Graham

In 1984, Constance Graham (“Graham”) was employed as Vice-President of Investments for the Balcor Company (“Balcor”). In the middle of the year, she was diagnosed with an illness that seriously affected her job performance. After contesting a recommendation that she be terminated, she agreed with Balcor that she would waive any wrongful discharge or employment discrimination claims against the company if Balcor kept her enrolled in its employee benefits plan for so long as she remained disabled. Graham left her job with Balcor in 1985, and her illness has kept her out of work to this day.

In 1990, Balcor ceased paying Graham’s medical expenses. In 1991, Graham filed a complaint in Arizona state court listing a number of state law theories of redress, including breach of contract, breach of covenant of good faith and fair dealing, and intentional infliction of emotional distress. Balcor removed the case to federal district court, where it argued that Graham’s claims were all barred by the Employment Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq. The district court found that the facts were as Graham alleged, but agreed with Balcor that her claims were…