Fall 2004 Employment Law Update

By Joshua Skinner

United States Supreme Court

Central Laborer’s Pension Fund v. Heinz, 2004 U.S. Lexis 4028 (June 7, 2004)

A subsequent alteration in the qualifications for reception of early retirement benefits is a violation of ERISA if it results in a decrease in the participants benefits.

Mr. Heinz retired from his position as a construction worker and was entitled to receive early retirement benefits under his employer’s pension plan, administered by Central Laborer’s Pension Fund.   The pension plan provided that participants could not receive early retirement benefits if they had “disqualifying employment,” which was defined as “a union or non-union construction worker.”   Mr. Heinz, however, took a position as a construction supervisor and the plan allowed his benefits.  Subsequently, the plan changed the definition of “disqualifying employment” to employment “in any capacity in the construction industry.”  The plan informed Mr. Heinz that his employment as a construction supervisor was now in conflict with the terms of the plan and he would have to cease his disqualifying employment or else not receive his benefits.  Mr. Heinz did not resign his position, his benefits were cut, and Mr. Heinz brought suit against the Pension Fund.  The Supreme Court held that the subsequent alteration in the qualifications for reception of a Mr. Heinz’s early retirement benefit was a violation of ERISA because ERISA specifically prohibits decreases by amendment of the “accrued benefit of a participant under a plan.” 29 U.S.C. § 1054(g)(1)-(2).

General Dynamics Land Systems, Inc. v. Cline, 124 S.Ct. 1236 (February 24, 2004)

The ADEA does not prohibit discrimination against younger employees.

In 1997, a collective-bargaining agreement between General Dynamics and the United Auto Workers eliminated the company’s obligation to provide health benefits to subsequently retired employees, except as to then-current workers at least 50 years old.   Cline, and the other plaintiffs, were then at least 40 years of age and therefore protected by the Age Discrimination in Employment Act.   The plaintiffs brought suit maintaining that the change discriminated against them because they were younger than employees at least 50 years old.  The Supreme Court held that the ADEA does not prohibit discrimination against younger employees, but only against older employees.

Fifth Circuit

McGowin v. Manpower Int’l, Inc., 363 F.3d 556 (April 5, 2004)

A plaintiff cannot show that exhaustion of administrative remedies under ERISA was futile without showing hostility on the part of the plan board.

McGowin formerly performed services for defendant ExxonMobil while on the payroll of a third-party employer, ManPower International, Inc.  She came to work for ManPower only after learning of a job opportunity at ExxonMobil that the company required to be filled by one of ManPower's employees rather than by a direct employee of ExxonMobil.  After McGowin’s employment was terminated, she brought suit against defendants in state court alleging that she was defrauded of her rights to ERISA benefits as an employee of ExxonMobil.  Defendants removed the case to federal court and filed a motion for summary judgment.  The motion was granted on the grounds that ERISA preempted McGowin’s state fraud claims and that under ERISA she had failed to exhaust her administrative remedies.  The Fifth Circuit affirmed and held that McGowin’s state claims were preempted and that she could not show that exhaustion of her administrative remedies was futile without showing hostility on the part of the plan board.

Markos v. City of Atlanta, Texas, 364 F.3d 567 (March 23, 2004)

There is a strong presumption that when a journalist approaches a governmental official for information, the matter is one of public concern and therefore entitled to First Amendment protection.

Markos was a police offers with the City of Atlanta, Texas when a fellow officer, Richard Dyer, used excessive force on a suspect in custody.  Markos reported the incident and the police department investigated.  The department concluded that the officer did use excessive force.  The suspect brought suit against the City and several officers, including Markos and Dyer.  The Chief of Police then sent a memo requiring all officers to remain silent about the issue.  Markos, however, gave an interview to a local newspaper.  He maintained that he gave the interview because the City was not defending the officers and his name was on the line.  Markos was demoted and an investigation was ordered because of his disobedience.  He brought suit alleging that the City’s actions were retaliatory for his exercise of his First Amendment right to free speech.  The City filed for summary judgment and the court held that Markos’ speech was not a matter of public concern and therefore not protected by the First Amendment.  The Fifth Circuit reversed and remanded, holding that because Markos’ speech included allegations of a police cover-up his speech was a matter of public concern.  The Fifth Circuit also noted that there is a strong presumption that when a journalist approaches an official for the information, it is a matter of public concern.  Finally, the Fifth Circuit held that the motivation of the speaker is not determinative of whether the speech is a matter of public concern.

