ERISA Does Not Preempt Executive Benefit Claims

A federal judge in the US District Court for the Western District of Virginia, in remanding the case back to state court, found that since the former employee sought damages from his employer and not from the benefit plan’s administrator, then the claims could not be brought under ERISA.

The case arose after Comdial Corp. – the defendant – informed William Grover – the plaintiff – that he was being dismissed for cause in July 2000.   As an executive of the company, Grover participated in an executive severance plan that would have been forfeited under the terms of the dismissal.

Grover then filed suit against the company in Virginia state court, alleging a breach of the employment contract.   However, Comdial moved for the case to be removed to federal court, claiming that Grover’s claims were preempted by ERISA.

Stating the history of the case is “long and tortured, evoking the well-known image of Mr. Dickens’ Jarndyce and Jarndyce, a case in equity dragging ‘its dreary length before the court, perennially hopeless,” Justice James Michael Jr determined that because the plaintiff’s charge remains a breach of contract case, it should be determined in the state courts.   This came after the case was remanded to state court and the plaintiff added a claim of “tortious interference with a contractual relationship” with his future retirement benefits.