Opinion
CASE NO. 4:02-CV-263
October 9, 2003
John Edward Wall, Jr., of Dallas, TX, for Plaintiffs
William O Ashcraft and Anita Marie Alessandra of Ashcraft Law Firm, Dallas, TX
Paula R. Johnson, Jostens Inc., Minneapolis, MN, For Defendants
MEMORANDUM OPINION
Plaintiff Rodolfo Buenrostro ("Buenrostro") filed this action against Defendant Jostens, Inc. ("Jostens") alleging a violation of the Employee Retirement Income Security Act of 1974 ("ERISA") § 510, 29 U.S.C. § 1140. Jostens properly removed the case from the 211th Judicial District Court of Denton County, Texas on September 4, 2002. On Jostens' motion (Docket #6), the Court set this case for bench trial (Docket # 17). The trial presented one issue for the court to determine: whether Jostens terminated Buenrostro for exercising his right to seek benefits under the Jostens Employee Injury Benefit Plan in violation of ERISA. After considering the evidence presented at trial and the applicable law, the Court finds that Jostens did not terminate Buenrostro for exercising his right to seek benefits or in retaliation for seeking benefits and ORDERS that Buenrostro take nothing.
Buenrostro's Original Complaint also alleges violation of 29 U.S.C. § 1109. However, a plaintiff must sue the plan and not an employer under § 1109. Gelardi v. Pertec Computer Corp., 761 F.2d 1323, 1324-25 (9th Cir. 1985); Blum v. Spectrum Restaurant Group, Inc., 261 F. Supp.2d 697, 708 (E.D. Tex. 2003). Plaintiff has failed to do that. Furthermore, Buenrostro presented neither evidence nor argument in support of a breach of fiduciary duty cause of action. Therefore, the Court disregards the § 1109 allegations and addresses only § 1140.
BACKGROUND
Buenrostro worked for Jostens as a "stone setter." Jostens makes high school, college, athletic, and other custom rings. Buenrostro would receive molded rings and set precious, semi-precious, or other stones in them according to the customer's order. The parties do not dispute that Buenrostro was very good at setting stones. In fact, at times Buenrostro would be responsible for correcting rings that other employees had improperly set.
Buenrostro often dealt with real and false stones at work. Because the rings are custom made, setters must be able to set rings with real stones, such as diamonds, as well as with false stones, such as cubic zirconia. When a customer order requires larger stones, the setter presents the order and receives exactly the stones required. For expedience, setters may collect many small stones, sometimes called "chips," from a "stone bin" without presenting an order. Although setters have discretion to collect and use stone chips, they are responsible for setting the correct stones pursuant to customer order.
Buenrostro made his first of two claims under the Jostens Employee Injury Benefit Plan ("Plan") in March 1998. That claim involved a work-related injury to his neck sustained in December 1997. It is undisputed that Buenrostro received Plan benefits for that injury from when he filed in March 1998 until October 1999. This injury is not at issue here because Jostens, pursuant to the Plan, terminated benefits for that injury when Buenrostro failed to attend required physical therapy.
At issue in this case is Buenrostro's second claim under the Plan. On February 17, 2000 Buenrostro began feeling pain in his upper arm, shoulder, and lower back. Dr. Barrus, a Plan-approved physician, put Buenrostro on leave from May 8 to May 22, 2000. Buenrostro continued to receive Plan benefits until he was fired on June 23, 2000.
Jostens terminated Buenrostro after he failed to test stones in a ring to determine whether they were cubic zirconias or diamonds. On June 20, 2000 a ring came to Buenrostro with an order to be set with two diamonds. Buenrostro incorrectly set the ring with one cubic zirconia and one diamond instead of two diamonds. Not only did Buenrostro improperly set the ring, but he also failed to test the stones, pursuant to Jostens policy, to determine whether they were real diamonds. After discovering the error, the plant manager, Albert Lopez, decided to terminate Buenrostro.
The Court must determine why Jostens fired Buenrostro. Buenrostro alleges that Jostens fired him in retaliation for filing a claim under the Plan. Jostens claims that it terminated Buenrostro because he did not comply with company testing procedures and because he was generally a bad, although talented, employee.
