an employee from receiving unemployment benefits underlines the public recognition of the wrongfulness of employees stealing from their employers.
Although relying solely upon state law to define the term "gross misconduct" as used in COBRA may be inappropriate, see Hammond v. Fidelity and Guaranty Life Ins. Co., 965 F.2d 428, 430 (7th Cir. 1992), the policies promoted by state law may also be legitimate considerations for a federal court which is seeking to apply the federal common law on a uniform basis nationwide. Discouraging employee theft and encouraging employee honesty is a public policy which should be applied nationwide. Withholding COBRA's benefits under the "gross misconduct" exception as to employees who engage in criminal theft from their employers would further the nationwide application of that policy.
Viewed in the light of these considerations, the plaintiff's procurement of turkeys through the redemption of Turkey Saver Stamps rises to the level of criminal theft and constitutes "gross misconduct" sufficient to justify a denial of continuing coverage under COBRA if a determination is properly made that plaintiff knew the redeemed stamps had been obtained by unauthorized means.
B. Judicial Review of Factual Determination of Gross Misconduct.
1. Plaintiff's Position.
Ms. Burke does not forcefully argue that criminal theft does not constitute "gross misconduct" under COBRA. She instead forwards factual arguments, primarily asserting that she is not guilty of criminal theft. Ms. Burke contends that she "was unaware that Jane Doe had wrongfully or illegally obtained the stamps in violation of the Jewel Turkey Stamp Saver Policy and procedure statement." (Plaintiff's Statement of Undisputed Facts, P 6.)
Ms. Burke does not, however, recant the November 22, 1989 statement she gave to Jewel in which she stated "[Jane Doe] had wrongfully gotten [the Turkey Saver Stamps] from the Jewel store on Jackson Street. . ." Ms. Burke asserts that though her statement was in her handwriting, she was told by Jewel personnel what to write and was told that her signing the statement would enable her to continue receiving benefits. (Plaintiff's Response to Defendant's Statement of Undisputed Facts, P 14.)
Ms. Burke has never asserted her November 22, 1989 statement is factually untrue. In fact, Ms. Burke "refused to retract the veracity of this statement" at her deposition. Id. Ms. Burke argues that her statements concerning her "knowledge" that the Turkey Saver Stamps were stolen as set forth in her November 22, 1989 statement should be viewed as referring to her knowledge at the time she signed the November 22, 1989 statement, after she had been told by Jewel that the stamps were stolen. Id.
Ms. Burke's arguments in essence amount to a request for a de novo determination in this court of whether she knew the Turkey Saver stamps were stolen when she used them to obtain Jewel turkeys and thus whether Jewel was correct in discharging her for "gross misconduct." In order to address her contentions, the court must consider the issue of the appropriate standard and method of review of Jewel's decision to terminate plaintiff for gross misconduct.
2. Judicially Expressed Standards of Review as to Determinations Affecting ERISA Benefits.
The proper standard for judicial review of decisions affecting employee benefits covered by ERISA is a subject which has received considerable judicial attention. In Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101 (1989), the Supreme Court altered the prevailing standard for federal court review of a plan administrator's denial of benefits where the plans' language was silent as to the plan's administrator's discretion. Under Firestone, denials of benefits based on plan interpretations by a plan administrator who is not provided interpretive authority by the Plan are to be reviewed de novo. See e.g., Hammond v. Fidelity and Guaranty Life Ins. Co., supra, 965 F.2d at 429-30. Among different judicial panels within the Seventh Circuit there has been disagreement over terminology as to the standard of review when the plan administrator is accorded interpretive responsibility.
The Supreme Court in Firestone left unresolved the question of the standard of review for factual determinations made by a plan administrator, see, Pierre v. Connecticut General Life Ins. Co., 116 L. Ed. 2d 470, U.S. , 112 S. Ct. 453 (1991) (White, J. dissenting from denial of certiorari). The Seventh Circuit has not yet spoken on the issue. See Halpin v. W.W. Grainger, Inc., 962 F.2d 685, 688 n.2 (7th Cir. 1992); Petrilli v. Drechsel, 910 F.2d 1441, 1446-47 (7th Cir. 1990). The circuits who have addressed the question are split.
Moreover, the Seventh Circuit has explicitly not answered the question of whether judicial review of factual determinations should focus only on the evidence presented to the Plan or should encompass all evidence placed before the court. Petrilli, 910 F.2d at 1448. The other circuits have reached differing conclusions on this issue.
Plaintiff's challenge in this case is not to a determination made by the Plan administrator but rather one made by her employer Jewel, which determined that Ms. Burke's actions constituted "gross misconduct." In Paris v. F. Korbel & Brothers Inc., supra, 751 F. Supp. at 838-39, the court reviewed this type of a decision. The district court in Paris did not define its standard of review with reference to the standards governing judicial review of a plan administrator's determinations. Rather, the court employed a reasonableness and good faith standard in order to evaluate whether an employer's discharge of an employee for "gross misconduct" was proper under COBRA. Id. at 838.
2. Evaluating Plaintiff's Case
In addressing the issue of the approach which should be taken to the review of an Jewel's decision to discharge plaintiff Burke for "gross misconduct" and deny her COBRA benefits, this court initially concludes that the inquiry into the propriety of an employer's determination should be limited to the evidence which was available to the employer at the time of the employee's termination. Cf. Perry v. Simplicity Engineering Division of Lukens General Industries, Inc., supra, 900 F.2d at 966.
