ERISA Causes of Action - The Types of Lawsuits That Can be Brought Under ERISA

The Employee Retirement Income Security Act of 1974 ("ERISA") is a federal law that most commonly affects people's lives in the following areas:

(1) Denial of pension, life insurance, disability insurance, or health insurance benefits (as part of an employer provided plan);
(2) Breach of fiduciary duty by the claim or plan administrator (for things like failure to provide plan documents, notifications, statutorily mandated explanations, or misappropriation of funds); or
(3) Interference with participants or beneficiaries' exercise of ERISA rights (like an employee being disciplined or fired for doing things that are protected by ERISA).

Evan T. Engler is an attorney and partner at the Columbus, Ohio based law firm of Harris & Engler.  Evan T. Engler helps clients with their ERISA cases, and the most common ERISA claims are further described below.  

ERISA Claim for Denial of Benefits

ERISA governs the process for how employee benefits such as pensions, life insurance, disability insurance, and health insurance are processed and decided.  If a claim has been denied, the plan participant or beneficiary has certain rights under ERISA for how to appeal those denial decisions.  Usually, the participant or beneficiary has a couple different shots at getting the denial decision overturned - first at the administrative stage and then at the federal court level.  It is most helpful to have an ERISA attorney involved as soon as possible after the initial denial.

ERISA section 502(a)(1)(B) controls who can file a lawsuit under the ERISA statute and it provides that a civil lawsuit may be brought by a plan participant or a beneficiary of an ERISA plan:

"To recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan."

This is the provision that an ERISA lawsuit is filed under if benefits are denied.  The goal of this cause of action is to force plan administrators (insurance companies) to meet their duties to provide plan benefits (insurance money) in accordance with the terms of the plan.  

ERISA Claim for Breach of Fiduciary Duty

ERISA plans can vary dramatically from employer to employer.  Usually an insurance company will create an ERISA governed plan for an employer to provide employee benefits in the areas of pensions, life insurance, disability insurance, and/or health insurance.  Each plan for each different employer created by the insurance company might be a little different.  ERISA defines a "fiduciary" as follows:

"A person is a fiduciary with respect to a plan to the extent (i) he exercises any discretionary authority or discretionary control respecting management of such plan or exercise any authority or control respecting management or disposition of its assets, (ii) he renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of such plan, or has any authority or responsibility to do so, or (iii) he has any discretionary authority or discretionary responsbility in the administration of such plan."  

29 U.S.C. 1002(21)(A).  Basically in ERISA, a fiduciary is the person or company that gets to decide whether to accept or deny benefits.  Fiduciaries are supposed to make that decision in accordance with the terms of the plan and for the benefit of beneficiaries (but this is not the practical reality).  Specifically, ERISA provides that:

"A fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and -

(A) for the exclusive purpose of:

(i) providing benefits to participants and their beneficiaries; and
(ii) defraying reasonable expenses of administering the plan;

(B) with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; 
(C) by diversifying the investments of the plan so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and
(D) in accordance with the documents and instruments governing the plan[.]  

In short, ERISA fiduciaries are supposed to do what a reasonably prudent person in similar circumstances would do.  If an ERISA fiduciary falls below this reasonably prudent standard, then under ERISA section 503, a lawsuit can be brought to (A) enjoin any act or practice which violates any provision of ERISA or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of ERISA or terms of the plan.

A cause of action for wrongful denial of benefits is usually a claim for money damages.  A cause of action for breach of fiduciary duty is usually a claim for action, such as a request that the fiduciary do what they are supposed to do.  If, however, part of the administrator's breach of fiduciary duty is failure to supply requested information, then pursuant to 29 U.S.C. section 1132(c), there is a statutory penalty of up to $100 per day from the date of the failure or refusal to supply the information.

Interference with ERISA Rights

ERISA section 510 provides a cause of action if any person is discharged, fired, suspended, expelled, disciplined, or discriminated against for exercising any right given under ERISA.  This prohibition makes it illegal to interfere with ERISA rights, retaliate against an employee for exercising a right provided by the ERISA plan, or taking adverse action against an employee for providing information about a plan in an inquiry.

One common type of ERISA interference or retaliation claim would be firing an employee right before their retirement benefits become vested in order to avoid paying the benefits.  Other times, any interference or retaliation claim exists when an employee or group of employees are disciplined or terminated due to exercising their right to use or take some employee benefits.

ERISA Claim Attorney

Most people have never heard of ERISA until they get an employee benefit denied and then the denial paperwork mentions "ERISA."  Attorney Evan T. Engler helps clients all around Ohio and elsewhere with their ERISA claims.  ERISA is a complex statute steeped in extensive federal case law.  If you have an ERISA claim then you need to talk to an attorney who is familiar with ERISA and how the statute is interpreted by the federal courts in your district.  You can talk to Evan T. Engler by calling (614) 610-9988.