Mitchell Energy & Development Corp. v. Fain, CIV.A. H-00-1465.
| Decision Date | 15 November 2001 |
| Docket Number | No. CIV.A. H-00-1465.,CIV.A. H-00-1465. |
| Parties | MITCHELL ENERGY & DEVELOPMENT CORP., Plaintiff, v. Vada L. FAIN, Lester G. Trollinger, John F. Wilkins, and Greer H. Yoes, Defendants. |
| Court | U.S. District Court — Southern District of Texas |
Matthew L. Hoeg, Andrews & Kurth, Mayor, Day, Caldwell & Keeton L.L.P., Houston, TX, for Plaintiff.
W. Fulton Broemer, Broemer & Associates, Houston, TX, Liane A. Janovsky, Law Snakard & Gambill, Ft. Worth, TX, for Defendants.
FINDINGS OF FACT & CONCLUSIONS OF LAW
Pending before the Court is Plaintiff Mitchell Energy & Development Corporation's Motion for Judgment. Having considered the motion, submissions on file, and applicable law, as well as the parties' arguments at a hearing conducted on October 22, 2001,1 the Court determines that the motion should be granted in part and denied in part. In so ruling, the Court now enters the following findings of fact and conclusions of law. Any finding of fact that should be construed as a conclusion of law is hereby adopted as such. Any conclusion of law that should be construed as a finding of fact is hereby adopted as such.
Plaintiff Mitchell Energy & Development Corporation ("MEDC") brought the instant suit against four of its former employees: Defendants Vada L. Fain, Lester G. Trollinger, John F. Wilkins, and Greer H. Yoes (collectively, "Defendants"). MEDC alleges that Defendants are liable under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq. (1999), for violating the terms of a voluntary incentive retirement program offered by MEDC and accepted by Defendants.
In December 1998, MEDC anticipated layoffs throughout its organization and initiated a "Voluntary Incentive Retirement Program" ("VIRP").2 The VIRP defined a class of eligible employees and provided for the payment of enhanced benefits to those eligible employees who elected to retire before a stated deadline.3 MEDC told employees that effective December 15, 1998, it would open a window for VIRP participation for employees age fifty-five and over who had at least ten years of service under the company's retirement plan. The window closed on January 29, 1999. For employees who were eligible and elected to participate in the VIRP, their termination was effective on February 15, 1999.
On January 8, 1999, MEDC conducted a meeting to apprise its employees of upcoming staff reductions. During that meeting, MEDC introduced employees to representatives of the Texas Workforce Commission ("TWC"). The TWC representatives spoke to the employees and stated that employees who were terminated would be eligible for unemployment benefits. MEDC did not ask TWC to address the VIRP arrangement. Instead, TWC was present only to inform employees who were laid off of the availability of unemployment compensation. The unemployment benefit statements were not intended to pertain to employees who were eligible for the VIRP; rather, the statements relating to eligibility for unemployment benefits applied only to the employees who would be laid off who were not eligible to voluntarily retire under the terms of the VIRP. MEDC did not, however, clarify or correct the TWC representatives' statements regarding unemployment benefits by explaining that eligibility for VIRP benefits would negate an employee's eligibility for unemployment benefits.
Each eligible employee under the VIRP, including Defendants, received written notification of eligibility to participate in the VIRP, as well as a copy of the VIRP Plan summary, a VIRP election form, and a VIRP Agreement. Each eligible employee under the VIRP was given forty-five days to consider whether he or she wished to participate in the VIRP and to obtain legal advice regarding the consequences of participating in the VIRP, signing the VIRP election form and executing the VIRP Agreement.
