Rokohl v. Texaco Inc ( 1996 )

United States Court of Appeals,
Fifth Circuit.
No. 95-40276.
Monroe R. ROKOHL, Plaintiff-Counter-Defendant-Appellant,
v.
TEXACO, INC., Defendant-Counter-Claimant-Appellee.
March 11, 1996.
Appeals from the United States District Court for the Southern
District of Texas.
Before REYNALDO G. GARZA, WIENER and STEWART, Circuit Judges.
WIENER, Circuit Judge:
Plaintiff-Appellant Monroe R. Rokohl filed suit against his
employer, Defendant-Appellee Texaco, Inc., alleging inter alia that
Texaco wrongfully dismissed him because of his disability, in
violation of the Texas Commission on Human Rights Act (TCHRA),1 and
that Texaco had discharged him to avoid paying him maximum
retirement benefits, in violation of the Employee Retirement Income
Security Act (ERISA).2 The district court granted summary judgment
in favor of Texaco on the TCHRA claim, reasoning that the claim was
preempted by ERISA; and, after a one-day bench trial, the court
1
When Rokohl filed his claim, the TCHRA was found at
TEX.REV.CIV.STAT.ANN. art. 5221k. In 1993, the Texas legislature
recodified the TCHRA as TEX.LAB.CODE ANN. §§ 21001-.262. The
legislature also amended some of the provisions of the Act;
however, those amendments apply only to complaints filed with the
Commission on Human Rights on or after September 1, 1993. See
Austin State Hosp. v. Kitchen, 903 S.W.2d 83, 87 n. 4
(Tex.App.1995).
2
See 29 U.S.C.S. §§ 1001 et seq. (Law. Co-op 1990 &
Supp.1995).
1
granted Texaco's motion for a directed verdict on Rokohl's ERISA
claim. Rokohl appeals only from the grant of summary judgment on
his TCHRA claim. Concluding that ERISA does not preempt Rokohl's
TCHRA claim, we reverse the district court's grant of summary
judgment dismissing that claim and remand for further proceedings
in the district court consistent with this opinion.
I.
FACTS
The essentially undisputed facts, with all inferences
presented in the light most favorable to Rokohl,3 are as follows:
From 1968 to 1990, Rokohl worked for Texaco as a roustabout, a
position that primarily entails the maintenance and repair of field
lines and equipment; and as a pumper, a position that primarily
entails driving around oil fields from well to well gauging volumes
of production and checking for mechanical problems with equipment.
In 1969, Rokohl started to experience epileptic seizures, the
frequency and severity of which increased over time. After Rokohl
suffered a seizure while driving a company truck in 1986, a Texaco
physician restricted him to performing tasks that did not involve
driving, climbing, or working near open machinery. Texaco
continued to employ Rokohl after his on-the-job seizure, although
the parties dispute the precise capacity in which he served after
the imposition of the medical restrictions.
3
When reviewing a grant of summary judgment, we view the facts
and inferences in the light most favorable to the non-moving party.
See Cavallini v. State Farm Mutual Auto Ins. Co., 44 F.3d 256, 266
(5th Cir.1995).
2
In 1988 and 1989, Texaco granted Rokohl any number of brief
medical leaves of absence pursuant to the company's Short-Term
Disability (STD) Plan. When Rokohl returned to work after one of
these leaves, he suffered yet another seizure and had to be driven
home by a co-worker. The following day, a Texaco executive
instructed Rokohl not to return to work until he had received a
complete medical release and was able to perform the full range of
duties of a roustabout.
In November of 1989, Rokohl underwent epilepsy surgery. The
surgery initially proved unsuccessful: Rokohl's seizures
continued, and he began to experience psychiatric problems. In
March of 1990, physicians treating Rokohl notified Texaco that he
could resume employment on the condition that he continue to avoid
driving, climbing, and operating hazardous machinery. Shortly
thereafter, Rokohl reported to Texaco's field office and asked to
be assigned to a roustabout crew. The Texaco supervisor on duty,
observing that Rokohl was trembling and unable to carry on a
coherent conversation, sent him home on sick leave. Texaco
officials again informed Rokohl that he should not return to work
until he was able to resume, without medical restrictions, the
duties of a roustabout.
