ERISA Section 510 makes it unlawful to take retaliatory action “against a person because he has given information or has testified or is about to testify in any inquiry or proceeding relating to” ERISA. At issue in a recent case was whether ERISA Section 510 applies to unsolicited informal complaints by an employee.
Victor George was a vice president of Junior Achievement of Central Indiana, Inc. In the summer of 2009, George discovered that amounts being withheld from his pay were not being deposited into his 401(k) and health savings accounts. George lodged several complaints with Junior Achievement’s accountants, officers, and board members. He also contacted the Department of Labor but declined to file a written complaint. In October 2009, Junior Achievement issued checks to George to make up for the missed deposits plus interest.
George had an employment agreement with Junior Achievement that ran until June 30, 2010. In late 2009, though, George discussed with Junior Achievement’s president and chief executive officer, among others, the possibility of retiring in April 2010. On January 4, 2010, Junior Achievement’s president and chief executive officer instructed George not to report to work the following day. George brought suit, alleging that Junior Achievement fired him for giving information in an inquiry regarding Junior Achievement’s failure to remit amounts withheld from his paycheck to the 401(k) plan and health savings account.
Junior Achievement argued that the term “inquiry” in ERISA Section 510 does not apply to unsolicited informal complaints such as those lodged by George; rather, it applies only to a formal inquiry such as a Department of Labor investigation. The court disagreed with Junior Achievement. Noting that the provision in ERISA Section 510 is “a mess of unpunctuated conjunctions and prepositions,” the court explained that when confronted with an ambiguous anti-retaliation provision, any ambiguity is resolved in favor of the employee. As such, the term inquiry should be construed to include an informal question, whether that question is being asked or answered by the employee.
As a result, the court held that ERISA Section 510 guards against retaliatory actions taken because of an informal unsolicited complaint relating to ERISA that is submitted by an employee. The court did not decide the issue of whether George’s complaints were the cause of his firing by Junior Achievement. The Seventh Circuit’s decision creates a split in the circuits, with the Second, Third, and Fourth Circuits holding that an inquiry requires a formal proceeding (although the courts disagree on the level of formality required), while the Fifth and Ninth Circuits previously held that Section 510 applies to unsolicited informal complaints.
Even though the Department of Labor submitted an amicus brief in support of George’s position, no clue is offered as to what, if any, enforcement action was taken by the department relating to Junior Achievement’s breach of fiduciary duty in failing to remit employee deferrals to the 401(k) plan and health savings account. (George v. Junior Achievement of Cent. Indiana, Inc.; 7th Cir., 2012)