Jackson v. E.J. Brach Corp.
| Decision Date | 05 May 1999 |
| Docket Number | No. 97-3940,97-3940 |
| Citation | 176 F.3d 971 |
| Parties | Pens. Plan Guide (CCH) P 23954P Roy A. JACKSON and Carlos E. Serment, Plaintiffs-Appellants, v. E.J. BRACH CORPORATION, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Carey M. Stein (argued), Ashman & Stein, Chicago, IL, for Plaintiffs-Appellants.
Robert L. Byman, Jenner & Block, Chicago, IL, Michael L. Mulhern (argued), Winston & Strawn, Chicago, IL, Jason L. Peltz, Barlit, Beck, Herman, Palenchar & Scott, Chicago, IL, for Defendant-Appellee.
Before POSNER, Chief Judge, and COFFEY and KANNE, Circuit Judges.
Roy Jackson and Carlos Serment have sued their former employer, E.J. Brach Corp. ("Brach"), for violating several provisions of the Employee Retirement Income Security Act of 1974 ("ERISA") and breach of contract. In addition, Jackson and Serment each has alleged that Brach terminated their employment in violation of Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act ("ADEA"). With regard to all but one of their claims, the district court granted Brach's motions to dismiss and for summary judgment.
In July 1994, Brach, a manufacturer of confectionary products, reduced its workforce by more than 200 salaried employees. The terminations resulted from the suggestion of a consulting group brought in by Brach to increase profitability in light of recent losses due to a decrease in sales. Brach eliminated both Jackson's and Serment's positions as part of this reduction in force ("RIF").
Jackson, an African-American, had worked for Brach for twenty-seven-and-a-half years. He was fifty-years-old when his position as second shift picking line supervisor in the Shipping Department at the Chicago facility was eliminated. Serment, who is Hispanic, had worked for Brach for thirty years. He was fifty-one-years-old when his position as second shift maintenance manager in the Central Services Cell of Brach's Chicago facility was eliminated. Both allege that they met their employer's expectations, were promoted during their time with the company, and were never disciplined.
Once Brach decided to streamline its workforce, the Vice President of Human Resources notified several supervisors dealing with implementing the reduction that they must eliminate jobs without violating Brach's anti-discrimination policy. He wrote: "when deciding which position to eliminate and which employees to lay off, you may only consider job-related criteria such as seniority, quality of work, skill and ability to do the remaining work, productivity, previous work record, prior discipline and attendance." In addition, he specifically stated they could not consider race, color, sex, age, religion, disability, national origin, citizenship status, ancestry, sexual orientation, marital status, parental status, veteran status, military discharge status, or other potential sources of income for the employee. He also noted that Brach would "try to make special accommodations for employees with 20 or more years of service, especially if such employee is 50 or more years of age."
Brach decided to eliminate Jackson's and Serment's positions based on suggestions from the pair's supervising sections. In Jackson's case, the Shipping Department concluded that it could eliminate two positions. It decided to terminate Jackson's position based on seniority and performance. Jackson was the third least senior salaried employee in the department. During his most recent evaluation, his supervisor noted that his performance "Needs Improvement." His rating was the lowest among the employees in his department. Jackson discussed his evaluation with his supervisor and signed off on it. Brach also terminated the position belonging to a fifty-four-year-old white male in this department. In Serment's case, the manager of the Central Services Cell determined that seven positions could be eliminated. All the positions associated with Serment's immediate group within the Central Services Cell were terminated. Of the seven employees who lost their jobs in this section of the company, six were white. Three were younger than Serment, and three were older. Both Jackson and Serment admit to not knowing how Brach selected their positions for termination.
While Brach chose to eliminate these positions, it appears to have reassigned some of the duties associated with each to other employees. Jackson's duties were assumed by his immediate supervisor, who was a forty-nine-year-old Hispanic, and another employee who was a forty-seven-year-old African-American. An employee, who was fifty-seven-years-old and white and in the Central Services Cell, assumed Serment's duties. This employee became the only Central Services Cell manager on the second shift. Brach states that its managers believed the employee replacing Serment had a broader-base of relevant knowledge, more work experience, and more exposure to the various aspects of the Central Services Cell than Serment.
