A Massachusetts district court recently validated the long-standing view that ERISA provides limited remedies, and that some wrongs are simply and intentionally under the terms of the statute not actionable. In Altshuler v. Animal Hospitals Ltd., No. 1:11-cv-10901-RGS (D. Mass. Oct. 31, 2012), the district court found that although the employer breached its fiduciary duties by failing to timely remit the employee’s individual retirement account contributions to the plan, the participant lacked any remedy under ERISA.
Plaintiff, an employee at the Animal Hospital of Lynnfield, Massachusetts (“AHL”) and participant in its ERISA-governed savings incentive match IRA retirement plan, accused AHL of illegally using her retirement plan contributions to pay business expenses. After learning that her withheld employee contributions had not been deposited into her IRA and that several months of contributions were overdue, Plaintiff confronted AHL’s president, Christopher Meehl about the overdue contributions. Meehl apologized for the late deposits and blamed the recession for contributing to cash flow problems. Plaintiff then withdrew from the retirement plan.
After Plaintiff again confronted Meehl about the failure to fully remit her employee contributions to the plan, AHL made all outstanding deposits to Plaintiff’s retirement plan with interest. AHL then terminated Plaintiff’s employment identifying Plaintiff ’s allegations as the basis for her termination. After Plaintiff threatened to sue, Meehl offered to reinstate Plaintiff .
Plaintiff rejected the offer of reinstatement and filed suit, alleging that AHL and Meehl violated ERISA by breaching their fiduciary duties, interfering with benefits, and retaliating against her for her complaints. Plaintiff also alleged several state law claims. Plaintiff sought compensatory damages, the 3% matching contributions she would have received had she stayed in the plan, and plan-wide relief for injury to other participants’ accounts. Plaintiff and Meehl filed cross-motions for summary judgment.
The court determined that although the employer breached its fiduciary duties under ERISA section 3(21)(A) by failing to timely remit the employee’s IRA contributions to the plan, Plaintiff was not entitled to any remedy. Plaintiff admitted that AHL already had contributed all of the money she was owed, she had voluntarily withdrawn from the plan, and she rejected Meehl’s offer of reinstatement.
The court also found that Plaintiff ’s ERISA section 510 interference claim failed. Although there was direct evidence supporting the retaliation claim based on Meehl’s termination letter, which stated that Plaintiff was terminated for complaining about the untimely IRA deposits, no remedy existed because the court found “no plausible theory [existed] linking her termination to any motive to deprive her of benefits.” Plaintiff ’s retirement account had been restored. Moreover, she had rejected AHL’s reinstatement offer prior to the filing of her lawsuit and that “refusal precludes any claim for ERISA-related damages post-dating the refusal.” Finally, the court dismissed Plaintiff ’s state law claims based on ERISA preemption.
This decision, like many others, demonstrates that the broad scope of preemption combined with the limited range of remedies available under ERISA makes some alleged wrongs involving employee benefit plans simply not redressable.