ERISA RETALIATION CLAIMS
ERISA § 510
Section 510 of ERISA, 29 U.S.C. § 1140, prevents retaliation against employees who exercise their rights under ERISA plans. Section 1140 provides in relevant part
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, this subchapter, . . . or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan, this subchapter or the Welfare and Pension Plans Disclosure Act. . . . The provisions of section 1132 of this title shall be applicable in the enforcement of this section.
However, to recover under ERISA, plaintiff-employees must satisfy a burden-shifting analysis similar to the one developed in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 804 (1973). Stafford v. True Temper Sports, 123 F.3d 291, 295 (5th Cir. 1997). Specifically, a plaintiff must first establish a prima facie case that a defendant "fired him with a specific discriminatory intent to retaliate for exercising an ERISA right or to prevent attainment of benefits which he would become entitled to under the plan." Stafford, 123 F.3d at 295. If the plaintiff establishes a prima facie case, then the burden shifts to the defendant to articulate a non-discriminatory reason for its actions. Id. And finally, the plaintiff may prove that the defendant's articulated reason is a pretext and that the real motivation was a denial of ERISA benefits. Id. A plaintiff may prove a prima facie claim under § 1140 by demonstrating that (1) he is entitled to ERISA protection (2) he was qualified from the position from which he was discharged, and (3) the employer discharged him with a specific intent to violate ERISA. See Unida v. Levi Strauss Co., 986 F.2d 970, 980 (5th Cir. 1993); Smith v. Gencorp, Inc., 971 F. Supp. 1071, 1076 (N.D. Miss. 1997). Although a plaintiff must show a specific intent to violate ERISA, that intent need only be a motivating factor, not the sole reason for discharge. Stafford, 123 F.3d at 295; Smith, 971 F. Supp. at 1076. Furthermore, a plaintiff may prove that the defendant had specific intent to discriminate through circumstantial evidence, but the plaintiff must show that the loss of benefits was more than an incidental loss from his discharge. Stafford, 123 F.3d at 295.
Did Jostens have cause to fire Buenrostro?
The critical issue in this case is whether Jostens' articulated reason for firing Buenrostro is pretextual. Buenrostro can establish his prima facie case. The parties do not dispute that Buenrostro is entitled to ERISA protection. Additionally, there is no dispute that Buenrostro was a very good stone setter and thus qualified for his position. Finally, the fact that Jostens fired Buenrostro while he was claiming benefits, coupled with the fact that Jostens denied a prescribed MRI examination (discussed below) meets the relatively low prima facie intent requirement. In response, Jostens claims that it fired Buenrostro because he failed to test the stones as required by company policy and because he was a generally bad employee. Because Jostens has articulated a non-discriminatory reason for terminating Buenrostro, the plaintiff now has the burden to prove that Jostens' reason is pretextual and that it fired him with the specific intent to retaliate for filing an ERISA claim. See Stafford, 123 F.3d at 295.
i) Did Jostens in fact require employees to test set stones?
Buenrostro argues that Jostens stated reason for firing him is a pretext because Jostens did not have a policy requiring employees to test stones. It is undisputed that Buenrostro set a cubic zirconia instead of a diamond because he did not test the stone. However, Buenrostro offers his own testimony that the testing procedure did not exist and that employees did not have testing devices. Buenrostro also offers a written document, dated the day he was fired, memorializing a meeting wherein Jostens discussed the testing procedure with its setters.
Plaintiff's counsel also introduced some evidence that the diamond chips had little value, presumably to prove that improperly setting the cubic zirconia was a de minimus violation and thus a pretextual reason for Buenrostro's termination. The Court opines that employers have a right to expect employees to properly perform their duties, particularly where the quality of the employer's product is at stake. Additionally, the Court notes that Jostens could face significant penalties under consumer protection laws, such as the Texas Deceptive Trade Practices Act, for selling a cubic zirconia that it represented as a diamond.
The Court does not find Buenrostro's evidence compelling. First, his own testimony regarding the testing procedure was inconsistent. Buenrostro alternately testified that: there were no testing devices available to setters; testers were available but were broken; and although there were working testers, there was only one for every few setters. Second, it seems reasonable for an employer to hold a meeting concerning a testing procedure the day that it fired an employee for violating that procedure. The Court finds it reasonable for Jostens to reemphasize the testing procedure's importance to all employees after disciplining an employee for violating the procedure. The meeting does not convince the Court that Jostens invented the testing procedure so that it could find an excuse to fire Buenrostro after he filed for Plan benefits.
