LOCATION: Oklahoma City Board of Education
DOCKET NO.: 89-1298
DECIDED BY: Rehnquist Court (1990-1991)
LOWER COURT: Supreme Court of Texas
CITATION: 498 US 133 (1990)
ARGUED: Oct 09, 1990
DECIDED: Dec 03, 1990
Christopher J. Wright - on behalf of the United States, as amicus curiae, in support of the Petitioner
Hollis T. Hurd - on behalf of the Petitioner
John W. Tavormina - on behalf of the Respondent
Facts of the case
Media for Ingersoll-Rand Company v. McClendonAudio Transcription for Oral Argument - October 09, 1990 in Ingersoll-Rand Company v. McClendon
Audio Transcription for Opinion Announcement - December 03, 1990 in Ingersoll-Rand Company v. McClendon
William H. Rehnquist:
The opinion of the Court in No. 89-1298, Ingersoll-Rand Company versus Mcclendon will be announced by Justice O'Connor.
Sandra Day O'Connor:
This case comes to the Court on writ of certiorari to the Supreme Court of Texas.
Citing a companywide reduction in force, the petitioner, Ingersoll-Rand, fired the respondent, Mcclendon, shortly before his tenth year with the company.
Mcclendon then filed a wrongful discharge action in State Court in Texas alleging that a principal reason for his termination was the company's desire to avoid contributing to his pension fund.
The State Court granted summary judgment in favor of the employer.
The Texas Supreme Court reversed and remanded for trial holding that the public policy of protecting employee's interest in their pension plans warranted recognition of a state cause of action for wrongful discharge to avoid pension obligations.
The Texas Court rejected the argument that such a cause of action is preempted by the Employee Retirement Income Security Act of 1974, a federal act known as ERISA.
The court reasoned that Mcclendon was not seeking lost pension benefits, but rather future lost wages recovery from mental anguish and punitive damages.
In the opinion filed today, we conclude that the Texas cause of action is preempted under ERISA.
A majority of the Court holds that the cause of action is expressly preempted by Section 514(a) which broadly provides that ERISA supersedes all state laws, including decisions having the effect of loss that relate to covered employee benefit plans.
Because the existence of a plan is a critical factor in establishing liability in the state cause of action and the Trial Court's inquiry must be directed to the plan, this judicially created cause of action in Texas relates to an ERISA plan and is therefore, preempted under Section 514(a).
A unanimous Court also concludes that the Texas cause of action is preempted as well because it conflicts directly with Section 510 of ERISA which prohibits the discharge of a plan participant for the purpose of interfering with his attainment of any right under the plan.
By its own terms, Section 510 protects plan participants from termination motivated by an employer's desire to prevent a pension from vesting; the precise purpose of the cause of action recognized by the Texas Supreme Court.
The judgment of the Texas Supreme Court is reversed.
Justice Marshall, Justice Blackmun, and Justice Stevens have joined only parts 1 and 2B of the opinion.