McLain v. Andersen Corp., No. 08-2473 (8th Cir. June 3, 2009)

By Paul Mollica

What appears to have been an attempt to broaden a state anti-discrimination law turns into a trap for the unwary, in this Eighth Circuit case. When Minnesota specifically defined age discrimination to include “acts which interfere with an employee’s opportunity to acquire pension credits or pension benefits,” it set up a conflict with ERISA § 510, which — given the complete preemption rule — the state statute was bound to lose.

McLain v. Andersen Corp., No. 08-2473 (8th Cir. June 3, 2009):  It may be recalled that back in the 1990s, our Supreme Court held in Hazen Paper v. Biggins, 507 U.S. 604 (1993), that discrimination against an employee based on proximity to retirement benefits did not support a claim for age discrimination under the ADEA.

The Minnesota Human Rights Act, Â§ 363A.08, subdivision 7, rejects this rule and states explicitly:

“Interference with age and pension rights. For purposes of this section, discrimination on account of age shall include acts which interfere with an employee’s opportunity to acquire pension credits or pension benefits when the interference cannot be shown to have been based on just cause unrelated to the employee’s status with regard to pension credits or pension benefits.”

And so, in this case, where the employee sued for age and disability discrimination under state law — where there was no diversity between the parties — the defendants seized on this section and made for the hills. 

The plaintiff, filing in state district court, alleged interference with pension in his complaint as ancillary to his age discrimination claim. The defendants removed, claiming that interference with pension was preempted by ERISA.  The plaintiff filed an amended complaint removing the claim, but the damage had already been done: the federal district court took supplementary jurisdiction over a state-law disability, retaliation and misrepresentation claim, and granted summary judgment on them all.

The plaintiff appealed the entire case, leading off with the argument that removal was improper. The Eighth Circuit affirms, not unexpectedly holding that any claim that challenges interference with benefits under an ERISA plan is preempted.  The plaintiff made a game effort on appeal to argue that he really hadn’t plead such a cause of action, but the panel rebuffs him:

“Second, McLain argues that complete preemption is not present because his pension losses were only a ‘consequence of the alleged discriminatory conduct,’ that ‘ERISA is not intended to preempt state law where there is an incidental loss of benefits as a result of discrimination,’ and ‘that ERISA does not preempt state law claims . . . where the benefits claimed are merely one part of the remedy.’ McLain’s original complaint, however, expressly asserted that Andersen, due to McLain’s age, interfered with McLain’s opportunity to acquire pension benefits in violation of the MHRA. That allegation supported its own cause of action, and McLain specifically alleged facts on the record to support that claim. We therefore reject as contrary to the record McLain’s argument that he merely sought to recover lost benefits as incidental damages to other alleged unlawful conduct.”

So now we know, if you’re practicing plaintiff’s-side employment law in Minnesota, to stay away from this language altogether if you don’t want to be removed.  (Also unsurprisingly, the panel affirms summary judgment on the merits.)  This is the complement of pleading yourself out of court — pleading yourself into the wrong court.