Employee Victims of ERISA § 510 Violators Deserve Full Make Whole Remedies of Back Pay, Front Pay and Other Equitable Relief

By Joseph Kwiatkowski and Glenn Gaffney


The Employee Retirement Income Security Act (ERISA) is a Federal Act which controls health, welfare and benefit plans created by employers. ERISA governs health insurance, disability insurance, defined contribution and defined benefit plans, some severance plans, life insurance, disability plans, incentive and stock option plans. It applies to not only large company welfare benefit plans, but also plans created by mid-size and small corporations and LLCs. Many small companies and professional practices offer Simple SEP and IRA plans and health insurance. ERISA was intended to make sure employees receive benefits they were promised, “but Congress did not require employers to establish benefit plans in the first place.”1 Therefore, courts have held that ERISA represents “a careful balancing” between the rights of plan participants while still encouraging companies to create and maintain those plans even in an unfavorable and highly competitive economic environment.2 ERISA’s goal is to induce employers to offer benefits and yet ensure a predictable set of liabilities under uniform standards with remedial but not punitive liability awards when a violation occurs.3 U.S. Supreme Court Chief Justice Roberts has said, “People make mistakes. Even administrators of ERISA plans.”4 However, these “mistakes” can have a major financial impact on individual Plan Participants. ERISA evolved from the law of trusts so there is a legal fiction that all relief must be equitable in nature regardless of the underlying harm caused by the Plan Administrator or even the employer itself. When an employee is affected by a Plan Administrator’s “mistake”, the ERISA claim needs to be presented within either the express statutory language of ERISA or using acceptable equitable concepts within an evolving Federal common law under the statutory guidance of “other appropriate equitable relief.”5

An aggrieved individual can usually obtain “benefits due him under the terms of the plan” with little problem or complication since such relief is expressly authorized by statute.6 However, when an individual seeks other “make-whole” relief such as money damages for unpaid medical bills or similar monetary relief, there are significant challenges. While ERISA is guided by principles of trust law (which for example preclude emotional distress or punitive damages as a form of relief),7 “trust law does not tell the entire story.”8 Recently, courts across the nation have begun to re-interpret equitable remedies to now include previously unavailable “legal damages.”9 The purpose of this article is to provide an understanding of the recent transformation and evolution of equitable terms and concepts relating to individuals seeking “make whole relief” for money damages under ERISA, in particular when the employee is a victim of discrimination or benefit interference by the Administrator or employer which clearly results in actual harm such as the loss of a job.


Back Pay and Front Pay as Remedies for ERISA § 510 ViolationsOverview

ERISA contains provisions designed to protect individuals from retaliation for asserting their rights under ERISA. Specifically, § 510 of ERISA states, “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”. 10 In order to establish a prima facie case under § 510 of ERISA, a plaintiff must demonstrate the following: “(1) [he] belongs to the protected class; (2) was qualified for his job position; and (3) was discharged or denied employment under circumstances that provide some basis for believing that the prohibited intent to retaliate was present”.11


Additionally, § 510 of ERISA provides, “It shall be unlawful for any person to discharge, fine, suspend, expel, or discriminate against any person because he has given information or has testified or is about to testify in any inquiry or proceeding relating to this chapter or the Welfare and Pension Plans Disclosure Act.”12 If an individual files or participates in a grievance under § 510 of ERISA, the grievance does not need to be correct, only plausible.13 This provision of ERISA protects not only individuals who report an actual violation of ERISA, but also those who had a reasonable belief that an ERISA violation was occurring.


The provisions of § 510 of ERISA are two pronged. They protect individuals from being deprived enjoyment of their ERISA rights and individuals who report ERISA violations. While determining if an ERISA violation occurred is one issue, another matter is determining the type of relief to award an aggrieved party when a violation occurs. A plaintiff’s remedies for ERISA § 510 violations are limited to the provisions under § 502(a)(3) of ERISA.14 “(a) A civil action may be brought… (3) by a participant, beneficiary, or fiduciary (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”.15 What constitutes “other appropriate equitable relief” has been a highly contested issue in the courts. Despite the contentious nature of this issue, courts have found, more often than not, that back pay and front pay are available remedies for violations of § 510 of ERISA.


