Re Ingersoll -Rand Co. V. McClendon, Page 57 Essays - Business, Law

Re: Ingersoll -Rand Co. v. McClendon, page 57 Date: 1-4-99 FACTS: Perry McClendon, plaintiff, was an employee of Ingersoll-Rand Co., defendant, for nine years. Plaintiff felt he was fired short of his ten years of service so defendant could avoid pension obligations. Plaintiff sued for wrongful discharge. Defendant argues that plaintiff's common law claim was preempted by the ERISA (Employee Retirement Income Security Act). ARGUMENTS: Plaintiff: Wrongful discharge Defendant: Terminated at will and common law case was preempted by ERISA provisions. ISSUE(S) An ERISA plan exists and the employer had a pension-defeating motive in terminating the employment of plaintiff. HOLDING: EIRSAs explicit language and its structure and purpose demonstrate a congressional intent to pre-empt a state common law claim that an employee was unlawfully discharged to prevent his attainment of benefits under an ERISA covered plan. DECISION: In favor of Defendant. ANALYSIS: General Rule of Law: The impact of this case of business today is noticeable in actions where you see companies offering early retirement packages to reduce workforce size and also avoid wrongful termination suits. This case has held corporations more accoutable for terminating. Case study states if plaintiff would have sued for pension benefits instead of wrongful termination the outcome would have been in his favor. Rule applied to facts: The Texas court granted the company summary judgment and the State Court of Appeals affirmed, ruling that plaintiff'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 pre-empted by the Employee Retirement Income Security Act of 1974, the court reasoned that plaintiff was seeking future lost wages, recovery for mental anguish, and punitive damages rather than lost pension benefits. Dissenting opinion: None given