After petitioner company fired respondent McClendon, he filed a
wrongful discharge action under various state law tort and contract
theories, alleging that a principal reason for his termination was
the company's desire to avoid contributing to his pension fund. The
Texas court granted the company summary judgment, and the State
Court of Appeals affirmed, ruling that McClendon's employment was
terminable at will. The State Supreme Court reversed and remanded
for trial, holding that public policy required recognition of an
exception to the employment-at-will doctrine. Therefore, recovery
would be permitted in a wrongful discharge action if the plaintiff
could prove that
"the principal reason for his termination was the employer's
desire to avoid contributing to or paying benefits under the
employee's pension fund."
In distinguishing federal cases holding similar claims preempted
by the Employee Retirement Income Security Act of 1974 (ERISA), the
court reasoned that McClendon was seeking future lost wages,
recovery for mental anguish, and punitive damages, rather than lost
pension benefits.
Held: ERISA's explicit language and its structure and
purpose demonstrate a congressional intent to preempt a state
common law claim that an employee was unlawfully discharged to
prevent his attainment of benefits under an ERISA-covered plan. Pp.
498 U. S.
137-145.
(a) The cause of action in this case is expressly preempted by §
514(a) of ERISA, which broadly declares that that statute
supersedes all state laws (including decisions having the effect of
law) that "relate to" any covered employee benefit plan. In order
to prevail on the cause of action, as formulated by the Texas
Supreme Court, a plaintiff must plead, and the trial court must
find, that an ERISA plan exists and the employer had a
pension-defeating motive in terminating the employment. Because the
existence of a plan is a critical factor in establishing liability,
and the trial court's inquiry must be directed to the plan, this
judicially created cause of action "relate[s] to" an ERISA plan.
Cf. Mackey v. Lanier Collection Agency & Service,
Inc., 486 U. S. 825,
486 U. S. 828,
and
Fort Halifax Packing Co. v. Coyne, 482 U. S.
1,
482 U. S. 12, 23
distinguished. In arguing that the plan is irrelevant to the cause
of action because all that is at issue is the employer's improper
motive, McClendon misses the point, which is that, under the state
court's analysis, there simply is no cause of action if there is no
plan. Similarly unavailing
Page 498 U. S. 134
is McClendon's argument that § 514(c)(2) -- which defines
"State" to include any state instrumentality purporting to regulate
the terms and conditions of covered plans -- causes § 514(a) to
preempt only those state laws that affect plan terms, conditions,
or administration, and not those that focus on the employer's
termination decision. That argument misreads § 514(c)(2), and
consequently misapprehends its purpose of expanding ERISA's general
definition of "State" to "include" state instrumentalities whose
actions might not otherwise be considered state law for preemption
purposes; would render § 514(a)'s "relate to" language superfluous,
since Congress need only have said that "all" state laws would be
preempted; and is foreclosed by this Court's precedents,
see
Mackey, supra, at
486 U. S. 828,
and n. 2,
486 U. S. 829.
Preemption here is also supported by § 514(a)'s goal of ensuring
uniformity in pension law, since allowing state based actions like
the one at issue might subject plans and plan sponsors to
conflicting substantive requirements developed by the courts of
each jurisdiction. Pp.
498 U. S.
138-142.
(b) The Texas cause of action is also preempted because it
conflicts directly with an ERISA cause of action. McClendon's claim
falls squarely within ERISA § 510 which prohibits the discharge of
a plan participant "for the purpose of interfering with [his]
attainment of any right . . . under the plan." However, that in
itself does not imply preemption of state remedies absent "special
features" warranting preemption.
See, e.g., English v. General
Electric Co., 496 U. S. 72,
496 U. S. 87.
Such a "special featur[e]" exists in the form of § 502(a), which
authorizes a civil action by a plan participant to enforce ERISA's
or the plan's terms, gives the federal district courts exclusive
jurisdiction of such actions, and has been held to be the exclusive
remedy for rights guaranteed by ERISA, including those provided by
§ 510,
Pilot Life Ins. Co. v. Dedeaux, 481 U. S.