Back Pay as an Available Remedy

The remedy of back pay is a payment for work done in the past and withheld unlawfully. Courts have taken a more liberal approach in defining back pay as “other appropriate equitable relief”. Monetary relief does not disqualify it from being equitable in nature.16 Monetary damages can be categorized as equitable when they are restitutionary.17 The Seventh Circuit has stated that restitution may be a monetary equitable remedy under ERISA.18 “Remedies for ERISA violations may include ‘awarding the employee back pay, reinstatement, restitution of his forfeited employee benefits, and any other relief necessary to make him whole’”.19


This open and liberal definition of “other appropriate equitable relief” should include back pay as an equitable remedy. Looking at the plain language of § 502(a)(3) of ERISA, it is evident that there is no preclusion of back pay as appropriate equitable relief.20 In general, back pay qualifies as an equitable remedy when it is intertwined with injunctive relief or is an integral part of an overall equitable remedy.21 It is established in the law that back pay is an equitable remedy when it is requested with reinstatement.22 Back pay and reinstatement are monetary equitable remedies that may be recovered under ERISA, as these remedies are relief necessary to make plaintiff whole.23


This line of reasoning has been applied in Seventh Circuit decisions. In Cabin, plaintiffs Howard Cabin and Cecilia Cabin, his wife, filed a claim for ERISA retaliation.24 They alleged that defendant terminated Howard Cabin in retaliation for his and his wife’s use, or to prevent the plaintiffs from continuing their use, of defendant’s employee benefit plans.25 The court held that plaintiffs were entitled to seek equitable monetary relief for the alleged ERISA violations.26 Likewise, in Anglin, plaintiff sued defendant for an alleged wrongful termination violating § 510 of ERISA.27 Plaintiff claimed that defendant terminated him so it would not have to pay him any further employee benefits.28 The court held that plaintiff was entitled to back pay, reinstatement and other various remedies if he was successful on his claim.29


Front Pay as an Available Remedy

Not only can victims of ERISA violations recover wages owed to them in the past, but they may also recover wages that would have been owed to them in the future. Money damages can be categorized as equitable relief under ERISA when they are restitutionary.30 Restitution is a remedy available in equity and falls within § 502(a)(3)’s category of “appropriate equitable relief”.31 Courts have expanded their understanding to include front pay as an equitable remedy.32


Although courts award front pay as an equitable remedy, it is only granted in certain circumstances. Front pay is an available equitable remedy under ERISA § 502(a)(3) when sought as a substitution for reinstatement.33 “Front pay is awarded only when the preferred remedy of reinstatement, indisputably an equitable remedy, is not appropriate or feasible”.34 Reinstatement is inappropriate when excessive hostility or antagonism exists between parties.35 Front pay can be available when “reinstatement is inappropriate, such as where no position is available or the employer-employee relationship has been so damaged by animosity that reinstatement is impracticable”.36


Courts have gone on further to distinguish front pay from compensatory damages. Despite being very similar, compensatory damages and front pay are different remedies.37 Front pay awards a plaintiff a monetary amount as if he had been reinstated in his old job.38 Compensatory damages are not as limited as front pay and provide relief for reputational harm, loss of experience, employment mobility, lost earning capacity and the ability to obtain a job in adverse economic situations.39 Likewise, a compensatory damages award that only provides a plaintiff with the cash value of reasonably-certain future earnings might leave the plaintiff still suffering harms that could be remedied by reinstatement such as a restored job track record and job history.40 At a minimum, front pay should be awarded as an equitable remedy even when compensatory damages are legal in nature.



