Employee Who Files Gender Discrimination Lawsuit Denied Long-Term Disability Benefits
Did Class Action Lawsuit Trigger Dismissal for Being Disabled?
When the district manager received notice that Jones had filed the class-action lawsuit, he requested updated medical information. Jones supplied the information on September 11, 2006. According to her orthopedic surgeon, at that time she was "symptomatic for ongoing patellofemoral osteoarthritis". He issued his opinion that she would eventually require total knee arthroplasty.
Just over a month later, on October 13, 2006, she was terminated. Her termination notice gave the reason for her severance – her physician's opinion that she was suffering from permanent work related restrictions which prevented her from filling her position as a store manager. She was told that she might possibly qualify for benefits under the Walgreen "Income Protection Plan."
Jones applied immediately for short-term disability benefits. MetLife, who administered the Walgreen plan, approved her application on December 15, 2006.
Approval for Short-term Disability is Reversed
When she had not received any payments by June 20, 2007, Jones sent an inquiry letter to MetLife. A month later, she found out that her benefits have been denied because she only became disabled after she stopped working for Walgreen. Because she had not been an active employee, MetLife determined that she was not eligible for benefits.
Jones appealed this decision on September 7, 2007. She informed MetLife that it was absurd that Walgreen had terminated her for being disabled, yet turned around and claimed that she only became disabled after she stopped working. MetLife informed her, on October 9 that it was standing by its initial finding that she did not qualify for benefits because she had not been an active employee at the time her disability occurred. She was informed that all administrative appeals have been exhausted.
ERISA Attorney Files Disability Lawsuit
Jones long-term disability attorney filed suit on her behalf on January 15, 2009. Her ERISA attorney accused Walgreen of wrongfully denying Jones' claim by claiming that her disability occurred after her termination. The attorney also claimed that MetLife had violated its duties as a plan fiduciary under ERISA when it denied Jones' application for short-term disability benefits. The disability lawyer also claimed that MetLife had failed to respond in a timely manner when it initially approved her application, then reversed its decision without notifying her.
Former Employer Seeks to Settle for Short-term Disability Benefits
After Jones filed her disability suit, Walgreen approached her with a check on August 31, 2009. Walgreens attorney claimed that this check was enough to cover the amount of short-term disability benefits that she would have received had MetLife not reversed its decision. The settlement was for the amount of $30,840 less what Walgreen had determined was the proper withholding amount for IRS purposes.
By November, Walgreen and MetLife were urging the Court to dismiss all the counts Jones' disability attorney had lodged against them and remand the case back to MetLife for consideration. The Court could not do this because Jones disability attorney and Walgreen disagreed on the amount of short-term disability benefits she should have received. Walgreens claimed that the $30,800 it had already settled was the full amount that she should have received. Jones disability attorney claimed that the full amount should have been $38,550.20.
The Court likewise was not willing to dismiss Jones' claim for long-term disability benefits. At the same time, the Court recognized that MetLife had never made a decision regarding whether or not Jones qualified for long-term disability benefits. This meant that the Court preferred to place a hold on Jones' claim until MetLife could properly process her application for long-term disability benefits.
Because MetLife's original decision was based on the faulty information provided by her former employer, the Court determined that MetLife should determine the validity of whether or not she had a claim. If after allowing Jones to submit evidence of her disability, MetLife once again determined that she did not qualify for long-term disability benefits, then the Court would review MetLife's decision.
Jones had also applied for emotional distress damages, but ERISA does not allow compensation for this type of damage. Even though MetLife had failed to process her claim within the 45 days mandated by ERISA, she did not have a right to monetary sanctions. Rather she had the right to consider her claim as having been denied and to pursue ERISA litigation.
At this point, it is not apparent whether this woman who filed a discrimination suit will eventually receive her long-term disability benefits or not. She could potentially receive damages connected to the delay in receiving her benefits (prejudgment interest) or possibly attorney's fees. She will not receive any benefits for emotional damages or fiduciary violations.