Informal Inquiry Protected Under ERISA

A court ruled that an informal inquiry by a plan participant about mismanagement of plan assets is protected activity under the Employee Retirement Income Security Act (ERISA).

The 7th U.S. Circuit Court of Appeals found that the wording in Section 510 of ERISA is vague—particularly the definition of “inquiry”—and that when dealing with ambiguous anti-retaliation provisions, it is supposed to favor the protection of employees. ERISA Section 510 prohibits retaliation “against any person because he has given information or has testified or is about to testify in any inquiry or proceeding relating to this [Act].”

The appellate court dismissed a district court’s opinion in favor of Junior Achievement of Central Indiana Inc. and sent it back for further proceedings. Junior Achievement argued that former vice president Victor George could not make a Section 510 claim because Section 510 only protects testimony in formal proceedings and formal inquiries by the employer of the participant, and not by the participant of the employer. 

The appellate court found that the best reading of Section 510 is one that divides the world into the informal sphere of giving information in or in response to inquiries and the formal sphere of testifying in proceedings. It determined that George’s complaints constituted an “inquiry” because Junior Achievement responded to them rather than ignoring them.



The court also cited a 9th U.S. Circuit Court of Appeals opinion that said reporting misconduct is a necessary step in the start of any formal inquiry and that if informal beginnings are not covered in this section, employers would then be inclined to dismiss employees as soon as they complained. The 7th Circuit also disagreed that the inquiry must be asked of the employee rather than the employer, finding that the statute does not specify who asks the question or initiates the inquiry.

In the summer of 2009, George discovered that money withheld from his pay was not being deposited into his retirement account and health savings account. He lodged complaints with Junior Achievement’s accountants and executives, including Jennifer Burk, its president and chief investment officer. He contacted the U.S. Department of Labor but declined to file a written complaint. In October, George addressed the company’s board. That month he received checks for around $2,600 to compensate him for the missed deposits plus interest.

George had an employment agreement until June 30, 2010, but in late 2009, he discussed with Burk and others retiring in April 2010. On January 4, 2010, Burk told George not to come to work the next day. George claims Junior Achievement terminated his employment because he questioned executives about the missing money from his accounts.

The 7th Circuit’s opinion is here.