labor Standards Act prohibits discharging an employee because he has
“filed any complaint” alleging a violation of the Act, 29 U.S.C. § 215(a)(3), and the Court had to
decide whether this provision covered oral as well as written complaints. The Court examined
dictionaries, then legislation, regulations and judicial opinions using the word “file,” then other
appearances of “file” in the Fair Labor Standards Act, then the texts of other anti-retaliation
provisions. 131 S. Ct. at 1331–33. Only because these indicators of meaning failed to yield a
“conclusive answer” did the Court turn to “functional considerations,” such as the importance of
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oral complaints to the law’s administration. Id. at 1333–34. Far from licensing free-form
interpretation of anti-retaliation laws, Kasten confirms the primacy of the statutory text.
Crawford v. Metropolitan Government of Nashville is of a piece. 555 U.S. 271 (2009). It
held that Title VII’s opposition clause protects employees who oppose unlawful practices,
regardless of whether they speak on their own initiative or in response to employer questions.
The result does not help Sexton, because (unlike the law invoked in this case) Title VII’s
opposition clause does not distinguish inquiries and proceedings from other settings. Nor does
the reasoning help him, because Crawford turned on the “ordinary meaning” of the opposition
clause, id. at 276, not on any special interpretive rule for anti-retaliation statutes. The dissent for
its part takes up Crawford’s observation that “nothing in [Title VII’s opposition clause] requires
a freakish rule protecting an employee who reports discrimination on her own initiative but not
one who reports the same discrimination in the words when her boss asks a question.” Id. at
277–78. The dissent reasons that it makes no sense to distinguish complaints made during
questioning from complaints made without questioning, prompting the conclusion that § 1140
protects all complaints whatsoever. But the conclusion does not follow from the premise. The
dissent overlooks another possibility, one that both avoids odd results and stays within the words
of the text: Interpret “inquiry” to mean “formal investigation” rather than “question.” That
indeed is what the Fourth Circuit does. See King v. Marriott Int’l, Inc., 337 F.3d 421, 427 (4th
Cir. 2003).
Sexton, the Secretary and the dissent also cast about for support in our circuit’s
precedents. The decisions they reel in, see, e.g., EEOC v. Ohio Edison Co., 7 F.3d 541 (6th Cir.
1993); EEOC v. Romeo Cmty. Sch., 976 F.2d 985 (6th Cir. 1992), do not help them. Each case
interprets a statute that already contains an opposition clause to protect a form of opposition.
None authorizes a court to create an opposition clause out of nothing.
The same is true of out-of-circuit decisions. Every relevant holding hurts Sexton’s
position. The Third and Fourth Circuits have both held that § 1140 does not cover complaints
like Sexton’s. See Edwards v. A.H. Cornell & Son, 610 F.3d 217, 225–26 (3d Cir. 2010)
(concluding that “unsolicited internal complaints are not protected under [§ 1140] based on a
plain reading of that provision’s terms”); King v. Marriott Int’l, Inc., 337 F.3d 421, 428 (4th Cir.
No. 13-1604 Sexton v. Panel Processing, Inc. et al. Page 12
2003) (concluding that “the most compelling interpretation of the statutory language” excludes
workplace complaints). The Second Circuit has reasoned the same way. Nicolaou v. Horizon
Media, Inc., 402 F.3d 325, 329 (2d Cir. 2005) (per curiam) (reasoning that § 1140 covers a
complaint only if the employee made it in response to a “request for information”).
As for Sexton’s citation of cases from the Fifth, Seventh and Ninth Circuits, they offer
less than advertised. In the case from the Fifth Circuit, an employee sued his employer under
state law for wrongful discharge, alleging that it fired him for refusing to carry out orders
violating ERISA. Anderson v. Elec. Data Sys. Corp., 11 F.3d 1311 (5th Cir. 1994). The Fifth
Circuit held that federal law preempts this state claim—a holding that has nothing to do with the
present debate. The court observed along the way, to be sure, that § 1140
“addresses . . . discharges for providing information or testimony relating to ERISA.” Id. at
1314. But the court immediately added a footnote that quoted § 1140 in full. Id. at 1314 n.2.
The Fifth Circuit’s passing remark amounts to a shorthand description of § 1140, not a holding
(or for that matter even a considered dictum) that § 1140 covers every complaint about a
violation, even complaints delinked from an inquiry or proceeding.
The Ninth Circuit’s decision follows a similar pattern. Hashimoto v. Bank of Hawaii,
999 F.2d 408, 411 (9th Cir. 1993). An employee sued her employer under a state whistleblower
law, alleging that it fired her for complaining about violations of ERISA. The Ninth Circuit held
that the doctrine of complete preemption converted the state claim into a federal ERISA claim.
Id. at 409. This holding does not cover the issue at hand, which concerns the validity of a claim
under federal law, not the propriety of recharacterizing a state claim as a federal one. Sexton and
the Secretary persist that, according to the Ninth Circuit’s opinion, § 1140 “may be fairly
construed to protect a person . . . fired because she was protesting a violation of law in
connection with an ERISA plan.” Id. at 411. But this statement was likely dictum. Even if it
were a holding, this drive-by construction of the law—hinged on the self-fulfilling prophecy that
“[t]his statute is clearly meant to protect whistle blowers,” id. at 411, and unhinged from the text
of the provision—is not convincing.