41,
481 U. S. 52,
481 U. S. 54-55.
Thus, the lower court's attempt to distinguish this case as not one
within ERISA's purview is without merit. Moreover, since there is
no basis in § 502(a)'s language for limiting ERISA actions to only
those which seek "pension benefits," it is clear that the relief
requested here is well within the power of federal courts; the fact
that a particular plaintiff is not seeking recovery of pension
benefits is no answer to a preemption argument. Pp.
498 U. S.
142-145.
779 S.W.2d 69
(Tex.1989), reversed.
O'CONNOR, J., delivered the opinion for a unanimous Court with
respect to Parts I and II-B, and the opinion of the Court with
respect to Part II-A, in which REHNQUIST, C.J., and WHITE, SCALIA,
KENNEDY, and SOUTER, JJ., joined.
Page 498 U. S. 135
Justice O'CONNOR delivered the opinion of the Court.
*
This case presents the question whether the Employee Retirement
Income Security Act of 1974 (ERISA), 88 Stat. 829,
as
amended, 29 U.S.C. § 1001
et seq., preempts a state
common law claim that an employee was unlawfully discharged to
prevent his attainment of benefits under a plan covered by
ERISA.
I
Petitioner Ingersoll-Rand employed respondent Perry McClendon as
a salesman and distributor of construction equipment. In 1981,
after McClendon had worked for the company for nine years and eight
months, the company fired him, citing a company-wide reduction in
force. McClendon sued the company in Texas state court, alleging
that his pension would have vested in another four months and that
a principal reason for his termination was the company's desire
Page 498 U. S. 136
to avoid making contributions to his pension fund. McClendon did
not realize that, pursuant to applicable regulations,
see
29 CFR § 2530.200b-4 (1990) (break-in-service regulation), he had
already been credited with sufficient service to vest his pension
under the plan's 10-year requirement. McClendon sought compensatory
and punitive damages under various tort and contract theories; he
did not assert any cause of action under ERISA. After a period of
discovery, the company moved for, and obtained, summary judgment on
all claims. The State Court of Appeals affirmed, holding that
McClendon's employment was terminable at will. 757 S.W.2d 816
(1988).
In a 5-to-4 decision, the Texas Supreme Court reversed and
remanded for trial. The majority reasoned that, notwithstanding the
traditional employment-at-will doctrine, public policy imposes
certain limitations upon an employer's power to discharge at-will
employees. Citing Tex.Rev. Civ.Stat.Ann., Title 110B (Vernon 1988
pamphlet), and § 510 of ERISA, the majority concluded that "the
state has an interest in protecting employees' interests in pension
plans."
779 S.W.2d 69, 71
(1989). As support, the court noted that "[t]he very passage of
ERISA demonstrates the great significance attached to income
security for retirement purposes."
Ibid. Accordingly, the
court held that, under Texas law, a plaintiff could recover in a
wrongful discharge action if he established that
"the principal reason for his termination was the employer's
desire to avoid contributing to or paying benefits under the
employee's pension fund."
Ibid. The court noted that federal courts had held
similar claims preempted by ERISA, but distinguished the present
case on the basis that McClendon was
"
not seeking lost
pension benefits, but [was]
instead seeking future lost wages, mental anguish and punitive
damages as a result of the wrongful discharge."
Id. at 71, n. 3 (emphasis in original).
Page 498 U. S. 137
Because this issue has divided state and federal courts,** we
granted certiorari, 494 U.S. 1078 (1990), and now reverse.
II
"ERISA is a comprehensive statute designed to promote the
interests of employees and their beneficiaries in employee benefit
plans."
Shaw v. Delta Air Lines, Inc., 463 U. S.
85,
463 U. S. 90
(1983).
"The statute imposes participation, funding, and vesting
requirements on pension plans. It also sets various uniform
standards, including rules concerning reporting, disclosure, and
fiduciary responsibility, for both pension and welfare plans."
Id. at
463 U. S. 91
(citation omitted). As part of this closely integrated regulatory
system, Congress included various safeguards to preclude abuse and
"to completely secure the rights and expectations brought into
being by this landmark reform legislation." S.Rep. No. 93-127, p.