The VIRP Plan summary described the purpose and nature of the VIRP and the VIRP benefits to the eligible employees. It expressly informed each eligible employee that he or she would be required, as a condition to participating in the VIRP, to "[e]xecute the Waiver and Release Agreement in order to participate in the VIRP." The agreement provided that
Each eligible employee received a copy of the VIRP election form and the VIRP Agreement that he or she was required to execute as a condition to obtain enhanced benefits under the VIRP. The VIRP Agreement is a one page document that states:
I understand and agree that if I elect to execute this Agreement, MEDC will be providing additional severance benefits to me that are greater than I would otherwise be eligible to receive (which have been fully explained to me and which I understand) and that these benefits are being paid to me in consideration for my execution of this Agreement. I acknowledge that I received this Agreement on or before the above date and understand that I have forty-five (45) days from this date to review and consider this Agreement before signing it. I acknowledge that MEDC has advised me to consult with an attorney prior to signing this Agreement. I also understand that I will have seven (7) days after the date this Agreement is signed and accepted in which to revoke it.
I voluntarily, knowingly and irrevocably release MEDC and its parent and affiliates, and each of the foregoing's directors, officers, employees and agents from any claims of any nature, whether now known or later becoming known, relating to my employment or termination of employment with MEDC, and its parent and affiliates including, without limitation, those arising under the Age Discrimination in Employment Act of 1967, as amended, the Workers Adjustment and Retraining Act, and any federal, state, local or common law relating to termination of employment or discrimination in employment on the basis of age, sex, race or otherwise. This waiver and release also applies to any claims brought by any person, or agency or any class actions under which I might otherwise have any right or benefit.
I promise never to file a lawsuit or bring any administrative proceedings asserting any claims that are released under this Agreement and never to accept any recoveries or benefits which may be obtained on my behalf by another person or agency or through any class action lawsuit or similar proceeding. If I break this promise, I will pay all costs incurred by MEDC, its parent and any affiliate, and each of the foregoing's officers, directors, employees or agents including reasonable attorneys' fees, in defending against any claims.
Each of the Defendants voluntarily elected to participate in the VIRP and executed a VIRP Agreement. None of the Defendants subsequently exercised his or her right to revoke the election. After electing to participate in the VIRP and signing a VIRP Agreement, each Defendant ceased employment with MEDC and began receiving enhanced benefits under the VIRP.
Defendant Fain received lump sum payments totaling $34,359.71 and continues to receive a monthly benefit of $1,388.71 per month.4 Defendant Trollinger received lump sum payments totaling $16,814.89 and continues to receive a monthly benefit of $961.32 per month.5 Defendant Wilkins received lump sum payments totaling $22,303.68 and continues to receive a VIRP monthly benefit of $1,057.61 per month.6 Defendant Yoes received lump sum payments totaling $17,388.18 and continues to receive a monthly retirement annuity benefit of $959.07 per month.7
Within weeks of electing to participate in the VIRP and executing the VIRP Agreement, Defendants initiated an administrative proceeding against MEDC with the TWC relating to Defendants' employment and the termination thereof. Defendants sought to recover unemployment compensation benefits, arguing that they did not voluntarily retire and that they were entitled to unemployment compensation benefits, with the amount of such benefits to be charged back to MEDC's account with TWC.
Upon notification of the Defendants' filing and pursuit of the unemployment claims, MEDC's General Counsel, Thomas Battle ("Battle"), wrote to Defendants to remind them of the terms of the VIRP Agreement. Battle's letter urged each of the Defendants to
A number of other VIRP participants who had also filed unemployment compensation claims withdrew or abandoned their claims upon receiving Battle's letter, but the Defendants did not. MEDC thereafter engaged counsel to file a response in opposition to each Defendant's claim in the TWC proceeding and to defend MEDC in the consolidated TWC proceeding. The TWC initially awarded unemployment benefits to Defendants. Ultimately, however, the TWC reversed its ruling and found in favor of MEDC, stating that Defendants had voluntarily retired from employment with MEDC and were not eligible to receive unemployment compensation benefits.
Following receipt of the TWC's final determination, Defendants filed a lawsuit in Travis County, Texas, against both MEDC and TWC. In the Travis County lawsuit, Defendants again claimed that they did not voluntarily retire and that they were entitled to unemployment compensation benefits, with the amount of such benefits to be charged back to MEDC.
MEDC engaged counsel to defend itself in the Travis County lawsuit. Both TWC and MEDC denied the claims asserted by Defendants in the Travis County lawsuit. In April 2000, TWC and MEDC filed jurisdictional pleas seeking the dismissal of that lawsuit. The Travis...
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