From JDSupra, Adam Carlisle and Lindsey Chopin discuss a recent case in which an independent contractor who alleged he was misclassified did not have standing to sue under the Employee Retirement Income Security Act of 1974 (ERISA). Adam and Lindsey write:
A California district court recently foreclosed a former independent contractor’s claims for benefits from ERISA-governed plans when it found that plaintiff was not a “participant” as defined by ERISA and thus did not have statutory standing to assert his ERISA claims. Alders v. YUM! Brands, Inc., No. 8:21-cv-01191-PSG-DFM (C.D. Cal. Feb. 1, 2022).
After working for 25 years as an independent contractor, plaintiff filed suit claiming that he had been misclassified as an independent contractor and, as a result, was wrongfully excluded from defendants’ various retirement plans. Defendants moved to dismiss the claims, in part on the grounds that plaintiff lacked statutory standing under ERISA because he was not a participant in the plans.
The court agreed with defendants and dismissed the claims. The court explained that only plan participants, beneficiaries, fiduciaries, and the Secretary of Labor are entitled to bring claims under ERISA Section 502(a). “Participant” was the only possible fit for plaintiff but did not apply here because a former employee claiming participant status must have a colorable claim to benefits, not just allege in a conclusory manner, as plaintiff did, that he should have been a participant. Further, plaintiff’s own complaint contradicted the allegation that he was a participant in the plans as it repeatedly stated that he was excluded from participating in defendants’ retirement plans. As such, plaintiff lacked the right to sue and his claims were dismissed.