ERISA Section 510 prohibits employers from firing employees to prevent them from attaining a benefit. A recent decision from the Eastern District of Pennsylvania recognized that even employees fired allegedly "for cause" can make use of Section 510.
In Leszczuk v. Lucent Technologies, Inc., three Lucent employees claimed that their employer fired them"for cause" to prevent them from receiving severance benefits. Lucent had established a severance benefit program for employees terminated under certain circumstances, including a reduction in force. The employees were notified that their facility was closing and that they would become eligible to participate in the severance plan by the end of the year. With a little more than two months remaining in the year, the employees were terminated "for cause" allegedly because they failed to work for 40 hours per week at their facility. The employees maintained that Lucent permitted them to perform some of their work off site and that Lucent never raised the issue of their work hours until after they were identified as potential severance plan participants.
Lucent filed for summary judgment. First, it argued that the employees did not have standing to file the lawsuit because they were terminated before they satisfied all the conditions necessary to participate in the severance plan. Under ERISA, employees must be plan "participants" to have standing to file a lawsuit. While standing issues can be tricky, the court recognized that Section 510 is designed to cover employees who are fired before they vest in (become eligible for) the disputed benefits. An employer "should not be able through its own malfeasance to defeat the employee's standing."
Next, Lucent argued that the employees' claims failed on the merits. Section 510 requires proof that the employer specifically intended to violate ERISA; if the employee offers only evidence of the lost opportunity to accrue benefits, he loses. The court ruled, however, that the Lucent employees had offered sufficient evidence to allow the case to proceed to trial. In particular, it seems that the timing of investigation leading to the firing weighed heavily in the judge's ruling.
Comment: For larger employers and smaller claims, there is often little apparent reason why an employer would choose to fire an employee to save a few dollars. Hence, Section 510 claims can be difficult to prove. The plaintiffs in this case contended that Lucent saved almost $200,000. The court, however, gave no weight to value of the contested benefits because the plaintiffs did not offer any supporting evidence. Nevertheless, the court was persuaded to permit the case to go to trial by plaintiffs' other evidence. In other words, the amount at stake was not important to this court, at least at the summary judgment stage.