That leaves the Seventh Circuit. It held that § 1140 covers any complaint about the Act
that either asks or answers a question. George v. Junior Achievement of Cent. Ind., Inc.,
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694 F.3d 812, 817 (7th Cir. 2012). But that decision does not help Sexton because his email did
neither.
According to the dissent, the Fifth, Seventh and Ninth Circuit decisions prove at least that
§ 1140 contains an ambiguity sufficient to trigger Chevron deference and sufficient to require a
liberal interpretation in favor of the employee. But as shown below and as the Secretary
concedes, this case does not involve Chevron. And as just shown, the Ninth Circuit did not hold
that § 1140 protects people like Sexton, and the Fifth and Seventh Circuits did not even suggest
it. None of these circuits, moreover, evaluated § 1140 against the backdrop of other federal anti-
retaliation laws. Not one of them acknowledges the distinction these laws make between
opposition and participation clauses, and not one of them explains why § 1140 should protect all
opposition to unlawful practices even though its text mentions only some participation in
inquiries and proceedings. No less importantly, disagreements between judges at most suggest
ambiguity. They do not prove it. If they did, the agency would win every circuit split about
whether a federal law authorizes its regulation, but see, e.g., Ragsdale v. Wolverine World Wide,
Inc., 535 U.S. 81 (2002) (agency loses); the State would win every circuit split about whether a
federal law preempts its statute, but see, e.g., Northwest, Inc. v. Ginsberg, 134 S. Ct. 1422 (2014)
(State loses); and the criminal defendant would win every circuit split about whether a federal
law punishes his conduct, but see, e.g., United States v. Castleman, 134 S. Ct. 1405 (2014)
(criminal defendant loses).
The Secretary urges us to defer to his interpretation of the statute. He (correctly) does not
claim deference under Chevron v. Natural Resources Defense Council, which requires courts to
accept an agency’s reasonable interpretation of a statute that the agency administers. 467 U.S.
837 (1984). The Act does not give the Secretary any authority to administer § 1140, instead
contemplating enforcement through private causes of action. Chevron has no place where
Congress entrusts enforcement of a statute to the courts rather than to an agency. Adams Fruit
Co. v. Barrett, 494 U.S. 638, 649–50 (1990). The Secretary’s interpretation, moreover, appears
not in a regulation but in a friend-of-the-court brief filed in this case and in similar briefs filed in
other circuits. Briefs do not receive Chevron deference. United States v. Mead Corp., 533 U.S.
218, 238 n.19 (2001). All of this explains why the Secretary appeals instead to Skidmore v. Swift
No. 13-1604 Sexton v. Panel Processing, Inc. et al. Page 14
& Co., which entitles an agency’s views to respect proportionate to its persuasive power.
323 U.S. 134, 140 (1944). As shown, we find the Secretary’s arguments unpersuasive.
For what it is worth, our decision has few if any consequences beyond this Act. Most
federal statutes that prohibit retaliation, like Title VII and the Fair Labor Standards Act, do
include separate clauses protecting employees who complain about or oppose unlawful practices.
29 U.S.C. § 215(a); 42 U.S.C. § 2000e-3(a). Congress chose not to include a similar clause in
ERISA, and we should respect that choice.
For these reasons, we affirm.
No. 13-1604 Sexton v. Panel Processing, Inc. et al. Page 15
APPENDIX
29 U.S.C. § 1140. 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 exercising any right to which he is entitled
under the provisions of an employee benefit plan, this subchapter, 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 Welfare and Pension Plans Disclosure Act. It shall be unlawful for any person
to discharge, fine, suspend, expel, or discriminate against any person because he has given
information or has testified or is about to testify in any inquiry or proceeding relating to this
chapter or the Welfare and Pension Plans Disclosure Act. In the case of a multiemployer plan, it
shall be unlawful for the plan sponsor or any other person to discriminate against any
contributing employer for exercising rights under this chapter or for giving information or
testifying in any inquiry or proceeding relating to this chapter before Congress. The provisions
of section 1132 of this title shall be applicable in the enforcement of this section.
No. 13-1604 Sexton v. Panel Processing, Inc. et al. Page 16
_________________
DISSENT
_________________
HELENE N. WHITE, Circuit Judge (dissenting). I respectfully dissent.
The question whether section 510 protects unsolicited employee complaints has split the
circuits. The Fifth, Seventh, and Ninth Circuits have interpreted § 510 to protect an employee’s
“unsolicited internal complaint.” In contrast, the Second, Third, and Fourth Circuits have
interpreted § 510 as only protecting employees when the employer asks the first
question/initiates the inquiry.
I do not agree that § 510’s “plain meaning” is easily ascertained; nor do I agree that the
Supreme Court’s most recent guidance in interpreting anti-retaliation provisions, Kasten v. Saint-
Gobain Performance Plastics Corp., 131 S. Ct. 1325 (2011), is inapposite here. I would follow
the most recent circuit court opinion on point, George v. Junior Achievement of Central Indiana,
Inc., 694 F.3d 812 (7th Cir. 2012). There, the Seventh Circuit observed that § 510 “is a mess of
unpunctuated conjunctions and prepositions. Although the district court concluded that the
language is unambiguous, it is anything but.” Id. at 814 (internal citations omitted). George, the
only post-Kasten circuit court decision, applied Kasten’s interpretive guidance, observing that
that the term “inquiry” “sometimes means nothing more than a question,” and that § 510 protects
unsolicited internal employee grievances regardless whether the employer or employee initiated
the “inquiry.” Id. at 815, 817.
