Crawford v. Trw Automotive U.S. LLC

• Citation: 560 F.3d 607
• Decision Date: 31 March 2009
• Docket Number: No. 08-1777.,No. 08-1132.,08-1132.,08-1777.
• Parties: Jerry CRAWFORD, et al., Plaintiffs-Appellants, v. TRW AUTOMOTIVE U.S. LLC, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

560 F.3d 607

Jerry CRAWFORD, et al., Plaintiffs-Appellants, v. TRW AUTOMOTIVE U.S. LLC, Defendant-Appellee.

No. 08-1132.

No. 08-1777.

United States Court of Appeals, Sixth Circuit.

Argued: January 20, 2009.

Decided and Filed: March 31, 2009.

ARGUED: Jeanne E. Mirer, Eisner & Mirer, New York, New York, for Appellants. Robert M. Vercruysse, Vercruysse, Murray & Calzone, Bingham Farms, Michigan, for Appellee. ON BRIEF: Jeanne E. Mirer, Eisner & Mirer, New York, New York, for Appellants. Robert M. Vercruysse, William E. Altman, Vercruysse, Murray & Calzone, Bingham Farms, Michigan, Brian A. Paton, TRW Automotive, Livonia, Michigan, for Appellee.

Before MARTIN and COOK, Circuit Judges; WATSON, District Judge.^*

OPINION

BOYCE F. MARTIN, JR., Circuit Judge.

Plaintiffs, a class of former TRW Automotive employees, allege that TRW violated the Employee Retirement and Income Security Act by closing the plant where they worked to interfere with the vesting of their retirement benefits. The district court disagreed, and granted the company's motion for summary judgment. We affirm.

I.

TRW, an indirect subsidiary of TRW Automotive Holdings Corporation, owned and operated the Van Dyke plant where plaintiffs worked. Van Dyke, a 370,000 square foot facility, was part of TRW's North American Braking and Suspension Group: workers there manufactured front suspension components for various car makers. Its employees, represented by the United Auto Workers, were covered by a collective bargaining agreement between TRW and the UAW, and a defined pension plan. Under the pension plan, employees who retired with thirty or more years of "benefit service" were entitled to retirement benefits; they earned benefit service for each year that they worked over 1680 hours, though if laid-off they only needed 170 hours to get a year's credit. Employees who retired with 10 years of service and were 55 or older were entitled to an early benefit.

TRW claims that, as of 2004, it faced overcapacity problems which hampered profits. In response, it organized a group to research the costs and benefits of shutting down some of its North American plants. That group identified the Van Dyke plant as a prime candidate for closure. But, before making that leap, TRW considered a few alternatives. Most significantly, it considered placing at Van Dyke work for DaimlerChrysler, though this was only assembly work and not the manufacturing kind typical of Van Dyke. Ultimately, however, the company decided that Van Dyke was in fact not the right place, and the DaimlerChrysler work wound up (the record is unclear precisely how) at a plant located on Mancini Drive owned by the Kelsey-Hayes Company, a separate subsidiary of TRW Holdings. (The Mancini plant employees are not represented by a union and they do not have a defined-benefit pension plan.) So Van Dyke's days became numbered.

Shortly before TRW shut Van Dyke down, however, the company discussed with the UAW the possibility of preferentially hiring laid-off Van Dyke employees to the Mancini plant and "bridging" the benefits of Van Dyke employees who were close to vesting. TRW also offered a severance to employees who opted out of their available retiree benefits. But the two sides failed to reach an agreement and TRW closed Van Dyke in January 2007. At that time, three employees missed the 30-year retirement mark by less than one year of benefit service (all three had been laid-off in 2005), and four others missed the 30-year mark by less than two years.

Plaintiffs, a certified class of former Van Dyke employees, sued, alleging that TRW violated ERISA § 510 by (1) failing to recall employees following a layoff, (2) refusing to transfer employees to the Mancini Drive facility, and (3) improperly discharging employees to interfere with their attainment of retirement eligibility. The district court granted summary judgment to TRW on all counts, and also later dismissed plaintiffs' motion for relief from the judgment on the basis of new evidence. Plaintiffs appeal.

II.

Summary judgment is only appropriate when there is no genuine issue of material fact, and, in giving the claim fresh review, this Court must draw "all justifiable inferences" in the non-moving party's favor. See Fed.R.Civ.P. 56(c); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

A.

