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Subject: INGERSOLL-RAND CO. v. McCLENDON




NOTICE: This opinion is subject to formal revision before publication in
the preliminary print of the United States Reports.  Readers are requested
to notify the Reporter of Decisions, Supreme Court of the United States,
Washington, D. C. 20543, of any typographical or other formal errors, in
order that corrections may be made before the preliminary print goes to
press.
SUPREME COURT OF THE UNITED STATES


No. 89-1298



INGERSOLL-RAND COMPANY, PETITIONER v.
PERRY McCLENDON


on writ of certiorari to the supreme court of texas

[December 3, 1990]



    Justice O'Connor delivered the opinion of the Court. {1}
    This case presents the question whether the Employee Retirement Income
Security Act of 1974 (ERISA), 88 Stat. 829, as amended, 29 U. S. C. MDRV
1001 et seq., pre-empts a state common law claim that an employee was
unlawfully discharged to prevent his attainment of benefits under a plan
covered by ERISA.

I
    Petitioner Ingersoll-Rand employed respondent Perry McClendon as a
salesman and distributor of construction equipment.  In 1981, after
McClendon had worked for the company for nine years and eight months, the
company fired him citing a companywide reduction in force.  McClendon sued
the company in Texas state court, alleging that his pension would have
vested in another four months and that a principal reason for his
termination was the company's desire to avoid making contributions to his
pension fund.  McClendon did not realize that pursuant to applicable
regulations, see 29 CFR MDRV 2530.200b-4 (1990) (break-in-service
regulation), he had already been credited with sufficient service to vest
his pension under the plan's 10-year requirement.  McClendon sought
compensatory and punitive damages under various tort and contract theories;
he did not assert any cause of action under ERISA.  After a period of
discovery, the company moved for, and obtained, summary judgment on all
claims.  The State Court of Appeals affirmed, holding that McClendon's
employment was terminable at will.  757 S. W. 2d 816 (1988).
    In a 5 to 4 decision, the Texas Supreme Court reversed and remanded for
trial.  The majority reasoned that notwithstanding the traditional
employment-at-will doctrine, public policy imposes certain limitations upon
an employer's power to discharge at-will employees.  Citing Tex. Rev. Civ.
Stat. Ann., Title 110B (Vernon 1988 pamphlet), and MDRV 510 of ERISA, the
majority concluded that "the state has an interest in protecting employees'
interests in pension plans."  779 S. W. 2d 69, 71 (1989).  As support the
court noted that "[t]he very passage of ERISA demonstrates the great
significance attached to income security for retirement purposes."  Ibid.
Accordingly, the court held that under Texas law a plaintiff could recover
in a wrongful discharge action if he established that "the principal reason
for his termination was the employer's desire to avoid contributing to or
paying benefits under the employee's pension fund."  Ibid.  The court noted
that federal courts had held similar claims pre-empted by ERISA, but
distinguished the present case on the basis that McClendon was "not seeking
lost pension benefits but [was] instead seeking future lost wages, mental
anguish and punitive damages as a result of the wrongful discharge."  Id.,
at 71, n. 3 (emphasis in original).
    Because this issue has divided state and federal courts, {2} we granted
certiorari, 494 U. S. --- (1990), and now reverse.