Wiggins v. Lowndes Co., 363 F.3d 387 (March 15, 2004)

Because the position of Road Foreman in Mississippi does not include discretion in the making of policy decisions and is not a confidential relationship with an elected official, it is not a politically sensitive position and is entitled to First Amendment protection.

Wiggins was employed as Road Foreman in Lowndes County.  He supported the rival candidate in the election of the County Supervisor and was demoted as a result.  Defendants argued that Road Foreman was a politically sensitive position such that Wiggins could be demoted for supporting a rival candidate for County Supervisor.  The district court and the Fifth Circuit, however, held that a Road Foreman in Lowndes County, Mississippi is a supervisor in the field without the discretion to make policy decisions and is not in a confidential relationship with an elected official. He can perform his job effectively regardless of his political allegiance. He is therefore protected by the First Amendment when he exercises his right to engage in political speech, and he cannot be demoted in retaliation for that speech.

Carter v. Countrywide Credit Industries Ins., 362 F.3d 294 (March 5, 2004)

Arbitration clauses in individual contacts are preempted by FLSA only if the arbitration procedures would prevent the plaintiff from bringing an FLSA charge.

The plaintiffs brought suit against Countrywide alleging violations of the Fair Labor Standards Act (FLSA).  Countrywide moved to compel the plaintiffs to arbitrate in conformity with their employment contracts.  The plaintiffs contended that the arbitration clauses were unenforceable because FLSA does not permit arbitration.  The district court and the Fifth Circuit found this argument unavailing and explicitly held that FLSA does not automatically preempt arbitration clauses in individual contracts.  Rather, a plaintiff must show that the arbitration procedures would prevent the plaintiff from bringing an FLSA charge.

Smith v. Rush Retail Centers, Inc., 360 F.3d 504 (March 3, 2004)

The Federal Arbitration Act does not grant an independent basis for federal jurisdiction.

Smith brought suit in federal court against Rush Retail requesting that the court vacate a arbitration award pursuant to the Federal Arbitration Act. 9 U.S.C. § 10.  The district court dismissed the case based on the finding of the magistrate that there was no diversity and no federal question.  Smith appealed contending that arbitration matters are federal questions under the Federal Arbitration Act.  The Fifth Circuit, however, held that no provision of the Federal Arbitration Act grants an independent basis for federal jurisdiction and therefore the district court’s dismissal was affirmed.

Johnson v. Louisiana, 369 F.3d 826 (May 5, 2004)

It does not violate the First Amendment to fire an employee for making completely unsupported and false claims against his supervisor.

Johnson was employed by the Louisiana Department of Public Service and Corrections and made a number of allegations against his supervisor.  In particular, Johnson alleged that Watson had sexually harassed another employee.  However, the other employee repeatedly denied the claims. As a result of these allegations, Johnson was investigated for filing false claims and was discharged.  He brought suit claiming that he was retaliated against for exercising his First Amendment right to report the alleged sexual harassment.  Johnson won at trial, but the Fifth Circuit reversed on appeal and directed a verdict in favor of the defendants.  The Fifth Circuit held that (1) Johnson had failed to provide any evidence to substantiate his allegations and the alleged victim (and witnesses) denied the allegations; and (2) Johnson failed to provide any evidence of an evil motive on the part of the person who investigated him nor the person who terminated his employment.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

Copyright © by Fanning Harper & Martinson P.C.. All rights reserved. You may reproduce materials available at this site for your own personal use and for non-commercial distribution. All copies must include this copyright statement.