Ingersoll-Rand Co. v. McClendon - 498 U.S. 133, 111 S. Ct. 478 (1990)

Rule:

A law "relates to" an employee benefit plan, in the normal sense of the phrase, if it has a connection with or reference to such a plan. Under this broad common-sense meaning, a state law may "relate to" a benefit plan, and thereby be pre-empted, even if the law is not specifically designed to affect such plans, or the effect is only indirect. Pre-emption is also not precluded simply because a state law is consistent with the substantive requirements of the Employee Retirement Income Security Act of 1974, 29 U.S.C.S. § 1001 et seq. 

Facts:

After petitioner company fired respondent McClendon, he filed a wrongful discharge action under various state law tort and contract theories, alleging that a principal reason for his termination was the company's desire to avoid contributing to his pension fund. The Texas court granted the company summary judgment, and the State Court of Appeals affirmed, ruling that McClendon's employment was terminable at will. The State Supreme Court reversed and remanded for trial, holding that public policy required recognition of an exception to the employment-at-will doctrine. Therefore, recovery would be permitted in a wrongful discharge action if the plaintiff could prove that "the principal reason for his termination was the employer's desire to avoid contributing to or paying benefits under the employee's pension fund." In distinguishing federal cases holding similar claims pre-empted by the Employee Retirement Income Security Act of 1974 (ERISA), the court reasoned that McClendon was seeking future lost wages, recovery for mental anguish, and punitive damages rather than lost pension benefits.

Issue:

Does ERISA, 88 Stat. 829, as amended, 29 U. S. C. § 1001 et seq., pre-empt a state common law claim that an employee was unlawfully discharged to prevent his attainment of benefits under a plan covered by ERISA?

Answer:

Yes.

Conclusion:

The court held that ERISA's explicit language and its structure and purpose demonstrate a congressional intent to pre-empt a state common law claim that an employee was unlawfully discharged to prevent his attainment of benefits under an ERISA-covered plan. The Court held that because the essence of the employee's claim related to the pension plan itself, the cause of action improperly attempted to obtain a remedy for the violation of a right expressly guaranteed by the broad pre-emption provision of § 510 of ERISA, 29 U.S.C.S. § 1140, as exclusively enforced by § 502(a) of ERISA, 29 U.S.C.S. § 1132(a). The Court concluded that there was no basis for limiting ERISA actions to only those causes of action seeking "pension benefits," and the relief the employee had requested was well within the power of the federal courts to provide. Thus, the employer's pre-emption argument prevailed notwithstanding the fact that the employee was not seeking to recover pension benefits. The employee's claim was expressly pre-empted by § 514(a) of ERISA (29 USCS 1144(a)), which provides for pre-emption of all state laws--including judicial decisions having the force of law--which "relate to" an employee benefit plan covered by ERISA; and even if there were no express pre-emption, the claim would be pre-empted as conflicting directly with an ERISA cause of action, inasmuch as § 510 of ERISA (29 USCS 1140) protects employee benefit plan participants from termination motivated by an employer's desire to prevent a pension from vesting, and § 502(a) (29 USCS 1132(a)) provides an exclusive federal remedy for violation of rights guaranteed under ERISA.