IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 00-60473
THOMAS W. BULLOCK,
Plaintiff-Appellee,
versus
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES,
Defendant-Appellant.
Appeal from the United States District Court
For the Southern District of Mississippi
July 24, 2001
Before HIGGINBOTHAM, DAVIS, and BENAVIDES, Circuit Judges.
PATRICK E. HIGGINBOTHAM, Circuit Judge:
This case requires that we again visit the uncertain ground of
preemption under the Employment Retirement Income Security Act.1 On
interlocutory appeal, the insurer asks us to overturn the district
court’s finding that ERISA does not preempt a claimant’s state law
claims. We are persuaded that the claims as now framed are
preempted. We vacate the district court’s judgment and remand for
further proceedings.
I
1
29 U.S.C. § 1001 et seq. (2001).
Thomas Bullock began working as an agent for The Equitable
Life Assurance Society in 1973. In early 1994, he became its Agency
Manager, responsible for overall administration of Equitable's
sales operations in Mississippi. He participated in the company's
pension plan.2
The written agreement governing Bullock's employment had no
fixed duration, providing that either party could terminate the
agreement "with or without cause" on written notice. The contract
stated that it was "intended to be the entire and final
understanding of the Equitable and [Bullock] concerning the matters
covered herein . . . . This contract may only be amended in a
written instrument executed by both parties." Bullock alleges that
after executing the contract, Equitable promised that he would be
retained as Agency Manager until age 65 or as long as he met
reasonable production and sales performance criteria. Bullock also
alleges that Equitable promised him that he would be treated as a
franchise owner and business owner. He further contends that
Equitable induced him to spend time and money in developing his
agency practice, in lieu of personal sales activity. Bullock
contends that he met or exceeded all reasonable sales and
2
The district court and both parties assume that the
Equitable pension plan at issue is an ERISA plan. See 29 U.S.C. §§
1002(1), 1002(2)(A) (2001). For purposes of this appeal, we will
accept this implicit finding. In any event, Bullock has waived any
objection on these grounds. See Hidden Oaks Ltd. v. City of Austin,
138 F.3d 1036, 1045 (5th Cir. 1998).
2
production criteria established by Equitable, a fact that Equitable
does not appear to dispute.
On July 14, 1998, Equitable informed Bullock that the company
was restructuring and several Agency Managers, including Bullock,
were to lose their positions. All managers were offered other
management or sales agent positions. Bullock resigned after
declining the company's offer, which included a benefits package
and required a release of claims.
On July 14, 1999, Bullock filed suit in the Circuit Court of
Madison County, Mississippi, alleging breach of contract, breach of
implied-in-fact contract, unjust enrichment, and promissory
estoppel. Count I of Bullock's complaint, entitled "Breach of
Express Contract," alleges that Bullock's termination constituted
a "breach of the implied covenant of good faith and fair dealing
embodied in every agreement." Count II alleges that Bullock was
terminated in violation of an implied-in-fact agreement. The
complaint alleges that, in violation of the agreements, Equitable
terminated Bullock to avoid heightened pension obligations that the
company would bear once he reached age 65. The complaint alleged
loss of future earnings from the Agency Manager Agreement, lost
future commission income, loss of share in the Equitable franchise,
loss of investment in his agency franchise, and loss of value of
his retirement and other benefits.
Equitable removed the case to the United States District Court
for the Southern District of Mississippi on diversity grounds.
3
Equitable moved for a transfer of venue to the United States
District Court for the Southern District of New York, relying on
both 28 U.S.C. § 1404(a) and the ERISA transfer provision, 29
U.S.C. § 1132(e)(2).3 Equitable also sought a declaration that
ERISA preempted Bullock's claims.
The district court denied Equitable's motion, later certifying
the ERISA-preemption question for interlocutory appeal.4 This Court
granted Equitable's petition to permit this appeal.
