ERISA-Sixth Circuit Holds That An Inquiry Is Needed To Establish A Section 510 Retaliation Claim

In Sexton v. Panel Processing, Inc., No. 13-1604 (6th Cir. 2014), the plaintiff, Brian Sexton (“Sexton”), had brought suit under ERISA against his former employer, defendant Panel Processing, Inc. (“Panel Processing”). Sexton claimed that Panel Processing fired him in retailiation for complaining about Panel Processing’s ERISA violations. The district court granted summary judgment against Sexton on the retaliation claim, and Sexton appeals..

In this case, Panel Processing makes floor panels. 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 other 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. 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. Sexton brought suit because of the firing, and the case wound up in district court.

In analyzing the case, the Sixth Circuit Court of Appeals (the “Court”) said that, on appeal, Sexton challenges the district court’s rejection of his retaliation claim under ERISA. The relevant law says in pertinent 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 [ERISA].” 29 U.S.C. § 1140 (ERISA Section 510). Both parties take as a given (for now) that the company fired Sexton because of his email to the chairman of the board. The Court said further, that in this case, Sexton can establish a retaliation claim only if the email amounted to “giv[ing] information . . . in any inquiry.”Was there an inquiry? The Court said no, since an inquiry appears to require an official investigation, or a question or a request for information by the potential informer or retaliator, and there was none here. As such, the Court affirmed the district court’s judgment.

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