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Seventh Circuit Affirms Denial of Employee’s ERISA Benefits Because of a Breach of Fiduciary Duty

James Brooks was severely injured in a work accident in which he lost his left hand, wrist and forearm. Brooks was an assembly-line operator for Prairie Packaging Inc.  The on-the-job incident resulted in the filing of a worker’s compensation claim in 1999, the year of this accident. In addition, Brooks sought recovery for a permanent and total disability because of the loss of his limb. 

Prairie Packaging kept Brooks employed despite his inability to work, treating him as a disabled employee on company-approved leave of absence.  In the meantime, Brooks continued to receive healthcare coverage under the company’s employee-benefits plan.

Brooks’s medical costs were paid by the employer-placed health insurance and supplemented by payments through the worker’s compensation action. 

In 2007, Pactiv Corporation bought Prairie Packaging and continued the arrangement with Brooks for a few years.  However, in early 2010, Pactiv sent Brooks a letter instructing him to submit documentation verifying his ability to return to work; failure to submit the required verification would mean the termination of his employment. Because his injury was totally disabling, Brooks did not submit the required verification and Pactiv fired him. As a consequence, he lost his healthcare coverage under the company’s employee-benefits plan.

Brooks filed this lawsuit against Pactiv and Prairie Packaging, claiming under ERISA (Employee Retirement Income Security Act) for benefits due and breach of fiduciary duty. He also made claim for retaliatory discharge under Illinois law. The U.S. District Court for the Northern District of Illinois dismissed the complaint for failure to state a claim and Brooks appealed to the Seventh U.S. Circuit Court of Appeals. 

The court of appeals found that Brooks did state a claim under Illinois law for retaliatory discharge.  The court stated that Illinois recognizes a limited cause of action for discharges committed in retaliation for an employee’s pursuit of a worker’s compensation claim.  The court also stated, “The parties were at an impasse in Brooks’s long-running worker’s compensation claim and one plausible interpretation of Pactiv’s ultimatum was that it was retaliatory.”  Accordingly, the case was reinstated for further disposition on the retaliatory discharge claim only.

Brooks v. Pactiv Corp., No. 12-1155 (U.S. Court of Appeals, 7th Cir. Sept. 6, 2013).

Kreisman Law Offices has been handling commercial litigation and work accidents for individuals, families and businesses for more than 37 years in and around Chicago, Cook County and its surrounding areas, including Chicago (Archer Heights, Bridgeport, Chinatown, East Village, Gold Coast, Greektown, Jackson Park), Morton Grove, Aurora, Lansing, Naperville, Chicago Ridge, Bolingbrook, Downers Grove, Evanston and Elgin, Ill.

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