Sixth Circuit Reverses Summary Judgment for ERISA § 503 Interference Claim

posted by Neil E. Klingshirn | June 26, 2018 in Employment Law

In 2014, Atlas Industries Inc. (“Atlas”) fired Robert Stein for missing three days of work without calling off. Stein was on medical leave, though, and thought his doctor’s instructions were to return on August 10th. In fact, he was supposed to return on July 21st. As a result, Stein did not report to work or call off on July 21 -23, 2014 and Atlas immediately terminated his employment as a result.

Stein filed suit for a violation of the Family and Medical Leave Act (FMLA). He also sued for interference with his medical benefits under ERISA since his son, Jordan suffers from a debilitating neurological condition that results in frequent hospital visits. Atlas has a self-insured employee healthcare plan and paid $250,000 or more of Jordan’s medical expenses from its own pocket. These medical expenses were the topic of many conversations and concerns for Atlas.

The trial court dismissed Stein’s FMLA and ERISA claims. On appeal, the Sixth Circuit affirmed the dismissal of Stein’s FMLA claims because Stein did not comply with the company notice and procedural requirements. However, the Sixth Circuit reversed summary judgment with respect to Stein’s ERISA § 503 interference claim. The following evidence convinced the Sixth Circuit that a reasonable jury could find Atlas interfered with Stein’s benefits by terminating him:

  1. Atlas repeatedly brought up their worry about the price of health care to their employees in a series of notices;
  2. While Jordan was in the hospital the Atlas vice president of operations told Stein that his son’s medical expenses were getting too expensive for the company and that he hoped he would be released soon;
  3. The HR director showed an employee how “astronomical payouts” on Jordan’s healthcare was causing the health insurance cost to rise.
  4. Based on his years of employment with Atlas, Stein “seems to have been a satisfactory employee.”

“A reasonable juror could find that [Stein’s termination for missing three consecutive work days], masks Atlas’s intent to violate Stein’s rights under ERISA.” “At trial, Stein [was able to] paint a picture suggesting that Atlas, [was] concerned about Jordan’s medical expenses, [they] simply bided [their] time and waited—Gotcha! style—for Stein to make a mistake. And then, when he did, the company jumped at the chance to cut him loose.”

(This is general legal information and is not offered as specific legal advice.  Do not rely on this information to make decisions about your rights.  If you have questions about potential retaliation in the workplace, contact an attorney)

Stein v. Atlas Indus., Inc., ___ Fed. Appx. ___ (6th Cir. Apr. 9, 2018)

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