II
    "ERISA is a comprehensive statute designed to promote the interests of
employees and their beneficiaries in employee benefit plans."  Shaw v.
Delta Air Lines, Inc., 463 U. S. 85, 90 (1983).  "The statute imposes
participation, funding, and vesting requirements on pension plans.  It also
sets various uniform standards, including rules concerning reporting,
disclosure, and fiduciary responsibility, for both pension and welfare
plans."  Id., at 91 (citation omitted).  As part of this closely integrated
regulatory system Congress included various safeguards to preclude abuse
and "to completely secure the rights and expectations brought into being by
this landmark reform legislation."  S. Rep. No. 93-127, p. 36 (1973).
Prominent among these safeguards are three provisions of particular
relevance to this case: MDRV 514(a), 29 U. S. C. MDRV 1144, ERISA's broad
pre-emption provision; MDRV 510, 29 U. S. C. MDRV 1140, which proscribes
interference with rights protected by ERISA; and MDRV 502(a), 29 U. S. C.
MDRV 1132(a), a " `carefully integrated' " civil enforcement scheme that
"is one of the essential tools for accomplishing the stated purposes of
ERISA."  Pilot Life Ins. Co. v. Dedeaux, 481 U. S. 41, 52, 54 (1987).
    We must decide whether these provisions, singly or in combination,
pre-empt the cause of action at issue in this case.  "[T]he question
whether a certain state action is preempted by federal law is one of
congressional intent.  `The purpose of Congress is the ultimate
touchstone.' "  AllisChalmers Corp. v. Lueck, 471 U. S. 202, 208 (1985)
(internal quotation omitted) (quoting Malone v. White Motor Corp., 435 U.
S. 497, 504 (1978)).  To discern Congress' intent we examine the explicit
statutory language and the structure and purpose of the statute.  See FMC
Corp. v. Holliday, 498 U. S. ---, --- (1990) (slip op., at 3), (citing Shaw
v. Delta Air Lines, Inc., supra, at 95).  Regardless of the avenue we
follow -- whether explicit or implied pre-emption -- this state law cause
of action cannot be sustained.

A
    Where, as here, Congress has expressly included a broadly worded
pre-emption provision in a comprehensive statute such as ERISA, our task of
discerning congressional intent is considerably simplified.  In MDRV 514(a)
of ERISA, as set forth in 29 U. S. C. MDRV 1144(a), Congress provided:

    "Except as provided in subsection (b) of this section, the provisions
of this subchapter and subchapter III of this chapter shall supersede any
and all State laws insofar as they may now or hereafter relate to any
employee benefit plan described in section 1003(a) of this title and not
exempt under section 1003(b) of this title."