36 (1973). Prominent among these safeguards are three provisions of
particular relevance to this case: § 514(a), 29 U.S.C. § 1144,
ERISA's broad preemption provision; § 510, 29 U.S.C. § 1140, which
proscribes interference with rights protected by ERISA; and §
502(a), 29 U.S.C. § 1132(a), a "
carefully integrated'" civil
enforcement scheme that "is one of the essential tools for
accomplishing the stated purposes of ERISA." Pilot Life Ins.
Co. v. Dedeaux, 481 U. S. 41,
481 U. S. 52,
481 U. S. 54
(1987).
We must decide whether these provisions, singly or in
combination, preempt the cause of action at issue in this case.
"[T]he question whether a certain state action is preempted
Page 498 U. S. 138
by federal law is one of congressional intent. 'The purpose of
Congress is the ultimate touchstone.'"
Allis-Chalmers Corp. v. Lueck, 471 U.
S. 202,
471 U. S. 208
(1985) (internal quotation omitted) (quoting
Malone v. White
Motor Corp., 435 U. S. 497,
435 U. S. 504
(1978)). To discern Congress' intent, we examine the explicit
statutory language and the structure and purpose of the statute.
See FMC Corp. v. Holliday, ante at
498 U. S. 56
(1990), (citing
Shaw v. Delta Air Lines, Inc., supra, 463
U.S. at
463 U. S. 95).
Regardless of the avenue we follow -- whether explicit or implied
preemption -- this state law cause of action cannot be
sustained.
A
Where, as here, Congress has expressly included a broadly worded
preemption provision in a comprehensive statute such as ERISA, our
task of discerning congressional intent is considerably simplified.
In § 514(a) of ERISA, as set forth in 29 U.S.C. § 1144(a), Congress
provided:
"Except as provided in subsection (b) of this section, the
provisions of this subchapter and subchapter III of this chapter
shall supersede any and all State laws insofar as they may now or
hereafter relate to any employee benefit plan described in section
1003(a) of this title and not exempt under section 1003(b) of this
title."
"The preemption clause is conspicuous for its breadth."
FMC
Corp., ante at
498 U. S. 58.
Its "deliberately expansive" language was "designed to
establish pension plan regulation as exclusively a federal
concern.'" Pilot Life, supra, 481 U.S. at 481 U. S. 46
(quoting Alessi v. Raybestos-Manhattan, Inc., 451 U.
S. 504, 451 U. S. 523
(1981)). The key to § 514(a) is found in the words "relate to."
Congress used those words in their broad sense, rejecting more
limited preemption language that would have made the clause
"applicable only to state laws relating to the specific subjects
covered by ERISA." Shaw, supra, 463 U.S. at 463 U. S. 98.
Moreover, to underscore its intent that § 514(a) be expansively
applied, Congress used equally broad language in defining
Page 498 U. S. 139
the "State law" that would be preempted. Such laws include "all
laws, decisions, rules, regulations, or other State action having
the effect of law." § 514(c)(1), 29 U.S.C. § 1144(c)(1).
"A law 1relates to' an employee benefit plan, in the normal
sense of the phrase, if it has a connection with or reference to
such a plan."
Shaw, supra, at
463 U. S. 96-97.
Under this "broad common sense meaning," a state law may "relate
to" a benefit plan, and thereby be preempted, even if the law is
not specifically designed to affect such plans, or the effect is
only indirect.
Pilot Life, supra, 481 U.S. at
481 U. S. 47.
See also Alessi v. Raybestos-Manhattan, Inc., supra, 451
U.S. at
451 U. S. 525.
Preemption is also not precluded simply because a state law is
consistent with ERISA's substantive requirements.
Metropolitan
Life Ins. Co. v. Massachusetts, 471 U.
S. 724,
471 U. S. 739
(1985).
Notwithstanding its breadth, we have recognized limits to
ERISA's preemption clause. In
Mackey v. Lanier Collection
Agency & Service, Inc., 486 U. S. 825
(1988), the Court held that ERISA did not preempt a State's general
garnishment statute, even though it was applied to collect
judgments against plan participants.
Id. at
486 U. S. 841.
The fact that collection might burden the administration of a plan
did not, by itself, compel preemption. Moreover, under the plain
language of § 514(a), the Court has held that only state laws that
relate to benefit plans are preempted.
