Amicus Curiae Brief — Ingersoll-Rand Co. v. McClendon

wet | Supreme Coutt, U.S.

FILED

ab’, JUL 19 1990

‘bea JR.

No. 89-1298 — -

Inu The

Supreme Court Of Che United States

OCTOBER TERM, 1990

INGERSOLL-RAND COMPANY,

Petitioner,

Vv.

PERRY McCLENDON,

Respondent.

ON WRIT OF CERTIORARI TO THE

SUPREME COURT OF TEXAS

BRIEF AMICUS CURIAE OF THE NATIONAL

EMPLOYMENT LAWYERS ASSOCIATION AND

AMERICAN CIVIL LIBERTIES UNION

IN SUPPORT OF RESPONDENT

Counsel for Amici Curiae: Of Counsel:

JANET BOND ARTERTON* JEFFREY LEWIS

MARKUS L. PENZEL SIGMAN & LEWIS

GARRISON, SILBERT AND 436 14th Street

ARTERTON, PC. Suite 1020

405 Orange Street Oakland, California 94612

New Haven, Connecticut 06511 (415) 839-6824

(203) 777-4425

*Counsel of Record

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TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES .. il

INTEREST OF THE AMICI CURIAE l

STATEMENT OF THE CASE l

ISSUE ..... 1

SUMMARY OF ARGUMENT . 2

ARGUMENT ...... eee 3

I. Absent A Clear And Unmistakable Congressional

Intent To Preempt State Law, A Federal Statute

May Not Eviscerate State Remedies For Wrongful

Termination Of The Employment Relationship 3

Il. The Employee Retirement Income Security Act,

29 U.S.C. § 1001 et seg., Preempts Only Those

State Laws That Both Relate To Employee

Benefit Plans And Purport To Regulate, Directly

Or Indirectly, The Terms And Conditions Of

Teese Pieme............ een sean 5

III. ERISA Does Not Preempt A State Common

Law That Prohibits An Employer From Dis-

charging An Employee In Order To Avoid

Contributing To Or Paying Benefits Under

The Employee's Pension Fund . 10

IV. That The Facts Of This Case May Have Also

Provided Respondent With A Cause Of Action

Under Section 510 Of ERISA Is Insufficient

To Support A Finding Of Preemption 13

CONCLUSION 15

TABLE OF AUTHORITIES

Cases: Page(s)

Alessi v. Raybestos-Manhattan, Inc., 451 U.S.

DP 2 cu ese ea eve wea wee eae 3, 4, 6, 8, 14

Amato v. Western Union International, Inc., 773

F.2d 1402 (2d Cir. 1985), cert. dismissed, 474

U.S. 1113

IS sc cota A ene ee ee og uate ce oath oo

Belknap v. Hale, 463 U.S. 491 (1983) ................ 3

California v. ARC America Corp., __ U.S. __, 109

a I ES «os oe uu ou caesar es ae

City of Burbank v. Lockheed Air Terminal, Inc., 411

ee PI so ooo. 00-50 Sere te Nees 3

Decanas v. Bica, 424 U.S. 351 (1976) ......... er

Dzinglski v. Weirton Steel Corp., 875 F.2d 1075 (4th

Cir.), cert. denied, 110 S.Ct. 281 (1989)... ... Mee

English v. General Electric Company,

__ US. _, 58 U.S.LW. 4679 (1990)... . . 3, 4, 5, 13, 14

Fort Halifax Packing Co. v. Coyne, 482 U.S. 1

Preparer art, ewe nha doy teed _. passim

Franchise Tax Board v. Construction Laborers

Vacation Trust, 463 U.S. 1 (1983) ........ 2 ra ag

Hillsborough County v. Automated Medical

Laboratories, Inc., 471 U.S. 707 (1985).......... 14

Hlinka v. Bethlehem Steel Corp., 863 F.2d 279 (3d Cir.

