Heath appealed, and the Seventh Circuit reversed the district court’s ruling. As explained by the Seventh Circuit, the district court saw a contradiction in giving an employer freedom to modify or abolish a plan while at the same time requiring that employer to ensure that each employee receives his full benefits. “To resolve this supposed contradiction, the district court limited section 510 to the sort of benefits that an employer cannot affect by changing or abrogating the plan,” the appellate court stated. “Yet a court should endeavor to apply all parts of a statute whenever possible.”
The Seventh Circuit went on to explain that the supposed contra- diction is in fact a result of a legislative compromise in ERISA among competing interests. Employers have the right to modify plans, while employees have the right to qualify for benefits under existing plans,