Partial Plan Termination Not Discriminatory

September 6, 2005 ( - A district court judge threw out a participant's charge that he was specifically discriminated against when his employer terminated its 401(k) plan for a group of employees which included him.

Timothy Carter filed charges of race, age, and disability discrimination against RHM Teleservices, Inc. because he was placed on an “unlawful Development plan” and had received “unlawful counseling threatening termination”, according to the court opinion.   He also claimed the company discriminated against him and violated ERISA when it terminated the plan for all telephone service representatives.

In his opinion, US District Judge Royal Furgeson of the US District Court for the Western District of Texas  found that Carter did not provide proof that the employer specifically discriminated against him when it terminated the plan for a group of employees.   Furgeson also said the company did not deny Carter his rights to receive benefits because he was still able to receive the benefits he had already accrued before the partial plan termination.

Furgeson also agreed with the company that Carter had not exhausted all his remedies with the Equal Employment Opportunity Commission (EEOC) because his initial claim with them did not mention racial discrimination.   Therefore, he granted the motion to dismiss this claim as well.

Finally, Carter’s claims under the US and Texas constitutions were dismissed because there was no evidence that the state had “significantly involved itself with invidious discriminations” since the company was not “a state actor or acting on behalf of the state.”

The opinion in Carter v. RMH Teleservices Inc., W.D. Texas, No. SA-04-CA-1130RF, 8/10/05 can be found  here .