Es oo 4 4k a seco cen banuhioeeeereoaoree 11

Jones v. Rath Packing Co., 430 U.S. 519 (1977) ........ 4

TABLE OF AUTHORITIES (continued)

Cases: Page(s)

K Mart Corp. v. Ponsock, 732 P.2d 1364 (Nev. 1987)... 10

Lingle v. Norge Division of Magic Chef, Inc., 486

ee I. a 5 9 6 cd Kd we eco eae 10, 11

Linn v. Plant Guard Workers, 383 U.S. 53 (i966) ...._.. 3

Mackey v. Lanier Collection Agency & Service,

Inc., 486 U.S. 825 (1988) .............. 9, 12, 13, 14

Martori Bros. Distributors v. James-Massengale, 781

F.2d 1349 (9th Cir.), cert. denied, 479 U.S. 949

I ase a Ga kf care aa OR eee ae ee 6, 11

Maryland v. Louisiana, 451 U.S. 725 (1981)... ee

Massachusetts v. Moradch, __ U.S. _, 109 S.Ct. 1668

ne ear ae a a re ee ete 3

Massachusetts Mutual Life Insurance Co. v. Russell,

Se ey rE I ss ores 0s 0h kek ees ere

McLendon v. Ingersoll-Rand Co., 779 SW.2d 69

IN do ac bcd s s os. ve see sa oe ce ee:

Metropolitan Life Insurance Co. v. Massachusetts,

ie ee eee | 6, 7

Metropolitan Life Insurance Co. v. Taylor, 481 U.S. 58

(1987), on remand sub. nom. Taylor v. General

Motors Corp., 826 F.2d 452 (6th Cir. 1987) __. 8,9

Morningstar v. Meijer, Inc., 662 F.Supp. 555 (E.D.

Mich. 1987) rap <n Ark oe a ratala , 11

ill

TABLE OF AUTHORITIES (continued)

Cases: Page(s)

Nachman Corp. v. Pension Benefit Guaranty Corp.,

446 U.S. 359 4980) 14

Pilot Life Insurance Co. v. Dedeaux, 481 US. 41

(i987) 8,9

Rebaldo v. Cuomo, 749 F.2d 133 (2d Cir. 1984). cert.

denied, 472 U.S. 1008 (1985) 6

Rice v. Santa Fe Elevater Corp., 331 U.S. 218

(1947) a 3

Shaw v. Delta Air Lines, Inc., 463 U.S. 85 (1983) .. 4, 6, 8

Stone & Webster Engineering Corporation v. Iisley,

690 F.2d 323 (2d Cir. 1982), aff'd sum. sub nom.

Arcudi v. Stone & Webster Engineering Corp.,

463 U.S. 1220 (1983).......... we 6

Teper v. Park West Galleries, Inc., 427 NW. 2d 535

Se MN seks ose oe ss | 7,11

Totton v. New York Life Insurance Co., 685 F.Supp. 27

(D. Conn. 1988)... .. fre 1}

Statutes:

Employee Retirement Income Security Act of 1974

(“ERISA”), Pub: L. No. 93-406, 88 Stat. 829,

ee ee _. passim

ERISA § 3(21)(A), 29 U.S.C. § 1002(21)(A) | 11

ERISA § 502, 29 U.SC. § 1132 | 9, 13

iv

TABLE OF AUTHORITIES (continued)

Statutes:

ERISA § 510, 29 USC.§1140 ..............

ERISA § 514, 29 USC. §1144 ..... ath

Legislative Materials:

Legislative History of the Employee Retirement

Income Security Act of 1974 (Comm. Print)

RS Sain ca kaas yaw thei hanes,

iNTEREST OF AMICI CURIAE*

The National Employment Lawyers Association (here-

after NELA) is a non-profit organization consisting of over

800 lawyers in forty-nine states. NELA’s members concen-

trate in the representation of individual employees in employ-

ment and labor matters. Members of NELA are active in

litigating abusive employee discharge claims like that of

Respondent throughout the ation. NELA is vitally inter-

ested in the outcome of this critical case.

The American Civil Liberties Union (ACLU) is a nation-

wide, nonprofit, nonpartisan organization with over 275,000

members dedicated to the principles of civil liberties and civil

rights. Based on those principles, the ACLU has encouraged

the development of both substantive and procedural limita-

tions on the common law doctrine of employment-at-will. The

decision below furthers the development of such limitations

and therefore raises issues of organizational concern to the

ACLU.