I. Supreme Court Guidance on the Interpretation of Anti-Retaliation Provisions C
Kasten (2011) and Crawford (2009)
Two relatively recent Supreme Court decisions construed anti-retaliation provisions,
Kasten, and Crawford v. Metropolitan Government of Nashville & Davidson County, Tennessee,
555 U.S. 271 (2009) (reversing the Sixth Circuit). Neither involved § 510 of ERISA, but both
demonstrate the trend of the Court to interpret anti-retaliation provisions to afford broad
protection of employees.
No. 13-1604 Sexton v. Panel Processing, Inc. et al. Page 17
A. Crawford’s Interpretation of Title VII
The Crawford Court interpreted Title VII s opposition clause, 42 U.S.C. § 2000e-3(a),
which makes it “unlawful . . . for an employer to discriminate against any . . . employe[e] . . .
because he has opposed any practice made . . . unlawful . . . by this subchapter.”). Crawford,
555 U.S. at 276. The issue was whether protection should be extended to an employee who
“speaks out about discrimination not on her own initiative, but in answering questions during” an
investigation. Id. at 273. The Court held that the protection afforded by Title VII’s opposition
clause extends to an employee who answers questions during an employer’s internal
investigation. Id. In holding that the employee’s actions were protected, the court rejected the
Sixth Circuit’s view that the opposition clause required an employee to actively instigate or
initiate a complaint to be protected. Id. at 277. Although the Sixth Circuit’s interpretation of the
word “opposition” “obviously exemplified” the word “as commonly understood,” the Supreme
Court nevertheless determined that this court’s interpretation did not represent “the limits of [the
word]” and that “nothing in the statute requires a freakish rule protecting an employee who
reports discrimination on her own initiative but not one who reports the same discrimination in
the same words when her boss asks a question.” Id. at 277B78.
B. Kasten’s Interpretation of the FLSA
In Kasten, 131 S. Ct. 1325 (2011), the Supreme Court considered the anti-retaliation
provision of the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., which forbids
employers from retaliating “against any employee because such employee has filed any
complaint . . . ” 29 U.S.C. § 215(a)(3). The issue in Kasten was whether the phrase “filed any
complaint” includes oral as well as written complaints. 131 S. Ct. at 1329.
Kasten worked for Saint-Gobain Performance Plastics Corporation. Id. Saint-Gobain
had placed employee timeclocks between the area where employees put on and took off their
work-related protective clothing and the area where the employees actually worked. The
location of the clocks prevented workers from getting credit for the time they spent changing
their clothes. Kasten claimed Saint-Gobain discharged him because he orally complained to
company officials that the location of the timeclocks violated the FLSA. Id.
No. 13-1604 Sexton v. Panel Processing, Inc. et al. Page 18
The district court granted summary judgment in favor of Saint-Gobain, concluding that
the FLSA’s anti-retaliation provision did not protect oral complaints. Id. The Seventh Circuit
affirmed. Id. The Supreme Court granted certiorari to resolve a circuit split on the question
whether oral complaints are protected under the FLSA § 215(a)(3) and reversed, holding that
“the statutory term ‘filed any complaint’ includes oral as well as written complaints.” Id. at
1329. Interpreting the phrase “filed any complaint,” the Court noted that the interpretation
“depends upon reading the whole statutory text, considering the purpose and context of the
statute, and consulting any precedents or authorities that inform the analysis.” Id. at 1330
(citing Dolan v. Postal Service, 546 U.S. 481, 486 (2006) (emphasis added)). The Court
observed that while “the language of the provision, considered in isolation, may be open to
competing interpretations. . . considering the provision in conjunction with the purpose and
context leads us to conclude that only one interpretation is permissible.” Id. at 1330B31.
The Kasten Court first considered the text of the statute, noting that “the word ‘filed’ has
different relevant meaning in different contexts.” Id. at 1331. In considering other possible
interpretations of the word “filed,” the Court examined dictionaries, regulations promulgated by
other federal agencies, caselaw, other appearances of the word “filed” in the FLSA, and other
statutes’ anti-retaliation provisions. Id. at 1331B33. In looking beyond the FLSA to other
statutes containing antiretaliation provisions, the court noted:
Those statutes, however, use somewhat different language. See, e.g., § 158(a)(4)
(protecting an employee who has “filed charges or given testimony”); § 623(d)
(protecting those who “opposed any [unlawful] practice” (emphasis added));
42 U.S.C. §§ 2000e-3(a), 12203(a) (same); 29 U.S.C. § 2615(a)(2) (similar). See
also, e.g., 15 U.S.C. § 2087(a)(1) (2006 ed., Supp. III) (“provided . . . to the
employer . . . information relating to any violation” (emphasis added)); § 2651(a)
(similar); 30 U.S.C. § 815(c)(1) (“filed or made a complaint” (emphasis added));
42 U.S.C. § 5851(a)(1)(A) (“notified his employer” (emphasis added)); 49 U.S.C.
§ 42121(a)(1) (“provided . . . information” (emphasis added)); § 60129(a)(1)
(same).
