Can an executive ever be liable personally for a §510 claim under the Employee Retirement Income Security Act (ERISA) ? On Nov. 9 the U.S. District Court for the Eastern District of Pennsylvania answered "yes.” Here what happened, per the court’s opinion regarding a motion to dismiss in Romero et al v. Allstate Insurance Co.: Allstate Insurance Co. allegedly terminated the employment contracts of some 6,300 employee agents and permitted them to remain associated with Allstate as independent contractors. Allegedly, this change was announced and was the brainchild of Allstate's president and CEO, Edward M. Liddy. Allstate and Liddy were sued under §510, which prohibits the termination of employees in order to interfere with their receipt of an employee benefit — in this case, retirement benefits. Liddy sought dismissal, arguing that individuals were not liable. Disagreeing, the court said that, by its terms, §510 prohibits "any person" from interfering with the receipt of benefits, Liddy fell within this definition, and he could be on the hook:
The Second Amended Complaint goes on to assert that “in discharging each of the class members and in imposing a moratorium on rehiring them, Allstate and Liddy acted with the specific intent of interfering with the attainment of rights to which class members were entitled or may have become entitled under the Plans.” (Id. ¶ 164 (emphasis added).) Taking such allegations as true -- as the Court is required to do on a Rule 12(b)(6) Motion -- the facts, if proven, would state an actionable claim against Defendant Liddy for violation of Section 510. Accordingly, the Court declines to dismiss Plaintiffs’ claim against him.
Note this though. ERISA applies to all sorts of benefit plans, including medical benefits. Its reach is expansive, all the more so now that decision makers can be held liable for their decisions---not just a CEO, but a manager, as well.
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