STATEMENT OF THE CASE

NELA and ACLU adopt the statement of the case as

presented by Respondent.

ISSUE

Whether the Employee Retirement Income Security Act

of 1974 (“ERISA”), 29 U.SC. § 1001 et seg., preempts a state

common law claim that an employer has unlawfully dis-

charged an employee in order to avoid contributing to or

paying benefits under the employee's pension fund.

*Letters of consent to the filing of this brief have been lodged with the

Clerk of the Court pursuant to Rule 37.3.

SUMMARY OF ARGUMENT

Absent a clear and unmistakable Congressional intent

to preempt state law, a federal statute may not eviscerate

state remedies for wrongful termination of the employment

relationship. While Congress intended the scope of ERISA’s

express preemption provision to be broad, that scope is not

unlimited. Rather, ERISA preempts only those state laws

that both relate to employee benefit plans and purport to

regulate, directly or indirectly, the terms and conditions of

those plans. Congress intended that preemption would ensure

that the administrative practices of a benefit plan will be

governed by only a single set of regulations, and preemption

is appropriate only when that intent is served. Because the

Texas law does not purport to regulate Petitioner's pension

plan, nor does it subject the plan to a different set of admin-

istrative practices, it is not preempted.

ARGUMENT

I. Absent A Clear And Unmistakabie Congressional Intent

To Preempt State Law, A Federal Statute May Not

Eviscerate State Remedies For Wrongful Termination Of

The Employment Relationship.

Preemption analysis begins with the settled concept that

all presumptions operate against preemption, Rice v. Santa

Fe Elevator Corp., 331 U.S. 218, 230 (1947), which rests on

‘the basic assumption that Congress did not intend to dis-

place state law.’ Maryland v. Louisiana, 451 U.S. 725, 746

(1981). As Chief Justice Rehnquist has explained, ‘‘unless the

requisite preemption intent is abundantly clear, we should

hesitate to invalidate state and local legislation. _._ _* City

of Burbank v. Lockheed Air Terminal, Inc., 411 U.s. 624, 643

(1973) (Rehnquist, J. dissenting). This hesitancy to displace

state law is ‘‘guided by respect for the separate spheres of

governmental authority preserved in our federalist system.’

Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 522 (1981);

Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 19 (1987);

Massachusetts v. Morash, __ US. _, 109 S.Ct. 1668, 1675

(1989).

This Court has long preserved states’ rights to enforce

common law remedies, especially in the labor context. See,

e.g., Belknap v. Hale, 463 U.S. 491, 509 (1983) (state fraud

and contract claims not preempted by the National Labor

Relations Act); Linn v. Plant Guard Workers, 383 U.S. 53,

63 (1966) (‘state remedies have been designed to compensate

the victim. . *’). As this Court emphasized in Fort Halifax

Packing Co., supra, 482 U.S. at 21, ‘pre-emption should not

be lightly inferred in this area, since the establishment of

labor standards falls within the traditional police power of

the State.’

Indeed, ** ‘where the field which Congress is said

to have preempted’ includes areas that have ‘been tradition-

ally occupied by the States, congressional intent to super-

sede state laws must be ‘clear and manifest.'*’ English v.

General Electric Company, __ U.S. __, 58 U.S.L.W. 4679, 4681

(1990) (quoting Jones v. Rath Packing Co., 430 U.S. 519, 525

(1977)) (emphasis added). ‘‘Preemption of state law by fed-

eral statute or regulation is not favored ‘in the absence of

persuasive reasons — either that the nature of the regulated

subject matter permits no other conclusion, or that the Con-

gress has unmistakably so ordained: *’ Alessi v. Raybestos-

Manhattan, Inc., supra, 451 U.S. at 422 (citations omitted)

(emphasis added). This Court therefore requires that the party

urging preemption meet a very high burden of proof indeed.

Following this principle, this Court has held that state

law is preempted when one of three tests is satistied.

First. Congress can define explicitly the extent

to which its enactments pre-empt state law. See

Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 95-98

(1983). Preemption fundamentally is a question of

congressional intent . . ., and when Congress has

made its intent known through explicit statutory lan-

guage, the court's task is an easy one.

