In Kairys v. Southern Pines Trucking Inc., No. 22-1783 (3d Cir. July 25, 2023), the Third Circuit holds that a district court’s bench ruling on an ERISA retaliation claim—rejecting an advisory jury verdict for the defendant and granting judgment to the plaintiff—did not conflict with the jury’s factual findings related to other plaintiff’s employment claims. ERISA is the federal employee-benefits law (full name: the Employee Retirement Income Security Act) and claims under that act are “equitable,” meaning that they are tried only to the judge.
Plaintiff Kairys alleged that he was fired after making significant use of the employer’s health-care plan, which was self-insured (and therefore directly cost the employer money). Under ERISA, 29 U.S.C. § 1140, an employer may not take adverse action against an employee (such as termination) to retaliate against or interfere with an employee using employee benefits. The employee also alleged that he was terminated in violation of the Americans with Disabilities Act (ADA), Age Discrimination in Employment Act (ADEA) and the Pennsylvania Human Relations Act (PHRA), all of which are tried to a jury.
Following a jury trial, the jury granted a verdict for the defendant on the ADA, ADEA and PHRA, and entered an advisory verdict for the defendant on the ERISA claim under Federal Rule of Civil Procedure 39(c). The jury awarded the plaintiff $5,384.62 in separation pay for breach of contract and the Pennsylvania Wage Payment and Collection Law (WPCL).
“The parties then briefed the ERISA claim to the District Court. Southern Pines asked the District Court to adopt the advisory verdict because Kairys failed to prove his case on that claim. The District Court disagreed. The Court observed that ‘the jury made no specific findings of fact,’ and explained that it would independently consider the trial evidence to evaluate the ERISA claim . . . . The Court then found that Kairys had proved by a preponderance of the evidence that the Company retaliated against him for using ERISA-protected benefits and interfered with his right to future benefits. The Court awarded Kairys $67,500 in front pay and determined that he was entitled to reasonable attorneys’ fees and costs.”
The Third Circuit affirms the judgment and award of attorney’s fees for the plaintiff. The principal argument of the defendant is that the judge’s finding for the plaintiff “conflicted with the jury’s factual findings on evidence common to all claims.” The Seventh Amendment dictates that in a mixed jury-bench trial, the judge “accept[] the jury’s findings on common facts” when deciding the equitable claims.
The panel observes that the “District Court faced a quandary because the jury made no specific findings of fact. Neither Southern Pines nor Kairys proffered a special verdict form, and the general verdict form asked only whether Kairys had proved ‘by a preponderance of the evidence’ that the Company discriminated or retaliated against him because of a particular protected characteristic or activity. The jury could check ‘Yes’ or ‘No’ in response for each claim.”
The significance of the lack of findings is that the district court was obliged therefore to infer what the jury must have found to reach its verdict on the other legal claims. “We therefore hold that, in a suit with equitable and legal claims and facts common to both, a district court must determine whether the jury verdict on the legal claims ‘necessarily implie[s]’ the resolution of any common factual issues, even when the jury fails to make explicit findings of fact.”
Absent such inferences, though, “the trial court retains full discretion to diverge from an advisory jury verdict (or to reach a result without the help of an advisory jury), so long as the factual findings underlying its contrary conclusion are consistent with those explicitly or implicitly found by the jury on the claims for which the jury sat as factfinder.”
The district court failed to engage in this analysis, i.e., “whether the jury’s verdict on the ADA, ADEA, and PHRA claims necessarily implied the resolution of any factual issues common to the ERISA claim.” So the panel carried the analysis out itself. Thus, for the ADA retaliation claim, “Kairys had to prove a causal connection between his termination and his request for a reasonable accommodation (i.e., leave for hip surgery) . . . . A jury could conclude that, although Kairys was not fired in retaliation for requesting time off, he was fired in retaliation for using his healthcare benefits.”
Likewise, with the ADA, ADEA and PHRA discrimination claims, “[t]hat neither Kairys’s arthritis nor his age was a determinative factor in his termination does not necessarily mean that his use of benefits also must not have been a determinative factor.”
One jury instruction that gives the panel pause stated that “[if] you believe [the Company’s] stated reason(s) and if you find that the termination would have occurred regardless of his disability and/or the cost of the medical expenses associated with his disability, then you must find for [the Company] on Mr. Kairys’s ADA claim.” But the panel holds the disjunctive “and/or” rescues the judgment. “Based on that disjunctive choice, the jury could have ruled for Southern Pines because it concluded the Company would have fired Kairys regardless of his disability, even if the Company would not have fired Kairys regardless of the cost of his medical expenses.”
The panel otherwise upholds the district court’s findings as not clearly erroneous and affirms the fee award.
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