A final significant aspect of ERISA is its prohibition of employer interference with employees attaining rights entitled under ERISA-covered employee benefits plans. Section 1140 of ERISA states that 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 of any right to which such participant may become entitled under the plan.”
Examples of actions that may violate Section 1140 might include an employer discharging an employee after he has worked for the employer for four years and ten months to avoid vesting his pension 100 percent; or an employer terminating an employee who contracts a serious disease to avoid having its insurer pay medical expenses related to the disease, causing the insurer to raise the amount of employer-paid premiums for health insurance in the future. Proving interference cases under ERISA is similar to proving the other types of discrimination cases that we have discussed in previous lessons. The key is demonstrating that the employee would not have been discriminated against absent his or her becoming eligible for an employee benefit or needing to utilize a benefit.
Keep in mind that the non-interference provisions of ERISA do not prohibit employers from changing or terminating pension or benefit plans in most instances, so long as:
- all employees or all of a particular class of affected employees are treated the same;
- procedural requirements necessary to change or terminate a plan, such as formal amendment or notification of beneficiaries, are complied with; and
- there is no evidence that the employer changed or terminated the plan with a specific intention of discriminating against one or more beneficiaries to prevent them from attaining rights to benefits.