A federal judge in South Dakota has denied a motion by Pioneer Bank to dismiss a lawsuit brought by former employee Andrew Taylor Thompson. The case centers on Thompson’s claim that the bank failed to provide deferred compensation and retirement benefits promised in a disputed agreement he argues is governed by federal law.
Chief Judge Roberto A. Lange ruled that Thompson’s complaint raises a viable claim under the Employee Retirement Income Security Act (ERISA), allowing the case to proceed in federal court.
Thompson, a longtime financial advisor at Pioneer Bank, resigned in August 2024. He now works at Raymond James. In his resignation notice, he cited untenable working conditions, including an overwhelming client load and lack of administrative support, which he claims amounted to constructive discharge.
The employment agreement between Thompson and Pioneer allowed termination "with or without cause," and contained both a non-compete clause and a non-solicitation clause. Thompson contends that the non-compete provision ceased upon his resignation, while the non-solicitation clause is unenforceable under South Dakota law.
The dispute hinges on a separate document: the Salary Continuation Agreement (SCA), which Thompson claims entitles him to retirement and deferred compensation benefits. He alleges the SCA is an ERISA plan and accuses Pioneer of breaching the agreement and interfering with his ERISA-protected rights. However, Pioneer contends that the SCA was never signed, and that a subsequent Long Term Retention Agreement (LTRA) governs Thompson’s benefits instead. Pioneer moved to dismiss the case, arguing the lack of a valid ERISA plan deprived the court of jurisdiction.
Judge Lange rejected Pioneer’s argument, pointing to a shift in Eighth Circuit precedent. Citing the 2020 decision in Sanzone v. Mercy Health, the court emphasized that whether an agreement qualifies as an ERISA plan is not a jurisdictional question but an element of Thompson’s claim.
The judge noted that Thompson’s complaint, which includes an unsigned copy of the SCA referencing ERISA provisions, presents a "colorable claim" sufficient to establish federal question jurisdiction. Any factual disputes over whether the SCA was binding, signed, or replaced by the LTRA should be addressed at later stages, not on a motion to dismiss.
The court also retained supplemental jurisdiction over Thompson’s additional claims for breach of contract and declaratory relief, as they arise from the same employment relationship.
The motion to dismiss was denied, and Thompson’s claims will move forward.
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