Pendleton v. Quiktrip Corp.

• Decision Date: 08 June 2009
• Docket Number: No. 08-2363.,No. 08-2434.,08-2363.,08-2434.
• Citation: 567 F.3d 988
• Parties: Brian PENDLETON, Plaintiff-Appellant/Cross-Appellee, v. QUIKTRIP CORPORATION, Defendant-Appellee/Cross-Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

567 F.3d 988

Brian PENDLETON, Plaintiff-Appellant/Cross-Appellee, v. QUIKTRIP CORPORATION, Defendant-Appellee/Cross-Appellant.

No. 08-2363.

No. 08-2434.

United States Court of Appeals, Eighth Circuit.

Submitted: April 13, 2009.

Filed: June 8, 2009.

Francis E. Pennington, III, argued, Francis Pennington, III and Laura A.

Shea, on the brief, St. Louis, MO, for appellant.

Richard Joseph Pautler and Jason S. Lifschultz, on the brief, St. Louis, MO, for appellee.

Before MURPHY, HANSEN, and BYE, Circuit Judges.

MURPHY, Circuit Judge.

Brian Pendleton brought this action against QuikTrip pursuant to the Employee Retirement Income Security Act of 1974 (ERISA), alleging that QuikTrip had terminated his employment to prevent him from receiving benefits under the company's severance and stock plans. QuikTrip moved for summary judgment, and the district court granted the motion after concluding that Pendleton was not entitled to any benefits under the plans. The district court also denied QuikTrip's motion for attorney fees. Both parties appeal. We affirm.

Brian Pendleton worked at QuikTrip from 1989 until his termination in 2004. He held several positions with the company, including his last post as a director of real estate. In June 2004, Pendleton told his direct supervisor, Jeff Thoene, that he intended to leave QuikTrip to pursue a career in private real estate development. Thoene informed his boss, James Marchesano, about Pendleton's plan to leave. Marchesano then called Pendleton and asked him to reconsider. Although Pendleton indicated that he did not want to stay at QuikTrip permanently, he agreed to postpone his departure to assist with his replacement's transition. Pendleton recommended to Thoene that the new real estate director be someone with a background in real estate and store development, rather than an insider who lacked such experience.

On July 23, 2004, Pendleton learned that his replacement would be Rodney Loyd, a QuikTrip employee from the operations group at corporate headquarters. That same day Pendleton held a meeting with his staff regarding the transition. After announcing at the meeting that Loyd would succeed him, Pendleton then made disparaging comments about Loyd and the company's management. According to a staff member who was present, Pendleton said that the selection of Loyd demonstrated that QuikTrip "promote[s] operations people into positions where they don't know what they're doing." Pendleton also accused management of developing inbreeds and referred to Loyd as a "twinkie bar" whose "only real estate experience was probably buying a house, but not doing a sophisticated, complicated deal."

Thoene and Marchesano quickly learned of Pendleton's remarks at the staff meeting. Thoene recommended to Marchesano that Pendleton be terminated immediately "because he was just going to undermine [Loyd's] ability to be able to lead this group going forward." QuikTrip's president, Chet Cadieux, authorized Marchesano to fire Pendleton if the comments were actually attributable to him. Thoene and Marchesano met with Pendleton, who did not deny making the statements, offer any excuses for his behavior, or apologize for his actions.

As a result Thoene and Marchesano gave Pendleton a written dismissal notice which stated that his termination was for "gross misconduct" and "insubordination." Marchesano also told Pendleton that his termination was "for cause." Pendleton later testified that he was not aware of any facts suggesting that Marchesano and Thoene acted in bad faith in their decision to terminate him. Pendleton contends that Thoene and Marchesano's stated reasons for his termination were pretextual and that he was actually fired so that QuikTrip could avoid paying him benefits under the company's severance and stock plans.