The Court finds that Buenrostro did violate an existing procedure requiring setters to test stones. Jostens presented several credible witnesses who testified that the testing procedure did exist and that Jostens had reviewed it with the setters in January and February of 2000. Furthermore, Jostens presented credible evidence that other quality inspectors had previously found Buenrostro setting cubic zirconia instead of diamonds. After considering the credibility of the evidence before the Court, it finds that the testing procedure did exist and that Buenrostro did not follow it.
ii) Buenrostro's employment record.
Jostens argues that, in addition to not following Jostens' testing procedure, they fired Buenrostro because he was generally a poor employee. It is undisputed that Buenrostro was excellent at setting diamonds. However, Jostens claims that Buenrostro's record further justifies his termination.
Jostens has presented documentary evidence, dated well before Buenrostro made a Plan claim, demonstrating problems he had as an employee. Jostens presented formal disciplinary reports indicating at least 15 different infractions from 1997 to 2000. Jostens also presented evidence of informal verbal and written warnings and a suspension dating from 1985. Generally, the evidence shows: tardiness, early departure from work, insubordination, disruption of the work environment, excessive absences from workstation, and failure to cooperate with coworkers. In fact, Buenrostro's co-workers also rated him poorly on peer review forms.
Most compelling was Albert Lopez's testimony that Buenrostro was generally not a good employee. Lopez was the plant manager when Jostens fired Buenrostro. The evidence showed that Lopez and Buenrostro were also social friends who regularly played racquetball together. The evidence also showed that Lopez made the ultimate decision to terminate Buenrostro after consulting with human resources manager Dave Bauereis. According to Lopez's testimony, Buenrostro was very good at setting stones, but he was bad at being an employee. Lopez testified to the disciplinary actions noted above and indicated that Buenrostro's conduct had a negative impact on the workplace. Lopez ultimately decided to terminate Buenrostro because of his failure to follow company procedure and his general disruption of Jostens' workplace.
Jostens' conduct regarding Buenrostro's Plan claims.
Buenrostro argues that Jostens' conduct while he was receiving benefits proves that Jostens fired him for filing a claim. Despite Buenrostro's work record, if he can prove that one motivating factor behind Jostens' decision to terminate him was a specific intent to retaliate against him for filing a claim, then he will prevail. See Stafford, 123 F.3d at 295; Smith, 971 F. Supp. at 1076. There is some indication that Jostens punished Buenrostro for attending doctors appointments and refused to pay for certain benefits. The Court addresses each incident in turn.
i) Did Jostens wrongfully discipline Buenrostro for attending physical therapy?
Buenrostro testified that Jostens wrongfully disciplined him for being tardy when he went to physical therapy sessions. Buenrostro typically scheduled his required physical therapy sessions during the middle of his afternoon shift. He claims that although he made his best efforts to return to work on time, Jostens would give him disciplinary reports for being tardy after these therapy sessions. Jostens claims that it only disciplined Buenrostro when he returned to work 30 minutes to one hour later than he should have considering the driving time from the therapist's office. Moreover, Jostens claimed that Buenrostro would time his return to work to coincide with his shift's end. Therefore, according to Jostens, Buenrostro would receive overtime pay for any hours worked after he returned from therapy.
Based on the evidence, the Court cannot say that Jostens wrongfully disciplined Buenrostro for returning late from therapy. Like so many incidents presented in this case, the evidence before this court is largely Buenrostro's testimony against Jostens' employees' testimony. However, the Court considers Buenrostro's employment record and documentary evidence, dating well before he made a Plan claim, demonstrating his tendency to break the rules. The Court, as trier of the facts, also considers the credibility of the witnesses produced. The Court is inclined to believe Jostens' version of events and finds that Jostens did not wrongfully discipline Buenrostro for being tardy after returning from therapy.
ii) Did Jostens wrongfully refuse to pay for prescribed treatment?
Buenrostro's most compelling evidence of discriminatory intent is an incident where David Bauereis, the HR manager at the time, refused to authorize a doctor-recommended MRI. Dr. Kristoferson, one of Buenrostro's treating physicians "recommended" a C-spine MRI for pain in Buenrostro's neck and forearm. Dr. Kristoferson recommended the MRI on June 11, 2000 only 12 days before Jostens terminated Buenrostro.
