Ingersoll-Rand Co. v. McClendon

[1] Mr. McClendon claimed his job was terminated to prevent his pension benefits from "vesting" (full rights becoming irrevocable if the employment contract ended) under the Employee Retirement Income Security Act of 1974.

The state action would also be preempted by implication as it conflicted potentially by the anti-discrimination provisions of ERISA (29 USC §1140).

McClendon's claim falls squarely within the ambit of ERISA § 510, which provides: "It shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan .

By its terms § 510 protects plan participants from termination motivated by an employer's desire to prevent a pension from vesting.

Congress viewed this section as a crucial part of ERISA because, without it, employers would be able to circumvent the provision of promised benefits.

Congress used those words in their broad sense, rejecting more limited pre-emption language that would have made the clause "applicable only to state laws relating to the specific subjects covered by ERISA."

Moreover, to underscore its intent that § 514(a) be expansively applied, Congress used equally broad language in defining the "State law" that would be pre-empted.

2182, 100 L.Ed.2d 836 (1988), the Court held that ERISA did not pre-empt a State's general garnishment statute, even though it was applied to collect judgments against plan participants.

Moreover, under the plain language of § 514(a) the Court has held that only state laws that relate to benefit plans are pre-empted.

We are not dealing here with a generally applicable statute that makes no reference to, or indeed functions irrespective of, the existence of an ERISA plan.

Here, the existence of a pension plan is a critical factor in establishing liability under the State's wrongful discharge law.

We have no difficulty in concluding that the cause of action which the Texas Supreme Court recognized here—a claim that the employer wrongfully terminated plaintiff primarily because of the employer's desire to avoid contributing to, or paying benefits under, the employee's pension fund—"relate[s] to" an ERISA-covered plan within the meaning of § 514(a), and is therefore pre-empted.

[...] McClendon argues that § 514(c)(2)'s limiting language causes § 514(a) to pre-empt only those state laws that affect plan terms, conditions, or administration.

Since the cause of action recognized by the Texas court does not focus on those items but rather on the employer's termination decision, McClendon claims that there can be no pre-emption here.

Had Congress intended to restrict ERISA's pre-emptive effect to state laws purporting to regulate plan terms and conditions, it surely would not have done so by placing the restriction in an adjunct definition section while using the broad phrase "relate to" in the pre-emption section itself.