The Equitable Remedy of Surcharge

Surcharge is an “amount that a court may charge a fiduciary that has breached its duty.”41 It has been a historic equitable remedy evolved from the law of trusts used to “charge” a trustee with a loss or depreciation to the trust estate resulting from a breach of trust.42

In the 2011 Supreme Court decision of Cigna v. Amara, a beneficiary sued the plan fiduciary for breach and sought a monetary remedy. The Supreme Court described the claim as the type of action that could only be brought in a court of equity prior to the merger of law and equity.43 Nevertheless, the beneficiary was awarded a money judgment which traditionally was considered a “legal remedy” and outside ERISA’s purview. The Supreme Court said, “but the fact that this relief takes the form of a money payment does not remove it from the category of traditionally equitable relief.” Equity courts possess the power to provide relief in the form of monetary compensation for a loss resulting from the trustee’s breach of duties, or to prevent the trustee’s unjust enrichment. The Court said, “Indeed, prior to the merger of law and equity this kind of monetary relief against the trustee, sometimes called a ‘surcharge’ was exclusively equitable.”44 Previously, the Supreme Court had ruled that an ERISA action could only restore the plaintiff with particular funds or property held by the defendant, and not punish the defendant with personal liability.45 The Roberts Supreme Court concluded that contrary to the lower court’s “fears” that “surcharge” violated the ERISA rule prohibiting legal judgments, surcharge was available as “appropriate equitable relief” pursuant to ERISA § 502(a)(3) so long as the plan participant makes a proper showing of “actual harm.”46 In addition to surcharge, the Supreme Court also upheld the District Court’s award of an affirmative and negative injunction as a measure of equitable relief, stating “Indeed, a maxim of equity states that ‘equity suffers not a right to be without a remedy.’ “47

Not long after Cigna, the 7th Circuit also expanded ERISA relief in Kenseth v. Dean Health Plans. There, the Plaintiff was mistakenly led to believe that her surgery would be a covered expense by the Plan administrator.48 Yet, the $77,974 surgery claim was denied and as a result, plaintiff sued the insurance plan for make whole relief.49 In the spirit of Cigna, the Seventh Circuit held that if the plaintiff proves a breach of fiduciary duty proximately causing her damages, then plaintiff may seek an appropriate equitable remedy including make-whole relief in the form of money damages.50


In this post-Cigna world, the 7th Circuit has not been alone in changing the method in which ERISA relief is understood. The 5th Circuit ruled that a plaintiff was eligible for make-whole relief money damages for medical benefits due to a fiduciary breach.51 The 4th Circuit held that life insurance benefits, and not just wrongfully paid premiums, were monetary damages available to Plaintiff.52 In McCravy, the court stated that “the portion of Amara in which the Supreme Court addressed Section 1132(a)(3) stands for the proposition that remedies traditionally available in courts of equity, expressly including estoppel and surcharge, are indeed available to plaintiffs suing fiduciaries under Section 1132(a)(3)”.53 Likewise, the 2nd, 8th and 9th Circuits have held that plaintiffs seeking monetary damages is an equitable remedy known as “surcharge” and is available relief under ERISA for fiduciary breaches.54


Equitable Estoppel

Equitable estoppel prevents a party from asserting rights he otherwise would have against another when his own conduct renders assertion of those rights contrary to equity. In ERISA claims, courts have utilized equitable estoppel when a beneficiary detrimentally relies on some misrepresentation of coverage. For estoppel to apply, the Seventh Circuit stated that “a plaintiff demonstrating extreme circumstances must also show (1) a knowing misrepresentation; (2) made in writing; (3) reasonable reliance on that misrepresentation by the plaintiff; and (4) that the reliance was to the plaintiff’s detriment reliance.”55


