Araujo v. Kraft Foods Global, Inc., 072310 FED3, 09-3329

Docket Nº:09-3329
Opinion Judge:GREENBERG, Circuit Judge.
Party Name:MANUEL ARAUJO, Appellant v. KRAFT FOODS GLOBAL, INC., Administrative Committee
Judge Panel:BEFORE: SMITH, FISHER, and GREENBERG, Circuit Judges
Case Date:July 23, 2010
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit



KRAFT FOODS GLOBAL, INC., Administrative Committee

No. 09-3329

United States Court of Appeals, Third Circuit

July 23, 2010


Submitted Pursuant to Third Circuit LAR 34.1(a) June 25, 2010

On Appeal from the United States District Court for the District of New Jersey (D.C. Civ. No. 08-00843) Honorable William J. Martini, District Judge



GREENBERG, Circuit Judge.


This matter comes on before the Court on an appeal from an order entered in the District Court on July 7, 2009, granting defendant Kraft Foods Global, Inc., Administration Committee's ("the Kraft Committee" or "Committee") motion for summary judgment and dismissing plaintiff Manuel Araujo's complaint in this ERISA case with prejudice. For the reasons set forth below, we will affirm the order of the District Court.


A. Facts

Araujo worked for Nabisco, Inc. as a warehouse worker continuously from 1970 until 2000 when Kraft Foods Global, Inc. purchased Nabisco. Thereafter, Araujo worked for Kraft until 2001 for a total of 31 years of continuous employment at the two companies.

Nabisco automatically enrolled its employees in its Plan for Pensions. When Kraft purchased Nabisco it took over Nabisco's Plan for Pensions including the Plan's assets and obligations. The Plan had several pension options including a Job Elimination Retirement Pension ("JERP"). The Plan provided that a participant was eligible for a JERP if he had "10 or more Vesting Years of Service, [] is at least age 55 and [] has a Termination of Employment due to job elimination." App. at 101. In addition to the formal Plan document setting forth its provisions, Nabisco provided a Summary Plan Description ("SPD"). Kraft, when acquiring Nabisco and its Plan for Pensions, did not change the SPD. The SPD, in language somewhat different from the formal Plan document, described a JERP as a pension applicable "[i]f your employment is terminated due to job elimination and you are at least age 55 and have completed at least 10 years of Vesting Service." App. at 86. In addition the SPD provided that "[a JERP] is payable monthly for life to Participants who retire as result of the elimination of their job and who are at least age 55 with 10 years of Vesting Service." Id. at 83. The SPD introduction stated that in the event of a conflict between the SPD and the Plan the terms of the Plan would control.

After the acquisition, the Kraft Committee assumed the duties and obligations that previously had been the responsibility of the Nabisco, Inc. Benefits Committee with respect to administration of the Plan. Thus, the Kraft Committee became responsible for making pension eligibility determinations under the Plan.

In 2001 Kraft decided to close its distribution center in Teterboro, New Jersey, where it employed Araujo. Thereafter, Kraft and the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Local 560 ("the Union") negotiated and signed a Memorandum of Agreement dealing with the effects of the closing on Local 560's members. Under the agreement, Union members, Araujo included, could transfer their employment, with their seniority intact, to a distribution center in Edison, New Jersey, or could apply for employment at a Kraft distribution center in Montgomery, New York. Employees also could choose to retire and receive certain severance payments including weekly severance pay for a calculable period and a lump sum settlement payment of $9, 000. The Memorandum of Agreement included a "Bridging Provision, " which enabled employees close to meeting the requirements for a JERP who chose to terminate their employment to spread their severance pay for up to two years in order to meet the age or years of vesting service requirement for a JERP. Araujo chose to retire and receive severance payments without adjustment for the Bridging Provision.1 If Araujo had chosen to spread his severance pay under the Bridging Provision, he nevertheless only would have reached age 53 rather than age 55 as required for JERP eligibility. His termination was effective November 1, 2001, but because of his election to retire he continued to receive his wage payments until June 7, 2002.

In September 2002, Araujo received information from Kraft concerning his pension eligibility. He was eligible to receive either a Vested Pension upon reaching age 65 or a Deferred Vested Pension ("DVP") beginning at age 55. Under the DVP, Araujo would receive smaller payments than he would have been paid if he elected to receive a Vested Pension, an adjustment reflecting the earlier starting date for pension payments under the DVP. It is obvious that at that time Araujo questioned whether he had other pension options for his counsel wrote a letter to Kraft inquiring why he was ineligible for a JERP which provided more generous payments than a DVP. So far as the record reveals Kraft did not respond to his letter.2 Araujo opted to receive the DVP and began receiving pension payments on April 1, 2004.3 He then filed an internal claim requesting that the Kraft Committee adjust his pension from a DVP to a JERP on the basis of his belief that he was eligible for a JERP even though he was not 55 years old at the time of his termination. The Committee denied the claim initially and then on appeal even though it acknowledged that the language of the...

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