Astor v. International Business Machines Corp., s. 92-3819
| Citation | 7 F.3d 533 |
| Decision Date | 20 October 1993 |
| Docket Number | Nos. 92-3819,92-3833,s. 92-3819 |
| Parties | , 17 Employee Benefits Cas. 1377, Pens. Plan Guide P 23887B Vincent ASTOR; Dennis Dangel; Richard Herbruck; Linda Hickle; F.J. Madera; Joe Manzella; Robert Steinberg; Lynn Steiner; Jack Walsh, Plaintiffs-Appellants, Cross-Appellees, v. INTERNATIONAL BUSINESS MACHINES CORPORATION, Defendant-Appellee, Cross-Appellant. |
| Court | United States Courts of Appeals. United States Court of Appeals (6th Circuit) |
Alan Belkin (argued and briefed), Shapiro, Turoff, Gisser & Belkin, Cleveland, OH, for plaintiff-appellant, cross-appellee.
Michael S. Horne (argued), Covington & Burling, Washington, DC, Tony C. Merry, Vorys, Sater, Seymour & Pease, Columbus, OH, John Winship Read (briefed), Vorys, Sater, Seymour & Pease, Cleveland, OH, Kenneth B. Hammer, IBM Legal Dept., Southfield, MI, for defendant-appellee, cross-appellant.
Before: MILBURN and GUY, Circuit Judges; and CONTIE, Senior Circuit Judge.
Nine former employees of IBM appeal the district court's decision awarding judgment to their former employer on the pleadings in this ERISA action. IBM, in turn, appeals the district court's decision denying its counterclaim for costs and attorney fees. We affirm the district court's determinations in part, and reverse in part, for the following reasons.
Plaintiffs-appellants/cross-appellees Vincent Astor, Dennis Dangel, Richard Herbruck, Linda Hickle, F.J. Madera, Joe Manzella, Robert Steinberg, Lynn Steiner, and Jack Walsh (collectively "the employees") are former employees of defendant-appellee/cross-appellant International Business Machines Corporation ("IBM"). The employees voluntarily resigned their positions with IBM as part of a company-wide reduction in force pursuant to an enhanced benefits severance plan termed the "Individual Transition Option Program" (the "Program") which IBM developed to induce voluntary employment terminations.
The Program was explained in a Summary Plan Description ("Summary") which IBM issued to its employees. The Summary provided (in relevant part):
As a matter of prudent business planning, IBM is continually reviewing and evaluating various proposals for changes in compensation and retirement programs, as well as proposals for special exit incentive programs like the current program. Some of these proposals, if finally approved and implemented, might be more advantageous or less advantageous than the current program. Because of the need for confidentiality, such decisions are not discussed or evaluated below the highest level of management. Any managers below such levels do not know whether IBM will or will not adopt any future compensation and/or retirement programs and are not in a position to advise any employee whether or not to participate in the ITO Program or to speculate about future programs. Unless and until such changes are formally announced by the company no one is authorized by IBM to give assurance that such changes will or will not occur.
If you choose to participate in the ITO Program, you should understand that IBM may adopt new or modified programs or benefits in the future that depending on your individual circumstances may be more or less advantageous to you than the current program. You should not expect or assume that any such new or modified programs or benefits will be extended on a retroactive basis to anyone who leaves IBM under the current program.
If you elect not to take advantage of the current program, you should understand that IBM may not offer any new or modified program or benefits or that, depending on your individual circumstances, any such new or modified program may be less advantageous to you than the current program.
....
GENERAL RELEASE AND COVENANT NOT TO SUE
. . . . .
If you feel that you are being coerced to sign this release or that your signing would for any reason not be voluntary, or you believe the process by which you have been offered this release or the payment in exchange for this release is discriminatory, you are encouraged to discuss this with your management or Personnel before signing this release.... You should thoroughly review and understand the effects of the release before signing it.