In July of 1990, when Rokohl's eligibility for benefits under
the STD plan expired, Texaco's division manager recommended that
Rokohl be approved for benefits under the company's Long-Term
Disability Plan, an ERISA-qualified "employee welfare benefit
3
plan."4 Significant for our consideration today, under Texaco
policy, the grant of LTD benefits constitutes a termination of
employment with that company.
In response to the division manager's recommendation, Texaco's
LTD plan administrator terminated Rokohl's employment upon finding
him eligible under the provisions of the LTD plan.5 As a result,
Rokohl was "granted" monthly LTD benefits, albeit without his
having applied therefor, effective October of 1990. Texaco
forthrightly concedes that this action constitutes termination of
employment.
II.
PROCEEDINGS
4
It is undisputed that the LTD Plan is an "employee welfare
benefit plan" within the meaning and coverage of ERISA. See 29
U.S.C.S. § 1002(1) (Law.Co-op 1990) ("The terms "employee welfare
benefit plan' and "welfare plan' mean any plan ... which ... is ...
established or maintained by an employer ... to the extent that
such plan ... is maintained for the purpose of providing ...
benefits in the event of sickness, accident, [or] death....").
5
The LTD Plan provides in relevant part:
The LTD Plan will provide the amount needed to bring your
total income, including "other income," up to 60% of your
monthly base pay in effect at the time of your LTD
separation.
Benefits under the LTD Plan will be payable until
the earlier of (1) age 65 (the earlier of age 70 or 60
months, if you become disabled at age 60 or later), (2)
recovery from your disability, or (3) death.
During the first 24 months, "disabled" means you are
unable to perform the normal duties of your regular or
comparable job assignment with the Company. Thereafter,
LTD benefits will continue only if you are unable to
perform any job for which your are, or may become,
qualified by training, education, or experience.
4
Shortly after Rokohl was thus discharged, he filed written
complaints with the Texas Commission of Human Rights and the Equal
Employment Opportunity Commission (the EEOC), alleging that Texaco
had discriminated against him because of his disability. After
exhausting all administrative remedies, Rokohl filed suit against
Texaco in Texas state court, alleging inter alia that Texaco had
(1) discharged him because of his disability, in violation of the
TCHRA, and (2) dismissed him to avoid paying maximum retirement
benefits, in violation of ERISA. The suit was removed to federal
district court on diversity grounds in March of 1992.6
Approximately two years later, Texaco moved for summary
judgment on all of Rokohl's claims. The district court denied the
motion with regard to the ERISA claim, but granted summary judgment
for Texaco on each of Rokohl's remaining claims—including the TCHRA
claim, which the court held was preempted by ERISA. In February of
1995, a one-day bench trial was held on the ERISA claim.7 After
Rokohl had presented his case, Texaco moved for a directed verdict.
The district court granted Texaco's motion and entered final
judgment for Texaco. Rokohl timely appealed, challenging only the
6
Federal question jurisdiction also exists over some of
Rokohl's claims, as he stated claims under ERISA, 29 U.S.C.S. §§
1001 et seq., and the Americans with Disability Act (ADA), 42
U.S.C.S. 12101 et seq. (Law.Co-op.Supp.1995). The district court
granted summary judgment for Texaco on the ADA claim, concluding
that Rokohl was discharged prior to the ADA's effective date.
Rokohl does not challenge this determination on appeal.
7
The bench trial was also held on a counterclaim filed by
Texaco for an offset of the social security benefits received by
Rokohl. The district court ultimately entered final judgment in
favor of Texaco on this counterclaim. Rokohl does not appeal from
the district court's adjudication of the counterclaim.
5
grant of summary judgment on his TCHRA claim.
III.