Second, in the absence of explicit statutory lan-

guage, state law is pre-empted where it regulates con-

duct in a field that Congress intended the Federal

Government to occupy exclusively.

2

Finally, state law is preempted to the extent that

it actually conflicts with federal law.

English v. General Electric Company, supra, at 4681 (cita-

tions omitted) (emphasis added).

II. The Employee Retirement Income Security Act, 29 U.S.C.

§ 1001 et seq., Preempts Only Those State Laws That

Both Relate To Employee Benefit Plans And Purport To

Regulate, Directly Or Indirectly, The Terms And Condi-

tions Of Those Plans.

Section 514 of ERISA, 29 U.S.C. § 1144, contains the

explicit statutory language that allows the Court to proceed

with an analysis under the first test in English and to dis-

pense with an analysis under the “field” theory of the second

test. Id. (citing Shaw v. Delta Airlines, Inc., supra). Section

514 provides in pertinent part:

(a) Supersedure; effective date

Except as provided in subsection (b) of this section,

the provisions of this subchapter and subchapter I11

of this chapter shall supersede any and all State laws

insofar as they may now or hereafter relate to any

employee benefit plan described in section 1003(a)

of this title and not exempt under section 1003(b)

of this title. . .

(c) Definitions

For purposes of this section:

(1) The term “State law” includes all laws, decisions,

rules, regulations, or other State action having the

effect of law, of any State. A law of the United States

applicable only to the District of Columbia shall be

treated as a State law rather than a law of the United

States.

(2) The term ‘State’ includes a State, any political

subdivisions thereof, or any agency or instrumen-

tality of either, which purports to regu! ate, directly

or indirectly, the terms and conditions of employee

benefit plans covered by this subchapter.

Section 514 has been described as a ‘‘virtually unique

preemption provision. Franchise Tax Board v. Construction

Laborers Vacation Trust, 463 U.S. 1, 24 n.26 (1983). Under

it, a ‘State law” is preempted if it ** ‘relates to’ an employee

benefit plan, in the normal sense of the phrase, if it has a

connection with or reference to such a plan.’ Shaw v. Delta

Airlines, Inc., supra, 463 U.S. at 96-97. This broad language,

however, is limited in several ways. First, it is limited by the

exceptions contained in Section 514({b). See, e.g., Metropolitan

Life Insurance Co. v. Massachusetts, 471 U.S. 724 (1985). In

addition, ‘‘[s}ome state actions may affect employee benefit

plans in too tenuous, remote, or peripheral a manner to war-

rant a finding that the law ‘relates to’ the plan.” Shaw v. Delta

Airlines, Inc., supra, 463 U.S. at 100 n.21.

Finally, the otherwise broad scope of this express preemp-

tion clause is further narrowed by Section 514(c), which

defines ‘“‘State law’ as the ‘laws __. of any State,’ and

which defines a ‘State’ to include *‘a State, any political sub-

divisions thereof, or any agency or instrumentality of either,

which purports to regulate, directly or indirectly, the terms

and conditions of employee benefit plans.’ (emphasis added).

Therefore, in order for a law to be a ‘State law” within the

scope of Section 514(a), the law must ‘‘purport to regulate’’

ERISA plans.’ At its broadest then, ERISA preempts only

those laws that both ‘‘relate to’’ and ‘‘purport to regulate”

ERISA plans. See Stone & Webster Engineering Corpora-

tion v. Ilsley, 690 F.2d 323, 329 (2d Cir. 1982), aff'd sum. sub

nom. Arcudi v. Stone & Webster Engineering Corp., 463 U.S.

1220 (1983); Alessi v. Raybestos-Manhattan, Inc., 451 U.S.

504, 525 (1981); Rebaldo v. Cuomo, 749 F.2d 133, 137 and n.1

(2d Cir. 1984), cert. denied, 472 U.S. 1008 (1985); Martori Bros.

Distributors v. James-Massengale, 781 F.2d 1349, 1359 (9th

' Just as the Court in Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 8

(1987), refused to read the word ‘‘plan’’ out of the statute, so should the

statute's definitions of ‘‘State’’ and ‘‘State law” be given their intended

life, particularly since they are included within the very section containing

the express preemption clause.

