Dismissal Prior to Reduction May Be 'Pretextual'

January 20, 2004 (PLANSPONSOR.com) - Terminating an employee for personal use of a corporate credit card may have been pretextual, meant to obfuscate the company's interference with the employee's severance benefits.

US District Judge Kathryn Vratil of theUS District Court for the District of Kansas found that discharging an employee less than two weeks before Honeywell International Inc. announced a reduction in force program raised “an inference of intentional, prohibited activity” in violation of Section 510 of the Employee Retirement Income Security Act (ERISA).   Thus the plaintiff’s claim was allowed to proceed , Vratil ruled in dismissing summary judgment for Honeywell to the plaintiff’s ERISA claim.   Summary judgment was granted to Honeywell in the plaintiff’s Age Discrimination in Employment Act (ADEA) claim.

InHuske v. Honeywell International Inc., the plaintiff offered four reasons why Honeywell’s dismissal were pretextual:

  • the plaintiff had used the corporate credit card in question for personal purchases since 1998 and the company had never told the plaintiff to cease use of the card for this reason previously
  • following a delinquency in June 2001, Honeywell sent a letter to the plaintiff to asking for payment of the delinquency but did not mention the possibility of disciplinary action
  • Honeywell did not discipline plaintiff until after the reduction had been announced
  • Honeywell stood to save money in not having to pay severance to the plaintiff by terminating employment prior to the reduction announcement.

Despite the reasons offered by the plaintiff, the court still foundHoneywell had a legitimate reason for firing the plaintiff. However, the proximity in time between when it fired her for her credit card use and the announcement of the workforce reduction raised an inference that Honeywell fired the plaintiff to prevent her from obtaining severance benefits.

“Viewing the record in the light most favorable to plaintiff, it appears that [the plaintiff] had used [the] card for personal purchase – in violation of company policy – since 1998. Honeywell took no action with regard to multiple years of misuse,” Vratil said.

“Honeywell learned that plaintiff’s account was delinquent no later than June 4, 2001. It did not notify [her supervisors] of the delinquency until October 8, 2001, however, and it did not discipline plaintiff until right before the [workforce reduction],” Vratil continued.

The case is Huske v. Honeywell International Inc. , District of Kansas, Number 03-2003-KHV.