Estoppel can be beneficial when a beneficiary suffers harm due to his reliance on misrepresentation made by a plan administrator. The Supreme Court confirmed the availability of this remedy upon a proper showing of detrimental reliance that “in truth, influences the conduct of the plaintiff, causing prejudice.”56 Frequently, courts utilize estoppel in combination with other equitable remedies. For instance, the Supreme Court upheld the remedy of reformation of an ERISA plan and enforced upon the employer what had been promised to its employees stating, “This aspect of the remedy resembles estoppel, a traditional equitable remedy.”57 Likewise, a District Court in Wisconsin ruled in favor of the beneficiary for her claims of estoppel and surcharge for breach of fiduciary duty against the employer and the plan.58 While the beneficiary could not recover twice, she was allowed to recover in the alternative if one of her claims were to fail.59


When a plaintiff attempts to obtain money damages, in general, then courts typically define disgorgement as a legal remedy. However, courts will label a disgorgement as an equitable remedy if plaintiffs seeks a constructive trust upon an identifiable res within defendant’s possession.60 This type of disgorgement is an equitable form of restitution “not to impose personal liability on the defendant, but to restore the plaintiff’s particular funds or property in the defendant’s possession.”61 It is absolutely critical that a plaintiff seeks specifically identified funds held in possession by the defendant or traceable items that the defendant purchased with the funds.62 An equitable lien is destroyed if the defendant spends the entire identifiable fund on nontraceable items.63 Successful plaintiffs can additionally obtain interest or lost earnings on a delayed benefit payment as a form of “other appropriate equitable relief.”64



Restitution can be legal or equitable in nature.65 In Mondry v. American Family Mut. Ins. Co., the court used the “equitable branch” of restitution to not only reverse an insurance company’s wrongful denial of a benefit claim, but also ordered the insurance company to disgorge the profit it received from the delay and use of money created by the breach.66 In another case, a plan administrator breached its fiduciary duty and the Court allowed the plan participant the opportunity to make a missed COBRA payment, then ordering the plan to “pay the maternity-related medical expenses it had refused to pay in reliance on the pre-existing conditions limitations.”67


When benefits are withheld, plans can gain interest at the expense of the beneficiary.


While interest alone is not a plan benefit, it can be the basis for imposing an equitable remedy due to the plan unjustly enriching itself.68 While restitution can be considered a legal remedy, like in breach of contract cases, it is classified an equitable remedy when there is a breach of trust.69


Accumulated Earnings, Pre-Judgment Interest and the Clean-Up Doctrine

Beneficiaries can obtain more than a constructive trust or something similar in nature when benefits have wrongfully been withheld. The Seventh Circuit has stated, “This is not to say that money can never be recovered in a suit in equity, apart from the equity clean-up document, which allows an equitable suitor to obtain incidental damages relief in his equity suit so as to spare himself, the defendant and the judiciary the burden of two suits on the same claim.”70


Back in 2011, the Second Circuit heard a case in which the plan participant sued the plan not only seeking funds wrongfully removed from his account and credited towards his ex-wife’s account, pursuant to a Qualified Domestic Relations Order (QDRO), but also the economic equivalent of the accumulations after the improper credit. The Court held that despite ERISA’s anti- alienation rule, plan assets can be used to satisfy a judicial judgment entered against the plan itself, including an award of accumulated earnings and pre-judgment interest on the money improperly segregated pursuant to the invalid QDRO.71 There, the Court held that plaintiff was entitled to be compensated for the time value of the “mis-directed funds” dictated by the Federal common law of “natural justice, and the law of every civilized country.”72 Now, there’s a concept and a quote any imaginative plaintiff’s lawyer can use seeking what essentially is a money remedy for a violation of ERISA.



It is apparent that the availability of remedies under ERISA is continually changing and evolving. Although ERISA evolved from the law of trusts, courts should continue to use equitable terms to provide an aggrieved victim full relief, including monetary awards as needed to make a victim whole. ERISA remedies should be based on what is reasonable, just, and fair as opposed to being self-limited to unreasonable and antiquated concepts of law and equity.

