Be Careful Of Comments On Healthcare Costs: Sixth Circuit Denies Summary Judgment On ERISA Interference And Retaliation Claims Based On Management Comments That Healthcare Costs Are Rising

Seyfarth Synopsis: An employer, which had paid medical expenses on behalf of an employee's dependent son, made comments about the company's rising healthcare costs several months before firing the employee. The Sixth Circuit found this was enough to warrant a trial on the employee's ERISA interference and retaliation claims.

In Stein v. Atlas Industries, Inc., No. 17-3737, the Sixth Circuit reversed the Northern District of Ohio, which had dismissed the plaintiff's ERISA interference and retaliation claims. Plaintiff's son, who suffers from a permanent and debilitating neurological condition, was hospitalized for four months in 2013. As an employee of Atlas Industries, Inc., plaintiff participated in a group medical plan that covered his son's medical expenses. Atlas's plan was partially self-insured, and the company paid approximately $250,000 for the son's care.

Seven months later, plaintiff did not call Atlas or report to work for three consecutive days after he had been released to work following a medical leave. Atlas's handbook provided that any employee absent for three consecutive days without permission would be automatically fired. After plaintiff's third no-call/no-show day, his supervisor fired him.

Plaintiff sued, alleging that the company had fired him because of his son's medical expenses, and thus that the company was liable for both retaliation and interference under ERISA. In support, plaintiff pointed to evidence that (1) Atlas had expressed concerns about "skyrocket[ing]" medical costs in employee notices; (2) an Atlas Vice President had told him in 2013 that he hoped his son would be released soon because the medical costs were getting expensive for the company; and (3) an Atlas human resources director showed another employee the son's...