Kasten, 131 S. Ct. at 1332B33. Given the use of broader language in other anti-retaliation
statutes and the fact that the use of the word “filed” in § 215(a)(3) “lends itself linguistically to
[a] broader, ‘oral’ interpretation,” the Court concluded that the use of the broader language in
other anti-retaliation statutes could mean 1) that Congress wanted to limit the scope of “filed” in
No. 13-1604 Sexton v. Panel Processing, Inc. et al. Page 19
§ 215(a)(3) of the FLSA to writings, or 2) that Congress did not believe a different use of “filed”
in anti-retaliation provisions outside of the FLSA made a significant interpretive difference. Id.
The Court noted that “[t]he bottom line is that the text, taken alone, cannot provide a conclusive
answer to our interpretive question.” Id.
The Kasten Court looked further into “functional considerations” and decided that
limiting § 215(a)(3) to written complaints would undermine the basic objectives of the FLSA.
Kasten, 131 S. Ct. at 1333. Limiting the scope of § 215(a)(3) to the filing of written complaints
would “prevent Government agencies from using hotlines, interviews, and other oral methods of
receiving complaints.” Id. at 1334. Such a limitation would also “discourage the use of
desirable informal workplace grievance procedures to secure compliance with the Act.” Id.
The need for effective enforcement of the FLSA led the Court to compare it to the
National Labor Relations Act (NLRA), 29 U.S.C. § 158(a)(4). Kasten, 131 S. Ct. at 1334. The
Court noted that it had “broadly interpreted the language of the NLRA’s antiretaliation
provision” because of the need for effective enforcement of the NLRA.1 Id. The similar
enforcement needs of the NLRA and FLSA require an interpretation that provides “broad rather
than narrow protection to the employee.” Id. (citing NLRB v. Scrivener, 405 U.S. 117, 122
(1972)).2 Based on these functional considerations, the Court determined that oral complaints
are within the scope of FLSA 215(a)(3) so long as the complaint is “sufficiently clear and
detailed for a reasonable employer to understand it, in light of both content and context, as an
assertion of rights protected by the statute and a call for their protection.” Id. at 1335. The Court
further observed that “[g]iven Congress’ delegation of enforcement powers to federal
administrative agencies, we also give a degree of weight to their views about the meaning of this
enforcement language.” Id.
1
The Court “broadly interpreted the language of the NLRA’s antiretaliation provisionC‘filed charges or
given testimony,’ 29 U.S.C. § 158(a)(4)Cas protecting workers who neither filed charges nor were ‘called formally
to testify’ but simply ‘participate[d] in a National Labor Relations Board investigation.’” Kasten, 131 S. Ct. at 1334
(emphasis added by the Court).
2
In addition, the Scrivener Court declined to read strictly the NLRA’s reference to an employee who “has
filed charges or given testimony,” or confine “in its reach to formal charges and formal testimony.” Scrivener,
405 U.S. at 122.
No. 13-1604 Sexton v. Panel Processing, Inc. et al. Page 20
II. Sixth-Circuit Interpretation of Anti-Retaliation Provisions
Sixth Circuit precedent analyzing anti-retaliation provisions has not taken as restrictive a
view as the majority does here. In EEOC v. Ohio Edison Co., 7 F.3d 541, 545 (6th Cir. 1993),
this court broadly construed the opposition provision of Title VII. See 42 U.S.C. § 2000e-3(a)
(prohibiting retaliation against any employee or applicant for employment “because he has
opposed any practice made an unlawful employment practice by this subchapter, or because he
has made a charge, testified, assisted, or participated in any manner in an investigation,
proceeding, or hearing under this subchapter.”) (emphasis added). This court read the phrase “he
has opposed any practice” to mean “he or his representative has opposed any practice.” Id. A
broad reading of the provision was necessary, this court stated, because it was consistent with the
purpose of the Act, which was to prohibit retaliation against protected activity. Id. This court
also noted that other courts have “routinely adopted interpretations of retaliation provisions in
employment statutes that might be viewed as outside the literal terms of the statute in order to
effectuate Congress’s clear purpose in proscribing retaliatory activity.” Id.
This court has also liberally interpreted anti-retaliation provisions in other statutes similar
to ERISA. In EEOC v. Romeo Community Schools, 976 F.2d 985, 989B90 (6th Cir. 1992), this
court held that the FLSA’s anti-retaliation provision, the precise provision at issue in Kasten, can
be triggered by unsolicited internal complaints. See 29 U.S.C. § 215(a)(3) (prohibiting
employers from retaliating “against any employee because such employee has filed any
complaint or instituted or caused to be instituted any proceeding under or related to this Act.”).
The plaintiff, a female teacher, informally complained to the school district that she believed it
was “breaking some sort of law” by providing higher wages to her male counterparts. 976 F.2d
at 990. This court held the employee’s informal complaint was protected under the Act,
rejecting the defendant’s argument that the FLSA § 215(a)(3) protects employee complaints only
where the employer’s retaliatory action takes place after the employee files an official complaint.
Romeo Cmty. Schools, 976 F.2d at 990; see also Dunlop v. Carriage Carpet Co., 548 F.2d 139,
142, 147 (6th Cir. 1977) (broadly interpreting the FLSA § 203(e) to include former employees,
despite the FLSA amendment by Congress of the phrase “employee includes” to “employee
means”); NLRB v. Retail Store Emps. Union, 570 F.2d 586, 590 (6th Cir. 1978) (broadly
interpreting NLRB § 8(a)(4), which states that it is an unfair labor practice for an employer “to
No. 13-1604 Sexton v. Panel Processing, Inc. et al. Page 21
discharge or otherwise discriminate against an employee because he has filed charges or given
testimony,” to protect employees who refuse to participate in an NLRB investigation). As the
Secretary of Labor’s amicus brief points out, Sixth Circuit precedent favors interpretations that
grant broad protections to employees.