Fort Halifax Packing Co.
v. Coyne, 482 U. S. 1,
482 U. S. 23
(1987). Thus, even though a state law required payment of severance
benefits, which would normally fall within the purview of ERISA, it
was not preempted, because the statute did not require the
establishment or maintenance of an ongoing plan.
Id. at
482 U. S. 12.
Neither of these limitations is applicable to this case. We are
not dealing here with a generally applicable statute that makes no
reference to, or indeed functions irrespective of, the existence of
an ERISA plan. Nor is the cost of defending this lawsuit a mere
administrative burden. Here, the existence of a pension plan is a
critical factor in establishing
Page 498 U. S. 140
liability under the State's wrongful discharge law. As a result,
this cause of action relates not merely to pension benefits, but to
the essence of the pension
plan itself.
We have no difficulty in concluding that the cause of action
which the Texas Supreme Court recognized here -- a claim that the
employer wrongfully terminated plaintiff primarily because of the
employer's desire to avoid contributing to or paying benefits under
the employee's pension fund -- "relate[s] to" an ERISA-covered plan
within the meaning of § 514(a), and is therefore preempted.
"[W]e have virtually taken it for granted that state laws which
are 'specifically designed to affect employee benefit plans' are
preempted under § 514(a)."
Mackey, supra, 486 U.S. at
486 U. S. 829.
In
Mackey, the statute's express reference to ERISA plans
established that it was so designed; consequently, it was
preempted. The facts here are slightly different, but the principle
is the same: The Texas cause of action makes specific reference to,
and indeed is premised on, the existence of a pension plan. In the
words of the Texas court, the cause of action
"allows recovery when the plaintiff proves that the principal
reason for his termination was the employer's desire to avoid
contributing to or paying benefits under the employee's pension
fund."
779 S.W.2d at 71. Thus, in order to prevail, a plaintiff must
plead, and the court must find, that an ERISA plan exists and the
employer had a pension-defeating motive in terminating the
employment. Because the court's inquiry must be directed to the
plan, this judicially created cause of action "relate[s] to" an
ERISA plan.
McClendon argues that the pension plan is irrelevant to the
Texas cause of action, because all that is at issue is the
employer's improper motive to avoid its pension obligations. The
argument misses the point, which is that, under the Texas court's
analysis, there simply is
no cause of action if there is
no plan.
Page 498 U. S. 141
Similarly unavailing is McClendon's argument that § 514(a) is
limited by the narrower language of § 514(c)(2), which
provides:
"The term 'State' includes a State, any political subdivisions
thereof, or any agency or instrumentality of either, which purports
to regulate, directly or indirectly, the terms and conditions of
employee benefit plans covered by this subchapter."
29 U.S.C. § 1144(c)(2).
McClendon argues that § 514(c)(2)'s limiting language causes §
514(a) to preempt only those state laws that affect plan terms,
conditions, or administration. Since the cause of action recognized
by the Texas court does not focus on those items, but rather on the
employer's termination decision, McClendon claims that there can be
no preemption here.
The flaw in this argument is that it misreads § 514(c)(2), and
consequently misapprehends its purpose. The ERISA definition of
"State" is found in § 3(10), which defines the term as
"any State of the United States, the District of Columbia,
Puerto Rico, the Virgin Islands, American Samoa, Guam, Wake Island,
and the Canal Zone."
29 U.S.C. § 1002(10). Section 514(c)(2) expands, rather than
restricts, that definition for preemption purposes in order to
"include" state agencies and instrumentalities whose actions might
not otherwise be considered state law. Had Congress intended to
restrict ERISA's preemptive effect to state laws purporting to
regulate plan terms and conditions, it surely would not have done
so by placing the restriction in an adjunct definition section,
while using the broad phrase "relate to" in the preemption section
itself. Moreover, if § 514(a) were construed as McClendon urges,
the "relate to" language would be superfluous -- Congress need only
have said that "all" state laws would be preempted. Moreover, our
precedents foreclose this argument. In
Mackey, the Court
held that ERISA preempted a Georgia garnishment statute that
excluded from garnishment ERISA plan benefits.