    "The pre-emption clause is conspicuous for its breadth."  FMC Corp.,
supra, at ---.  Its "deliberately expansive" language was "designed to
`establish pension plan regulation as exclusively a federal concern.' "
Pilot Life, supra, at 46 (quoting Alessi v. Raybestos-Manhattan, Inc., 451
U. S. 504, 523 (1981)).  The key to MDRV 514(a) is found in the words
"relate to."  Congress used those words in their broad sense, rejecting
more limited pre-emption language that would have made the clause
"applicable only to state laws relating to the specific subjects covered by
ERISA."  Shaw, supra, at 98.  Moreover, to underscore its intent that MDRV
514(a) be expansively applied, Congress used equally broad language in
defining the "State law" that would be pre-empted.  Such laws include "all
laws, decisions, rules, regulations, or other State action having the
effect of law."  MDRV 514(c)(1), 29 U. S. C. MDRV 1144(c)(1).
    "A law `relates to' an employee benefit plan, in the normal sense of
the phrase, if it has a connection with or reference to such a plan."
Shaw, supra, at 96-97.  Under this "broad common-sense meaning," a state
law may "relate to" a benefit plan, and thereby be pre-empted, even if the
law is not specifically designed to affect such plans, or the effect is
only indirect.  Pilot Life, supra, at 47.  See also Alessi v.
Raybestos-Manhattan, Inc., supra, at 525.  Pre-emption is also not
precluded simply because a state law is consistent with ERISA's substantive
requirements.  Metropolitan Life Ins. Co. v. Massachusetts, 471 U. S. 724,
739 (1985).
    Notwithstanding its breadth, we have recognized limits to ERISA's
pre-emption clause.  In Mackey v. Lanier Collection Agency & Service, Inc.,
486 U. S. 825 (1988), the Court held that ERISA did not pre-empt a State's
general garnishment statute, even though it was applied to collect
judgments against plan participants.  Id., at 841.  The fact that
collection might burden the administration of a plan did not, by itself,
compel pre-emption.  Moreover, under the plain language of MDRV 514(a) the
Court has held that only state laws that relate to benefit plans are
pre-empted.  Fort Halifax Packing Co. v. Coyne, 482 U. S. 1, 23 (1987).
Thus, even though a state law required payment of severance benefits, which
would normally fall within the purview of ERISA, it was not pre-empted
because the statute did not require the establishment or maintenance of an
ongoing plan.  Id., at 12.
    Neither of these limitations is applicable to this case.  We are not
dealing here with a generally applicable statute that makes no reference
to, or indeed functions irrespective of, the existence of an ERISA plan.
Nor is the cost of defending this lawsuit a mere administrative burden.
Here, the existence of a pension plan is a critical factor in establishing
liability under the State's wrongful discharge law.  As a result, this
cause of action relates not merely to pension benefits, but to the essence
of the pension plan itself.
    We have no difficulty in concluding that the cause of action which the
Texas Supreme Court recognized here -- a claim that the employer wrongfully
terminated plaintiff primarily because of the employer's desire to avoid
contributing to or paying benefits under the employee's pension fund --
"relate[s] to" an ERISA-covered plan within the meaning of MDRV 514(a), and
is therefore pre-empted.
    "[W]e have virtually taken it for granted that state laws which are
`specifically designed to affect employee benefit plans' are pre-empted
under MDRV 514(a)." Mackey, supra, at 829.  In Mackey the statute's express
reference to ERISA plans established that it was so designed; consequently,
it was pre-empted.  The facts here are slightly different but the principle
is the same: The Texas cause of action makes specific reference to, and
indeed is premised on, the existence of a pension plan.  In the words of
the Texas court, the cause of action "allows recovery when the plaintiff
proves that the principal reason for his termination was the employer's
desire to avoid contributing to or paying benefits under the employee's
pension fund."  779 S. W. 2d, at 71.  Thus, in order to prevail, a
plaintiff must plead, and the court must find, that an ERISA plan exists
and the employer had a pension-defeating motive in terminating the
employment.  Because the court's inquiry must be directed to the plan, this
judicially created cause of action "relate[s] to" an ERISA plan.
    McClendon argues that the pension plan is irrelevant to the Texas cause
of action because all that is at issue is the employer's improper motive to
avoid its pension obligations.  The argument misses the point, which is
that under the Texas court's analysis there simply is no cause of action if
there is no plan.
    Similarly unavailing is McClendon's argument that MDRV 514(a) is
limited by the narrower language of MDRV 514(c)(2) which provides:

    "The term `State' includes a State, any political subdivisions thereof,
or any agency or instrumentality of either, which purports to regulate,
directly or indirectly, the terms and conditions of employee benefit plans
covered by this subchapter."  29 U. S. C. MDRV 1144(c)(2).


    McClendon argues that MDRV 514(c)(2)'s limiting language causes MDRV
514(a) to pre-empt only those state laws that affect plan terms,
conditions, or administration.  Since the cause of action recognized by the
Texas court does not focus on those items but rather on the employer's
termination decision, Mc Clendon claims that there can be no pre-emption
here.
    The flaw in this argument is that it misreads MDRV 514(c)(2) and
consequently misapprehends its purpose.  The ERISA definition of "State" is
found in MDRV 3(10), which defines the term as "any State of the United
States, the District of Columbia, Puerto Rico, the Virgin Islands, American
Samoa, Guam, Wake Island, and the Canal Zone."  29 U. S. C. MDRV 1002(10).
Section 514(c)(2) expands, rather than restricts, that definition for
pre-emption purposes in order to "include" state agencies and
instrumentalities whose actions might not otherwise be considered state
law.  Had Congress intended to restrict ERISA's pre-emptive effect to state
laws purporting to regulate plan terms and conditions, it surely would not
have done so by placing the restriction in an adjunct definition section
while using the broad phrase "relate to" in the pre-emption section itself.
Moreover, if MDRV 514(a) were construed as McClendon urges, the "relate to"
language would be superfluous -- Congress need only have said that "all"
state laws would be pre-empted.  Moreover, our precedents foreclose this
argument.  In Mackey the Court held that ERISA pre-empted a Georgia
garnishment statute that excluded from garnishment ERISA plan benefits.
Mackey, supra, at 828, and n. 2, 829.  Such a law clearly did not regulate
the terms or conditions of ERISA-covered plans, and yet we found
pre-emption.  Mackey demonstrates that MDRV 514(a) cannot be read so
restrictively.
    The conclusion that the cause of action in this case is preempted by
MDRV 514(a) is supported by our understanding of the purposes of that
provision.  Section 514(a) was intended to ensure that plans and plan
sponsors would be subject to a uniform body of benefit law; the goal was to
minimize the administrative and financial burden of complying with
conflicting directives among States or between States and the Federal
Government.  Otherwise, the inefficiencies created could work to the
detriment of plan beneficiaries.  FMC Corp., 498 U. S., at --- (citing Fort
Halifax, 482 U. S., at 10-11); Shaw, 463 U. S., at 105, and n. 25.
Allowing state based actions like the one at issue here would subject plans
and plan sponsors to burdens not unlike those that Congress sought to
foreclose through MDRV 514(a).  Particularly disruptive is the potential
for conflict in substantive law.  It is foreseeable that state courts,
exercising their common law powers, might develop different substantive
standards applicable to the same employer conduct, requiring the tailoring
of plans and employer conduct to the peculiarities of the law of each
jurisdiction.  Such an outcome is fundamentally at odds with the goal of
uniformity that Congress sought to implement.

