Employee suspended without pay ineligible for ERISA benefits

Employee suspended without pay ineligible for ERISA benefits
Pollett v Rinker Materials Corp., USCA 6th Circuit, #05-6459

William Pollett was suspended without pay pending the investigation of allegations that he had failed to respond to an equipment malfunction while at work in the proper manner. While on suspension without pay his physician determined that Pollett unable to work due to numerous physical ailments. That same day, Pollett notified Rinker Materials that he was unable to work and provided Rinker with his physician’s written assessment.

Pollett then applied for “short term disability benefits” under Rinker Materials’ ERISA plan. The plan provides up to 70% of an employee’s basic weekly earnings commencing on the fifteenth day of continuous disability, for a maximum of 12 weeks.

The plan administrator disapproved his application. When Pollett sued, a federal district court judge dismissed Pollett’s challenge to the plan administrator’s determination.

Sustaining the lower court’s decision, the Circuit Court said that in order to qualify for short term disability benefits under the plan, an employee must be “actively at work” when he notifies his employee of a disability. Under the plan, “[a]n employee will be considered actively at work if he was actually at work on the day immediately preceding: . . . an excused leave of absence . . . .”

Pollett contended that he was an “active employee” and thus eligible for benefits because “A suspension without pay equates with an excused leave of absence” and he was at work the day before Rinker suspended him.

The court said “While novel, Pollett’s argument is unpersuasive” It rejected Pollett’s claim that he was “actively at work” for the purposes of eligibility for short-term disability benefits under Rinker’s ERISA plan because equating “a suspension without pay with an excused leave defies common sense.”

In the words of the court, “A suspension without pay constitutes a unilateral penalty which an employer imposes upon an employee” while “an excused leave is more akin to a bilateral understanding during which an employer grants an employee permission to be absent from work.” In this instance, said Circuit Court “the plain meaning of the phrase ‘suspended without pay’ denotes Rinker barred Pollett from employment and all its attendant privileges during the period of his suspension.

Under the facts of this case, the court said that it had little difficulty concluding that an ordinary person would not view Pollett’s suspension without pay as an excused leave of absence and dismissed his appeal.

For the full text of the decision, go to:
http://nypublicpersonnellawarchives.blogspot.com/2007/02/suspended-without-pay-employee-not.html