QuikTrip maintained an ERISA governed severance plan at the time that Pendleton was terminated. The plan had undergone substantial revisions. The original plan stated that "[s]everance pay based on tenure with QuikTrip will be provided when a full-time employee terminates employment for any reason with the exception of gross misconduct." A revised plan was in place at the time of Pendleton's termination, however, which narrowed the availability of severance pay. The policy section of the revised plan states that its primary purpose is to "accommodate position eliminations/lay-offs." The policy section also provides that "[s]everance pay based on tenure with QuikTrip may ... be provided to full time employees who are physically unable to perform their job duties, meet the Rule of 75, or upon death,"¹ but states that employees terminated for cause are ineligible for severance. The procedure section of the plan states that severance packages for directors, such as Pendleton, "will be negotiated" but indicates that a director must meet one of the criteria in the policy section, such as death or disability, even to qualify for negotiations.

Several documents were circulated to QuikTrip employees in relation to the revised severance plan, including a memorandum by QuikTrip's president which described the new severance plan as "a significant change" that would reduce benefits. Nevertheless, an email written by the director of human resources stated that there was "no change" for directors in the revised plan. She later testified that her email only clarified that the amount of severance would not change but that it did not indicate that all directors still qualified for severance pay.

QuikTrip also maintained a stock plan at the time of Pendleton's termination. In pertinent part, the stock plan states:

In the event that the relationship between the Participant and the Company is terminated, either voluntarily or involuntarily ... the Company shall have the irrevocable options, exercisable within one hundred eighty (180) days after the date of the payment of the final cash severance benefit by the payment of cash, to purchase the shares of stock of the Company owned by the participant at its book value of the stock as of the end of the last month preceding the date of the payment of the final cash severance benefit....

(R. at 412). While the stock plan provides QuikTrip with the right to quickly repurchase its stock within a 180 day period after termination, the plan allows specific employees to slow the speed at which QuikTrip can repurchase its stock. Terminated employees with 20 years or more with the company or employees who "retire" from the company may retain ownership of some QuikTrip stock for more than 180 days. An employee "retires" from the company if he satisfies the rule of 75, becomes permanently disabled, or the board of directors specially places him in this category.

Pendleton contends that QuikTrip actually gave other real estate directors generous severance payments and stock benefits when they left the company. Around the time of Pendleton's termination, three other real estate directors, who voluntarily left the company and did not meet any of the plans' specific requirements, received severance and stock benefits. QuikTrip maintains that Pendleton did not receive the same benefits as the other directors because he was terminated for cause and did not fulfill his promise to aid in his successor's transition. In August, 2004, QuikTrip offered Pendleton eight weeks of severance pay, which he refused to accept. Then in December, 2004, QuikTrip attempted to repurchase Pendleton's 4,517 shares of its stock under the terms of the stock plan. Pendleton refused to tender his shares. Prior to the initiation of this action, QuikTrip also paid Pendleton's final salary, outstanding bonuses, and related benefits.

Pendleton filed a complaint in district court alleging that QuikTrip had terminated him to interfere with his rights to benefits under both the severance and stock plans, in violation of § 510 of ERISA, 29 U.S.C. § 1140. The district court granted QuikTrip's motion for summary judgment after concluding that Pendleton was not entitled to any benefits under QuikTrip's plans. Pendleton appeals, contending that the district court erred in granting summary judgment because genuine issues of material facts exist as to Pendleton's benefits under the company plans and QuikTrip's actual reasons for terminating Pendleton.

We review a district court's grant of summary judgment de novo. Fischer v. Andersen Corp., 483 F.3d 553, 556 (8th Cir.2007). Summary judgment is appropriate when the evidence, viewed in the light most favorable to the nonmoving party, presents no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Summary judgment should be granted if any essential element of the prima facie case is not sufficiently supported by specific facts to raise genuine issues for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

Section 510 of ERISA makes it unlawful for an employer to discharge an ERISA plan participant "for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan." 29 U.S.C. § 1140. To prevail under § 510, Pendleton must show that QuikTrip "had a specific intent to interfere with [his] benefits, but that may be shown by circumstantial evidence." Register v. Honeywell Fed. Mfg. & Tech., LLC, 397 F.3d 1130, 1137 (8th Cir.2005). Claims brought under § 510 are analyzed under the McDonnell Douglas burden shifting framework. Fitzgerald v. Action Inc., 521 F.3d 867, 871 (8th Cir.2008). Under this analysis, if plaintiff makes a prima facie case of discrimination, then the burden shifts to the defendant to articulate a nondiscriminatory reason for the termination. Id. If the defendant does so, then the burden shifts back to the plaintiff to prove that the defendant's...