Cir.), cert. denied, 479 U.S. 949 (1986); Teper v. Park West

Galleries, Inc., 427 N.W.2d 535, 545 (Mich. 1988) (Riley, C.J.,

concurring).

In addition to the statute's plain language, the extensive

legislative history cited by Petitioner (Pet. Brief 32-35) fully

supports this two-prong test and the conclusion that Section

514 was intended to prohibit state regulation of benefit plans.

For example, Representative Dent spoke of ‘the reservation

to Federal authority [of] the sole power to regulate the field

of employee benefit plans [and the need to apply] this prin-

ciple in its broadest sense to foreclose any non-Federal regu-

lation of employee benefit plans.’ 120 Cong. Rec. 29197 (1974),

reprinted in 3 Legislative History of the Employee Retire-

ment Income Security Act of 1974 (‘‘Legislative History’)

(Comm. Print 1976) at 4670-4671 (emphasis added). Senator

Williams, in addressing the need for the preemption clause,

spoke of ‘eliminating the threat of conflicting or inconsis-

tent State and local regulation of employee benefit plans.”

/d. at 4746 (emphasis added). And Senator Javits concluded

his remarks by commenting:

Although the desirability of further regulation

— at either the State or Federal level — undoubt-

edly warrants further attention, on balance, the emer-

gence of a comprehensive and pervasive Federal

interest and the interests of uniformity with respect

to interstate plans required — but for certain excep-

tions -— the displacement of State action in the field

of private employee benefit programs.

Id. at 4770-4771 (emphasis added).

This Court, in analyzing whether ERISA preempts a

state law, has repeatedly stated that ‘as in any preemption

analysis, ‘the purpose of Congress is the ultimate touch-

stone. "’ Fort Halifax Packing Ca. v. Coyne, 482 U.S. 1, 8 (1987)

(quoting Metropolitan Life Ins. Co. v. Massachusetts, 471

U.S. 724, 474 (1985)). In Fort Halifax, the Court, relying in

substantial part on the legislative history cited above, exam-

ined this purpose and stated:

It is thus clear that ERISA’s pre-emption pro-

vision was prompted by recognition that employers

establishing and maintaining employee benefit plans

are faced with the task of coordinating complex

administrative activities. A patchwork scheme of

regulation would introduce considerable inefficien-

cies in benefit program operation, which might lead

those employers with existing plans to reduce bene-

fits, and those without such plans to refrain from

adopting them. Pre-emption ensures that the admin-

istrative practices of a benefit plan will be governed

by only a single set of regulations.

Id. at 11 (citation omitted) (emphasis added). Therefore, the

Court concluded that preemption of a state law must further

the purpose of ERISA preemption. /d. at 15.

Although Ft. Halifax and other prior opinions of this

Court have not expressly incorporated the “purports to regu-

late’ language of Section 514(c) within their reading of Sec-

tion 514(a), the conclusion that the ‘‘purports to regulate

language establishes the outer bounds of ERISA preemption

flows from and is consistent with these decisions. In Alessi,

supra, the Court struck down a state law that would have

affected the amount of benefits provided in ERISA-covered

plans and the manner in which those benefits were calculated.

State regulation of this type strikes at the heart of plan

administration. Similarly, in Shaw, supra, the state law

preempted also involved an attempt to mandate what bene-

fits would be included in ERISA-covered plans.

In both Metropolitan Life Insurance Co. v. Taylor, 481

U.S. 58 (1987), and Pilot Life Insurance Co. v. Dedeaux, 481

U.S. 41 (1987), each plaintiff brought common law causes of

action alleging improper processing of a claim for benefits

under an employee benefit plan.” Because the state laws

2 The Court in Taylor did not address the question of ERISA preemption

of bo claims against the employer, since removal jurisdiction was not nee

upon those claims. See Taylor v. General Motors Corp., 826 F.2d 452 | t

Cir. 1987) (addressing pendent claims on remand). Therefore, the Court s

statement in Taylor that ‘Taylor's common law contract and tort claims

are preempted by ERISA,” id. at 62, perhaps inadvertently sweeps too

broadly.

involved efforts to have state courts assume the ultimate

responsibility for claims processing, they were clearly imper-

missible attempts to regulate the administration of ERISA-

covered plans and were properly preempted.’ And in Mackey

v. Lanier Collection Agency & Service, Inc., 486 U.S. 825

(1988), the garnishment law struck down was one that

expressly purported to regulate an ERISA plan, while the

garnishment law of general application survived the preemp-

tion analysis, even though its application plainly had a ‘‘con-

nection to’ ERISA plans.

