A Claim By Any Other Name Would Still Be Pre-empted By ERISA
You and I make a deal: You pay me monthly installments and when an event occurs, I will pay you a set amount of money (we’ll call this deal “life insurance”). After several years, I notify you that you have failed to return a required document, allowing me to void the life insurance. The event occurs and I refuse to pay. In most circumstances you could potentially make claims against me for negligent misrepresentation or fraud; constructive fraud; and negligent or intentional infliction of emotional distress. But if I were your employer, all of these claims would be preempted by the Employee Retirement Income Security Act (ERISA).
In Prince v. Sears Holdings Corp., No. 16-1075 (4th Cir. Jan. 27, 2017), the 4th Circuit reiterated that regardless of what a plaintiff calls a claim or how the plaintiff frames the claim, if ERISA applies, then ERISA pre-empts that claim. In 2011, Prince purchased a life insurance policy on his wife through his employer, Sears. Sears sent a confirmation letter and began withholding premiums from Prince’s pay. Later that year, Mrs. Prince was diagnosed with cancer. In 2012, Prince checked his benefits summary with Sears, which confirmed the life insurance. In 2013, Sears notified Prince that he had not returned a required document in 2011—Prince denied receiving the document but had no proof it had not been sent—and, therefore, Prince’s insurance would be canceled. Mrs. Prince died in 2014 and Sears denied Prince’s claim on the insurance policy.