ANALYSIS
A. STANDARD OF REVIEW
When reviewing a grant of summary judgment, we view the facts
and inferences in the light most favorable to the non-moving
party8; and we apply the same standards as those governing the
lower court in its determination.9 Summary judgment must be
granted if a court determines "that there is no genuine issue as to
any material fact and that the moving party is entitled to a
judgment as a matter of law."10
B. ERISA PREEMPTION
Section 514(a) of ERISA states that the statute "shall
supersede any and all State laws insofar as they may now or
hereafter relate to any employee benefit plan" that is covered by
ERISA.11 Courts have interpreted this preemption clause broadly,
observing that its deliberatively expansive language was designed
"to establish pension plan regulation as exclusively a federal
concern."12
8
See Cavallini, 44 F.3d at 266.
9
See Neff v. American Dairy Queen Corp., 58 F.3d 1063, 1065
(5th Cir.1995), cert. denied, --- U.S. ----, 116 S. Ct. 704, 133
L. Ed. 2d 660 (1996).
10
FED.R.CIV.P. 56(c).
11
See 29 U.S.C.S. § 1144(a) (Law.Co-op 1990).
12
Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 138, 111 S. Ct.
478, 482, 112 L. Ed. 2d 474 (1990) (internal quotations and citations
omitted).
6
The Supreme Court has given the phrase "relate to" a "broad
common-sense meaning."13 A state law relates to an ERISA plan "in
the normal sense of the phrase if it has connection with or
reference to such a plan."14 A state law can relate to an ERISA
plan even if that law was not specifically designed to affect such
plans, and even if its effect is only indirect.15 If a state law
does not expressly concern employee benefit plans, it will still be
preempted insofar as it applies to benefit plans in particular
cases.16
Nevertheless, ERISA preemption is not without limits. The
Supreme Court has cautioned that "[s]ome state actions may affect
employee benefit plans in too tenuous, remote, or peripheral a
manner to warrant a finding that the law "relates to' the plan."17
The ultimate question is whether, "if the appellant['s] claims were
stripped of their link to the pension plans, they would cease to
exist."18 We have held in this regard that ERISA does not preempt
13
Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 47, 107 S. Ct.
1549, 1553, 95 L. Ed. 2d 39 (1987).
14
Shaw v. Delta Air Lines, 463 U.S. 85, 96-97, 103 S. Ct. 2890,
2899-900, 77 L. Ed. 2d 490 (1983).
15
See Rozzell v. Security Services, Inc., 38 F.3d 819, 821 (5th
Cir.1994) (citing Pilot Life, 481 U.S. 41, 107 S. Ct. 1549).
16
See Sommers Drug Stores Co. Employee Profit Sharing Trust v.
Corrigan Enter., Inc., 793 F.2d 1456 (5th Cir.1986), cert. denied,
479 U.S. 1034, 107 S. Ct. 884, 93 L. Ed. 2d 837, and cert. denied, 479
U.S. 1089, 107 S. Ct. 1298, 94 L. Ed. 2d 154 (1987).
17
Shaw, 463 U.S. at 100 n. 21, 103 S. Ct. at 2901 n. 21.
18
Hook v. Morrison Milling Co., 38 F.3d 776, 784 (5th Cir.1994)
(internal quotations omitted) (quoting Christopher v. Mobil Oil
Corp., 950 F.2d 1209 (5th Cir.), cert. denied, 506 U.S. 820, 113
7
state law claims when the claims "affec[t] only [an employee's]
employer/employee relationship with [an employer] and not her
administrator/beneficiary relationship with the company."19 More
relevant to our analysis today is our earlier admonition that an
employer may not use its ERISA plan as a "gimmick" to trigger
preemption and thereby avoid litigation in state court.20 In the
classic metaphor, ERISA preemption may be used as a shield but not
as a sword.
In the instant case, the district court concluded that
Rokohl's TCHRA claim was sufficiently connected to the Texaco LTD
plan to warrant a holding that the claim is preempted by ERISA. We
disagree. The heart of Rokohl's claim is that he was wrongfully
discharged by Texaco on the basis of his disability. As such,
Rokohl's claim would have arisen whether Texaco had terminated his
employment through the use of the LTD plan or in some other manner.
Indeed, Rokohl's cause of action would pertain even if Texaco had
not maintained an ERISA plan at all. Accordingly, the claim does
not "cease to exist" when " "stripped of [its] link' " to the
S.Ct. 68, 121 L. Ed. 2d 35 (1992)).
