BALTIMORE (LN) — U.S. District Judge Stephanie A. Gallagher granted Allegis Group Inc.’s partial motion to dismiss Count II of the Amended Complaint, ruling that the plaintiff did not plausibly plead facts suggesting the recoupment of deferred compensation occurred because he requested a benefits review rather than because he violated restrictive covenants.
U.S. District Judge Stephanie A. Gallagher granted Allegis Group’s partial motion to dismiss Count II of the Amended Complaint, which alleged a violation of 29 U.S.C. § 1140.
The court accepted as true the plaintiff’s allegations that he worked for Allegis subsidiaries for about 20 years, most recently as Director of Sales Operations for Actalent, Inc. in Illinois.
During his tenure, the plaintiff participated in deferred compensation programs, the Incentive Investment Plan and Investment Growth Plan, which included 30-month non-compete and confidentiality provisions.
In December 2023, the plaintiff decided to relocate to Colorado to be closer to family and subsequently created a new business, Industrial Talent Group, focusing on skilled trades staffing.
According to the complaint, Allegis paid the plaintiff $75,237 in April 2024 as the first quarterly installment of deferred compensation.
About one month later, Allegis launched an investigation and concluded the plaintiff violated confidentiality and competitive activity restrictions by accessing internal documents and creating a market analysis while still employed.
The Committee administering the plans refused to make further quarterly payments, depriving the plaintiff of substantial benefits he was owed.
Following a request for review, the Committee affirmed the denial and announced an intent to recoup the initial payment.
The plaintiff sued, alleging the recoupment was retaliation for his protected activity seeking review of the benefit denial.
Judge Gallagher wrote that the plaintiff’s claim sounded in the standard for retaliation claims in an employment discrimination context rather than ERISA’s distinct standard for interference with protected rights.
The court noted that ERISA’s definition of interference requires specific prohibited conduct, such as discharging, fining, suspending, expelling, disciplining, or discriminating against a participant.
The judge observed that the plaintiff appeared to rely on the “discriminate against” language but failed to allege facts suggesting he was treated differently from another similarly situated individual who had not exercised rights under the plans.
The court noted that the situation presented a “Catch-22,” because a similarly situated participant would have to have exercised the same right to request review.
However, the court ruled the plaintiff did not plausibly plead facts suggesting the recoupment occurred because he requested the review rather than because he violated restrictive covenants.
The court dismissed Count II without prejudice.
Allegis is required to file its answer to the remaining count asserting wrongful denial of benefits.