B
    Even if there were no express pre-emption in this case, the Texas cause
of action would be pre-empted because it conflicts directly with an ERISA
cause of action.  McClendon's claim falls squarely within the ambit of
ERISA MDRV 510, which provides:

    "It shall be unlawful for any person to discharge, fine, suspend,
expel, discipline, or discriminate against a participant or beneficiary for
exercising any right to which he is entitled under the provisions of an
employee benefit plan . . . or for the purpose of interfering with the
attainment of any right to which such participant may become entitled under
the plan . . . ."  29 U. S. C. MDRV 1140 (emphasis added).


    By its terms MDRV 510 protects plan participants from termination
motivated by an employer's desire to prevent a pension from vesting.
Congress viewed this section as a crucial part of ERISA because, without
it, employers would be able to circumvent the provision of promised
benefits.  S. Rep. No. 93-127, pp. 35-36 (1973); H. R. Rep. No. 93-533, p.
17 (1973).  We have no doubt that this claim is prototypical of the kind
Congress intended to cover under MDRV 510.
    "[T]he mere existence of a federal regulatory or enforcement scheme,"
however, even a considerably detailed one, "does not by itself imply
pre-emption of state remedies."  English v. General Electric Co., 496 U. S.
---, --- (1990) (slip op., at 14).  Accordingly, " `we must look for
special features warranting pre-emption.' "  Ibid. (quoting Hills borough
County v. Automated Medical Laboratories, Inc., 471 U. S. 707, 719
(1985)).
    Of particular relevance in this inquiry is MDRV 502(a) -- ERISA's civil
enforcement mechanism.  That section as set forth in 29 U. S. C. 15
1132(a)(3), (e), provides, in pertinent part:

    "A civil action may be brought --
    "(3) by a participant . . . (A) to enjoin any act or practice which
violates any provision of this subchapter or the terms of the plan, or (B)
to obtain other appropriate equitable relief (i) to redress such violations
or (ii) to enforce any provisions of this subchapter or the terms of the
plan;

    . . . . .



    "(e) (1) Except for actions under subsection (a)(1)(B) of this section,
the district courts of the United States shall have exclusive jurisdiction
of civil actions under this subchapter brought by . . . a participant."
(Emphasis added.)


    In Pilot Life we examined this section at some length and explained
that Congress intended MDRV 502(a) to be the exclusive remedy for rights
guaranteed under ERISA, including those provided by MDRV 510:

    "[T]he detailed provisions of MDRV 502(a) set forth a comprehensive
civil enforcement scheme that represents a careful balancing of the need
for prompt and fair claims settlement procedures against the public
interest in encouraging the formation of employee benefit plans.  The
policy choices reflected in the inclusion of certain remedies and the
exclusion of others under the federal scheme would be completely undermined
if ERISA-plan participants and beneficiaries were free to obtain remedies
under state law that Congress rejected in ERISA.  `The six carefully
integrated civil enforcement provisions found in MDRV 502(a) of the statute
as finally enacted . . . provide strong evidence that Congress did not
intend to authorize other remedies that it simply forgot to incorporate
expressly.' "  481 U. S., at 54 (quoting Massachu setts Mutual Life Ins.
Co. v. Russell, 473 U. S. 134, 146 (1985)).


