George v. Junior Achievement of Central Indiana, Inc. , 694 F.3d 812 ( 2012 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 11-3291
V ICTOR G EORGE,
Plaintiff-Appellant,
v.
JUNIOR A CHIEVEMENT OF C ENTRAL INDIANA, INC.,
Defendant-Appellee.
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.
A RGUED A PRIL 4, 2012—D ECIDED S EPTEMBER 4, 2012
Before E ASTERBROOK, Chief Judge, and F LAUM and
M ANION, Circuit Judges.
E ASTERBROOK, Chief Judge. 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-
2 No. 11-3291
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 now concedes
that George was entitled to withdraw the funds when
he did, but it 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
No. 11-3291 3
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. L EXIS 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
4 No. 11-3291
holdings of Anderson and Hashimoto to be atextual and
followed Edwards: §510’s language does not protect em-
ployees who make “unsolicited complaints that are not
made in the context of an inquiry or a formal proceeding.”
2011 U.S. Dist. L EXIS 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. L EXIS 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
No. 11-3291 5
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))
6 No. 11-3291
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
support to splitting the provision into two parallel tracks.
Junior Achievement contends that, if “question” is one
meaning of “inquiry”, then that sense must apply to
questions asked of the employee but not questions asked
by an employee. Edwards, 610 F.3d at 223, came to this
conclusion. We do not see it this way, however. The
statute does not specify who asks the question or, more
generally, initiates the inquiry. There is no linguistic
reason why “inquiry” cannot refer to the employee’s
questions as well as the employer’s. Most questions (or
observations) will lead to questions in return; after
George complained, managers at Junior Achievement
asked questions of him. Treating §510 as covering only
half of the dialogue would not make sense.
Because §510 refers to inquiries without specifying
who is doing the inquiring, it logically covers employ-
ees’ inquiries. Crawford provides some support for this
understanding. Title VII’s anti-retaliation provision
makes it “unlawful . . . for any employer to discrim-
No. 11-3291 7
inate against any of his employees . . . because he has
opposed any practice made an unlawful employ-
ment practice by [Title VII]”. 42 U.S.C. §2000e–3(a). In
Crawford the employer proposed appending “actively”
and “consistently” to “opposed,” but the Court con-
cluded that such elaborations are unwarranted and held
that employees are protected whether they “oppose”
unlawful practices spontaneously or in response to ques-
tions received from others. 555 U.S. at 276–79. Junior
Achievement proposes to add modifiers such as “formal”
or “solicited” to the word “inquiry” in §510. Just as
in Crawford, we must enforce the text as enacted, without
the additions. See also Kasten, 131 S. Ct. at 1330. The
grammatical structure and functions of §510 do not
support reading the statute as if it read: “for giving in-
formation . . . in response to any inquiry” (adding
the italicized words to the enacted text). Crawford ad-
monishes us to resist the urge to read words into statutes.
The preposition “in”—in the phrase “in any inquiry
or proceeding” (emphasis added)—offers some support
for Junior Achievement’s position. Substitute “question”
for “inquiry” in this phrase, and it is not grammatical.
Still, we think the prepositional phrase to be primarily
concerned with a setting—the “in” tells us that the
information has to be part of, rather than extraneous to,
the inquiry or proceeding. It supplies a location, a
“where.” Giving information in a question means that
the information is imparted in the form of a question;
that is a how rather than a where.
Context tells us that all possible definitions of the
word “inquiry” cannot be plugged in directly; it cannot
8 No. 11-3291
include all possible questions. For the purpose of this
provision the apt informal usage of “inquiry” might be
“[t]he action of asking or questioning”. 7 The Oxford
English Dictionary 1010 (2d ed. 1989). That phrase could
be substituted for “inquiry” in §510. The setting for
this action would be the where in which the giving of
information occurs and could range from a full-fledged
corporate inquiry to a brief informal inquiry where
the employee gives information in the same breath as
asking a question. This construction would not restrict
the scope of the covered conduct because, any time there
is a question, there must also be someone asking it,
but it does ease concerns of imperfect parallel construc-
tion. This provision could never be mistaken for
beautiful prose but still, given Kasten and Crawford, ac-
cepting some awkwardness is better than treating
§510 as a whole as limited to formal proceedings or
employer-initiated inquiries.
