ERISA Section 510 standards of proof

[Rip Verkerke <ripv@virginia.edu>]

A student asked:

I was reviewing my notes from our class discussion of Nemeth v. Clark
Equipment. Was your point that the Price Waterhouse standard would have been
a more sensible approach to take in the ERISA context? Or, were you
indicating that the courts have actually adopted the Price Waterhouse
approach since the Nemeth decision (eliminating the third stage of pretext
and focusing instead on the second stage of the same decision defense).

Rip responded:

Good question.  My first point was that the Nemeth court doesn't do a very
good job of stating the test for mixed motive cases.  There is no "pretext"
stage since that idea comes from the McDD test for circumstantial evidence
cases.  Instead, there are two possibilities.  The Nemeth court really
applies the Price Waterhouse standard under which a "same decision" showing
is a complete defense to liability.  Prior to the CRA of 1991, that's
exactly what it would mean to apply Title VII standards to an ERISA  501
mixed motive case.

Now there is some ambiguity because the CRA of 1991 amended Title VII (but
not ERISA) to provide a new standard for mixed motive cases.  Under 
703(m), the same decision defense only limits remedies (basically to
declaratory judgment and attorney's fees).  The troubling question is
whether courts enforcing (unamended) ERISA should apply the old Price
Waterhouse standard or the new  703(m) standard.  I invited students to
post their ideas about this issue to the class email list.

I hope that is helpful.  You might also take a look at the relevant recaps
for more detailed discussion of the differences between Price Waterhouse and
 703(m).

Regards,

Rip