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Victor George v. Junior Achievement of Central Indiana

September 4, 2012; as amended September 24, 2012


Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. 1:10-cv-0220-JMS-MJD--Jane E. Magnus-Stinson, Judge.

The opinion of the court was delivered by: Easterbrook, Chief Judge.


Before EASTERBROOK, Chief Judge, and FLAUM and MANION, Circuit Judges.

In the summer of 2009 Victor George, a vice president of Junior Achievement of Central Indiana, Inc., discovered that money with- held from his pay was not being deposited into his re- tirement account and health savings account. Over the next few months he lodged complaints with Junior Achievement's accountants and some executives, in- cluding Jennifer Burk, its President and Chief Executive Officer. He contacted the United States Department of Labor but declined to file a written complaint. In October George raised the issue with two members of Junior Achievement's board. That month he received checks for about $2,600 to make up for the missed deposits plus interest.

George was contemplating retirement. His employ- ment agreement ran until June 30, 2010, but in late 2009 he had discussions with Burk and others about retiring in April 2010. On January 4, 2010, Burk told George not to come to work the next day. Burk later discovered that George had drawn down the account containing his deferred compensation. She believed that George had acted prematurely. Junior Achievement's attorney wrote a letter stating that George's termination was effective as of December 31, 2009, and demanding that he restore the money to the deferred-compensation ac- count. In response George told Burk that an amend- ment to his employment agreement had changed the vesting date for his deferred-compensation account to December 1, 2009. Junior Achievement did not rescind his discharge.

An employer's failure to deposit money withheld from an employee's paycheck into that employee's re- tirement account is a breach of the employer's duties as a fiduciary under the Employee Retirement Income Security Act of 1974 (ERISA). See 29 U.S.C. §1104(a).

George protested his employer's violation of that duty and maintains that the protests led to his firing. Section 510 of ERISA prohibits retaliation "against any person because he has given information or has testified or is about to testify in any inquiry or proceeding relating to this [Act]". 29 U.S.C. §1140. Junior Achievement argues that the language does not cover George's complaints, and the district court agreed. It granted Junior Achieve- ment's motion for summary judgment on the ERISA claim and dismissed George's state-law claims without prejudice. 2011 U.S. Dist. LEXIS 111846 (S.D. Ind. Sept. 28, 2011).

The district judge observed that courts of appeals have disagreed about the scope of §510: Some circuits have observed that "testify" and "proceeding" denote formal actions (although these circuits disagree about the level of formality required) and concluded that "inquiry" therefore also should be understood as a formal proceeding. See Edwards v. A.H. Cornell & Son, Inc., 610 F.3d 217, 222-24 (3d Cir. 2010); Nicolaou v. Horizon Media, Inc., 402 F.3d 325, 330 (2d Cir. 2005); King v. Marriott International, Inc., 337 F.3d 421, 427-28 (4th Cir. 2003). Two other circuits have held that §510 applies to unsolicited informal complaints. Anderson v. Electric Data Systems Corp., 11 F.3d 1311, 1313, 1315 (5th Cir. 1994); Hashimoto v. Bank of Hawaii, 999 F.2d 408, 411 (9th Cir. 1993). The ninth circuit stated that reporting misconduct is a necessary step in the commencement of any formal inquiry and that, unless informal begin- nings are covered, employers would be induced to dismiss employees as soon as they complained or asked a barbed question. The district court thought the holdings of Anderson and Hashimoto to be atextual and followed Edwards: §510's language does not protect employees who make "unsolicited complaints that are not made in the context of an inquiry or a formal proceeding." 2011 U.S. Dist. LEXIS 111846 at *17-22.

The district court was right to rely on the text. Kasten v. Saint-Gobain Performance Plastics Corp., 131 S. Ct. 1325, 1331 (2011). This text's interpretation, however, is not straightforward. The provision is a mess of unpunctuated conjunctions and prepositions. Although the district court concluded that the language is unambiguous, 2011 U.S. Dist. LEXIS 111846 at *22, it is anything but. See also Edwards, 610 F.3d at 224. When dealing with ambiguous anti-retaliation provisions, we are supposed to resolve the ambiguity in favor of protecting employees. See Kasten, 131 S. Ct. at 1333-35; Crawford v. Metropolitan Government of Nashville, 555 U.S. 271, 278-79 (2009).

Junior Achievement does not quarrel with George's contention that he has satisfied the first part of §510 by "giv[ing] information" to executives such as Burk. It denies, however, that any "inquiry" occurred. The phrase "has given information or has testified or is about to testify" provides context that helps us under- stand "inquiry." The clause "has given information" covers every kind of communication, while "has testified or is about to testify" denotes a type of communication in a more formal setting, such as a trial or administra- tive hearing. The latter language implies a level of formal- ity--but not necessarily formality in "giv[ing] informa- tion". A natural inference from the fact that the statute refers to "giv[ing] information" in addition to testi- fying is that "giv[ing] information" covers informal com- munications--and, if informal communications are cov- ered, "inquiry" cannot be limited to formal proceedings.

The parties' disagreement centers on "inquiry" in the prepositional phrase "in any inquiry or proceed- ing". "Inquiry" could mean something official, such as the investigation that the Department of Labor conducts before deciding whether to file suit under ERISA, but sometimes an inquiry means nothing more than a question. Dictionaries include both formal and informal understandings of "inquiry." Junior Achievement favors the formal understandings, but Kasten warns against discarding definitions that would make sense in the statutory context. Kasten held that retaliation because an "employee has filed any complaint" (29 U.S.C. §215(a)(3)) is not limited to written filings. 131 S. Ct. at 1336. The Court found it significant that the word "filed" sometimes refers to oral statements. Id. at 1331-33. Similarly, one common usage of "inquiry" is as a synonym for "question." Unless the structure of §510 makes equating "inquiry" and "question" incongruous, Kasten tells us, we should allow the informal sense of "inquiry" as well as the formal one.

Both the initial clauses in §510 and the prepositional phrase that modifies them employ the disjunctive, which implies that informal and formal approaches are separate tracks, both of which are covered. Section 510 can be parsed this way: ((has given information) or (has testified or is about to testify)) in (any ((inquiry) or (proceeding))).

Likewise we can group the actions and settings based on formality: ((has given information) in (any inquiry)) or ((has testified or is about to testify) in (any proceed- ing)).

This understanding about which words go with which other words is not compelled by rules of grammar--the language is ambiguous--but clues including the similar ordering of the informal and formal options lend ...

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