The evidence suggests that Bauereis denied the MRI because he thought that it was related to Buenrostro's 1998 injury. Jostens had properly stopped paying benefits for Buenrostro's 1998 injury before Buenrostro's 2000 injury, at issue in this case. Bauereis testified that he denied the MRI neck scan in 2000 because Buenrostro's 2000 claim was for injury to the shoulder, arm, and lower back. Additionally, a memo introduced into evidence by the Plaintiff supports Bauereis' testimony. The memo memorializes a conversation with Bauereis when he denied the MRI and declares in part "Dr. Kristoferson is recommending Cervical MRI-(Neck)-I spoke with Dave Bauereis regarding this since Rudy's [Plan] Claim on his neck was denied last year. Dave said "NO" — Josten's willnot pay for MRI on his neck."
Although denying the MRI may be some circumstantial evidence of discriminatory intent, the Court cannot give it much weight. Although denying the MRI only 12 days before terminating Buenrostro is suspicious, the timing itself is not dispositive. Additionally, Bauereis' testimony and the memo indicate that he denied the MRI for a non-discriminatory, although perhaps foolish, reason. Furthermore, in another incident Jostens actually paid for medicine not covered by the Plan. In that incident, Buenrostro had a prescription filled at a pharmacy not covered by the Plan. Although the Plan did not obligate Jostens to pay for the improperly filled prescription, Jostens did pay and reminded Buenrostro to use approved pharmacies. Thus, although denying the MRI may be suspicious, the Court does not find that it shows discriminatory intent.
Was Buenrostro still eligible for Plan benefits after he was terminated?
Jostens claims that it could not have terminated Buenrostro with intent to interfere with his Plan benefits or to retaliate for claiming benefits because he would have still been eligible even after being fired. Bauereis testified that the Plan covers all claims for 116 weeks from the date of injury, regardless of whether the employee is terminated. Thus, Buenrostro would have been covered until May 17, 2002 regardless of whether Jostens terminated him or not. Buenrostro's counsel argues that the Plan actually does not cover terminated employees because they cease to be "covered employees" under the Plan.
The Court declines to interpret the Plan's terms because the Plan's interpretation is not ripe for adjudication in this dispute. The parties have submitted no pleadings or motions requesting judicial interpretation of the Plan. Moreover, the parties did not put the Plan's post-termination applicability in dispute because Buenrostro never requested continued benefits under the plan and Jostens never represented that benefits would end upon termination. Furthermore, this case presents the unusual situation where an employee argues that the employer construes the plan too broadly. Thus, the Court concludes that the Plan's interpretation is not ripe for dispute because the case has an insufficient adversarial posture on this issue.
The Court does note that Jostens broad Plan interpretation is credible because of FED. R. EVID. 801(d). Under 801(d), Bauereis' testimony in this case could be used as evidence in future cases involving interpretation of the Plan.
CONCLUSION
The Court finds that Jostens fired Buenrostro because he was a poor employee who violated company policy, not because Jostens intended to retaliate against Buenrostro for filing a Plan claim or to interfere with Buenrostro's Plan benefits. In many respects, this case is about Buenrostro's own testimony against Jostens' employees' testimony. Based on the documentary evidence available, the Court's credibility determinations, and the Court's own reasoning, the Court holds that Jostens did not violate ERISA § 510, 29 U.S.C. §; 1140. The Court finds that Buenrostro did violate an existing Jostens policy that stone setters must test stones they set. Furthermore, the Court finds that Buenrostro had a long history of disciplinary actions and misconduct that disrupted the workplace. The Court does not find that Jostens improperly disciplined Buenrostro for attending physical therapy. Finally, the Court does not find that Jostens improperly refused to pay for any of Buenrostro's benefits under the plan, including the MRI. Consistent with the Court's holding and findings, the Court ORDERS that Buenrostro take nothing in this case.
Buenrostro introduced evidence at the bench trial purporting to show that Jostens engaged in a pattern and practice of discrimination against ERISA claimants. Although the Court has reservations about applying pattern and practice evidence in ERISA cases, the Court notes for the record that it does not find that Buenrostro's evidence shows any pattern or practice of past discrimination against employees claiming ERISA-protected benefits.
So ORDERED