Plaintiffs contend that the district court improperly granted TRW summary judgment because the company violated ERISA when it laid them off in connection with closing the Van Dyke plant. ERISA § 510 makes it "unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary ... for the purpose of interfering with the attainment of any right to which such participant may become entitled under [an employee benefit plan]." 29 U.S.C. § 1140. This section was designed to prevent "employers from discharging or harassing" employees to preclude "them from obtaining vested pension rights." West v. Butler, 621 F.2d 240, 245 (6th Cir.1980). Of course, not only is this illegal, it is also bad business: because providing benefits is discretionary (and so part of total employee-compensation), firing older employees to reduce pension costs both creates animosity between employer and employee and makes employees' compensation less certain, and thus employees will demand higher wages to offset this heightened risk of being fired inopportunely; as a result, employers will have to pay employees higher wages to attract and keep them. See Maria O'Brien Hylton, Insecure Retirement Income, Wrongful Plan Administration and Other Employee Benefits Woes-Evaluating ERISA at Age Thirty, 53 BUFF. L.REV. 1193, 1204-11 (2005). But some employers are foolish, and thus Congress enacted § 510 to provide a remedy. Plaintiffs assert that TRW "discharge[d]" them to "interfer[e]" with their attainment of full retirement benefits in violation of § 510.

So the primary question here is whether the plaintiffs proffered enough evidence of this improper motive to get to a jury. But first we must dismiss two errant contentions: TRW asserts that ERISA interference claims in the plant sale or closing context are never actionable and plaintiffs assert that TRW violated § 510 by failing to recall or transfer them following their discharge. Neither is correct.

1.

TRW overreaches in stating that employees may never challenge discharges that result from a plant-closing decision. While "[e]mployers or other plan sponsors are generally free under ERISA ... to adopt, modify or terminate" pension benefit plans, Coomer v. Bethesda Hosp. Inc., 370 F.3d 499, 508 (6th Cir.2004), this discretion does not permit them to discharge employees or alter their plan rights to "circumvent the provision of promised benefits." Inter-Modal Rail Emples. Ass'n v. Atchison, Topeka & Santa Fe Ry., 520 U.S. 510, 515, 117 S.Ct. 1513, 137 L.Ed.2d 763 (1997) (internal quotations omitted).

Of course, the D.C. Circuit has pointed out that Congress's use of the term "discharge" in § 510 comes in the context of other individually focused terms like "fine, suspend, expel, [and] discipline." Andes v. Ford Motor Co., 70 F.3d 1332, 1337 (D.C.Cir.1995). TRW latches onto this to say that broad or class-based claims are never actionable. But, as the D.C. Circuit—and other courts—have routinely recognized, the term "discharge," by definition, is not so limited and thus covers employees fired or laid-off, either individually or as a group, and thus the statutory language gives any "discharged" employee a right to sue, whether via class-action or individually. See, e.g., Gavalik v. Cont'l Can Co., 812 F.2d 834, 838 (3d Cir.1987). Indeed, the Andes court explicitly pointed out the possibility that some employer might unscrupulously sell or close a plant to shake off employees on the cusp of establishing benefit eligibility. 70 F.3d at 1338.

2.

Plaintiffs similarly overreach in claiming that TRW was legally required to recall many of them back to or to transfer them to the Mancini plant. As stated above, § 510 includes a list of prohibited actions, including improperly "discharg[ing], fin[ing], expel[ling]," and "discriminat[ing]." But nowhere is "transferring" or "recalling" listed. Neither have plaintiffs identified caselaw giving effect to such a claim. This is not surprising: the sine qua non of a § 510 claim is the presence of some adverse action done to interfere with an employee's rights, and had plaintiffs not been laid-off, whether or not there was a transfer would have been irrelevant because plaintiffs would still have been accruing benefits; similarly, recall would have been irrelevant if there was no discharge or it was lawful, because employees would have no more right to be hired than someone who had never worked for TRW. In other words, the whole game is whether TRW unlawfully discharged plaintiffs.

Also, TRW's decision to recall some employees and not others was not discriminatory because those decisions were seniority based, and at least two employees accrued enough pension credits to retire with benefits after being recalled. Finally, the employees' collective bargaining agreement provided that benefits accrued only at the Van Dyke plant, so plaintiffs also lacked plan rights to be recalled. See McGath v. Auto-Body North Shore, Inc., 7 F.3d 665, 670 (7th Cir.1993).

A final detour before the main event: plaintiffs, in support of their theory that § 510 gives them a right to be recalled or transferred, try to import two doctrines into ERISA law: the corporate "alter-ego" doctrine, see Yolton v. El Paso Tenn. Pipeline Co., 435 F.3d 571, 587 (6th Cir.2006), and the labor law "double-breasting" doctrine, see NLRB v. Fullerton Transfer & Storage, Ltd., Inc., 910 F.2d 331, 336 n. 7 (6th Cir.1990). The idea seems to be that the plaintiffs view the Mancini plant as the successor or "alter-ego" of the defunct Van Dyke ...