MacLachlan v. Exxonmobil Corp.

• Citation: 350 F.3d 472
• Decision Date: 20 November 2003
• Docket Number: No. 02-31249.,02-31249.
• Parties: John MacLACHLAN; James Brown; Stephen K. Manley; Alaina Spurlock; Bernd Stahr; Michael Zainotz, on Behalf of Themselves and all Others Similarly Situated, Plaintiffs-Appellants, v. EXXONMOBIL CORPORATION (successor by merger to Mobil Corporation), as trustee administrator and fiduciary of retirement, savings, severance, separation, insurance, and other miscellaneous employee benefit/welfare plans of Mobil Corporation; Thomas C. Harrison, as Assistant Administrator Benefits of ExxonMobil Corporation, retirement, savings, severance, separation, insurance, and other miscellaneous benefit plans of ExxonMobil Corporation; Retirement Plan, also known as Mobil Retirement Plan; Comprehensive Medical Plan, also known as Mobil Medical Plan; Dental Assistance Provisions, also known as Mobil Dental Plan; Dependent Group Life Insurance Plan, also known as Mobil Group Life Insurance Plan; Disability Income Plan; Employee Stock Ownership Plan, also known as Mobil Stock Plan; Employee Savings Plan, also known as Mobil Savings Plan; Life Insurance Plan, also known as Mobil Life Insurance Plan; Pre-Social Security Plan, also known as Mobil Pre-Social Security Plan; Termination Allowance Plan; Employee Severance Plan, also known as Mobil Severance Plan; Employee Separation Benefit Plan, also known as Separation Benefit Plan, Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

350 F.3d 472

John MacLACHLAN; James Brown; Stephen K. Manley; Alaina Spurlock; Bernd Stahr; Michael Zainotz, on Behalf of Themselves and all Others Similarly Situated, Plaintiffs-Appellants, v. EXXONMOBIL CORPORATION (successor by merger to Mobil Corporation), as trustee administrator and fiduciary of retirement, savings, severance, separation, insurance, and other miscellaneous employee benefit/welfare plans of Mobil Corporation; Thomas C. Harrison, as Assistant Administrator Benefits of ExxonMobil Corporation, retirement, savings, severance, separation, insurance, and other miscellaneous benefit plans of ExxonMobil Corporation; Retirement Plan, also known as Mobil Retirement Plan; Comprehensive Medical Plan, also known as Mobil Medical Plan; Dental Assistance Provisions, also known as Mobil Dental Plan; Dependent Group Life Insurance Plan, also known as Mobil Group Life Insurance Plan; Disability Income Plan; Employee Stock Ownership Plan, also known as Mobil Stock Plan; Employee Savings Plan, also known as Mobil Savings Plan; Life Insurance Plan, also known as Mobil Life Insurance Plan; Pre-Social Security Plan, also known as Mobil Pre-Social Security Plan; Termination Allowance Plan; Employee Severance Plan, also known as Mobil Severance Plan; Employee Separation Benefit Plan, also known as Separation Benefit Plan, Defendants-Appellees.

No. 02-31249.

United States Court of Appeals, Fifth Circuit.

Filed November 20, 2003.

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Barbara Gale Haynie (argued), Kingsmill Riess, Brian Edward Adorno, New Orleans, LA, for Plaintiffs-Appellants.

Tony P. Rosenstein (argued), Baker Botts, Houston, TX, for ExxonMobil Corp.

Robert Beattie McNeal, Monica Levine Lacks, Frilot, Partridge, Kohnke & Clements, New Orleans, LA, for Defendants-Appellees.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before JOLLY, SMITH and EMILIO M. GARZA, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

The six named plaintiffs, all workers who formerly performed services for Mobil Corporation while on the payroll of third-party companies, filed this class action complaint seeking retroactive employment benefits from ExxonMobil Corporation and other defendants (hereinafter collectively "Mobil"), after the merger of Mobil Corporation and Exxon Corporation, pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended, 29 U.S.C. § 1001 et seq. The district court granted summary judgment for Mobil. Finding no error, we affirm.

I.

Like many companies, Mobil seeks to attract and reward capable employees by offering a variety of health, vacation, and other benefits. These benefits are expensive, however, and in an effort to reduce costs, Mobil began, in the early 1980's, to hire some of its employees through third-party payroll companies.

Employees hired in that fashion performed services similar or identical to those of other Mobil employees while on Mobil's premises and under its supervision. They often worked side-by-side with other Mobil employees, and the services they provided were not highly specialized or individualized. They were not, however, on Mobil's payroll. This appeal presents the question whether such employees — specifically, the six named plaintiffs and the putative class on behalf of which they are suing — are eligible to collect benefits under the governing Mobil benefit plans.

Plaintiff John MacLachlan provided services for Mobil but was not on its payroll. Rather, during the eleven years he worked as an electronics technician for Mobil, he was directly employed and paid by two other companies: Consolidated Technical Services, Inc. ("CTS"), between 1987 and 1989; and Universal Technical Services, Inc. ("UTS"), from 1989 to 1999. MacLachlan's contract with CTS specified that he was to report for work at the job site of Mobil Oil Exploration & Producing Southeast, Inc. His involvement with Mobil ended when he was terminated by UTS without cause on February 4, 1999. He was eligible for employment benefits offered by CTS and UTS.

