Henglein v. Informal Plan for Plant Shutdown Benefits for Salaried Employees
| Decision Date | 08 September 1992 |
| Docket Number | Nos. 91-3379,91-3413,No. 91-3413,No. 91-3379,91-3379,s. 91-3379 |
| Citation | 974 F.2d 391 |
| Parties | 16 Employee Benefits Cas. 1667 George W. HENGLEIN, L.C. Albacker, R.B. Andrews, R.L. Appeldorn, R.H. Ashenbaugh, A.L. Austin, J.W. Bagosi, J.D. Balser, A. Barrasso, J.O. Bauer, E.E. Best, H.W. Bigleman, C.R. Blazier, J.P. Bressanelli, G.D. Brown, F.C. Buchholz, E.C. Calvin, R.R. Campbell, P.D. Castellano, J.L. Cerasi, E. Chapman, S. Christy, T.M. Costello, C.A. Dauka, A.J. Decosta, M.G. Degrande, A.S. Diccio, A.P. Dimarzio, C.J. Dimarzio, R.J. Dougherty, M. Druga, E.P. Erath, E.P. Fahnert, H. Farrington, M. Ferlaino, R.D. Feydo, E.R. Finger, J.N. Flara, N.E. Frederick, J.P. Frenn, R.E. Fronko, L.L. Gibbs, W.L. Gleason, L.E. Gordon, R.W. Gott, J.E. Grimm, P.E. Grubbs, E.R. Guerra, A.J. Gulutz, J.T. Haaf, J.D. Hamacher, Jr., P.J. Hannon, R.M. Hansen, M.I. Harpham, D.H. Heldman, J.K. Hile, R.S. Hogsett, R.T. Hopper, H.M. Howell, W.M. Hyams, J.M. Janke, C.L. Jobe, Jr., K.H. Johns, R.O. Johnson, Jr., E.T. Jones, R. Kao, D.P. Kerr, Jr., P.A. Keys, R.W. Knallay, E.E. Knapek, W.J. Kofalt, S.W. Kohler, T. Kominitsky, T.R. Krupa, P.R. Kullen, J.R. Kundick, W. Lake, D.F. Lavene, T.T. Lehmann, R.H. Lewis, R.A. Lippert, W.R. Livingston, J.H. Lutton, A.J. Lynn, D.B. McClain, J.L. McKain, P.F. McNicol, E.L. Marsh, F.S. Matsukas, H.J. Mercer, A.R. Middleton, M. Mitrovich, M.A. Molchan, R.A. Montgomery, R.T. Morelli, A.N. Morrison, H. Mraunac, M.R. Muckian, C.W. Murray, III, C.J. Muers, L.V. Nagle, D.A. Nobers, J.A. Nuzo, E. Ordich, W.H. Orr, T.H. Parsons, A.J. Pasko, Jr., H.S. Pease, III, G.J. Pescion, G.V. Peterson, J.J. Popp, G.P. Porto, G. Postich, D.E. Powell, R.W. Prentice, J.V. Presutti, W.C. Price, L.E. Raykovics, T.R. Reed, J.W. Reider, J.J. Rose, A.J. Rosepiller, C.S. Russell, K.E. Sanders, M.A. Sarver, P.K. Schake, J.W. Scholtz, A.H. Sheline, M.L. Sherry, F.R. Shuss, W.W. Simpson, A.E. Six, J.E. Smith, E.H. Spaziani, W.H. Stephens, C.D. Strosnider, J.F. Suffoletta, H.L. Taylor, K.E. Thomas, F.S. Thornberry, Jr., J.R. Tice, D.A. Townley, R. Trbovich, R.T. Turner, H.B. Van |
| Court | U.S. Court of Appeals — Third Circuit |
James J. Ahearn (argued), Ligonier, Pa., for appellants cross appellees.
William H. Powderly, III (argued), Paula E. Ganz, Joan C. Zangrilli, Jones, Day, Reavis & Pogue, Pittsburgh, Pa., for appellees cross appellants.
Before: SLOVITER, Chief Judge, and MANSMANN and HUTCHINSON, Circuit Judges.
We write to clarify that, in an ERISA action, a plaintiff's failure to prove the existence of an employee benefit plan, though it results in a dismissal of the claim, does not deprive the district court of subject matter jurisdiction to enter a judgment on the merits. Additionally, we examine the standard for determining, in the absence of a formal plan document, whether an informal employee benefit plan exists. Because the district court used a vague standard to conclude a plan did not exist, and erroneously ruled that the absence of a plan deprived the court of jurisdiction, we will vacate the judgment of the district court and remand for further proceedings.
The plaintiffs are former salaried nonunion employees of a steel plant closed in 1982. These employees seek to prove that their employer and its successors in interest maintained an informal benefit plan. They claim that this "Informal Plan" entitles them to severance benefits.
To prove the existence of the Informal Plan, the employees have referred to the following events and documents.
Effective July 1, 1962, Crucible, Inc., the owner of the plant, instituted a severance benefit that gave to laid-off employees, aged 60 or older with 15 or more years of service, an immediate retirement benefit without actuarial reduction, plus $25 per month until they became eligible for social security. The document's procedure allowed an employee's supervisor to propose the benefit through channels to the Retirement Board and to charge the cost of the benefit, if approved, back to the employee's department. A 1965 memorandum expanded on these procedures. See R. at 78-82.
In 1968, a new memorandum added the immediate receipt of a "Special Retirement Benefit." 1 The 1968 Memorandum also instituted "20-30 year retirement," in which laid-off employees having between 20 and 30 years of service, who would not be eligible for early retirement benefits, would receive the Special Retirement Benefit and an immediate, actuarially reduced annuity. The 1968 Memorandum also expanded in great detail upon the procedure for applying for the benefit. See R. at 127-163. The employees claim that the 1968 Memorandum was widely distributed. See Appellants' Brief at 17; R. at 259-60 ().
Soon after the 1968 Memorandum, Crucible issued a proxy statement in conjunction with Colt Industries, pursuant to a proposed consolidation of the two companies. One sentence of the proxy statement read: "Benefits under the various benefit, retirement and pension plans of Crucible will not be affected by the consolidation...." R. at 120.
After the consolidation, a document dated February 2, 1969, outlined benefits and a claims procedure that were similar to the benefits and procedure in the 1968 Memorandum. The employees claim that they did not receive the 1969 Memorandum or notice of its contents, which were confidential. See R. at 137 (). The 1969 Memorandum clearly noted that "employees do not have a right to these benefits," and it also purported to terminate the 1968 Memorandum. R. at 137-48. The employees also allege that they did not have notice of a 1972 resolution by Crucible's Board of Directors to rescind the 1969 Memorandum, and the defendant has admitted that written notice of the 1972 resolution was not disseminated to the employees generally. See, e.g., Appellant's Brief, at 5; R. at 192 (defendant's admission).
The employees claim that, throughout their employment, they were consistently assured that they would receive benefits "equal to or better than" union benefits, which were similar to those in the 1968 and 1969 Memoranda. See, e.g., Supp.App. at 99. Similarly, employees testified that they had a general knowledge that the 1968 plan existed. See, e.g., Supp.App. at 22, 26. The plaintiffs also offered evidence that the company knew that employees believed there was an Informal Plan, and that the company did not inform them otherwise. For example, an internal memo by E.A. March insisted that "there is no informal plan" and stated that efforts would be made to so inform...
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