Retaliation for ERISA Complaints about Retirement Account Misconduct

Retaliation for ERISA Complaints about Retirement Account Misconduct

It’s not unusual for employers to retaliate for complaining.  Retaliation is designed to punish the complainer, and send a message to others about how they will be treated.  It is quite effective, especially in a sluggish economy, where employees don’t feel confident that they can get a new job.

Fortunately, several employee protection laws have anti-retaliation provisions.  Interestingly enough, retaliation claims are often easier to prove and to get judges riled up over than are the underlying complaints.  A sex discrimination complaint may be hard to prove, but the swift retribution for going to the EEOC seems more obvious.

That seems to have been the case in a recent decision by the Seventh Circuit Court of Appeals.  A vice-president of Junior Achievement discovered that his employer was withholding money from his pay for retirement savings, but not depositing it in his accounts.  He brought it up with the board, and shortly thereafter he was paid enough to make up for the missing deposits.  Two months later he withdrew the money from one of the deferred contribution accounts.  (You can hardly blame him; the organization had previously secretly kept his retirement money until he complained.)  But once Junior Achievement discovered he’d drawn from the deferred compensation account, the employee was fired, and its lawyer demanded that he restore the money.  He showed that his contract permitted the withdrawal, and Junior Achievement backed down on the demand, but  refused to hire him back.

The employee lost at the trial court, but the appellate court required the trial court to reconsider.  On appeal, the court said that the employee’s initial inquiry about the irregularities was enough of a complaint to support a claim of retaliation.  The employee now has the right to have a judge decide whether the firing was caused by his calling the employer on its wrongdoing.

Retaliation, to succeed in court, has to be based on a law that forbids retaliation. Retaliating against someone who has become a personal enemy for some reason is legal, because it falls into the vast employment at will arena.  Some laws still require a written complaint, or a complaint to an agency outside the bounds of the employer.  A written complaint is helpful for proof purposes in any event.  If you wonder what you have to do to get protection from expected retaliation, you might want to contact a lawyer.

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