Edmond C. Teumer v. General Motors CorporationEdmond C. Teumer v. General Motors Corporation
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This case involves alleged ERISA violations stemming from Edmond Teumer’s layoff from General Motors and the timing of his subsequent recall to the company. The district court granted summary judgment for General Motors on both counts of Teumer’s complaint, relying on a limitations bar to reject one and an inadequacy of proof to dispose of the other. 840 F.Supp. 538 (N.D.Ill.1993). Teumer’s appeal requires us to consider these issues afresh and in the process address certain areas of ERISA law that have to date been left unresolved in our circuit. Doing so leaves us in substantial agreement with the district court’s resolution of the legal and factual matters involved in this case.
When Teumer was laid off from his production supervisor position at GM’s Electro Motive Division Plant 207 on May 1, 1986, he had amassed fourteen years and nine months of service with GM. At the time an Income Protection Plan (IPP) was in effect at GM which provided to all laid off salaried employees with fifteen years or more of service benefits additional to the basic package of layoff benefits to which all laid off salaried employees were entitled. Employees with only ten years of service were also eligible for IPP benefits when layoffs were due specifically to plant closings. GM, however, categorized the 1986 reduction in force at Plant 207 as a “plant consolidation” rather than a “plant closing,” and because Teumer was several months short of the fifteen years service otherwise necessary to trigger IPP eligibility he did not receive benefits under the plan upon his layoff. In 1989 and 1991 Teumer was twice recalled to temporary positions, and in September, 1991, he was permanently recalled to a production supervisor position. Teumer originally filed suit on March 17, 1992, and subsequently amended his complaint twice. In its final form, Teumer’s complaint purports to state several violations of ERISA § 510 (
The appeal in this case is muddied somewhat by the fact that Teumer does not merely contest the district court’s selection and application of a limitations bar for § 510 rights or its appraisal of the evidence adduced in support of his § 510 theory. For the first time he argues an additional and wholly distinct theory of liability in support of one of his layoff-related claims, a theory of liability which is in fact much more suited to the substance of that claim (and has a potentially longer limitations period, see Jenkins v. Local 705, 713 F.2d 247, 253 (7th Cir.1983)) than the § 510 theory that has been the sole legal focus of this ease until now.
Section 510 declares it unlawful for an employer
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 . . . or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan....
Made enforceable by participants and beneficiaries through § 502(a)(3), § 510 protects employment relationships from disruptions designed to frustrate the vesting of benefit plan rights or the continued enjoyment of rights already vested but yet to be partaken.
See Ingersoll-Rand Co. v. McClendon,
498 U.S. 133, 142-44, 111 S.Ct. 478, 485, 112
Although it includes only two “counts,” Teumer’s complaint in substance purports to allege three violations of ERISA § 510. (All relate to benefits under the IPP whose status as an “employee benefit plan” within the coverage of ERISA no one disputes.
See
And there is no reason it should. If one is in fact entitled to benefits under a plan and does not receive them for any reason, malicious or not, § 502(a)(1)(B) provides a remedy: “A civil action may be brought by a participant or beneficiary to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.” To the extent Teumer’s suit involves a claim that Plant 207 did “close” and GM improperly did not pay out IPP benefits to him, a qualifying ten-year employee, it seeks relief under § 502(a)(1)(B). Teumer now recognizes as much, and we agree that his complaint stated a set of facts adequate to support such relief. That it misidentified the governing legal theory, repeatedly invoking § 510 as the sole authority for all of his claims, is not fatal to later assertion of the proper theory under the federal system’s forgiving notice pleading rules. See Tolle v. Carroll Touch, Inc., 977 F.2d 1129, 1134 (7th Cir.1992); Bartholet v. Reishauer A.G., 953 F.2d 1073, 1078 (7th Cir.1992). (In light of our discussions in Tolle and Bartholet, we disavow any suggestion contained in dicta in Pritchard v. Rainfair, Inc., 945 F.2d 185, 191 (7th Cir.1991), that a complaint that does not contain the appropriate legal theory to match the facts alleged is deficient.)
But what is fatal to Teumer’s § 502(a)(1)(B) theory on appeal is his failure to mention it to the district court when the time did come in the proceedings below to present legal arguments linking the claims described in the complaint to the relevant
The § 510 claims that have been properly characterized and preserved are based on the 1986 decision to lay off Teumer and on decisions, apparently made in 1989, to recall others employees ahead of Teumer. The district court determined that Illinois’ five year statute of limitations for retaliatory discharge should apply to suits on § 510 rights and accordingly found Teumer’s challenge to the layoff time-barred. To date, our court has not decided which statute of limitations should apply to claims premised upon § 510 although we have discussed the issue, see Tolle, 977 F.2d at 1137-38, and other district courts in Illinois have reached the same conclusion as the district court in this ease. See Bonnema v. Emery Worldwide, A.C.F., 1992 WL 211496 (N.D.Ill.1992); Gladich v. Navistar Int’l Transp. Corp., 703 F.Supp. 1331 (N.D.Ill.1989).