When Brach notified Jackson and Serment, as well as the other employees, that their positions had been eliminated, the company offered them severance benefits. The offer conditioned the receipt of benefits on the employee's execution of a general release. This release stated that the employee waived any and all claims against Brach, including any potential discrimination claims. Jackson and Serment knew Brach offered employees a severance plan, but did not know until after they had lost their jobs that in order to receive the benefits they must waive their claims against the company. Brach, in fact, had amended its severance plan a year earlier to include the general release requirement. Jackson and Serment claim that Brach failed to disclose or notify them of this change. Neither signed the release. As a result, they did not receive any severance benefits.
Jackson and Serment challenged Brach's requirement that they execute a general release before receiving any severance benefits. They requested a copy of the severance plan under § 1133 of ERISA, and Brach provided them, at the very least, with some of these documents. The pair sought relief by filing suit against Brach. In this suit, they contend that Brach breached an implied employee contract with them and violated several provisions of ERISA. 1 They seek declaratory and monetary relief plus attorneys' fees. The district court granted Brach's motion to dismiss all of their claims, save one, finding that the pair was not prejudiced by Brach's conduct. The court also ruled in favor of Brach as to their breach of contract claim. However, it denied Brach's motion with regard to the portion of their claims dealing with the violation of ERISA's requirement to provide a copy of the summary plan description to participants who request it within thirty days of the request. The district court eventually granted Jackson and Serment's motion for summary judgment on this issue and awarded them $6920.00.
After receiving right-to-sue letters from the EEOC, but before the court had ruled on their ERISA claims, Jackson and Serment amended their complaint to include claims of race and age discrimination. In a second round of motions, the district court granted Brach's motion for summary judgment as to Jackson's and Serment's discrimination claims. The court concluded that Jackson and Serment failed to demonstrate that the reasons proffered by Brach for their termination were a pretext for discrimination. Jackson and Serment appeal.
Jackson and Serment challenge the district court's decision regarding their allegations that Brach did not provide the summary plan descriptions of its severance plan, did not notify employees about modification to the plan, did not file reports required under ERISA, and did not include a claims procedure in the plan. In addition, they contest the district court's grant of summary judgment to Brach as to their discrimination claims.
The district court granted Brach's motion to dismiss Jackson and Serment's ERISA claims under Fed.R.Civ.P. 12(b)(6) for failure to state a claim. We review such decisions de novo. See Strasburger v. Board of Educ. Hardin County Community Unit Sch. Dist. No. 1, 143 F.3d 351, 359 (7th Cir.1998), cert. denied, --- U.S. ----, 119 S.Ct. 800, 142 L.Ed.2d 661 (1999). We must accept "the well-pleaded allegations in the complaint as true and draw[ ] all reasonable inferences in favor of the plaintiff," Mallett v. Wisconsin Div. of Vocational Rehabilitation, 130 F.3d 1245, 1248 (7th Cir.1997). However, "[a] complaint which consists of conclusory allegations unsupported by factual assertions fails even the liberal standard of Rule 12(b)(6)." Palda v. General Dynamics Corp., 47 F.3d 872, 875 (7th Cir.1995). Rule 12(b)(6) motions should be granted only if the plaintiff cannot present any set of facts that would entitle her to relief. See Porter v. DiBlasio, 93 F.3d 301, 305 (7th Cir.1996).
Congress enacted ERISA to provide comprehensive regulation of certain employee benefit plans. It protects "the interests of participants in employee benefit plans and their beneficiaries, by requiring the disclosure and reporting to participants and beneficiaries of financial and other information with respect thereto...." 29 U.S.C. § 1001(b). As we have noted, "employees depend on ERISA for assurance that they will at least know what their benefits are so that they can plan accordingly." Panaras v. Liquid Carbonic Indus. Corp., 74 F.3d 786, 793 (7th Cir.1996).
Under ERISA, severance benefit plans qualify as welfare benefit plans. See Young v. Standard Oil (Indiana), 849 F.2d 1039, 1045 (7th Cir.1988). Unlike retirement or pension benefits, welfare benefits do not accrue or vest, see id., and, while subject to some disclosure, see 29 U.S.C. §§ 1021-1031, and fiduciary requirements, see 29 U.S.C. §§ 1101-1114, these...
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