741 F.3d 819
7th Cir.2014Background
- Berkshire Hathaway and affiliates own the Railroad; RTS operated Corwith Yard as an independent contractor from 2000 to 2010.
- Teamsters Local 705 represented RTS employees who were in a pension plan to which the Railroad contributed under contract.
- In 2010 the Railroad moved Corwith work in-house, seeking wage-and-benefits concessions from Local 705; it then contracted with TCIU for in-house work with lesser benefits.
- RTS informed Corwith employees they would be laid off and could reapply with the Railroad, but under a less generous TCIU package.
- Local 705 and six employees filed a proposed class action under ERISA §§ 510 and 502(a) and a conspiracy claim; district court dismissed for failure to state a claim.
- On appeal, the court affirmed dismissal of all claims, holding no viable conspiracy claim under ERISA and that § 510 claim fails against all defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ERISA § 510 supports a conspiracy claim. | Local 705 seeks a federal conspiracy claim under ERISA § 510. | ERISA does not authorize conspiracy claims under § 510 or by nonadjudicative means. | No implied conspiracy claim under ERISA § 510. |
| Whether a conspiracy claim premised on ERISA § 510 is preempted or improper. | Conspiracy claim could be federal or state-law preempted or augment ERISA remedies. | ERISA preempts state-law conspiracy claims; no federal conspiracy remedy exists under ERISA. | Conspiracy claim properly dismissed; ERISA preemption and absence of express/implied remedy bar it. |
| Whether Local 705 has standing to pursue § 510 against Railroad, RTS, and TCIU. | Plaintiffs allege § 510 violations against multiple defendants with some employment relationships. | Only RTS has an employment relationship with the Corwith employees; others cannot be liable as discharging parties. | Claims against Railroad and TCIU dismissed; RTS discharge-based claim also failing due to lack of specific intent allegations. |
| Whether § 510 requires an employment relationship to support liability for discharge. | § 510 covers a broader set of 'persons' beyond employers; discharge is not strictly confined. | Discharge presupposes an employment relationship; only an employer discharges an employee. | Section 510 liability can extend beyond employers, but here the claims fail for lack of specific intent and proper factual predicates. |
Key Cases Cited
- Alexander v. Sandoval, 532 U.S. 275 (2001) (express remedies preclude implied rights)
- Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134 (1985) (ERISA enforcement scheme comprehensive)
- Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (1987) (ERISA enforcement framework and remedies)
- Mertens v. Hewitt Assocs., 508 U.S. 248 (1993) (limits on federal common-law development under ERISA)
- Pappas v. Buck Consultants, Inc., 923 F.2d 531 (7th Cir. 1991) (limits on extending ERISA common-law duties)
- Davila v. Aetna Health, Inc., 542 U.S. 200 (2004) (ERISA preemption of state-law remedies)
- Feinberg v. RM Acquisition, LLC, 629 F.3d 671 (7th Cir. 2011) (discharge-related § 510 scope and nonemployer liability)
- Inter-Modal Rail Employees Ass’n v. Atchison, Topeka & Santa Fe Railway, 80 F.3d 348 (9th Cir. 1996) (footnote recognizing potential conspiracy against nonemployer)
- Custer v. Pan Am. Life Ins. Co., 12 F.3d 410 (4th Cir. 1993) (definition of 'person' under ERISA § 510)