When Congress does not provide a statute of limitations for claims arising under federal statutes — and aside from several specific exceptions not applicable here,
see
What may be contributing toward this lack of consensus in the grafting of limitations periods for actions on § 510 rights is the variant nature of the several rights recognized in that one provision. That is, protection from retaliation in the workplace for the exercise of a favored right is conceptually quite distinct from protection from interference with the process of attaining that right at the hands of the party who controls the process yet against whose financial interest the vested right would stand. The former does seem to deal with a particular species of abuse that the common law tort of wrongful termination or retaliatory discharge redresses: preventing employers from punishing employees for taking advantage of or participating in those benefits, privileges or processes so favored by public policy as to be deemed outside the wide range of permissible considerations on which to base at-will employment decisions. Through ERISA, Congress has announced a policy preference in the enjoyment of vested benefit plan rights and created a remedy against employers who do not respect that preference; through its courts, Illinois has done the same with respect to a number of favored areas, ranging from the claiming of workers’ com
However, § 510’s protection against employer interference with the attainment of benefit rights in the first instance seems to target a distinct abuse which finds a tighter analytical parallel in the good faith and fair dealing doctrines of contract law. Benefit plans are themselves contracts between employee and employer.
See Jenkins, supra.
They impose conditional duties on employers to provide to employees agreed benefits of one sort or another. The employer, however, frequently retains much power over the occurrence of many of the conditions precedent to its duties under a plan, as aspects of the employment relationship over which it has inherent control, like employment status, position or years of service, are commonly relevant to benefit eligibility. Under ordinary principles of contract law, a party may not purposely prevent the occurrence of a condition of its duties under a contract.
See
E. Allan Farnsworth, II Farnsworth on Contracts § 8.6, at 380 (1990). And, in its law of contracts, Illinois recognizes “that a party who prevents the fulfillment of a condition upon which his own liability rests may not defeat his liability by asserting the failure of the condition he himself has rendered impossible.”
Cummings v. Beaton & Associates, Inc.,
249 Ill.App.3d 287, 301, 187 Ill.Dec. 701, 710, 618 N.E.2d 292, 303 (1992). An employer who discharges an employee or otherwise tinkers with his employment status in order to prevent him from attaining his contractual rights under a benefit plan avoids the ripening of his duties under the plan by sabotaging the occurrence of a condition precedent. By forbidding such practices in § 510 of ERISA, Congress has, in the area of employee benefit plans, in effect adopted a statutory version of the common law’s “wrongful prevention doctrine” (which itself would be unavailable to employees because of ERISA’s sweeping displacement of state law in this area). And when a nonperforming party’s duty under a contract is not excused because the party prevented a condition precedent from occurring, that party is in breach of the contract; the remedy is in contract; the applicable statute of limitations is the one governing disputes under the type of contract involved. Documented benefit plans are written contracts, actions on which in Illinois are subject to a ten-year limitations period.
See
If we were to stop here, we would apparently be faced with competing analogues to § 510 rights in state law.
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We could aecord-
Moreover, in recognition of the overlap between backward-looking retaliation and forward-looking interference, at least in policy if not always in practice, Illinois has defined its “retaliatory” discharge tort broadly to encompass discharges that
either
retaliate against
or
interfere with the exercise of favored rights.
See Richardson v. Illinois Bell Telephone Company,
156 Ill.App.3d 1006, 109 Ill.Dec. 513, 515-16, 510 N.E.2d 134, 136-37 (1987);
Wolcowicz v. Intercraft Industries Corp.,
133 Ill.App.3d 157, 88 Ill.Dec. 431, 433-35, 478 N.E.2d 1039, 1041-43 (1985). (We have already recognized that this Illinois cause of action is of such scope.
See Horton v. Miller Chemical Co.,
776 F.2d 1351, 1355-56 (7th Cir.1985),
cert. denied,
475 U.S. 1122, 106 S.Ct. 1641, 90 L.Ed.2d 186 (1986).) Thus, contract’s wrongful prevention doctrine is not, after all, the only viable state analogue to ERISA interference claims. In fact, the interference prong of the retaliatory discharge tort quite clearly bears a closer family resemblance to the § 510 right, as it deals generally with favored areas of public policy and frequently with economic/employment concerns — like workers’ compensation — as opposed to the wholly general coverage of contract law. In sum, the analytical correspondence between Illinois’ retaliatory discharge tort and both retaliation and interference claims under § 510, the similarity in
Teumer’s § 510 claim challenging the legality of his layoff accrued in 1986 when the layoff occurred and he found out about it, see Tolle, 977 F.2d at 1140, and is time-barred since this suit was originally filed in 1992. In his opening brief, Teumer presents a meritless argument that the claim did not accrue until he first discovered the information from which he ascertained the alleged unlawful nature of the layoff. As GM rightly points out, such a contention has nothing to do with accrual; Teumer is really insisting that the limitations clock should be equitably tolled for the time in which he was unable to determine that his injury (of which he was aware) — the layoff — was due to wrongdoing. See Cada v. Baxter Healthcare Corp., 920 F.2d 446, 451 (7th Cir.1990), cert. denied, 501 U.S. 1261, 111 S.Ct. 2916, 115 L.Ed.2d 1079 (1991). But by his own admission Teumer began to suspect wrongdoing about two and one-half years before he filed suit, and one and one-half years before the limitations clock had run, when he discovered that certain prior work experience — which could have affected his layoff priority — had been deleted from his work record. Principles of equitable tolling required him to bring suit within a “reasonable time” after he obtained, or could have obtained by due diligence, this information. See id. at 453. Teumer has made no attempt to show that this delay was reasonable, and we doubt that he could. In his reply brief, Teumer amends his argument (and his complaint in effect) by asserting that the wrongful act of which he is complaining is not the layoff itself but the alteration of his work record, which he did not learn of until 1989. Besides being thoroughly waived, this argument is without merit. Once an unlawful action is taken, a claim accrues when the putative plaintiff discovers the injury that results. See id. at 450. Teumer’s alleged injuries were the layoff and the timing of the recall. His claims that focus on the former are time-barred. His claims involving the latter are not, but they face another obstacle.