III. The Circuit Split: Circuits That Protect “Unsolicited Internal Complaints”
A. Post-Kasten Interpretation of § 510
In George v. Junior Achievement of Central Indiana, Inc., 694 F.3d 812, 815 (7th Cir.
2012), the Seventh Circuit explicitly held that § 510 protects an employee’s unsolicited internal
complaint. The plaintiff in George noticed that his employer had failed to deposit money
withheld from his paycheck into his retirement account. Id. at 813. George protested about this
ERISA violation to various high-level executives of the company. Id. Eventually, he received
checks that made up the missed deposits plus interest, but he was discharged within several
months. Id. Like the Fifth and Ninth Circuits, the Seventh Circuit held that George’s unsolicited
internal complaints were protected “inquiries.”
Two other circuits have held that § 510 applies to unsolicited informal
complaints. Anderson v. Electronic Data Systems Corp., 11 F.3d 1311, 1313,
1315 (5th Cir. 1994); Hashimoto v. Bank of Hawaii, 999 F.2d 408, 411 (9th Cir.
1993). The ninth circuit stated that reporting misconduct is a necessary step in the
commencement of any formal inquiry and that, unless informal beginnings are
covered, employers would be induced to dismiss employees as soon as they
complained or asked a barbed question.
....
The statute does not specify who asks the question or, more generally, initiates the
inquiry. There is no linguistic reason why “inquiry” cannot refer to the
employee’s questions as well as the employer’s. Most questions (or observations)
will lead to questions in return; after George complained, managers at Junior
Achievement asked questions of him. Treating § 510 as covering only half of the
dialogue would not make sense.
Id. at 814, 815. The George court rejected the Third Circuit’s contention that § 510’s language is
unambiguous:
Both the initial clauses in § 510 and the prepositional phrase that modifies
them employ the disjunctive, which implies that informal and formal approaches
are separate tracks, both of which are covered. Section 510 can be parsed this
way:
((has given information) or (has testified or is about to testify))
No. 13-1604 Sexton v. Panel Processing, Inc. et al. Page 22
in (any ((inquiry) or (proceeding))).
Likewise we can group the actions and settings based on formality:
((has given information) in (any inquiry))
or ((has testified or is about to testify) in (any proceeding)).
This understanding about which words go with which other words is not
compelled by rules of grammar—the language is ambiguous—but clues including
the similar ordering of the informal and formal options lend support to splitting
the provision into two parallel tracks.
....
Because § 510 refers to inquiries without specifying who is doing the
inquiring, it logically covers employees' inquiries. Crawford provides some
support for this understanding. .. Junior Achievement proposes to add modifiers
such as “formal” or “solicited” to the word “inquiry” in § 510. Just as in
Crawford, we must enforce the text as enacted, without the additions. See also
Kasten, 131 S. Ct. at 1330. The grammatical structure and functions of § 510 do
not support reading the statute as if it read: “for giving information . . . in
response to any inquiry” (adding the italicized words to the enacted text).
Crawford admonishes us to resist the urge to read words into statutes.
George, 694 F.3d at 814B16 (rejecting Edwards v. A.H. Cornell & Son, Inc., 610 F.3d 217, 224
(3rd Cir. 2010) (emphasis in original). George followed Kasten in deciding that “[w]hen dealing
with ambiguous anti-retaliation provisions,” a court must “resolve the ambiguity in favor of
protecting employees.” 694 F.3d at 814 (citing Kasten, 131 S. Ct. at 1333B35).
B. Pre-Kasten Interpretation of § 510
Before the Supreme Court decided Kasten, the Ninth Circuit considered a case involving
an employee’s unsolicited internal complaint in Hashimoto v. Bank of Hawaii, 999 F.2d 408 (9th
Cir. 1993). Hashimoto was instructed by her co-workers to commit various ERISA violations.
Id. at 409. After Hashimoto complained to other employees about “potential and/or actual
violations by the Bank of the reporting and disclosure requirements and fiduciary standards of
ERISA,” she was discharged. Id. Although the controlling issue was whether Hashimoto’s state
claims were preempted, the Ninth Circuit noted that § 510 was “clearly meant to protect whistle
blowers” in Hashimoto’s position. Id. at 411. The court stated that the “normal first step in
giving information or testifying” was “to present the problem first to the responsible managers of
the ERISA plan.” Id. If an employee “is then discharged for raising the problem, the process of
No. 13-1604 Sexton v. Panel Processing, Inc. et al. Page 23
giving information or testifying is interrupted at its start: the anticipatory discharge discourages
the whistle blower before the whistle is blown.” Id.
The Fifth Circuit interpreted § 510 as protecting unsolicited internal complaints in
Anderson v. Electronic Data Systems Corp., 11 F.3d 1311 (5th Cir. 1994). Anderson was asked
by a specific employee to commit various ERISA violations. Id. at 1312. After Anderson
refused and reported the alleged ERISA violations to management, he was demoted and
discharged. Id. Similar to the Ninth Circuit in Hashimoto, the Fifth Circuit in Anderson focused
on the ERISA preemption issue, but noted that § 510 protects employees, like Anderson, who
“provid[e] information or testimony relating to ERISA.” Id. at 1315.
