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BARBER-COLMAN CO. v. BARBOSA

September 27, 1996

BARBER-COLMAN COMPANY, Plaintiff,
v.
COMMISSIONER MANUEL BARBOSA, CHIEF COMMISSIONER OF THE ILLINOIS HUMAN RIGHTS COMMISSION; DIRECTOR ROSE MARY BOMBELA, DIRECTOR OF THE ILLINOIS DEPARTMENT OF HUMAN RIGHTS; and PAUL S. COMBS, Defendants.



The opinion of the court was delivered by: REINHARD

 INTRODUCTION

 Plaintiff, Barbara-Colman Co., filed an amended complaint against defendants, Manuel Barbosa, Chief Commissioner of the Illinois Human Rights Commission (HRC), Rose Mary Bombela, Director of the Illinois Department of Human Rights (IDHR), and Paul S. Combs, seeking, pursuant to 28 U.S.C. § 2201, a declaratory judgment that the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq., preempts Combs' action before the HRC in which he claims Barber-Colman discriminated against him on the basis of age in violation of section 2-102 (A) of the Illinois Human Rights Act (Act), 775 ILCS 5/2-102(A), when it refused to provide him severance pay upon his discharge from Barber-Colman's employment. Defendants, excepting Combs, have moved to dismiss the amended complaint. *fn1"

 FACTS *fn2"

 Barber-Colman filed a motion to dismiss before the HRC, contending that Combs' action under section 2-102 (A) is preempted by ERISA because the allegations pertaining to a violation of section 2-102 (A) relate to Barber-Colman's employee severance plan. An administrative law judge (ALJ) issued a recommended order and decision, finding that the severance plan is an employee welfare benefit plan under ERISA and that, because the HRC's adjudication of Combs' claim would require it to determine his eligibility for severance pay under the plan, ERISA preempts the claim. Thus, the ALJ recommended that Barber-Colman's motion to dismiss be granted.

 After considering the recommended order and decision, a three-member panel of the HRC refused to accept it and denied Barber-Colman's motion to dismiss. In doing so, the panel ruled, relying principally on Shaw v. Delta Airlines, Inc., 463 U.S. 85, 77 L. Ed. 2d 490, 103 S. Ct. 2890 (1983) and Babcock & Wilcox v. Illinois Dept. of Human Rights, 189 Ill. App. 3d 827, 545 N.E.2d 799, 137 Ill. Dec. 146 (2d Dist. 1989), that because Combs' action under section 2-102 (A) raises an age discrimination claim also covered by the Age Discrimination in Employment Act of 1967 (ADEA), 29 U.S.C. § 621 et seq., ERISA does not preempt the claim. A subsequent petition for rehearing before the full HRC by Barber-Colman was denied by the HRC.

 Barber-Colman, in turn, filed its claim for declaratory relief in this court. *fn3" In its amended complaint, it alleges that ERISA preempts the section 2-102 (A) claim before the HRC because that claim relates to an employee benefit plan and section 514 (a) of ERISA preempts all state laws that so relate.

 Defendants, in their motion to dismiss, contend that, because Combs' section 2-102 (A) claim is based on conduct equally actionable under the ADEA, section 514(d) of ERISA exempts his claim from preemption. Barber-Colman responds that the Act and the ADEA are different because the Act, unlike the ADEA, has no corresponding "bona fide employee benefit plan" exception and, therefore, the Act prohibits actions that are otherwise legal under the ADEA.

 DISCUSSION

 Dismissal of a complaint is appropriate only if it is clear the plaintiff can prove no set of facts consistent with the complaint which would entitle him to relief. Jones v. General Elec. Co., 87 F.3d 209, 211 (7th Cir. 1996). In evaluating the complaint, the court accepts as true all well-pleaded factual allegations and draws all reasonable inferences in favor of the plaintiff. Hager v. City of West Peoria, 84 F.3d 865, 868-69 (7th Cir. 1996).

 Appellants in that case, like defendants here, relied on section 514 (d) which provides that section 514 (a) shall not "be construed to alter, amend, modify, invalidate, impair, or supersede any law of the United States." Id. at 100-01. The Court began its analysis by noting that state law obviously plays a significant role in the enforcement of Title VII. Id. at 101. Pointing to the provisions of Title VII that expressly preserve nonconflicting state laws and require recourse to available state administrative remedies, the Court explained that preemption of the New York law at issue would impair Title VII to the extent the state law provides a means of enforcing Title VII's commands. Id. at 101-02. If ERISA were interpreted to preempt entirely the New York law with respect to covered benefit plans, the EEOC would be unable to refer claims to the state agency, thereby frustrating the goal of encouraging joint state and federal enforcement of Title VII. Id. at 102. Such a disruption of the enforcement scheme contemplated by Title VII would, in terms of section 514 (d), "modify" and "impair" federal law. Id. Thus, the exception to preemption provided by section 514 (d) would apply.

 On the other hand, the Court explained that preemption would not impair Title VII within the meaning of section 514(d) where a state law prohibits employment practices that are lawful under Title VII. Id. at 103. The court could not "see how federal law would be impaired by preemption of a state law prohibiting conduct that federal law permitted." Id. at 103-04. Recognizing that its interpretation of section 514 (d) as requiring partial preemption of state fair employment laws might cause certain practical problems, the Court noted that courts and state agencies would have to determine whether employment practices are prohibited by Title VII rather than considering whether they are unlawful under a ...


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