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Mary C. Henderson, An Individual v. Upmc

April 5, 2011

MARY C. HENDERSON, AN INDIVIDUAL, ON BEHALF OF HERSELF AND ALL OTHERS SIMILARLY SITUATED, APPELLANT
v.
UPMC, DOING BUSINESS AS UNIVERSITY OF PITTSBURGH MEDICAL CENTER; UPMC GROUP; UPMC PRESBYTERIAN SHADYSIDE; UPMC SOUTHSIDE; UPMC ST. MARGARET; UPMC MCKEESPORT; UPMC PASSAVANT; UPMC BRADDOCK; UPMC HORIZON; UPMC NORTHWEST; UPMC BEDFORD MEMORIAL; MAGEE WOMENS HOSPITAL OF UPMC; UPMC MERCY; UPMC 401A RETIREMENT SAVINGS PLAN; UPMC 403B RETIREMENT SAVINGS PLAN; UPMC BASIC RETIREMENT PLAN



On Appeal from the United States District Court for the Western District of Pennsylvania (D.C. No. 3-09-cv-00187) Magistrate Judge: Honorable Cathy Bissoon

The opinion of the court was delivered by: Sloviter, Circuit Judge.

PRECEDENTIAL

Argued December 16, 2010

Before: SLOVITER, GREENAWAY, JR., and GREENBERG, Circuit Judges

OPINION OF THE COURT

Under Section 209(a)(1) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1059(a)(1), an employer has an obligation to maintain records sufficient to determine the benefits due or which may become due to each of its employees. This appeal concerns the circumstances under which an employer can be held liable for failing to maintain such records. Appellant Mary Henderson brought this putative class action against the University of Pittsburgh Medical Center ("UPMC"), alleging that UPMC failed to keep records of the hours Henderson had worked. The District Court held that Henderson failed to state a claim because under the applicable employee benefit plans, UPMC was only required to keep records of wages paid and not hours worked. Henderson appeals.

I.*fn1

Henderson‟s Second Amended Complaint alleges that while employed as a registered nurse for UPMC, she and other nurses were required to work during their thirty-minute unpaid "meal breaks," but were never compensated for this work. App. at 31. In addition, UPMC began increasing the number of patients assigned to each nurse per shift. Nurses were allocated thirty minutes of paid time at the beginning of their shifts to review the status reports of the patients they would cover during the upcoming shift. The complaint alleges that as a result of the increased patient load, nurses such as Henderson had to begin arriving at work and reviewing the status reports twenty to forty minutes prior to the official start of their shift. Even though the nurses clocked in when they arrived, UPMC would not start crediting the nurses with paid work time until the official start of the shift. Henderson filed a lawsuit in state court alleging that UPMC violated the Pennsylvania Wage Payment and Collection law and the Pennsylvania Minimum Wage Act. Henderson v. UPMC, No. GD-09-13303 (Court of Common Pleas, Allegheny County, Pa. filed July 23, 2009).*fn2 That suit remains pending.

She also brought this ERISA action based on her participation in three retirement plans, all administered and sponsored by UPMC. Under the 401A and 403B Retirement Savings Plans, defined contribution plans which the parties refer to collectively as the "Savings Plan," plan participants may direct a percentage of their compensation to their individual savings accounts. Under those plans, after the employee has worked for a year UPMC will pay into the account of each participating employee a matching contribution equal to fifty percent of the amount of the participant‟s contribution, subject to a ceiling equal to a percentage of the participant‟s compensation. It follows that both the contributions of the participating employees and UPMC are based on a percentage of the "Participant‟s Compensation." App. at 221, 340. "Compensation" is defined as "the Employee‟s compensation as reportable on Box 1 of Form W-2." App. at 207, 324.

UPMC also offers a third plan, the Basic Retirement or Cash Balance Plan, which is a defined benefit plan funded entirely by UPMC. Each year in which a participant is paid for at least 1,000 hours of work, the participant earns retirement credits. Each retirement credit is based on a percentage multiplied by the participant‟s pay, with the percentage being based upon the participant‟s age and years of service. The plan provides that "Retirement Credits shall be applied on the basis of the Employee‟s Compensation earned while an Active Participant" in the Cash Balance Plan during the Plan Year. App. at 521. "Compensation" here too is defined as "an Active Participant‟s compensation as reportable in Box 1 of Form W-2." App. at 502.

Henderson contends that these plans and the ERISA statute which controls them require that UPMC, as an employer, keep records of the uncompensated hours she worked and, as a fiduciary, to investigate and ensure that contributions allegedly corresponding to the hours worked were being provided so that the relevant fund can distribute benefits to Henderson when she retires. Specifically, she alleges that "UPMC failed to maintain records . . . sufficient to determine the benefits due," in violation of Section 209(a)(1) of ERISA. App. at 49. Henderson also claims that UPMC breached its fiduciary duty under Section 404(a), 29 U.S.C. § 1104(a), "to act prudently and solely in the interests of [Henderson and her co-workers] by failing to credit them with all hours worked for which they were entitled to be paid when calculating their pension benefits, or to investigate whether such hours should be credited." App. at 50. By way of remedies, Henderson seeks equitable relief pursuant to Section 502(a)(3), 29 U.S.C § 1132(a)(3), and "[a]ll applicable statutory benefits and contributions" pursuant to Section 502(a)(1)(B), 29 U.S.C § 1132(a)(1)(B). App. at 51.

UPMC moved to dismiss for failure to state a claim. Without deciding whether an employee can "shoe horn" a remedy for fair wage violations into an ERISA cause of action, the District Court granted the motion and dismissed the complaint with prejudice. The Court held that UPMC‟s recording and fiduciary obligations were limited by the plan language, which only required that UPMC document the wages Henderson was paid, not the hours she allegedly worked but was not paid. Henderson v. UPMC, No. 09-187J, 2010 WL 235117, at *3 (W.D. Pa. Jan. 11, 2010).

II.The District Court had jurisdiction under 28 U.S.C. § 1331, and we have appellate jurisdiction under 28 U.S.C. § 1291. We exercise plenary review of a district court‟s order granting a motion to dismiss for failure to state a claim. Gelman v. State Farm Mut. Auto. Ins. Co., 583 F.3d 187, 190 (3d Cir. 2009). In so doing, we must accept all well-pleaded factual allegations contained in the complaint as true and construe the complaint in the light most favorable to Henderson. See id.

III.ERISA permits employers who are also pension plan administrators to wear separate "hats" and imposes different duties on them depending on whether they are acting as employers qua employers or employers qua administrators. Varity Corp. v. Howe, 516 U.S. 489, 498 (1996). When acting as the plan administrator, ERISA imposes fiduciary duties "to ensure that a plan receives all funds to which it is entitled, so that those funds can be used on behalf of participants and beneficiaries." Cent. States, Se. & Sw. Areas Pension Fund v. Cent. Transp., Inc., 472 U.S. 559, 571 (1985); see also 29 ...


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