Dive Brief:

• A federal judge sided with Western & Southern Financial Group in a retirement benefits discrimination lawsuit on Monday, holding that the insurer did not violate the Employee Retirement Income Security Act when it fired an employee days before she planned to retire and begin receiving plan benefits.
• Per the decision in Armstrong v. Western and Southern Financial Group, LLC, the plaintiff had been employed as a sales representative for 18 years. In early 2022, she notified the company about her intent to retire in May, but Western & Southern allegedly suspended her in February with notice that it was investigating her for alleged policy violations.
• The company fired the plaintiff in April 2022 for an alleged breach of multiple company policies. She claimed her termination violated ERISA with an intent to interfere with attainment and receipt of her benefits under the plan and to retaliate against her for seeking benefits. The judge granted Western & Southern’s motion to dismiss.

Dive Insight:

The plaintiff ultimately failed to show that Western & Southern violated the relevant portions of ERISA, which makes it unlawful for employers to discharge, fine, suspend, expel, discipline or discriminate against a covered plan participant or beneficiary “for the purpose of interfering with the attainment of any right which such participant may become entitled” under the plan.

In Armstrong, the plaintiff alleged that the company’s investigation of her was “pretextual and fabricated” and that Western & Southern hid information about the investigation from her. But such allegations did not permit a reasonable inference that the company was motivated to deny her benefits because of her retirement decision or because of an intent to violate ERISA, the U.S. District Court for the Southern District of Ohio found.

“In other words, Plaintiff seeks to characterize Western & Southern’s conduct as something it was not — a violation of Sections 510 and 502(a)(3) of ERISA — when in reality it was nothing more than a denial of benefits under the Plan, albeit coupled with a separate letter terminating her employment,” the judge wrote.

Separately, the court found that the plan at issue contained a six-month statute of limitations clause that barred the plaintiff’s claims and necessitated their dismissal with prejudice.

The lawsuit is a reminder of the breadth of HR’s ERISA compliance responsibilities, which encompasses tasks ranging from fulfillment of employees’ plan information requests to exercising fiduciary duties with respect to retirement plan investments.

ERISA is also not the only statute that can be implicated in the retirement benefits context. For example, federal regulators have pursued lawsuits against employers for violations of the Age Discrimination in Employment Act, including allegations that employers have discriminated against older workers in retirement plan design.