State Law Negligence Claim Allowed Against Employer Despite Employee's Waiver Under ERISA Disability Plan

State Law Negligence Claim Allowed Against Employer Despite Employee's Waiver Under ERISA Disability Plan

On January 15, 2008, the Fifth Circuit in McAteer v. Silverleaf Resorts, Inc., 514 F.3d 411 (2008) reversed the District Court’s decision dismissing McAteer’s claims against Silverleaf Resorts based upon an ERISA plan.
 
Silverleaf Resorts does not subscribe to the workers’ compensation system of the State of Texas.  Instead, Silverleaf provided benefits to employees through an injured employee benefit plan which is governed by ERISA (“disability plan”).  The disability plan provides no-fault benefits for on-the-job injuries.  However, employees must enroll in the disability plan, sign an agreement the plan is the exclusive remedy for on-the-job injuries, and agree to binding arbitration. 
 
Ms. McAteer sustained an injury in the course and scope of her employment but did not report the injury timely to Silverleaf according to the disability plan.  Silverleaf’s administrator denied the claim for failure to timely report the injury, failure to seek advance approval for medical treatment, and failure to use a plan-approved physician.
 
McAteer filed suit against her employer alleging failure to maintain a safe working environment.  Silverleaf removed the case to Federal Court based upon ERISA preemption.  McAteer filed a motion to remand arguing ERISA did not preempt her state law negligence cause of action.  The Federal Court held McAteer’s claims were preempted and ordered mediation. 
 
Mediation was not successful.  The court granted Silverleaf’s motion to compel arbitration and dismissed the claim with prejudice. 
 
In 1994, the Fifth Circuit held ERISA does not preempt state law negligence claims.  Hook v. Morrison Milling Company, 38 F.3d 776 (5th Cir. 1994).  Silverleaf argued Hook was superceded by the Supreme Court’s decision in Aetna Health Inc. v. Davilla, 542 U.S. 200 (2004). 
 
The court held preemption is not required merely because the ERISA plan refers to a state law.  Citing Hook, the court stated, “A law or claim is preempted when it relates to an ERISA plan, and not the reverse.”  Hook at 784.  In other words, preemption is appropriate when the law or claim relates to an ERISA plan; not when the ERISA plan relates to a law or claim. Id. at 785. 
 
The court further stated, “However, simply because the tort claims in Davilla were preempted by ERISA does not mean all tort claims are similarly preempted.” The court must “...consider not only whether McAteer’s claims could have been brought under ERISA but also whether her claims arise from a legal duty independent of ERISA.  This court has already determined that state law negligence claims for failing to maintain a safe workplace are independent of ERISA.”  (Citations omitted).  Therefore, the Fifth Circuit held McAteer could bring a state law negligence claim against Silverleaf even if she signed a waiver pursuant to her ERISA disability plan.