II
Equitable contends that the district court erred in finding
that ERISA did not preempt Bullock's state-law claims. This Court
reviews de novo the court's preemption determination.5 Section
514(a) of the statute provides that ERISA "shall supersede any and
all State laws insofar as they may now or hereafter relate to an
3
See 28 U.S.C. § 1404(a) (2001) (“For the convenience of
parties and witnesses, in the interest of justice, a district court
may transfer any civil action to any other district or division
where it might have been brought.”); 29 U.S.C. § 1132(e)(2) (2001)
(“Where an action under this subchapter is brought in a district
court of the United States, it may be brought in the district where
the plan is administered, where the breach took place, or where a
defendant resides or may be found, and process may be served in any
other district where a defendant resides or may be found.”).
4
See 28 U.S.C. § 1292(b) (2001). The transfer-of-venue issue
is therefore not before this Court.
5
See McNeil v. Time Ins. Co., 205 F.3d 179, 189 (5th Cir.
2000).
4
employee benefit plan" covered by ERISA.6 The Supreme Court has
emphasized the "deliberately expansive" nature of ERISA's
preemption provision,7 which was intended to modify "the starting
presumption that Congress does not intend to supplant state law."8
Section 514(a) gives rise to "ordinary" or "conflict" preemption,
resulting in the displacement of state law.9
We have observed that, in recent cases, the Supreme Court has
returned in ERISA cases to a "traditional analysis of preemption,
asking if a state regulation frustrated the federal interest in
uniformity."10 We must "go beyond the unhelpful text and the
frustrating difficulty of defining its key term, and look instead
to the objectives of the ERISA statute as a guide to the scope of
the state law that Congress understood would survive."11
6
29 U.S.C. § 1144(a) (2001).
7
Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 46 (1987).
8
De Buono v. NYSA-ILA Med. & Clinical Servs. Fund, 520 U.S.
806, 813 (1997).
9
See McClelland v. Gronwaldt, 155 F.3d 507, 516 (5th Cir.
1998).
10
Corporate Health Ins., Inc. v. Tex. Dep't of Ins., 215 F.3d
526, 533 (5th Cir. 2000)(citing DeBuono, 520 U.S. at 814-15;
California Div. of Labor Standards Enforcement v. Dillingham
Constr., N.A., Inc., 519 U.S. 316 (1997); and New York State Conf.
of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S.
645 (1995)).
11
DeBuono, 520 U.S. at 813-14.
5
Of course, "[s]ome state actions may affect employee benefit
plans in too tenuous, remote, or peripheral a manner to warrant a
finding that the law 'relates to' the plan."12 We find preemption
where (1) the claim addresses areas of exclusive federal concern,
such as the right to receive benefits under the terms of an ERISA
plan; and (2) the claim directly affects the relationship among
traditional ERISA entities—i.e., the employer, plan administrators,
fiduciaries, participants, and beneficiaries.13
Equitable characterizes Bullock's complaint as alleging acts
of economic retaliation prohibited by section 510 of the statute.
Section 510 renders it unlawful for "any person to discharge, fine,
suspend, expel, discipline, or discriminate against a participant
or beneficiary for exercising" his rights under ERISA or a pension
plan or "for the purpose of interfering with [his] attainment of
12
Shaw v. Delta Air Lines, Inc., 463 U.S. 84, 100 n.21 (1983).
13
Hook v. Henderson Milling Co., 38 F.3d 776, 781 (5th Cir.
1981); Memorial Hosp. Sys. v. Northbrook Life Ins. Co., 904 F.2d
236, 245 (5th Cir. 1990). ERISA defines "employer" as "any person
acting directly as an employer, or indirectly in the interest of an
employer, in relation to an employee benefit plan; and includes a
group or association or employers acting for an employer in such
capacity." 29 U.S.C. § 1002(5). A “participant” is defined as "any
employee or former employee of an employer . . . who is or may
become eligible to receive a benefit of any type from an employee
benefit plan . . . ." 29 U.S.C. § 1002(7). ERISA also defines a
"beneficiary" as "a person designated by a participant, or by the
terms of an employee benefit plan, who is or may become entitled to
benefit thereunder." 29 U.S.C. § 1002(8).
