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


  • Phelps began working as a commercial real estate division manager for Field Real Estate in February, 1985.
  • In November of 1986, he learned he was infected with HIV.
    • He had no symptoms of disease, it didn’t interfere with his ability to perform his job, and he kept his condition secret.
  • In March of 1988, the CEO found out by way of an anonymous letter on his desk.
  • Phelps was discharged for poor performance in August of 1989.
  • He then brought this action under Employee Retirement Income Security Act (ERISA) and Colorado handicap discrimination statute, alleging he was discharged because he had tested positive.

The district court determined that Poole in fact was aware that Phelps had AIDS, but that this was not the motivating factor for Phelps’ discharge.

  • In this respect, the district court found that “sales performance was a serious problem in the summer of 1988.

Whether Poole fired Phelps because “at least in part,” Poole wanted to protect the benefit plans from the effect of Phelps’ health condition.

  • Put bluntly, was Poole motivated to save the costs of health care, disability and death benefits as the expected consequences of the plaintiff’s developing AIDS?

No. Affirmed.


  • Section 510 of ERISA provides that:
    • “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 … for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan….
  • Here, the court was of the opinion that decision to discharge Phelps was part of reorganization of his department and not to protect the benefit plan.
    • Phelps’ termination was not made until more than fourteen months after he first disclosed his medical condition.
    • In addition, there was evidence of poor performance – the commercial sales division failed to meet the expectations of Poole and his board of directors.

Rule: ERISA prohibits discrimination against participants of any employee benefit plan for the purpose of interfering with rights under such plan.

  • Discrimination need only be a motivating factor, NOT but for.