A plaintiff seeking relief under § 510 must establish that the complained of action affecting his employment situation was taken by his employer with the specific intent of interfering with his benefit rights.
See Meredith v. Navistar Intern’l Transp. Co.,
935 F.2d 124, 127 (7th Cir.1991). The illicit motivation must be a “determinative factor” in that action.
See id.
That is, the plaintiff must ultimately show that a desire to frustrate his attainment or enjoyment of benefit rights contributed toward the employer’s decision
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and can avoid summary judgment only if the materials properly before the district court, construed sympathetically, allow for such a conclusion. Here they do not. It is undisputed (in the parties Local Rule 12 statements) that the GM official who altered Teumer’s work record did so without knowing what the impact of such action would be on Teumer’s recall rights, did not discuss IPP benefits with anyone prior to making his decision, and knew nothing about the funding of IPP benefits except that they were not the responsibility of the individual plants where affected workers were employed. Teumer has not come forward with evidence that could establish against this backdrop that IPP considerations were in fact behind the erroneous deletion of one portion of his work record. Teumer actually asserts that no other employees had work experience removed from their records and that GM eventually corrected his record to again accurately reflect his experience. Rather than betray an insidious plot by GM to tamper with work records in the hope of engineering particular layoff and recall postures that would reduce IPP expenditures, these admitted facts indicate that any improper amendment of Teumer’s work history was at worst an isolated instance of thoughtless and lax recordkeeping. Whether the adjustments to Teumer’s
AFFIRMED.
Notes
. There is a “narrow exception to the general rule” that is activated “when a rule from elsewhere in federal law clearly provides a closer analogy than available state statutes, and when the federal policies at stake and the practicalities of litigation make that rule a significantly more appropriate vehicle for interstitial lawmaking.” Id. (quoting DelCostello v. Teamsters, 462 U.S. 151, 172, 103 S.Ct. 2281, 2294, 76 L.Ed.2d 476 (1983)); see also Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350, 355-58, 111 S.Ct. 2773, 2778-79, 115 L.Ed.2d 321 (1991) (plurality opinion). (For criticism of this exception and an argument that there should be no limitations period when state law cannot fill Congressional silence with an “appropriate” analogue, see Agency Holding Corp. v. Malley-Duff & Associates, Inc., 483 U.S. 143, 157-70, 107 S.Ct. 2759, 2767-74, 97 L.Ed.2d 121 (1987) (Scalia, J„ concurring in the judgment).) Neither party has argued that this exception should come into play. Nor do we discern such an inadequacy in the limitations options Illinois has to offer or the existence of a particularly appropriate federal analogue that would prompt us to depart from the usual practice in this case. See Byrd v. MacPapers, Inc., 961 F.2d 157, 159 n. 1 (11th Cir.1992); Held, 912 F.2d at 1209-10 (Ebel, J„ concurring in part); Gladich, 703 F.Supp. at 1332.
. Because Illinois is both the forum state and the state in which the significant events of this case took place, we will refer to its law without resolving the difficult question of what is the proper choice-of-law rule when selecting state limitation periods for federal claims. See Auto Workers v. Hoosier Cardinal Corp., 383 U.S. 696, 705 n. 8, 86 S.Ct. 1107, 1113 n. 8, 16 L.Ed.2d 192 (1966) (reserving the question); Held, 912 F.2d at 1202 (listing competing approaches among the circuits); see also Paul M. Bator, et al., Hart and Wechsler’s the Federal Courts and the Federal System, at 959 (3rd ed. 1988).
. GM has suggested that we consider another statute of limitations to govern § 510 claims: the 180 day period, set out in
. In cases where motives may be mixed, once the plaintiff establishes that there was a bad one at work, the defendant may prevail by showing that the same action would still have been prompted by wholly legitimate motives. See id.; Gavalik, 812 F.2d at 859-60 & n. 41.