ERISA- Eighth Circuit Holds That Plaintiff Fails To Make Out A Case Of Interference Under Section 510 Of ERISA

In Barnhardt v. Open Harvest Cooperative, No. 13-2254 (8th Cir. 2014), the plaintiff, Jacqueline Barnhardt (“Barnhardt”), was appealing the district court’s grant of summary judgment to the defendant, Open Harvest Cooperative (“Open Harvest”), on her claim alleging a violation of § 510 of ERISA.

In this case, in December 2006, Barnhardt was diagnosed with arteriovenous malformation (“AVM”), a vascular condition that causes cognitive difficulties and occasional seizures. At some point during February 2011, Barnhardt disclosed her AVM to her supervisor. Open Harvest terminated Barnhardt’s employment in August 2011. On September 15, 2011, Barnhardt filed a claim for short-term disability benefits with Dearborn National. In its letter denying benefits, Dearborn National stated that Open Harvest had terminated Barnhardt’s coverage on July 31, 2011, and that Barnhardt had not become disabled until August 2, 2011. Because she became disabled after her coverage had terminated, Barnhardt was not entitled to benefits. Barnhardt then brought suit againt Open Harvest claiming, among other things, that Open Harvest had violated § 510 of ERISA by preventing her from obtaining the short-term disability benefits.

In analyzing the case, the Eighth Circuit Court of Appeals (the “Court”) said that Section 510 of ERISA prohibits, among other things, an employer from discharging or discriminating against a participant in an ERISA plan “for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan.” 29 U.S.C. § 1140. In order to recover under a § 510 interference claim, a plaintiff must prove that the defendant possessed a specific intent to interfere with her ERISA benefits. The Court found that Barnhardt had not identified any direct evidence that Open Harvest acted with the specific intent to interfere with her ERISA benefits. As such, the Court said that it had to analyze her claim under the McDonnell Douglas burden-shifting framework.

Applying this analysis, the Court concluded that Open Harvest had articulated a legitimate, non-discriminatory justification for its termination of Barnhardt’s coverage under the short-term disability plan. Under the McDonnell Douglas framework, the burden shifted back to the plaintiff to show a genuine dispute whether Open Harvest’s justification was pretextual. The Court concluded that Barnhardt had not shown a genuine dispute whether Open Harvest terminated her employment with a specific intent to interfere with her ERISA benefits. As such the Court affirmed the district court’s summary judgment in favor of Open Harvest.

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