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Nordloh v. Tuschall Engineering Co.

September 4, 2008


The opinion of the court was delivered by: Judge Robert M. Dow, Jr.


This matter is before the Court on Defendants' motion to dismiss Count III of Plaintiff's second amended complaint [48]. Defendants Tuschall Engineering Company, Inc. Defined Benefit Pension Plan and Trust ("TEC Plan"), Tuschall Engineering Company, Inc. ("TEC"), and James Tuschall argue that Count III should be dismissed because Plaintiff Matthew Nordloh has failed to state a cognizable claim under Section 510 of the Employee Retirement Income Security Act of 1974 ("ERISA"). For the following reasons, the Court denies Defendants' motion.

I. Background

On October 23, 2007, Plaintiff Matthew Nordloh filed his second amended complaint. In Count I, Plaintiff contends that Defendants violated 29 U.S.C. §§ 1024 and 1025 by failing to provide Plaintiff with certain notices and reports that are required under ERISA. In Count II, Plaintiff claims that he is entitled to recover certain benefits under his pension plan pursuant to 29 U.S.C. § 1132. Finally, in Count III, Plaintiff asserts that Defendants unlawfully interfered with Plaintiff's rights in violation of Section 510 of ERISA, 29 U.S.C. § 1140.

In Count III, Plaintiff alleges that he worked as a salesman for TEC until he was terminated on January 3, 2006. According to Plaintiff, he qualified as a beneficiary and participant of the TEC Plan, and he was one of only a few actively employed participants in the TEC Plan. In 2004 and 2005, Plaintiff was entitled to receive contributions into the Plan's fund based on his level of compensation received from TEC. According to the complaint, Plaintiff's pension benefits would increase incrementally based upon the worth of the contracts that Plaintiff procured. Plaintiff alleges that during 2005, he procured contracts in excess of three million dollars, greatly increasing the amount of contribution that TEC was required to pay into the TEC Plan fund on Plaintiff's behalf. Plaintiff contends that Defendants, motivated by a desire to prevent Plaintiff's attainment of TEC Plan benefits and Defendant's corresponding obligation to further fund the Plan on Plaintiff's behalf, terminated Plaintiff on January 3, 2006. According to Plaintiff, the termination at that time served to prevent Plaintiff's receipt of sizable commissions earned by him which would have materialized into a substantial amount of TEC Plan benefit funding.

II. Analysis

A. Standard of Review

A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of the complaint and not the merits of the suit.See Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). To survive a Rule 12(b)(6) motion to dismiss, the complaint first must comply with Rule 8(a) by providing "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), such that the defendant is given "fair notice of what the * * * claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1969 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)).

Second, the factual allegations in the complaint must be sufficient to raise the possibility of relief above the "speculative level," assuming that all of the allegations in the complaint are true. E.E.O.C. v. Concentra Health Servs., Inc., 496 F.3d 773, 776 (7th Cir. 2007) (quoting Bell Atlantic, 127 S.Ct. at 1965, 1973 n.14). "[O]nce a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint." Bell Atlantic, 127 S.Ct. at 1969. The Court accepts as true all of the well-pleaded facts alleged by the plaintiff and all reasonable inferences that can be drawn therefrom. See Barnes v. Briley, 420 F.3d 673, 677 (7th Cir. 2005).

B. Section 510 of ERISA

Section 510 of ERISA, 29 U.S.C. § 1140, "Interference with Protected Rights," protects participants and beneficiaries from dismissal and other adverse employment actions taken to discourage or prevent them from gaining or asserting rights under an employee benefit plan. It provides in relevant part as follows:

It 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, this subchapter, section 1201 of this title, or the Welfare and Pension Plans Disclosure Act, or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan, this subchapter, or the Welfare and Pension Plans Disclosure Act.

The clear language of the statute prohibits interference with the attainment of pension rights, such as benefits, to which a participant eventually may become entitled. See Deeming v. American Standard, Inc., 905 F.2d 1124, 1127 (7th Cir. 1990); Healy v. Axelrod Const. Co. Defined Ben. Pension Plan & Trust, 787 F. Supp. 838, 845 (N.D. Ill. 1992). To recover under Section 510, Plaintiff must demonstrate that (1) he is a member of an ERISA plan; (2) he was qualified for the position; and (3) he was discharged under circumstances that provide some basis for believing that his employer intended to deprive him of benefits. See Kampmier v. Emeritus Corp., 472 F.3d 930, 943 (7th Cir. 2007).

Defendants' primary argument is that Count III deals with the alleged interference of non-ERISA rights, not rights arising pursuant to ERISA, and that Section 510 therefore does not provide a remedy. In particular, Defendants contend that because Plaintiff's claim is tied to the amount that he received in commissions from the contracts that he procured, any alleged interference arises out of Plaintiff's employment agreement, not the Plan. ...

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