6
such rights."14 ERISA therefore prohibits an employer from
terminating an employment contract to deprive an employee of
pension benefits.15 Bullock alleges in his complaint that Equitable
terminated his employment contract to prevent him from becoming
eligible for pension benefits at age 65. These allegations
therefore fall squarely within the scope of section 510.
This case also directly involves the relationship among
traditional ERISA entities.16 Bullock does not deny that he would
qualify as a "participant" in a pension plan, or that Equitable is
an "employer" for purposes of the statute.17 Equitable also
qualifies as a “person” capable of imposing the economic
retaliation prohibited by section 510.18 Given the centrality of
14
29 U.S.C. § 1140 (2001); see also Heimann v. Nat'l Elevator
Indus. Fund, 187 F.3d 493, 505 (5th Cir. 1999). The definition of
"person" encompasses corporate entities such as Equitable. See 29
U.S.C. § 1002(9).
15
Given that this Court has broadly interpreted the kind of
behavior which violates section 510, Equitable's alleged actions
would fall under the statutory prohibition. See 29 U.S.C. § 1140
(rendering it unlawful for an employer to "discharge, fine,
suspend, expel, discipline, or discriminate against" an employee
for purposes of preventing him from attaining plan benefits);
Heimann, 187 F.3d at 504-06.
16
See Hook, 38 F.3d at 781.
17
See 29 U.S.C. § 1002(5).
18
See 29 U.S.C. § 1140; 29 U.S.C. § 1002(9). Bullock’s
contract claims appear to be rooted in Equitable’s desire to
prevent his pension benefits from vesting. Bullock’s unjust
enrichment and promissory estoppel claims address the consequences
of Equitable’s alleged breach. As pled, Bullock’s claims implicate—
albeit to a varying degree—the core concerns of section 510.
7
Equitable’s “pension-defeating motive” to the allegations in the
complaint,19 Bullock’s claims implicate his status as a participant,
and not merely his employer-employee relationship with Equitable.20
Because Section 502(a) provides the exclusive enforcement
mechanism for section 510 rights, it preempts any state cause of
action seeking such relief, no matter how artfully pled.21 As the
Supreme Court observed, “[t]he policy choices reflected in the
inclusion of certain remedies and the exclusion of others under the
federal scheme would be completely undermined if ERISA-plan
participants and beneficiaries were free to obtain remedies under
state law that Congress rejected in ERISA.”22
III
19
See Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 140
(1990).
20
See Rokohl v. Texaco, Inc., 77 F.3d 126, 129 (5th Cir.
1996).
21
See Copling v. The Container Store, Inc., 174 F.3d 590, 594
(5th Cir. 1999); McClelland v. Gronwaldt, 155 F.3d 507, 515-17 (5th
Cir. 1998) (distinguishing between “ordinary” and “complete”
preemption); see also 29 U.S.C. § 1132(f) (vesting the U.S.
district courts with jurisdiction, without respect to amount in
controversy or citizenship, to grant relief provided for in section
1132(a)). This Court generally engages in a two-step inquiry,
determining, first, whether a claim is subject to ordinary
preemption, and second, whether complete preemption applies. See
McClelland, 155 F.3d at 517. Although complete preemption would be
present in this case, this finding is not necessary to our holding.
Federal jurisdiction is already premised on diversity.
22
Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 54 (1987).
8
We VACATE the district court’s opinion finding no ERISA
preemption. We REMAND for proceedings not inconsistent with this
opinion, with instructions to grant Bullock the opportunity to
amend his complaint to escape federal preemption, if he can.23
VACATED and REMANDED.
23
See Smith v. Tex. Children’s Hosp., 84 F.3d 152, 157 (5th
Cir. 1996); Ramirez v. Inter-Continental Hotels, 890 F.2d 760, 764
(5th Cir. 1989).
9