Brace v. International Business Machines Corp.

• Citation: 953 F.Supp. 561
• Decision Date: 23 January 1997
• Docket Number: No. 2:94-cv-128.,2:94-cv-128.
• Parties: Michael BRACE, Plaintiff, v. INTERNATIONAL BUSINESS MACHINES CORP., Defendant.
• Court: U.S. District Court — District of Vermont

953 F.Supp. 561

Michael BRACE, Plaintiff, v. INTERNATIONAL BUSINESS MACHINES CORP., Defendant.

No. 2:94-cv-128.

United States District Court, D. Vermont.

January 23, 1997.

Eileen Morris Blackwood, Blackwood and Kraynak, Burlington, VT, for plaintiff.

Heather Briggs, Carol L. Shea, Asst. U.S. Atty., Downs, Rachlin & Martin, P.C., Burlington, VT, for defendant.

OPINION AND ORDER

SESSIONS, District Judge.

In this civil action, Michael Brace claims that International Business Machines Corporation ("IBM") discharged him from employment in violation of the Vermont Fair Employment Practices Act ("FEPA"), the Employee Retirement Income Security Act of 1974 ("ERISA"), and Vermont common law. The case was removed pursuant to 28 U.S.C. § 1441(a) and § 1446 from Chittenden Superior Court, where it was commenced.

The parties filed cross-motions for summary judgment (papers 26 and 31). IBM also filed motions to strike (papers 34 and 35). The matter was subsequently referred to the United States Magistrate Judge pursuant to 28 U.S.C. § 636(b)(1)(A) and (B). The Magistrate Judge granted the motions to strike. He recommended that IBM's motion for summary judgment be granted in part and denied in part, and that Brace's motion for partial summary judgment be denied ("R & R," paper 47). Both parties timely filed objections to the R & R (papers 48 and 49).

A district judge must make a de novo determination of those portions of a magistrate judge's report and recommendation to which objection is made. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b). The court may then accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge. Id. For the reasons that follow, this Court adopts the Magistrate's recommendations as to the FEPA count and the ERISA count, and adopts in part and rejects in part the recommendations as to the Vermont common law counts.¹

I. Facts

The facts of this case for purposes of the summary judgment motions have been thoroughly recited in the R & R, and need not be repeated at length here. Essentially, Brace worked for IBM from February 27, 1978 to July 22, 1991. In 1987 he accepted a transfer to a manufacturing position within the company. In 1987 and 1988 Brace worked a substantial number of overtime hours. In 1988 IBM began to limit overtime hours. Brace disagreed with this decision, and used IBM's "Open Door" policy to appeal work-related decisions to management. The issue was not resolved to Brace's satisfaction, and, moreover, he felt that his manager was treating him unfairly in retaliation for his complaints.

In 1990, Brace was transferred to a new department. He continued throughout this period to make use of the Open Door process to air his grievances with management decisions. In the fall of 1990, IBM's medical department became concerned about Brace's mental state, and suggested that he meet with the company psychiatrist. He did so. The psychiatrist diagnosed Brace as having a narcissistic personality disorder.

In the winter of 1990, Brace again found himself working under a manager with whom he had conflicts. He became increasingly distressed, and on April 1, 1991, cut his wrist in the men's room at work.

Brace was placed on sick leave. In May his doctor recommended that he return to partial and then full employment in a setting in which he felt safe. Brace named two supervisors with whom he felt safe. IBM did not agree with this arrangement.

Instead, while Brace was on sick leave, IBM told him he would be terminated effective June 17, 1991. The company placed him on management-directed time off with pay. Brace's employment was extended, however, to permit him to consider a voluntary termination program. He declined the termination package, and was discharged July 22, 1991, based, according to IBM, on "clear and consistent demonstration of his incompatibility with IBM's work environment." IBM gave Brace no specific information about eligibility or applications for its Sickness and Accident Income Plan or its Medical Disability Income Plan. General information concerning the plans was provided to employees in IBM's employee handbook, "About Your Company."

Brace was hospitalized from August 23, 1991 to October 18, 1991. In early 1992, he requested reinstatement. IBM refused to reinstate him. In 1993, the Social Security Administration awarded Brace disability benefits retroactive to April, 1991.

On August 5, 1994, Brace filed an amended complaint, claiming that IBM had violated FEPA by failing to make reasonable accommodations for him as a qualified handicapped individual (Count I); had violated ERISA by failing to provide employee benefits to which he was entitled (Count II); should be estopped from firing him because it failed to keep certain employment-related promises (Count III); breached its contract of employment with him (Count IV); and breached a covenant of good faith and fair dealing (Count V).

