Federal Appellate Court Upholds ERISA Claim Dismissal

The 7 ^th U.S. Circuit Court of Appeals decided Evelyn Benders never proved it was the true intent of the Bellows and Bellows (B&B) firm to save itself the 401(k) contributions by changing her work classification.

According to the ruling, Benders was romantically involved with Joel Bellows, the law firm’s owner and president, for five years. After the relationship ended, Bellows told Benders she needed to leave the firm and eventually hired an outside consultant to share her office responsibilities, the court said.

In December 2003, Bellows offered to pay off a civil judgment against Benders instead of making a 401(k) contribution for 2003, but told her she would have to be reclassified as an independent contractor. Benders claimed she agreed to being reclassified for a limited period of time, but the firm never reinstated her employee status.

In February 2004, Benders, an African American, filed a claim with the Illinois Equal Opportunity Commission, alleging race and age discrimination. She said the filing contributed to her work environment growing more hostile. Shortly after that, the firm claimed she had become insubordinate and fired her.

“Given the reality of the sticky situation at (the law firm) – where amour was hot and heavy in the air—it’s more than a bit unrealistic to think that the firm shoved Benders out the door so it could save a few bucks by dodging a 401(k) contribution to a pension plan,” wrote Circuit Judge Terence T. Evans, for the court. “Summary judgment was properly granted to B&B on Benders’ ERISA claim.”

While the 7 ^th Circuit agreed with the dismissal of the ERISA claim, it reversed the dismissal by U.S. District Judge Samuel Der-Yeghiayan of the U.S. District Court for the Northern District of Illinois of Benders’ retaliatory firing claims.

The 7 ^th Circuit ruling in Benders v. Bellows and Bellows, 7th Cir., No. 06-1487, 2/12/08 is here .