## Facts

- John F. Phelps worked for Field Real Estate Company as a commercial real estate division manager beginning in 1985.
- In 1986, Phelps learned he was HIV-positive.
- Field’s commercial real estate operations experienced poor sales performance, particularly in 1988.
- Field undertook a reorganization of its commercial real estate business.
- Field discharged Phelps on August 4, 1989, resulting in loss of insurance benefits.
- Phelps sued alleging (1) termination to interfere with employee benefit rights under ERISA § 510 and (2) handicap discrimination under Colorado law.
- After a bench trial, the district court entered judgment for defendants, finding Phelps failed to prove intent to violate ERISA § 510 and failed to prove discharge or discrimination in violation of Colorado law.
- On appeal, Phelps accepted the district court’s factual findings but challenged the legal conclusions drawn from those facts.

## Issues

1. Whether Phelps proved he was discharged “for the purpose of interfering” with attainment of rights under an employee benefit plan, as required for liability under ERISA § 510, 29 U.S.C. § 1140.
2. Whether, given the facts found by the district court, Phelps carried his burden to prove handicap discrimination under Colo. Rev. Stat. § 24-34-402(1)(a).

## Decision

- The Tenth Circuit affirmed the judgment for defendants on both claims.
- The court held Phelps did not establish the specific intent required for an ERISA § 510 violation.
- The court held Phelps did not prove his termination was because of handicap under Colorado law, where the factfinder credited performance and reorganization reasons.

## Legal Principles

- ERISA § 510 requires proof the employer acted with a purpose to interfere with ERISA-protected rights; an incidental loss of benefits from termination is insufficient.
- When an appellant accepts the trial court’s findings of fact and challenges only legal conclusions, the appellate inquiry is whether the findings support the judgment under the correct legal standards.
- Under Colorado’s handicap-discrimination statute, the plaintiff must show the adverse action was because of the handicap; where the trier of fact finds a legitimate, non-discriminatory reason supported by the record and the plaintiff cannot show pretext, the claim fails.

## Conclusion

The court affirmed judgment for the employer because the findings supported that Phelps was terminated for business reasons (performance and reorganization), not with a specific purpose to interfere with benefits under ERISA § 510 or because of handicap under Colorado law.


Phelps v. Field Real Estate Co., 991 F.2d 645 (10th Cir. 1993)