IV. Circuits That Do Not Protect Unsolicited Internal Complaints
Every circuit court case that interprets § 510 protection as not protecting an employee’s
unsolicited internal complaint was decided pre-Kasten. But After Kasten, the Fourth Circuit in a
FLSA retaliation case followed the Supreme Court’s guidance on statutory interpretation.
A. Pre-Kasten Interpretation of § 510
The Fourth Circuit in King v. Marriott Int’l, Inc., 337 F.3d 421 (4th Cir. 2003), held that
unsolicited internal complaints are not protected under § 510. King had learned of potential
ERISA violations and reported them to her immediate supervisor. Instead of remedying the
violations, the supervisor promoted King and gave her increased responsibilities regarding
benefit plan finances. When the supervisor revived his potentially violative plan, King objected
again and shared her objections with two in-house attorneys in addition to her supervisor. Id.
When the supervisor revived his plan a third time, King objected again, orally and in writing, and
was fired, purportedly for feuding with other employees. Id. The Fourth Circuit concluded that
King’s complaints were not protected under § 510:
In interpreting a very similar provision of the Fair Labor Standards Act . . . 3 we
concluded that the term “proceeding” referred only to administrative or legal
proceedings, and not to the making of an intra-company complaint. See Ball v.
Memphis Bar-B-Q Co., 228 F.3d 360, 364 (4th Cir. 2000). In Ball, we said that
3
The provision forbids employers from retaliating “against any employee because such employee has filed
any complaint or instituted or caused to be instituted any proceeding under or related to this Act.” 29 U.S.C.
§ 215(a)(3).
No. 13-1604 Sexton v. Panel Processing, Inc. et al. Page 24
“the ‘proceeding’ necessary for liability . . . refers to procedures conducted in
judicial or administrative tribunals,” noting that “proceeding,” in the Act, was
“modified by attributes of administrative or court proceedings.” In particular, we
explained, “testify” and “institute” both connote “a formality that does not attend
an employee's oral complaint to his supervisor.”
King, 337 F.3d at 427. The King court determined that § 510 of ERISA, like the FLSA provision
interpreted in Ball, was “much narrower” than other anti-retaliation provisions, such as found in
Title VII, and required a stricter interpretation. King, 337 F.3d at 427 (citing Ball, 228 F.3d at
364, and Ball’s reference to Title VII’s anti-retaliations provision, 42 U.S.C. § 2000e-3(a)
(making it unlawful for an employer to discriminate against an employee because he has opposed
any practice made unlawful by the Act.)) The court interpreted § 510 protections to be limited to
the legal or administrative proceedings, “or at least to something more formal than written or oral
complaints made to a supervisor.” Id. at 427.
In Edwards v. A.H. Cornell & Son, Inc., the Third Circuit followed King and held that
§ 510 of ERISA does not protect an employee’s unsolicited internal complaint. 610 F.3d 217
(3rd Cir. 2010). Edwards discovered ERISA violations, “objected to and/or complained” about
them to her company’s “management,” and was later fired. Id. at 219. In holding that Edwards’
complaints were not protected, the Third Circuit determined that § 510 only protects employer-
initiated inquiries. Id. at 223. The Third Circuit held § 510 “plain and unambiguous,” and not
“reasonably susceptible of different interpretations.” Id. at 222 (internal citations omitted). The
Edwards court interpreted § 510 as granting protection only where there is an employer-initiated
request for information. Id. at 223.
The Second Circuit also denied § 510 protection to unsolicited internal complaints in
Nicolaou v. Horizon Media, Inc., 402 F.3d 325 (2d Cir. 2005). Nicolaou discovered a “serious
payroll discrepancy” that she believed put her company in violation of ERISA. Id. at 326. She
brought the discrepancy to the attention of the Chief Financial Officer and Controller, and
eventually felt compelled to inform “outside counsel” for the company, who conducted his own
investigation and agreed with Nicolaou. Id. Nicolaou and the attorney then met with the
President of the company, who reassigned Nicolaou, after which her employment was
terminated. Because the district court record did not reflect whether the President of the company
arranged the meeting, the Second Circuit remanded to the district court to decide whether
No. 13-1604 Sexton v. Panel Processing, Inc. et al. Page 25
Nicolaou could “demonstrate that she was contacted to meet with [the President] in order to give
information about the alleged underfunding of the Plan.” Id. at 330 (emphasis added). The
Court decided that the “informal gathering of information falls within the plain meaning of
‘inquiry,’” and was protected by § 510. Id. at 329. Thus, if Nicolaou could demonstrate that she
was contacted by her employer “to give information about the alleged underfunding of the Plan,
her actions would fall within the protection of Section 510.” Id. at 330. The Court limited § 510
protection to employees who give information in employer-initiated inquiries. The Nicolaou
court did not consider Nicolaou’s actions before her meeting with the President as relevant under
§ 510.