The language of the statute, its legislative history, and

the prior decisions of this Court all support the conclusion

that Congress intended ERISA to displace only those laws

that relate to and purport to regulate benefit plans. This con-

clusion gives full effect to the Congressional intent to foster

the uniform regulation of benefit plans by preventing state

interference in the management and administration of those

plans.

> Both Taylor, supra at 66, and Dedeaux, supra at 52-55, also arguably

Suggest in dicta that any state law claim that could be recharacterized

as falling within the scope of § 502(a) is preempted. In these cases, however,

the common law claims preempted fell within the scope of § 502(a)(1)(B).

Therefore, only consideration of the preemptive force of § 502(a)(1)(B) was

necessary to the decision of those cases, as any claim within the scope

of that subsection necessarily “purports to regulate’ an ERISA plan. In

fact, the legislative history on which both Taylor and Dedeaux relied to

find a clear manifestation of preemptive intent applies only to claims within

the scope of § 502(a)(1)(B). Taylor at 65-66; Dedeaux at 55 (citing H.R.

Conf. Rep. No. 93-1280, p. 327 (1974)). Any broadening of this line of

analysis to causes of action other than those within the scope of

§ 502(a)(1)(B) should take place only if it is consistent with the “purports

to regulate’ language of § 514(c) and otherwise furthers the purpose of

ERISA preemption as described in Ft. Halifax, supra. Because Respon-

dent's claim does not fall within the scope of § 502(a)(1)(B), the clear and

manifest legislative intent necessary to support a finding of preemption

does not exist.

III. ERISA Does Not Preempt A State Common Law That

Prohibits An Employer From Discharging An Employee

In Order To Avoid Contributing To Or Paying Benefits

Under The Employee’s Pension Fund.

Applying this standard to the Texas law under attack

by Petitioner, it becomes clear that because the law does not

purport to regulate an ERISA Plan, it is not a ‘State law”’

preempted by Section 514. Far from regulating any terms

and conditions of Petitioner's pensicn fund, the law attempts

instead to regulate the employer-employee relationship, an

area ‘‘within the traditional police power of the State.” F't.

Halifax Packing Co., supra, 482 U.S. at 21. Under the Texas

law, a terminated employee will be allowed recovery when he

proves that ‘‘the principal reason for his termination was the

employer's desire to avoid contributing to or paying bene-

fits under the employee’s pension fund.’ McLendon uv.

Ingersoll-Rand Co., 779 SW.2d 69, 71 (Tex. 1989). The focus

of the employee's claim, therefore, will be the employer's

intent in severing the employment relationship. An inquiry

into this intent can hardly be said to regulate, either directly

or indirectly, the terms and conditions of an ERISA plan.*

See, e.g., K Mart Corp. v. Ponsock, 732 P.2d 1364 (Nev. 1987)

(award of extracontractual damages for bad faith discharge

of employee to avoid payment of retirement benefits).

The decision to terminate an employee does not impli-

cate any fiduciary duties under ERISA. Cf, Amato v. Western

* While Petitioner's pension plan may contain information, such as a

vesting schedule, that may provide circumstantial evidence of the

employer's intent, this fact alone does not involve the regulation, direct

or indirect, of the plan, and would be insufficient to trigger preemption.

Cf. Lingle v. Norge Division of Magic Chef, Inc., 486 U.S. 399, 413 n.12

(1988) (‘although federal law would govern the interpretation of [a collec-

tive bargaining] agreement to determine the proper damages, the under-

lying state-law claim, not otherwise pre-empted, would stand.’). Moreover,

that Petitioner may have ultimately allowed Respondent's pension Lo vest

only underscores the fact that his cause of action does not purport to regu-

late the terms and conditions of the plan.