19
Hook, 38 F.3d at 783 (emphasis in original) (holding that an
employee's unsafe workplace claim was not preempted by ERISA, even
though the employee had elected to participate in an ERISA plan
that included a waiver clause prohibiting participants in the plan
from filing suit against the company under the state law in
question); see also Sommers Drug Stores Co., 793 F.2d 1456
(holding that ERISA did not preempt breach of fiduciary duty claim
brought by plan itself, as claim actually centered on relations
between corporate director and shareholder); Memorial Hospital
Sys. v. Northbrook Life Ins. Co., 904 F.2d 236 (5th Cir.1990).
20
See Hook, 38 F.3d at 782.
8
plan.21 Moreover, Rokohl's claim fundamentally affects his
employee-employer relationship with Texaco, and only incidentally
affects his beneficiary-administrator relationship with the plan.22
As such, the connection between Rokohl's claim and Texaco's ERISA-
qualified plan is too remote and tenuous to warrant preemption.23
Indeed, if we were to accept Texaco's argument that ERISA
preempts Rokohl's TCHRA claim, we would effectively permit Texaco
to hide behind its ERISA plan in avoidance of state
anti-discrimination laws. To do that would be to allow an employer
to disguise its firing decisions—even decisions to dismiss an
employee because of his or her race, gender, age, or disability—as
benefits decisions, in avoidance of state anti-discrimination
statutes, simply by adopting an ERISA-qualified plan and awarding
each discharged employee benefits under that plan. A human
resources director would not have to be the proverbial rocket
scientist to devise, for example, an ERISA early retirement
severance plan that could evade state age discrimination laws.
Congress could not have intended for ERISA—a statute " "designed to
promote the interests of employees ... in employee benefit plans'
"24—to operate so as to "vest employers with such authority."25 That
21
See id. at 784.
22
See id. at 783.
23
See id.; Sommers Drug Stores, 793 F.2d 1456; Memorial
Hospital Sys., 904 F.2d 236.
24
Hook, 38 F.3d at 785 (quoting Shaw, 463 U.S. at 90, 103 S.Ct.
at 2896 (emphasis added)).
25
Id.
9
would turn ERISA preemption on its head, putting the cart of
disability benefits under ERISA before the horse of employment
termination decisions. First comes discharge and then comes
determination of benefits, not vice versa as Texaco contends. Thus
the district court erred in concluding that Rokohl's TCHRA claim
was preempted by ERISA.
C. GENUINE ISSUE OF MATERIAL FACT
Texaco argues in the alternative that, even if the TCHRA claim
is not preempted by ERISA, a grant of summary judgment in its favor
is appropriate because Rokohl failed to raise a genuine issue of
material fact on the question whether Texaco violated the TCHRA.
The district court disposed of the TCHRA claim on ERISA preemption
grounds, however, without ever addressing whether Rokohl had raised
sufficient issues of fact to survive summary judgment. Even
though, in our de novo review, we could consider summary judgment
on that issue, we think it advisable to remand the claim to the
district court for it to give this issue its initial
consideration.26 In so doing, we intimate no opinion on the merits
of Texaco's alternative argument.
26
Texaco also argues that, as Rokohl has accepted LTD benefits,
he is estopped from pursuing his TCHRA wrongful discharge claim.
In support of this contention, Texaco cites two cases holding that
once employees have accepted retirement benefits, they are estopped
from recovering wages pursuant to implied or express employment
contracts. See Hurt v. Standard Oil Co. of Texas, 444 S.W.2d 342
(Tex.Civ.App.1969, no writ); Allen v. Dempster Mill Mfg. Co., 402
S.W.2d 809 (Tex.Civ.App.1966, writ ref'd n.r.e.). Texaco cites no
cases establishing a waiver or estoppel principle when, as here, an
employee brings a discrimination claim against the employer; and
no such case emerged after independent research. Accordingly,
Texaco's estoppel argument is unavailing.
10
IV.
CONCLUSION
For the foregoing reasons, the district court's grant of
summary judgment in favor of Texaco on Rokohl's TCHRA claim is
reversed, and the claim is remanded for further consideration by
the district court consistent with this opinion.
REVERSED and REMANDED.
. . . . .
11