Similarly, the other named plaintiffs performed services for Mobil while under the direct employ of a third party. James Brown spent a decade as a mechanic for Mobil Aviation in Morgan City, Louisiana, but was paid by three different firms: Lee Services from 1989 to 1990; Jet Professionals from 1990 to 1992; and Excalibur from 1992 to 1999. Stephen Manley worked as a dispatcher and flight controller for Mobil Aviation from 1983 to 1999, during which time he was paid by Jet Professionals, from 1983 to 1986; Lee Services, from 1986 to 1994; and Excalibur, from 1994 to 1999. Alaina Spurlock was a clerical support staffer for Mobil Aviation, first while on the payroll of Lee Services from 1988 to 1994; then while on the payroll of Excalibur from 1994 to 1999. Bernd Stahr was a computer operator for Mobil in New Orleans from 1986 to 1996, spending the duration of that period on the payroll of Software & Scanning Service. Michael Zainotz was hired to be a computer systems administrator for Mobil's New Orleans office and worked in that capacity while on the payroll of Computerized Process from 1986 through 1999.

The putative class also is comprised of former Mobil workers who were on the payroll of third parties. As defined by the plaintiffs, the class consists of "all persons, past, present and future, employed in or at Defendant Mobil's facilities in the United States who perform(ed) personal services for Mobil and who are not, or were not, classified as regular employees of Mobil, but instead are or were classified as independent contractors or employees of third-party agencies for ... one year."

Under the relevant Mobil plans, eligibility is restricted to "regular employees," but there are two definitions of that term in the record. First, as used in the retirement plan that was in effect at the time MacLachlan began working for Mobil, a "regular employee" is "an individual ... who is employed by an employer corporation for work ... for a regular period of at least 1,000 hours of employment per calendar year." An "employer corporation," as used in the plan, is "Mobil Corporation and each subsidiary participating in the Plan." The definitions in this plan make no mention of payroll status as a defining criteria, nor of an exclusion of non-payroll employees from the plan.¹

The second definition comes from a 1994 amendment to the retirement plan that specifically excludes employees of third parties and independent contractors. That plan provides: "An individual who performs services for an Employer under an agreement ... pursuant to which such individual is treated as an independent contractor... shall not be a Regular Employee irrespective of whether he is treated as an employee of an Employer under Common-law employment principles...."

All the relevant plans also include language vesting the administrator with the discretion to interpret the plans and to determine whether claimants are eligible for benefits. Under the retirement plan, a designated plan administrator is vested with the "discretion and final authority to determine eligibility ... and to reach a final determination." Similarly, for the severance plan, the administrator "may interpret the plan ... and make all other determinations necessary." And, under the savings plan, "the administrative fiduciary shall have all power and discretion necessary ... to carry out their duties."

II.

In March 1999, following his termination by Mobil, MacLachlan sent a letter to Mobil's employee benefits administrators formally requesting retroactive employment benefits.² He made the request on the ground that he was a "common law employee" of Mobil, a term that he argued should be read to fit within the plan's definition of "regular employee."

Exxon and Mobil merged in December 1999, some ten months after MacLachlan lost his job with UTS and nine months after he contacted Mobil about his eligibility for benefits. It was not until after the merger that Thomas Harrison, an assistant plan administrator with the delegated authority to decide claims, first took action on MacLachlan's petition.

Before the merger, Harrison was an Exxon employee and had not previously reviewed a claim for benefits under the Mobil plans. To make his decision, he reviewed the terms of the Mobil plans described above as well as MacLachlan's employment history with Mobil and CTS/UTS. Harrison also discussed the history of the plan's administration with Doug Davies, an ExxonMobil attorney who worked in Mobil's benefits division before the merger.

Davies informed Harrison that there was no record of Mobil's paying benefits to similarly situated third-party contractors. Davies also stated his belief that MacLachlan was the first contractor to file a claim seeking benefits. Harrison's investigation revealed that Mobil historically had mailed information about benefits only to payroll employees. On the basis of this record, Harrison concluded that contractors such as MacLachlan are outside the plan's definition of "regular employees" and thus are ineligible for benefits.

In March 2000, Harrison sent a letter to MacLachlan's attorney, formally denying benefits. Harrison explained that Mobil was denying MacLachlan's claims because MacLachlan had been employed by CTS/UTS and had not been on the Mobil payroll. Moreover, as Harrison stated, even if MacLachlan had been a common-law employee for tax purposes, "Mobil has consistently limited benefits to persons in a formal employment relationship with a participating employer-corporation."³

Harrison also made specific findings with respect to the different Mobil plans. MacLachlan was ineligible for the Retirement and Savings Plan, Harrison found, not only because MacLachlan was not on the payroll, but also because the terms of the plan exclude any person "retained by an employer-corporation under written contract on a...