When employers consider potential discrimination claims to avoid, the analysis should not stop with Title VII, the Age Discrimination in Employment Act (“ADEA”), and the Americans with Disabilities Act (“ADA”). Hiding in plain sight, but not to be overlooked, is ERISA Section 510, 29 U.S.C. § 1140. 

ERISA Section 510, 29 U.S.C. § 1140, provides:

“[i]t 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 . . . or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan…”  

ERISA Section 3(7), 29 U.S.C. § 1002(7), defines a “participant” as “any employee or former employee of an employer, or any member or former member of an employee organization, who is or may become eligible to receive a benefit of any type from an employee benefit plan which covers employees of such employer or members of such organization, or whose beneficiaries may be eligible to receive any such benefit.”  

Discrimination claims under ERISA Section 510 occur most often when an employer has terminated an employee, and the employee claims that the termination was to prevent the employee from making a claim under a benefit plan or becoming eligible for benefits under a benefit plan.

Although discrimination claims brought under ERISA Section 510 face different substantive requirements than discrimination claims brought under Title VII, the ADEA, and the ADA, they are similarly analyzed under the familiar McDonnell Douglas three-stage burden-shifting paradigm.  

To prevail under ERISA Section 510, an employee must prove that the employer’s adverse employment action was taken with the specific intent to interfere with the employee’s rights or benefits under an ERISA plan. This means that the loss of benefits was the reason behind the adverse employment action, not merely a consequence of the action. As with other employment discrimination causes of action, if the employee can make an initial showing of a prima facie case for intentional interference, then the employer must come forward  with a legitimate, non-discriminatory basis for their action. If the employer succeeds, then the ERISA Section 510 plaintiff is “required to present evidence that [an employer] acted with ‘specific intent’ to interfere with their rights” to overcome an employer's legitimate, non-discriminatory reason. This specific intent can be shown with circumstantial evidence, but must be more specific than mere conjecture.  

ERISA Section 510 claims have become more prevalent. Employers contemplating layoffs or terminations of employees with benefits subject to ERISA should consult with counsel to identify and mitigate the risk of ERISA Section 510 claims.