Under this approach, the court avoids serving as a "super personnel department" engaged in second-guessing employment decisions based on information which was not available to the employer. Cf. Mechnig v. Sears, Roebuck & Co., 864 F.2d 1359, 1365 (7th Cir. 1988). Moreover, this approach allows latitude for reliance by an employer upon information, which may not fit into the formalities of admissibility under the Federal Rules of Evidence, that the employer should reasonably and appropriately consider in making a business decision--such as termination of an employee. The result of a contrary rule would be "increased expense and delay of benefit determinations." Wildbur v. ARCO Chemical Co., supra, 974 F.2d at 640; Sandoval v. Aetna Life & Casualty Ins. Co., 967 F.2d 377, 380 (10th Cir. 1992).
This court's decision to evaluate the case with reference to the information before plaintiff Burke's employer, Jewel, at the time of the termination decision indicates that under the undisputed material facts plaintiff's claims must fail. The evidence of Ms. Burke's wrongdoing available to Jewel was so clear that the correctness of Jewel's determination must be upheld, regardless of whether the court employs a de novo or a more deferential standard of review, such as an "abuse of discretion" standard or a "reasonableness" test.
Jewel decided to terminate plaintiff Burke because it found that she had engaged in activity which the company properly considered "gross misconduct." The basis of Jewel's determination was Ms. Burke's own admissions in her November 22, 1989 statement
and the corroborating November 20, 1989 statement of Jane Doe. The record offers no indication that plaintiff offered a competing version of these facts at the time of her dismissal from Jewel.
Ms. Burke's attempt to raise factual issues relative to Jewel's denial of COBRA benefits, which comes months after her firing and after she has incurred significant medical expenses, is too late. Cf. Winchester v. Pension Committee of Michael Reese Health Plan, etc., 942 F.2d 1190 (7th Cir. 1991). Based on the undisputed material facts as to the information available to Jewel at the time it had to decide to terminate or continue Ms. Burke's employment, Jewel's decision was correct.
Ms. Burke's own statement as to the facts, which she has never repudiated, provided Jewel with the appropriate basis. Viewing those undisputed material facts in the light most favorable to Ms. Burke, see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986), no reasonable factfinder could reach a contrary result. Id. at 249. Jewel acted properly and reasonably in deciding to terminate Ms. Burke for gross misconduct in which it found she had engaged. Id. at 249. Jewel therefore appropriately applied § 1163(2) of COBRA in eliminating Ms. Burke's eligibility for continuing coverage under COBRA.
II. CLAIM UNDER 29 U.S.C. § 1140
Title 29 United States Code § 1140 prohibits any person from, inter alia, discharging any plan participant for the purposes of interfering with the attainment of any right to which the participant may become entitled under the plan. Plaintiff claims that the defendant violated this section by discharging plaintiff for "gross misconduct" thereby interfering with her right to COBRA benefits.
In order to succeed on her claim under 29 U.S.C. § 1140, plaintiff must first present a prima facie case that the desire to interfere with her health benefits was a "determinative factor" in her employer's decision. See Meredith v. Navistar International Transportation Corp., 935 F.2d 124, 127 (7th Cir. 1991), citing Turner v. Schering-Plough Corp., 901 F.2d 335, 347 (3rd Cir. 1990). If a prima facie case is made, then, as in a Title VII case, the burden shifts to the employer to articulate a permissible reason for its action. Meredith, 935 F.2d at 127. The employee then bears the burden of proving that the proffered reason was a pretext for interference with rights under the plan.
Plaintiff Burke cannot sustain her burden in this case. The uncontested facts demonstrate that she was involved in the improper use of stolen Turkey Saver stamps and her connection with the theft led directly to her dismissal. Ms. Burke contends that Jewel wrongly concluded that she redeemed the stamps knowing them to have been stolen, but this argument does not support the conclusion that Jewel's proffered reason for discharging her for gross misconduct was not its true reason. See Mechnig v. Sears, Roebuck & Co., 864 F.2d 1359, 1365 (7th Cir. 1988) (discrimination inquiry focuses on whether employer has truthfully explained its actions, not on whether employer was mistaken in taking those actions). Therefore, even if Jewel were mistaken (which this court holds it was not) in its decision that Ms. Burke engaged in gross misconduct, so long as that was Jewel's true reason for terminating Ms. Burke's employment, Jewel should prevail on plaintiff's claim under 29 U.S.C. § 1140.
Jewel's knowledge that plaintiff had filed a worker's compensation claim and was incurring medical expenses does not support the conclusion that she was discharged for discriminatory reasons. Discriminatory intent and action cannot be inferred from knowledge alone. See Visser v. Packer Engineering Associates, Inc. 924 F.2d 655, 658 (7th Cir. 1991). The claimed inference of discriminatory animus is made even more unlikely in this case in light of the circumstances surrounding plaintiff's dismissal. Based on the record before the court, no reasonable trier of fact could conclude that Jewel did not discharge Ms. Burke for engaging in what Jewel decided was gross misconduct, but rather fired her in order to interfere with her health benefits. Defendants are consequently entitled to summary judgment.
For the reasons stated in this memorandum opinion and order, defendants' motion for summary judgment is GRANTED. Plaintiff's motion to strike and plaintiff's motion for summary judgment are DENIED. This case is dismissed in its entirety.
JAMES F. HOLDERMAN
United States District Judge
DATED: March 2, 1993