Mackey,
supra, 486 U.S. at
486 U. S. 828,
and n. 2. Such a law clearly did not regulate the
Page 498 U. S. 142
terms or conditions of ERISA-covered plans, and yet we found
preemption.
Mackey demonstrates that § 514(a) cannot be
read so restrictively.
The conclusion that the cause of action in this case is
preempted by § 514(a) is supported by our understanding of the
purposes of that provision. Section 514(a) was intended to ensure
that plans and plan sponsors would be subject to a uniform body of
benefit law; the goal was to minimize the administrative and
financial burden of complying with conflicting directives among
States or between States and the Federal Government. Otherwise, the
inefficiencies created could work to the detriment of plan
beneficiaries.
FMC Corp.,ante at
498 U. S. 60
(citing
Fort Halifax, 482 U.S. at
482 U. S. 10-11);
Shaw, 463 U.S. at
463 U. S. 105, and n. 25. Allowing state based actions
like the one at issue here would subject plans and plan sponsors to
burdens not unlike those that Congress sought to foreclose through
§ 514(a). Particularly disruptive is the potential for conflict in
substantive law. It is foreseeable that state courts, exercising
their common law powers, might develop different substantive
standards applicable to the same employer conduct, requiring the
tailoring of plans and employer conduct to the peculiarities of the
law of each jurisdiction. Such an outcome is fundamentally at odds
with the goal of uniformity that Congress sought to implement.
B
Even if there were no express preemption in this case, the Texas
cause of action would be preempted because it conflicts directly
with an ERISA cause of action. McClendon's claim falls squarely
within the ambit of ERISA § 510, which provides:
"It shall be unlawful for any person to discharge, fine,
suspend, expel, discipline, or discriminate against a participant
or beneficiary for exercising any right to which he is entitled
under the provisions of an employee benefit plan . . .
or for
the purpose of interfering with the attainment
Page 498 U. S. 143
of any right to which such participant may become
entitled under the plan. . . ."
29 U.S.C. § 1140 (emphasis added).
By its terms, § 510 protects plan participants from termination
motivated by an employer's desire to prevent a pension from
vesting. Congress viewed this section as a crucial part of ERISA
because, without it, employers would be able to circumvent the
provision of promised benefits. S.Rep. No. 93-127, pp. 35-36
(1973); H.R.Rep. No. 93-533, p. 17 (1973). We have no doubt that
this claim is prototypical of the kind Congress intended to cover
under § 510.
"[T]he mere existence of a federal regulatory or enforcement
scheme," however, even a considerably detailed one, "does not by
itself imply preemption of state remedies."
English v. General
Electric Co., 496 U. S. 72,
496 U. S. 87
(1990). Accordingly, "
we must look for special features
warranting preemption.'" Ibid. (quoting Hillsborough
County v. Automated Medical Laboratories, Inc., 471 U.
S. 707, 471 U. S. 719
(1985)).
Of particular relevance in this inquiry is § 502(a) -- ERISA's
civil enforcement mechanism. That section, as set forth in 29
U.S.C. §§ 1132(a)(3), (e), provides in pertinent part:
"A civil action may be brought -- "
"(3) by a participant . . . (A) to enjoin any act or practice
which violates any provision of this subchapter or the terms of the
plan, or (B) to obtain other appropriate equitable relief (i) to
redress such violations or (ii) to enforce any provisions of this
subchapter or the terms of the plan;"
"
* * * *"
"(e)(1) Except for actions under subsection (a)(1)(B) of this
section, the district courts of the United States shall have
exclusive jurisdiction of civil actions under this
subchapter brought by . . . a participant."
(Emphasis added.)
Page 498 U. S. 144
In
Pilot Life, we examined this section at some length
and explained that Congress intended § 502(a) to be the exclusive
remedy for rights guaranteed under ERISA, including those provided
by § 510:
"[T]he detailed provisions of § 502(a) set forth a comprehensive
civil enforcement scheme that represents a careful balancing of the
need for prompt and fair claims settlement procedures against the
public interest in encouraging the formation of employee benefit
plans. The policy choices reflected in the inclusion of certain
remedies and the exclusion of others under the federal scheme would
be completely undermined if ERISA-plan participants and
beneficiaries were free to obtain remedies under state law that
Congress rejected in ERISA. 'The six carefully integrated civil
enforcement provisions found in § 502(a) of the statute as finally
enacted . . . provide strong evidence that Congress did not intend
to authorize other remedies that it simply forgot to incorporate
expressly.'"
