Authier v. Ginsberg

757 F.2d 796, 6 Employee Benefits Cas. (BNA) 1420
Court of Appeals for the Sixth Circuit·Decided March 26, 1985·No. No. 83-1674·Published·Cited by 59 cases

Opinions

CELEBREZZE, Senior Circuit Judge.

Defendants-appellants, National Steel Corporation (National), its wholly owned subsidiary, American Steel Corporation (American), and Fred Ginsberg, American’s Chairman, appealed from a jury verdict in favor of Plaintiff-Appellant, Emery Authier, Jr. The defendants contend that the district court submitted improperly the case to the jury because Authier’s complaint failed to state a cause of action under Michigan law and because, in any event, the action was preempted by Section 514(a) of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1001-1461 (1982). We hold that although Authier stated a cause of action under Michigan law, such an action is preempted by ERI-SA. Accordingly, we vacate the jury verdict.

Authier was employed as an accountant by American from November of 1968 until his discharge in November of 1980. In January 1978, Authier was appointed as an administrator of American’s profit sharing plan, along with George Angevine, National’s General Counsel, and Bill Rust, National’s Vice President-Finance. Since American’s profit sharing plan was subject to [798] ERISA regulation, see 29 U.S.C. § 1003(a) (1982), Authier and the other administrators become subject to ERISA’s fiduciary duties, see 29 U.S.C. § 1104 (1982).

In the fall of 1979, a corporate decision was made to terminate American’s profit sharing plan and bring the participants within National’s pension plan. During the termination process, Authier spoke to a partner in the law firm in charge of the termination of the plan. The partner informed Authier that an associate believed that a few problems existed with the plan. The next day Authier contacted the associate who denied making the statements attributed to him and assured Authier that nothing was wrong with the plan. Authier then contacted the firm which originally drafted the profit sharing plan; a partner at the firm told Authier that the termination should occur without difficulty.

Believing he was obligated by ERISA to inform his co-fiduciaries and the plan’s participants of potential problems, Authier drafted a letter in which he related his concerns. The letter recommended, among other things, that the law firm which drafted the pension plan be placed in charge of its termination. This letter was sent to Rust, Angevine, and the plan’s participants. Subsequently, according to the defendants, since Authier had been instructed previously to clear all mail of a non-routine nature with Ginsberg and since he failed to obtain Ginsberg’s approval prior to sending the letter, Authier was discharged from his positions at American. Authier then brought suit, arguing that his discharge contravened Michigan public policy.

Generally, under Michigan law, an employee can be discharged for any reason. E.g., Lynas v. Maxwell Farms, 279 Mich. 684, 687, 273 N.W. 315, 316 (1937). The Michigan courts, however, recognize an exception to this general rule; an employee may not be discharged in violation of a “clearly articulated, well-accepted public policy.” Clifford v. Cactus Drilling Corp., 419 Mich. 356, 367, 353 N.W.2d 469, 474 (1984). In order to invoke this public policy exception, a plaintiff must establish that he was engaged in a protected activity, that he was discharged, and that his discharge was due to performing the protected activity. Id. at 367, 353 N.W.2d at 474. In this case, the jury found specifically that Authier was discharged for fulfilling his duties under ERISA. Thus, as an initial matter, the issue before this court is whether a fiduciary’s compliance with his duties under ERISA is a protected activity.

The Michigan Supreme Court has noted that an employee’s compliance with a statutory directive may, under certain circumstances, be a protected activity. Clifford, 419 Mich, at 365, 353 N.W.2d at 473. For example, in Trombetta v. Detroit, Toledo & Ironton Railroad Co., 81 Mich.App. 489, 265 N.W.2d 385 (1978), the Michigan Court of Appeals held that an employer could not, consistent with public policy, discharge an employee for refusing to falsify state required pollution control reports.1 The Trombetta court reasoned that “[i]t is without question that the public policy of this state does not condone attempts to violate its duly enacted laws.” Id. at 495, 265 N.W.2d at 388. Accord Goins v. Ford Motor Co., 131 Mich.App. 185, 347 N.W.2d 184 (1983) (Michigan public policy violated by firing an employee for filing a worker’s compensation report). In addition to an employee’s compliance with the statutory mandate, however, the statutory scheme must create a clearly-mandated public policy.2 E.g., Suchodolski v. Michigan Con[799] solidated Gas Co., 412 Mich. 692, 696, 316 N.W.2d 710, 712 (1982) (per curiam).

In order to protect pension plan participants and beneficiaries, Congress set up a comprehensive statutory scheme which established “standards of conduct, responsibility, and obligation for fiduciaries.” 29 U.S.C. § 1001(b) (1982). An ERISA fiduciary is obligated to perform his duties with the “skill, prudence, and diligence” of a reasonable man and act “solely in the interest of the participants and beneficiaries.” 29 U.S.C. § 1104(a)(1)(B) (1982). Moreover, fiduciaries are personally liable for breaches of their duties under ERISA, 29 U.S.C. § 1109(a) (1982), and, under some circumstances, for breaches by their co-fiduciaries, 29 U.S.C. § 1105 (1982). We believe that this explicit Congressional policy statement coupled with ERISA’s detailed statutory provisions rises to the level of an important and clearly-articulated public policy under Michigan law.3 Thus, the district court held correctly that Authier asserted a cause of action under Michigan law, and, consequently, appropriately considered whether the action was preempted by ERI-SA.

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Authier v. Ginsberg, 757 F.2d 796, 6 Employee Benefits Cas. (BNA) 1420 (6th Cir. 1985).

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