The Second Circuit based its conclusions on the “plain language” of § 510. Nicolaou,
402 F.3d at 328. The court refused to recognize any similarities to the FLSA, 29 U.S.C.
§ 215(a)(3),4 as ERISA § 510 was “unambiguously broader in scope.” Nicolaou, 402 F.3d at
328. The Nicolaou court noted that its holding did not conflict with the Fourth Circuit’s King
decision. Id. at 421. The court recognized King’s interpretation that “Section 510’s use of the
phrase ‘inquiry or proceeding’” reached only “the legal or administrative, or at least
. . . something more formal than written or oral complaints made to a supervisor.” Nicolaou,
402 F.3d at 330 (citing King, 337 F.3d at 427). The Nicolaou court, however, stated “the proper
focus is not on the formality or informality of the circumstances under which an individual gives
information, but rather on whether the circumstances can fairly be deemed to constitute an
‘inquiry,’” and focused on whether the employer initiated the inquiry. Id.
B. Post-Kasten Statutory Interpretation in the Fourth Circuit
No circuit court interpreting § 510 of ERISA as failing to protect an employee’s
unsolicited internal complaints has returned to the question post-Kasten. In Minor v. Bostwick
Laboratories, Inc., 669 F.3d 428 (4th Cir. 2012), however, the Fourth Circuit (post-Kasten)
broadly interpreted § 215(a)(3) of the FLSA to protect an employee’s unsolicited internal
complaint.
The issue in Minor was whether an employee’s internal complaint could trigger the
protection of § 215(a)(3). Minor, 669 F.3d at 431. Minor argued that Kasten requires a holding
4
That is the same provision of the FLSA the Court later interpreted in Kasten.
No. 13-1604 Sexton v. Panel Processing, Inc. et al. Page 26
that protects “intracompany complaints” under § 215(a)(3). Id. Her employer argued that Ball,
228 F.3d 360 (4th Cir. 2000), was controlling, rather than Kasten, and that Ball “compell[ed] the
conclusion that intracompany complaints are unprotected.” Minor, 669 F.3d at 431. In the
alternative, both parties argued that the plain language of § 215(a)(3) supported their respective
positions. Id.
The Fourth Circuit held that “although the language of § 215(a)(3) is ambiguous, the
remedial purpose of the statute requires that it protect from retaliation employees who file
intracompany complaints.” Id. at 432. It explained that Kasten’s reasoning was “persuasive” but
not “directly controlling,” as the Supreme Court had “expressly declined to address the question
of whether an intracompany complaint could qualify as protected activity under the FLSA.” Id.
(citing Kasten, 131 S. Ct. at 1336). The Fourth Circuit distinguished Kasten from Ball by
breaking down the FLSA’s anti-retaliation provision into three clauses, interpreting the phrase
“filing any complaint” in § 215(a)(3) as the “complaint clause.” Minor, 669 F.3d at 433. The
court stated that § 215(a)(3) protects three distinct types of activities; (1) filing any complaint,
(2) instituting or causing to be instituted any proceeding, and (3) testifying or being about to
testify in any such proceeding. Id. at 433. The Minor court stated it had “specifically noted in
Ball that our opinion did not purport to construe the ‘complaint clause.’” Id. (citing Ball,
228 F.3d at n.*).
Determining that neither Kasten nor Ball were “directly controlling,” the Fourth Circuit
turned “to an independent review of the language of § 215(a)(3).” Minor, 669 F.3d at 434. The
court noted that, unlike the district court, it now had “the benefit of the Supreme Court’s recent
consideration of the plain meaning of ‘filed any complaint’ from Kasten.” Id. at 435. Using
Kasten as a guide, the court concluded “that the language ‘filed any complaint’ is ambiguous
with regard to whether intracompany complaints are protected activity under § 215(a)(3).” Id.
The court declined to overrule its statement in Ball that the term “proceeding” in § 215(a)(3)
referred only to administrative or legal proceedings and not to the making of an intra-company
complaint, on the ground that Ball did not involve the complaint clause of § 215(a)(3) and that it
was Congress’ intent to consider each category of protected activity separately. Id. at 436.
No. 13-1604 Sexton v. Panel Processing, Inc. et al. Page 27
Because the term “filed any complaint” in § 215(a)(3) is ambiguous, the Fourth Circuit
turned to the “functional considerations” considered in Kasten, 131 S. Ct. at 1333, and found that
those considerations “dictate that intracompany complaints qualify as protected activity within
the meaning of the FLSA’s antiretaliation provision.” Id. at 437. The Minor court considered
the FLSA’s basic goals, including that it was enacted to combat labor conditions detrimental to
the well-being of workers, that Congress had included the anti-retaliation provision so that
employees would not have to fear economic retaliation for reporting violations, and that limiting
the provision’s coverage to complaints made only to an administrative or adjudicative body
would undermine the purpose of the FLSA. Id. An interpretation of § 215(3)(a) that protected
intracompany complaints, “on the other hand, comports with the statute’s objectives as described
by Congress’s findings and the Supreme Court’s interpretation of those findings.” Id. at 437.
V. Analysis
The threshold question is whether § 510 is reasonably susceptible of different
interpretations. Kasten, 131 S. Ct. at 1330B31 (observing that an anti-retaliation provision is
ambiguous if “the language of the provision, considered in isolation, may be open to competing
interpretations.”); see also Edwards, 610 F.3d 217 at 222. If § 510 is ambiguous regarding
whether it protects unsolicited internal complaints, Kasten counsels that its interpretation
“depends upon reading the whole statutory text, considering the purpose and context of the
statute, and consulting any precedents or authorities that inform the analysis.” Kasten, 131 S. Ct.
1325, 1330 (citing Dolan, 546 U.S. at 486).