481 U.S. at
481 U. S. 54
(quoting
Massachusetts Mutual Life Ins. Co. v. Russell,
473 U. S. 134,
473 U. S. 146
(1985)).
It is clear to us that the exclusive remedy provided by § 502(a)
is precisely the kind of "
special featur[e]'" that "`warrant[s]
preemption'" in this case. English, supra, 496 U.S. at
496 U. S. 87;
see also Automated Medical, supra, 471 U.S. at
471 U. S. 719.
As we explained in Pilot Life, ERISA's legislative history
makes clear that
"the preemptive force of § 502(a) was modeled on the exclusive
remedy provided by § 301 of the Labor Management Relations Act,
1947 (LMRA), 61 Stat. 156, 29 U.S.C. § 185."
481 U.S. at
481 U. S. 52;
id. at
481 U. S. 54-55
(citing H.R.Conf.Rep. No. 93-1280, p. 327 (1974)). "Congress was
well aware that the powerful preemptive force of § 301 of the LMRA
displaced" all state law claims, "even when the state action
purported to authorize a remedy unavailable under the federal
provision."
Pilot Life, 481 U.S. at
481 U. S. 55. In
Metropolitan Life Ins. Co. v. Taylor, 481 U. S.
58 (1987), we again
Page 498 U. S. 145
drew upon the parallel between § 502(a) and § 301 of the LMRA to
support our conclusion that the preemptive effect of § 502(a) was
so complete that an ERISA preemption defense provides a sufficient
basis for removal of a cause of action to the federal forum
notwithstanding the traditional limitation imposed by the "well
pleaded complaint" rule.
Id. at
481 U. S.
64-67.
We rely on this same evidence in concluding that the
requirements of conflict preemption are satisfied in this case.
Unquestionably, the Texas cause of action purports to provide a
remedy for the violation of a right expressly guaranteed by § 510
and exclusively enforced by § 502(a). Accordingly we hold that
"'[w]hen it is clear or may fairly be assumed that the
activities which a State purports to regulate are protected' by §
510 of ERISA, 'due regard for the federal enactment requires that
state jurisdiction must yield.'"
Cf. Lingle v. Norge Division of Magic Chef, Inc.,
486 U. S. 399,
486 U. S. 409,
n. 8 (1988).
The preceding discussion also responds to the Texas court's
attempt to distinguish this case as not one within ERISA's purview.
Not only is § 502(a) the exclusive remedy for vindicating §
510-protected rights, there is no basis in § 502(a)'s language for
limiting ERISA actions to only those which seek "pension benefits."
It is clear that the relief requested here is well within the power
of federal courts to provide. Consequently, it is no answer to a
preemption argument that a particular plaintiff is not seeking
recovery of pension benefits.
The judgment of the Texas Supreme Court is reversed.
It is so ordered
* Justice MARSHALL, Justice BLACKMUN, and Justice STEVENS join
Parts I and II-B of this opinion.
**
See, e.g., Fitzgerald v. Codex Corp., 882 F.2d 586
(CA1 1989) (ERISA preempts state wrongful discharge actions
premised on employer interference with the attainment of rights
under employee benefit plans);
Pane v. RCA Corp., 868 F.2d
631 (CA3 1989) (same);
Sorosky v. Burroughs Corp., 826
F.2d 794 (CA9 1987) (same).
Accord, Conaway v. Eastern
Associated Coal Corp., ___ W.Va. ___,
358
S.E.2d 423 (1986).
Contra, K Mart Corp. v. Ponsock,
103 Nev. 39,
732 P.2d 1364
(1987);
Hovey v. Lutheran Medical Center, 516 F.
Supp. 554 (EDNY 1981);
Savodnik v. Korvettes,
Inc., 488 F.
Supp. 822 (EDNY 1980).