In exchange for the sums and benefits which you will receive pursuant to the terms of the Individual Transition Option Program, [employee name] (hereinafter "you") agrees to release International Business Machines Corporation (hereinafter "IBM") from all claims, demands, actions or liabilities you may have against IBM which are related to your employment with IBM or the termination of that employment. You agree that this also releases from liability IBM's agents, directors, officers, employees, representatives, successors and assigns (hereinafter "those associated with IBM"). You agree that you have executed this release on your own behalf, and also on behalf of any heirs, agents, representatives, successors and assigns that you may have now or in the future. You also agree that this release covers, but is not limited to, claims arising from the Age Discrimination in Employment Act of 1967, as amended, Title VII of the Civil Rights Act of 1964, as amended, and any other federal or state law dealing with discrimination in employment on the basis of sex, race, national origin, religion, disability, or age. You also agree that this release includes claims based on theories of contract or tort, whether based on common law or otherwise. This release does not include your vested rights if any in the IBM Retirement Plan, which survive unaffected by this release.
You agree that you will never institute a claim or charge of employment discrimination with any agency or sue IBM, or those associated with IBM, concerning any claim you may have relating to your employment with IBM or the termination of that employment. If you violate this release by suing IBM or those associated with IBM, you agree that you will pay all costs and expenses of defending against the suit incurred by IBM or those associated with IBM, including reasonable attorneys' fees.
You acknowledge and agree that:
1. The benefits provided pursuant to the ITO Program constitute consideration for this release, in that there are benefits to which you would not have been entitled had you not signed this release.
2. You have been given a period of at least forty-five (45) days within which to consider this release and to review [relevant documents].
3. This release does not waive any claims that you may have which arise after the date you sign the release.
....
5. You have not relied on any representations, promises, or agreements of any kind made to you in connection with your decision to accept the ITO Program except for those set forth in the ITO Summary Plan Description and other official plan documentation.
....
This release is not effective or enforceable for seven days after you sign it and you may revoke it during that time....
Joint Appendix at 25, 133-36 (footnote omitted). The plaintiffs-appellants/cross-appellees concede that each one of them received the Summary and executed the General Release and Covenant Not to Sue. IBM concedes that the Program is an employee benefits plan subject to the terms of the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended.
The employees initiated this ERISA action on January 30, 1992, pursuant to 29 U.S.C. § 1132(e)(1) which provides that "the district courts of the United States shall have exclusive jurisdiction of civil actions under this subchapter brought by the Secretary or by a participant, beneficiary, or fiduciary." The employees' complaint alleged (in relevant part):
6. Despite the representations made in the summary plan description that participation in the ITO program by eligible employees was voluntary and that eligible employees would be given until December 31, 1991 to decide whether they would participate in the ITO program, defendant, through its agents, specifically told each plaintiff that each plaintiff must determine whether he or she wished to participate in the ITO program no later than July 31, 1991, the initial date of departure eligibility, or the program would not be available to [the] plaintiff thereafter. Defendant, through its agents, again in contravention of the stated terms and provisions of the ITO program advised each plaintiff that if each plaintiff did not elect to participate in the ITO program within the time parameters stated by defendant's agent there was a substantial likelihood that each plaintiff's job with defendant would be eliminated and each plaintiff would be separated from defendant's employ without the benefits attendant to the ITO program....
7. Relying upon the representations made to them by defendant's agents, particularly the representations that if each plaintiff did not immediately elect to participate in the ITO program that program would not be available to them, each plaintiff resigned his or her position with defendant effective July 31, 1991 except plaintiff Steiner [who] received permission to resign her position in or about October, 1991.
8. Subsequent to each plaintiff's resignation but prior to December 31, 1991 defendant advised eligible employees that the participation period for the ITO program was extended to July 31, 1992....
9. By virtue of the material misrepresentations and express and implied threats made by defendant's agents to each plaintiff, each plaintiff's early entry into the ITO program caused each plaintiff to lose benefits that would have been available to him or her had each plaintiff been afforded the benefit of the original ITO program termination date of December 31, 1991 or the extended ITO termination date of July 31, 1992. Each plaintiff's losses include, but are not limited to, salary each plaintiff would have earned, benefits that would have been paid, additional...
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