The circuit split and divergent opinions regarding whether § 510 protects an employee’s
unsolicited internal complaints suggest an ambiguity. See Smiley v. Citibank (South Dakota),
N.A., 517 U.S. 735, 739 (1996) (in light of different interpretations in state supreme courts and
federal circuit courts, the court found it difficult “to contend that the word ‘interest’ in the
National Bank Act is unambiguous . . .”); North Fork Coal Corp. v. Fed. Mine Safety & Health
Review Comm’n, 691 F.3d 735, 740 (6th Cir. 2012) (the fact that the phrase “pending final order
on the complaint” of 30 U.S.C. § 815(c)(3) “does not have a plain meaning” and “is subject to
more than one reasonable interpretation” was demonstrated by the competing interpretations
No. 13-1604 Sexton v. Panel Processing, Inc. et al. Page 28
offered by the parties, and noting that “the existence of divergent court opinions also suggests
ambiguity.”).
Kasten has important implications for interpreting § 510. In both King and Edwards,
which relies on King’s reasoning, § 510 protection was limited to employees who give
information in “something more formal than written or oral complaints made to a supervisor.”
King, 337 F.3d at 427; Edwards, 610 F.3d at 223 (“even beyond the plain meaning of ‘inquiry’
and ‘proceeding,’ the phrase ‘testified or is about to testify’ implies that the phrase ‘inquiry or
proceeding’ is limited to more formal actions.”) Relying on another pre-Kasten case, Ball,5 the
King court determined that § 510 of ERISA, like the anti-retaliation provision of the FLSA
interpreted in Ball, was “much narrower” than other anti-retaliations provisions, requiring a
stricter interpretation of § 510. Id. King interpreted § 215(a)(3) of the FLSA--the same
whistleblower provision the Supreme Court interpreted a decade later in Kasten. But Kasten
interpreted the provision to protect employees who make informal oral or written complaints.
131 S. Ct. at 1335.
The Second Circuit in Nicoloau focused less on the formality of the inquiry and more on
the importance of the inquiry being “employer-initiated.” 402 F.3d at 330. In fact, the Nicoloau
court observed that ERISA’s § 510 is “unambiguosly broader in scope” than the FLSA’s
§ 215(a)(3). Id. at 328. However, none of these statements take away from the fact that the
court did not believe its holding conflicted with King’s reasoning, or that it based its conclusions
on the “plain language” of § 510. Id. In fact, Nicoloau’s holding calls for a broader
interpretation of § 510 than King and Edwards, with its statement that the “plain language of
ERISA Section 510” is “unambiguously broader in scope” than the FLSA’s § 215(a)(3). Id. at
328. Following the court’s own reasoning, if Nicoloau had been decided post-Kasten the Second
Circuit would interpret § 510 of ERISA to protect an employee’s unsolicited internal complaint,
since Kasten interpreted § 215(a)(3) of the FLSA to afford broad protections for employees.
After the Supreme Court decided Kasten, the Fourth Circuit held that § 215(a)(3) of the
FLSA protects an employee’s unsolicited internal complaints in Minor, 669 F.3d at 439. The
Fourth Circuit noted that it had adopted the majority view, which included the Sixth Circuit, on
5
Ball, 228 F.3d 360, 364 (4th Cir. 2000).
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the same issue. Id. at 438 (citing Romeo Cmty. Schools, 976 F.2d at 989). However, after
Kasten the Fourth Circuit’s Minor and King decisions cannot be reconciled. Compare King,
337 F.3d at 427 (relying on Ball in its determination that § 510 of ERISA and § 215(a)(3) of the
FLSA require a strict, narrow interpretation), with Minor, 669 F.3d at 435B37 (distinguishing
Ball from Kasten and using Kasten as a guide in determining that § 215(a)(3) of the FLSA was
ambiguous and that functional considerations dictated “that intracompany complaints qualify as
protected activity.”). Minor is noteworthy because the only two other circuits to interpret
ERISA’s § 510 as not protecting an employee’s unsolicited internal complaint relied on the
Fourth Circuit’s reasoning in King.
VI.
The district court decided this case primarily on the basis that Sexton’s email was not an
inquiry. The majority makes this point as well. Initially, Sexton inquired of the Human
Resources manager as to the results of the election. After confirming that the employees had
received the most votes, he sent the email to the board chairman. The majority concedes that
Sexton gave information in the email, but concludes that it was not given in an inquiry. I agree
with the Secretary that a complaint may, in context, be an inquiry, and that Sexton was clearly
asserting that Panel Processing had violated ERISA and inquiring whether the board would take
action or Sexton would be required to do so. Sexton argues that Panel Processing responded to
that inquiry by firing him.
VII.
Section 510 is susceptible of several interpretations, only one of which is that employee
information must be given 1) at the employer’s initial request and/or 2) in “something more
formal than written or oral complaints,” in order to be protected. See, e.g., King, 337 F.3d at
427. I would follow George, the only circuit court decision issued after Kasten. 694 F.3d at 814
(“When dealing with ambiguous anti-retaliation provisions, we are supposed to resolve the
ambiguity in favor of protecting employees.” (citing Kasten, 131 S. Ct. at 1333B35)); see also
Crawford, 555 U.S. at 277B78 (“nothing in the statute requires a freakish rule protecting an
employee who reports discrimination on her own initiative but not one who reports the same
discrimination in the same words when her boss asks a question.”)