    It is clear to us that the exclusive remedy provided by MDRV 502(a) is
precisely the kind of " `special featur[e]' " that " `warrant[s]
pre-emption' " in this case.  English, supra, at --- (slip op., at 14); see
also Automated Medical, supra, at 719.  As we explained in Pilot Life,
ERISA's legislative history makes clear that "the pre-emptive force of MDRV
502(a) was modeled on the exclusive remedy provided by MDRV 301 of the
Labor Management Relations Act, 1947 (LMRA), 61 Stat. 156, 29 U. S. C. MDRV
185." 481 U. S., at 52; id., at 54-55 (citing H. R. Conf. Rep. No. 93-1280,
p. 327 (1974)).  "Congress was well aware that the powerful pre-emptive
force of MDRV 301 of the LMRA displaced" all state-law claims, "even when
the state action purported to authorize a remedy unavailable under the
federal provision."  Pilot Life, 481 U. S., at 55.  In Metropolitan Life
Ins. Co. v. Taylor, 481 U. S. 58 (1987), we again drew upon the parallel
between MDRV 502(a) and MDRV 301 of the LMRA to support our conclusion that
the pre-emptive effect of MDRV 502(a) was so complete that an ERISA
pre-emption defense provides a sufficient basis for removal of a cause of
action to the federal forum notwithstanding the traditional limitation
imposed by the "well-pleaded complaint" rule.  Id., at 64-67.
    We rely on this same evidence in concluding that the requirements of
conflict pre-emption are satisfied in this case.  Unquestionably, the Texas
cause of action purports to provide a remedy for the violation of a right
expressly guaranteed by MDRV 510 and exclusively enforced by MDRV 502(a).
Accordingly we hold that " `[w]hen it is clear or may fairly be assumed
that the activities which a State purports to regulate are protected" by
MDRV 510 of ERISA, "due regard for the federal enactment requires that
state jurisdiction must yield.' "  Cf. Lingle v. Norge Division of Magic
Chef, Inc., 486 U. S. 399, 409, n. 8 (1988).
    The preceding discussion also responds to the Texas court's attempt to
distinguish this case as not one within ERISA's purview.  Not only is MDRV
502(a) the exclusive remedy for vindicating MDRV 510-protected rights,
there is no basis in MDRV 502(a)'s language for limiting ERISA actions to
only those which seek "pension benefits."  It is clear that the relief
requested here is well within the power of federal courts to provide.
Consequently, it is no answer to a pre-emption argument that a particular
plaintiff is not seeking recovery of pension benefits.
    The judgment of the Texas Supreme Court is reversed.

It is so ordered.





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1
    Justice Marshall, Justice Blackmun, and Justice Stevens join Parts I
and II-B of this opinion.

2
    See, e. g., Fitzgerald v. Codex Corp., 882 F. 2d 586 (CA1 1989) (ERISA
pre-empts state wrongful discharge actions premised on employer
interference with the attainment of rights under employee benefit plans);
Pane v. RCA Corp., 868 F. 2d 631 (CA3 1989) (same); Sorosky v. Burroughs
Corp., 826 F. 2d 794 (CA9 1987) (same).  Accord, Conaway v. Eastern
Associated Coal Corp., --- W. Va. ---, 358 S. E. 2d 423 (1986).  Contra, K
Mart Corp. v. Ponsock, 103 Nev. 39, 732 P. 2d 1364 (1987); Hovey v.
Lutheran Medical Center, 516 F. Supp. 554 (EDNY 1981); Savodnik v.
Korvettes, Inc., 488 F. Supp. 822 (EDNY 1980).