10

Union International, Inc., 773 F.2d 1402, 1416 (2d Cir. 1985),

cert. dismissed, 474 U.S. 1113 (1986) (‘ERISA permits

employers to wear ‘two hats, and [ | they assume fiduciary

status ‘only when and to the extent’ that they function in

their capacity as plan administrators... "'); see also,

Dzinglski v. Weirton Steel Corp., 875 F.2d 1075, 1078-9 (4th

Cir.), cert. denied, 110 S.Ct. 281 (1989); Hlinka v. Bethlehem

Steel Corp., 863 F.2d 279, 285 (3d Cir. 1988). Since Section

3(21)(A), 29 U.S.C. Section 1002 (21)(A), defines a fiduciary

in part as one who has any discretionary authority or con-

trol regarding the management or administration of a benefit

plan, the termination of an employee, and an inquiry into the

reasons for the termination, do not and will not affect the

management or administration of the plan.

Nor, as Petitioner concedes (Pet. Brief at 46 n.12), will

the calculation of Respondent's damages, including his lost

benefits, if any, interfere in the regulation of the plan. Because

the loss of benefits from any wrongful termination, regard-

less of motive, is nothing more than a consequence of the ter-

mination and does not therefore ‘‘relate to’’ the underlying

plan, the fact that lost benefits are included as an element

of damages to make the employee whole does not trigger

preemption. See, Teper v. Park West Galleries, Inc., 427 N.W.

2d 535 (Mich. 1988); Martori Bros. Distributors v. James-

Massengale, 781 F.2d 1349, 1358 (1986) (cited with approval

in Fort Halifax, supra, 482 U.S. at 12 n.6); Morningstar v.

Meijer, Inc., 662 F.Supp. 555 (E.D. Mich. 1987); Totton v. New

York Life Insurance Co., 685 F.Supp. 27 (D. Conn. 1988); cf,

Lingle v. Norge Division of Magic Chef, Inc., supra, 486 U.S.

at 413 n.12. To hold otherwise would preempt every wrongful

termination action, regardless of the underlying public policy

supporting it, in which the employee claimed lost benefits

as an element of damages. There is simply no evidence of a

Congressional intent, let alone clear, manifest, and unmistak-

11

able evidence, to support such a sweeping application of the

preemption clause.”

Finally, in the highly speculative event that the Texas

law might, by the circuitous process envisioned by Petitioner

(Pet. Brief at 36-41), affect Petitioner's plan, these effects

are no less tenuous, remote, and peripheral than those rejected

by the Court in Mackey v. Lanier Collection Agency & Ser-

vice, Inc., 486 U.S. 825 (1988). There, the majority was appar-

ently unpersuaded by the dissent’s claim that ‘‘[clompliance

with the state garnishment procedures subjects the plan to

significant administrative burdens and costs.” Jd. at 842. It

is particularly significant that the majority reached its con-

clusion without quarreling with the dissent’s claim that:

Petitioners are required to confirm the identify

of each of the 22 plan participants who owe money

to respondent, calculate the participant’s maximum

entitlernent from the fund for the period between the

service date and the reply date of the summons of

garnishment, determine the amount that each par-

ticipant owes to respondent, and make payments into

state court of the lesser of the amount owed to

respondent and the participant’s entitlement. Peti-

tioners must also make decisions concerning the

validity and priority of garnishments and, if neces-

sary, bear the costs of litigating these issues. Fur-

ther, as trustees of a multiemployer plan covering

participants in several States, petitioners are poten-

tially subject to multiple garnishment orders under

varying or conflicting state laws. It is apparent that

these effects of garnishment laws on employee

benefit plans are not tenuous, remote, or peripheral,

and that such laws are accordingly pre-empted.

° To the extent that Respondent sought lost benefits in a lump sum from

his employer as an element of damages, Amici disagree with footnove 3

of the Texas Supreme Court's opinion. That an employee has sought lost

benefits in a lump sum as an element of damages shouid have no bearing

on the preemption analysis for the reasons stated above.

