IBM Did Not Fire an Employee for Future Dependent Disabilities

June 7, 2004 ( - An employee with extensive medical bills for his dependants was not fired for the medical history; rather he was terminated for poor performance.

The U.S. 7th Court of Appeals, affirming a lower court’s opinion, found IBM Corp acted within its province in terminating the employee for poor job performance.    The former employee, in Larimer v. International Business Machines Corp. , had contended he was let go due to the cost associated with taking care of his premature twin daughters; a firing that was in violation of two federal laws.

Thomas Larimer, a salesman for IBM, was fired and brought suit against the company under both the Americans with Disabilities Act (ADA) and the Employee Retirement Income Security Act (ERISA).   Larimer alleged IBM violated ADA by firing him because his twin daughters were disabled.   This was after the two girls were born premature and required extensive medical treatment totaling almost $200,000, which was all picked up by IBM’s employee health plan.   Further, the doctors warned that Larimer’s daughters had some probability of developing “serious physical or mental handicaps as they grow older.”

As for his ERISA claim, Larimer alleged IBM was in violation of the Section 510 Act after he was fired for racking up huge medical bills at the company’s expense.  

Appeals’ Decision

Circuit Judge Richard Posner, writing for the court, found IBM did not terminate Larimer’s employment due to his daughters’ medical expenses and the possibly for even higher costs in the future. Rather, the court ruled IBM firmed Larimer for poor work performance.

>The theme of the appellate court’s opinion was one of a lack of supporting evidence to any of Larimer’s claims.   Examining Larimer’s ADA claim, the appeallate court outlined three situations of potential discrimination that would fall under the intended scope of ADA:

  • “expense” – an employee is fired because a family member has a disability that is costly to the employer’s health plan;
  • “disability by association” – an employee is fired because the company fears the employee will contract a disease from their family;
  • “distraction” -an employee who is fired because they become inattentive at work due to a family member’s medical situation.

>The court peremptorily ruled out the later two situations and focused on the first. Additionally, the court said there was no evidence that Larimer was discharged out of IBM’s concern about mounting health costs for Larimer’s daughters.   Despite Larimer’s arguments to the contrary the court found the company had no stake in firing an “expensive employee.”

>Additionally, Larimer raised questions about IBM’s ERISA compliance and again the court found the claims to be without merit.   Larimer argued IBM fired him because of the “annoyance at having to pay so much,” and the potential for the medical costs to balloon in the future, a claim which the court rephrased as “the claim is that IBM retaliated against Larimer for exercising his rights under IBM’s welfare benefits plan.”

As in the ADA claims the court found a lack of sufficient evidence to support his contention.   “He has no evidence of this, just as he has no evidence of disability discrimination,” the court said.   To have proved his ERISA claims, the court said, Larimer would have had to show one of two things:

  • a similarly situated employee of IBM who had not applied for substantial welfare benefits yet had been treated better than he;
  • he was performing his job in a manner that satisfied his employer’s legitimate expectations.

In the end, the court rules Larimer, “strikes out on both counts.”

“His discharge had nothing to do with the expense incurred by IBM with respect to his daughters,” the appeals court concluded.

The case isLarimer v. International Business Machines Corp., Seventh Circuit, No. 03-2256.