1. Lockheed Corp. v. Spink, 517 U.S. 882, 887 (1996).

2. Aetna Health Inc. v. Davila, 542 U.S. 200, 215 (2004).

3. Rush Prudential HMO, Inc. v. Moran, 530 U.S. 355, 379 (2002).

4. Conkright v. Frommert, 559 U.S. 506, 130 S.Ct. 1640, 1644 (2010) (The fact that plan administrators make mistakes should come as no surprise, given the Employee Retirement Income Security Act of 1974 is “an enormously complex and detailed statute,” Mertens v. Hewitt Associates, 508 U.S. 248, 262 (1993), and the plan that administrators must construe can be lengthy and complicated.)

5. 29 U.S.C. § 1132(a)(3); Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 209-210 (2002).

6. 29 U.S.C. § 1132 (a)(1)(B).

7. Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 142 (1985); Mertens v. Hewitt Associates, 508 U.S. 262.

8. Varsity Corp. v. Howe, 516 U.S. 489, 497 (1996).

9.Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 142 (U.S. Supreme Court concluded that § 1132(a)(2) did not authorize plaintiff to sue for compensatory and punitive damages for employer’s alleged breach of fiduciary duty).

10. 29 U.S.C. § 1140.

11. Grottkau v. Sky Climber, Inc., 79 F.3d 70, 73 (7th Cir. 1996).

12. 29 U.S.C. § 1140.

13. George v. Junior Achievement of Cent. Indiana, Inc., 694 F.3d 812, 817 (7th Cir. 2012).

14. Teumer v. General Motors Corp., 34 F.3d 542, 544 (7th Cir.1994).

15. 29 U.S.C. § 1132(a)(3).

16. Warner v. Buck Creek Nursery, Inc., 149 F.Supp.2d 246, 255 (W.D. Va. 2001).

17. Schwartz v. Gregori, 45 F.3d 1017, 1022 (6th Cir. 1995).

18. Anglin v. Sears, Roebuck and Co., 139 F.Supp.2d 914, 919 (N.D. Ill. 2001).

19. Cabin v. Plastofilm Industries, Inc., 1996 WL 496604 at *2 (N.D. Ill. 1996) (citing, Bittner v. Sadoff & Rudoy Inds., 490 F.Supp. 534, 536 (E.D. Wis. 1980).

20. Millsap v. McDonnell Douglas Corp., 368 F.3d 1246, 1263 (10th Cir. 2004) (Lucero, J., dissent).

21. Id. at 1265.

22. Cabin v. Plastofilm Industries, Inc., 1996 WL 496604 at *2.

23. Anglin v. Sears, Roebuck and Co., 139 F.Supp.2d 920.

24. Cabin v. Plastofilm Industries, Inc., 1996 WL 496604 at *1.

25. Id.

26. Id. at *2.

27. Anglin v. Sears, Roebuck and Co., 139 F.Supp.2d 916.

28. Id. at 916.

29. Id. at 920.

30. Schwartz v. Gregori, 45 F.3d 1022.

31. Id.

32. Id.

33. Warner v. Buck Creek Nursery, Inc., 149 F.Supp.2d 257.

34. Schwartz v. Gregori, 45 F.3d 1023.

35. Teutscher v. Woodson, 835 F.3d 936, 946 (9th Cir. 2016).

36. Id. at 947 (citing, Traxler v. Multnomah County, 596 F.3d 1007, 1011-12 (9th Cir. 2010).

37. Id. at 959 (Smith, J., concurring opinion).

38. Williams v. Pharmacia, 137 F.3d 944, 953 (7th Cir. 1998).

39. Id.

40. Teutscher v. Woodson, 835 F.3d 959 (Smith, J., concurring opinion).

41. Black’s Law Dictionary, 1579 (9th Ed. 2009).

42. Restatement of Trusts § 205.

43. Cigna Corp. v. Amara, 131 S.Ct. 1866, 1879 (2011).

44. Cigna Corp. v. Amara, 131 S.Ct. 1879.

45. Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 214; Mertens v. Hewitt Associates, 508 U.S. 256.