The Secretary of Labor filed an amicus curiae brief sup-
porting George. She filed briefs in Edwards and Nicolaou
as well and believes that her briefs collectively provide
an understanding of §510 to which the courts must
defer under Auer v. Robbins, 519 U.S. 452, 462 (1997). Some
Justices have questioned the propriety of giving Chevron
deference (see Chevron U.S.A. Inc. v. Natural Resources
Defense Council, Inc., 467 U.S. 837 (1984)) to positions
taken in briefs, and the Court as a whole has flagged
the subject for further attention. See Christopher v.
SmithKline Beecham Corp., 132 S. Ct. 2156, 2165–69 (2012).
The Court left the subject open in Christopher, and we
can do so here as well, because Chevron applies only
No. 11-3291 9
when an agency has the authority to issue regulations
or enforce the rules in administrative proceedings.
Where “Congress has expressly established the Judiciary
and not the Department of Labor as the adjudicator of . . .
rights of action arising under the statute”, Chevron does
not apply—for the premise of Chevron is delegation to
an agency. Adams Fruit Co. v. Barrett, 494 U.S. 638,
649–50 (1990). The Secretary has no delegated rulemaking
or adjudicative authority concerning §510; instead the
Secretary acts as a prosecutor, bringing suits asking
for judicial enforcement. See 29 U.S.C. §1132(a)(5), (e)(1).
So although we give the Secretary’s arguments re-
spectful consideration, we do not “defer” to the Depart-
ment’s position. See United States v. Mead Corp., 533
U.S. 218 (2001); Skidmore v. Swift & Co., 323 U.S. 134 (1944).
Most of the Secretary’s arguments have been
addressed already, but she offers one contention that
neither George nor any other court of appeals embraces.
It is that, even if “inquiry” means formal inquests, the
initial grievance by the employee could be considered
the first part of that process just as a complaint is the
first step in civil litigation. See Hashimoto, 999 F.2d at
411; see also Neal v. Honeywell Inc., 33 F.3d 860, 863–64
(7th Cir. 1994) (the False Claims Act’s anti-retaliation
provision covers initial investigations as the first step
in an “action filed or to be filed”). This contention has
force. Consider: a complaint standing alone is not
“civil litigation,” but it is still the first part of the formal
litigation process. Unsolicited complaints often require
investigation by the government or employer, making
further action—that is, a formal “inquiry”—inevitable.
10 No. 11-3291
See Central States, Southeast and Southwest Areas Pension
Fund v. Central Transport, Inc., 472 U.S. 559, 572–73 (1985)
(discussing an ERISA fiduciary’s duties to ensure that
the plan’s funds are not misused). If at the end of an
investigation the initial complaint would be considered
part of the “inquiry,” should that complaint be ex-
cluded just because the investigation halts early (here,
because the employer made good the injury)?
We conclude that the best reading of §510 is one that
divides the world into the informal sphere of giving
information in or in response to inquiries and the
formal sphere of testifying in proceedings. This means
that an employee’s grievance is within §510’s scope
whether or not the employer solicited information.
It does not mean that §510 covers trivial belly-
aches—the statute requires the retaliation to be “because”
of a protected activity. See Kasten, 131 S. Ct. at 1334–35.
Someone must ask a question, and the adverse action
must be caused by the question or the response. What’s
more, the grievance must be a plausible one, though
not necessarily one on which the employee is correct.
We have held that the anti-retaliation provision of
Title VII does not protect employees who make insub-
stantial complaints. See, e.g., Mattson v. Caterpillar, Inc.,
359 F.3d 885, 890–92 (7th Cir. 2004). That’s equally true
for §510.
George notified Junior Achievement of the potential
breach of its fiduciary duties and asked (repeatedly)
what would be done to remedy the situation. Those
conversations involved an “inquiry,” as we understand
No. 11-3291 11
that word, because Junior Achievement responded to
them rather than ignoring them. (If it had ignored
them, they could not have caused the discharge.) The
district court must decide whether there is some other
ground on which this case may be resolved short of trial,
or whether a trial on causation is necessary. The
judgment of the district court is vacated, and the case
is remanded for proceedings consistent with this opinion.
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