II. Discussion

A. FEPA Claim

After careful review of the file, the R & R, the Plaintiff's objection and the Defendant's response, this Court ADOPTS the Magistrate Judge's recommendation that the motion for summary judgment be granted on this count. Assuming without deciding that Plaintiff is a "handicapped individual" as defined by Vt.Stat.Ann. tit. 21, § 495d(5) (1987), he has failed to demonstrate that he is a "qualified handicapped individual."

Under title 21 § 495d(6) "`Qualified handicapped individual' means an individual with a handicap who is capable of performing the essential functions of the job or jobs for which he is being considered with reasonable accommodation to his handicap." The only accommodation proposed by Plaintiff was to assign him to a manager with whom he felt safe. It is well settled in this district that the reasonable accommodation an employer must make under FEPA to account for an employee's disability does not include an obligation to transfer that employee solely to allow him to work under a different supervisor. Mancini v. General Elec. Co., 820 F.Supp. 141, 148 (D.Vt.1993). See also Wernick v. Federal Reserve Bank, 91 F.3d 379 (2d Cir.1996). Because the Plaintiff has failed to demonstrate that his disability could be reasonably accommodated, an essential component of his prima facie case, Defendant's motion for summary judgment on this claim is GRANTED.²

B. ERISA Claim

After careful review of the file, the R & R, the Defendant's objection and the Plaintiff's response, this Court ADOPTS the Magistrate Judge's recommendation that summary judgment be denied on this count.

Plaintiff claimed that he was unlawfully denied health and disability benefits to which he was entitled, in violation of ERISA, 29 U.S.C. § 1132 (1985 and Supp.1996), and that he was unlawfully discharged to avoid paying him benefits, in violation of § 510 of ERISA, 29 U.S.C. § 1140 (1985). The Magistrate found disputed issues of fact precluding summary judgment in connection with both issues.

1. Entitlement to benefits

An employer may lawfully exclude certain illnesses or disabilities from coverage under an ERISA plan. Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 732, 105 S.Ct. 2380, 2385, 85 L.Ed.2d 728 (1985). IBM's Medical Disability Income Plan excluded chronic social and personal adjustment problems, and pre-existing conditions which have not significantly deteriorated. IBM objected that Brace's condition was preexisting. Brace argued that his condition, if pre-existing, had significantly deteriorated. Whether Brace's condition was excluded from coverage as pre-existing involves the resolution of disputed issues of fact, and is inappropriate for summary judgment.

IBM also objected that Brace was suffering from a chronic social and personal adjustment problem, and was excluded from medical disability coverage on that ground as well. Brace argued that his condition was a disorder specifically listed in the Diagnostic & Statistical Manual of Mental Disorders (3d ed.rev. 1987) ("DSM III-R"), and did not fit within the definition of an adjustment problem. The interpretation of the phrase "chronic social and personal adjustment problem" likewise must be left for the finder of fact to make.

2. Application for benefits

Because IBM has no formal procedure for filing an application for medical disability, a claimant need only make a written or oral communication reasonably calculated to bring the claim to the attention of a party who handles employee benefit matters, or any officer of the employer. 29 C.F.R. 2560.503-1(d) (1997). The Magistrate found that Brace arguably made such a communication on June 6, 1991, before he was terminated, and on March 31, 1992, after he was terminated. IBM objected that Brace never applied for benefits before he was discharged.

As to the first conversation, Brace testified that he spoke with a manager, Edmond Walsh, about IBM medical benefits, and about being released while he was out on medical leave. Brace Dep. at 428 (paper 31, att. 4). Whether this communication was reasonably calculated to bring his claim to the attention of a party responsible for employee benefit matters is an issue of fact to be resolved at trial.

3. Discriminatory denial of benefits

In order to establish a prima facie case under § 510, a plaintiff must show that he was 1) entitled to ERISA's protection, 2) qualified for the position, and 3) discharged under circumstances that allow an inference of discrimination. Dister v. Continental Group, Inc., 859 F.2d 1108, 1114-15 (2d Cir. 1988); Barbour v. Dynamics Research Corp., 63 F.3d 32, 38 (1st Cir.1995), cert. denied, ___ U.S. ___, 116 S.Ct. 914, 133 L.Ed.2d 845 (1996). Plaintiff was entitled to ERISA's protection because he had the opportunity to obtain benefits under an employee benefit plan. He presented evidence that he was qualified for his position, in that he was performing satisfactorily, at least until early 1991, when his troubles arose with his supervisor....