46. Cigna Corp. v. Amara, 131 S.Ct. 1881.

47. Cigna Corp. v. Amara, 131 S.Ct. 1879.

48. Kenseth v. Dean Health Plan, Inc., 722 F.3d 869, 872 (7th Cir. 2013).

49. Id.

50. Id. at 883.

51. Gearlds v. Entergy Services, Inc., 709 F.3d 448 (5th Cir. 2013).

52. McCravy v. Metropolitan Life Ins. Co., 690 F.3d 176 (4th Cir. 2012).

53. Id. at 181.

54. Gabriel v. Alaska Elec. Pension Fund, 773 F.3d 945, 963 (9th Cir.2014); Silva v. Metro. Life Ins. Co., 762 F.3d 711, 724–25 (8th Cir.2014); New York State Psychiatric Ass’n, Inc. v. UnitedHealth Group, 798 F.3d 125, 134-135 (2nd Cir. 2015).

55. Pearson v. Voith Paper Rolls, Inc., 656 F.3d 504, 509 (7th Cir. 2011).

56. Cigna Corp v. Amara, 131 S.Ct. 1881.

57. Cigna Corp. v. Amara, 131 S.Ct. 1880.

58. Winkelspecht v. Gustave A. Larson Co., 2012 WL 1995103.

59. Id.

60. Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 213.

61. Knudson, 534 U.S. at 214.

62. Montanile v. Board of Trustees of Nat. Elevator Industry Health Benefit Plan, 136 S.Ct. 651, 659 (2016).

63. Id.

64. Fotta v. Trustees of United Mine Workers of America, Health & Retirement Fund of 1974, 165 F.3d 209, 214 (3rd Cir. 1998).

65. Kenseth v. Dean Health Plan, Inc., 610 F.3d 452, 482 (7th Cir. 2010).

66. Mondry v. American Family Mut. Ins. Co., 557 F.3d 781, 807 (7th Cir. 2009) (American Family’s plan was self-funded and it arguably benefited from the delay that Mondry experienced in obtaining documents which should have been produced by the plan administrator and reversing an erroneous denial of a claim for benefits).

67. Bowerman v. Wal-Mart Stores, Inc., 226 F.3d 574, 592 (7th Cir. 2000).

68. May Dept. Stores Co. v. Federal Ins. Co., 305 F.3d 597, 603 (7th Cir. 2002).

69. Mondry, 557 F.3d at 806 (citing Clair v. Harris Trust & Sav. Bank, 190 F.3d 495, 498 (7th Cir. 1999).

70. May Dept. Stores Co. v. Federal Ins. Co., 305 F.3d 603 (Wrongful withholding of benefits due can entitle the beneficiary to impose a constructive trust on interest from the withheld benefits which results in a monetary judgment for plaintiff).

71. Milgram v. Orthopedic Associates Defined Contribution Pension Plan, 666 F.3d 68, 79-80 (2nd Cir. 2011).

72. Id. at 79 (First finding that implied agreements to pay interest on delayed disbursements of owed money fits squarely within the tradition of common law contract interpretation and then relying upon turn-of-the-century U.S. Supreme Court decision of Spalding v. Motion, 161 U.S. 375, 396 (1896).


Joseph Kwiatkowski received his Bachelor’s Degree from the University of Illinois at Urbana-Champaign and J.D. from the Chicago-Kent College of Law. He is an Associate at the Law Offices of Michael Lee Tinaglia, Ltd. He has experience representing plaintiffs and defendants in employment, commercial and real estate law matters. 

Glenn Gaffney is a graduate of the University of Illinois with a B. S. in Business Administration and received his J.D. from Southern Illinois University School of Law. He has been Chair of both the DCBA Labor and Employment Section and the ISBA Labor and Employment Section Council. Mr. Gaffney was President of the DCBA for the term 2006-2007.