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/d.1f anything, the burdens and costs hypothesized by Peti-

tioner are less severe than those feared by the dissent in

Mackey. Moreover, Petitioner's speculation is no substitute

for the clear, manifest, and unmistakable showing required

to meet its burden of proof. Accordingly, preemption would

in no way address the concerns of ERISA’s preemption pro-

a and ERISA does not preempt Respondent's state law

claim.

IV. That The Facts Of This Case May Have Also Provided

Respondent With A Cause Of Action Under Section 510

Of ERISA Is Insufficient To Support A Finding Of

Preemption.

Section 510 of ERISA, 29 U.S.C. § 1140, makes it

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 pro-

visions of an employee benefit plan... . or for the purpose

of interfering with the attainment of any right to which such

participant may become entitled under the plan... "’ Sec-

tion 502(e)(1), 29 U.S.C. § 1132(e)(1), gives the federal courts

exclusive jurisdiction over Section 510 claims.

Respondent may very well have been able to state a claim

under Section 510. Nonetheless, this possibility provides no

basis for the conclusion that his state law claim is preempted

by ERISA. Any conclusion that Sections 510 and 502(e)

together preempt the Texas law would have to rest on an

analysis that Congress has not only expressly preempted the

field of pension plan regulation, but that it has also implicitly

preempted a field of wrongful termination law. This analysis,

however, is precluded by Section 514’s express preemption

provision. See, English v. General Electric Company, __ U.S.

—, 58 US.L.W. 4679, 4681 (1990) (‘in the absence of explicit

statutory language, state law is pre-empted where it regu-

lates conduct in a field that Congress intended the Federal

Government to occupy exclusively. ') (emphasis added); Cal-

ifornia v. ARC America Corp., 109 S.Ct. 1661, 1665 (19839).

13

Moreover, ERiSA has been described as ‘‘a ‘comprehen-

sive and reticulated statute, which Congress adopted after

careful study of private retirement pension plans.” Alessi v.

Raybestos-Manhattan, Inc., 451 U.S. 504, 511 (1981) (quoting

Nachman Corp. v. Pension Benefit Guaranty Corp., 446 U.S.

359, 361 (1980)). Because the express language of Section 514

cannot be read to preempt Texas law, in ‘‘a comprehensive

regulatory scheme like ERISA, such omissions are signifi-

cant ones.’ Mackey v. Lanier Collection Agency & Service,

Inc., 486 U.S. 825, 837 (1988). Cf. Massachusetts Mutual Life

Insurance Co. v. Russell, 473 U.S. 134, 147 (1985).

Finally, no conflict exists between the Texas law and Sec-

tion 510. “[O}rdinarily, state causes of ac... are not

preempted solely because they impose liability over and above

that authorized by federal law.’ English v. General Electric

Co., supra, 58 U.S.L.W. at 4684 (quoting California v. ARC

America Corp., 109 S.Ct. 1661, 1667 (1989)). While “every sub-

ject that merits congressional legislation is, by definition, a

subject of national concern . . . [, this] cannot mean, however,

that every federal statute ousts all related statelaw..s”’

Hillsborough County v. Automated Medical Laboratories,

Inc., 471 U.S. 707, 719 (1985). In Decanas v. Bica, 424 U.S.

351, 356 (1976), this Court recognized that ‘‘states possess

broad authority .. . to regulate the employment relation-

ship to protect workers within the State.’ Preempting the

‘Texas law, where Congress has declined to provide for it within

an express preemption clause, would frustrate this principle

and needlessly impair the state's ability to protect the

employer-employee relationship.

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CONCLUSION

Wherefore, Amici respectfully urge this Court to affirm

the judgment below.

Counsel for Amici Curiae: Of Counsel:

JANET BOND ARTERTON* JEFFREY LEWIS

MARKUS L. PENZEL SIGMAN & LEWIS

GARRISON, SILBERT AND 436 14th Street

ARTERTON, PC. Suite 1020

405 Orange Street Oakland, California 94612

New Haven, Connecticut 06511 (415) 839-6824

(203) 777-4425

*Counsel of Record

Juiy 1990

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