Meredith v. Allsteel, Inc.
| Decision Date | 10 January 1994 |
| Docket Number | No. 92-3997,92-3997 |
| Citation | 11 F.3d 1354 |
| Parties | 17 Employee Benefits Cas. 1945 David L. MEREDITH, John Guddendorf, Ivar Kizans, et al., Plaintiffs-Appellants, v. ALLSTEEL, INCORPORATED and Dan T. Cosgrove, in his capacity as Plan Administrator, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Thomas H. Geoghegan, Leon M. Despres, Robert C. Drizin, Despres, Schwartz & Geoghegan, R. Edward Wilhoite, Jr. (argued), Lerner & Wilhoite, Chicago, IL, 60614 for plaintiffs-appellants.
Arthur B. Smith, Jr., Michael T. Roumell (argued), Walter W. Miller, Murphy, Smith & Polk, Chicago, IL, for defendants-appellees.
Before POSNER, Chief Judge, MANION, Circuit Judge, and FOREMAN, Senior District Judge. *
Allsteel Inc. provided employees who retired by a certain date with early retirement benefits. Some employees who wanted the benefits did not retire in time. They sued Allsteel, claiming that they intended to retire within the required time, but did not do so because Allsteel misinformed them about the actual cut off date. They also claimed that Allsteel violated ERISA by this failure to properly notify them and by improperly reducing the early retirement benefits it provided. The district court, 814 F.Supp. 657, granted summary judgment for Allsteel and the employees appeal. We affirm in part, reverse in part, and remand.
Allsteel, a company which manufactures office furniture, adopted a pension plan for its employees on August 1, 1974. The pension plan provided retirement benefits for the employees. Under the plan's terms, retirement benefits were to be paid beginning on the employees' "retirement date." For administrative purposes, the plan defined "retirement date" as "the first day of the month coincident with or next following the date on which [the employee] retires." Therefore, if an employee retired on the first day of a month, the plan regarded that day as his official retirement date. But if the employee retired on any other day during a month, his official retirement date was the first day of the next month. Thus, the day an employee retired was not necessarily his retirement date.
Periodically, Allsteel and the employees negotiated changes in the 1974 pension plan through the collective bargaining process. Once these changes were made, they were incorporated into the pension plan by the express terms of the applicable collective bargaining agreement. In the collective bargaining agreements negotiated in 1988 and 1991, Allsteel agreed to supply the employees with early retirement benefits as an incentive for early retirement. The benefits provided the plan participant with an additional source of income until age 65, when Social Security retirement benefits commenced. The 1988 agreement provided:
(a) Any member who retires on or after January 1, 1985 but before April 1, 1991 shall be entitled to a supplemental benefit for the month in which he retires and each month thereafter while he is living during the payment period in the amount of $600 until such member attains age sixty-five....
(c) Any member who retires on or after April 1, 1988 shall be entitled to a supplemental benefit commencing on July 1, 1988 or at later retirement and for each month thereafter while he is living during the payment period in the amount of $900 until such member attains age sixty-five.
The 1991 agreement provided:
1. Employees who retired on or after 1/1/85 and prior to 3/31/91 shall be entitled to receive a $600 per month pension supplement until they reach age sixty-five.
2. Employees who retired on or after 4/3/88 and prior to 3/31/91 shall be entitled to continue to receive a $900 pension supplement until they reach age sixty-five.
Together, these provisions opened a window of opportunity between January 1, 1985 and March 31, 1991 for employees who wished to retire early with a generous benefit package. Many employees did retire early. The plaintiffs did not and they blame the company for quashing their opportunity. They claim that they approached Allsteel in February and March 1991 expressing an interest in early retirement. But Allsteel told them that if they retired after March 1, 1991, they were not entitled to benefits because the pension plan would then deem their retirement date to be April 1, the day after the supplemental benefit expired. The company does not dispute that this has always been its position--that an employee is not deemed to have retired until his official retirement date. In its appellate brief, however, the company disputes that the employees approached its representatives seeking to retire in March 1991 only to be told that the opportunity had expired.
The employees filed a complaint hoping to compel the company to reinstate the opportunity for early retirement. They also sought damages, claiming the company prematurely terminated the early retirement option, thus denying them the benefit. In their brief, the employees summarized the crux of their argument:
In February and March of 1991, certain plaintiffs informed Allsteel that they intended to retire prior to March 31, 1991 in order to receive the supplemental pension benefits. App. at 5. Allsteel informed these plaintiffs that although they could retire prior to March 31, 1991, Allsteel would deem their retirement date to be April 1, 1991, and that any employee who retired after March 1, 1991 would not be eligible for the pension supplements. App. at pp. 5-6. The remaining plaintiffs, all of whom wished to retire prior to March 31, 1991 were informed prior to that date of Allsteel's interpretation of the eligibility requirement for the supplemental early retirement benefits. Complaint, R-1 at para. 17. As a result of this information, and unsure of their eligibility for the pension supplements, plaintiffs did not retire prior to March 31, 1991. App. at 6.
The record cites in this paragraph are deceptive. Cites to the appendix simply refer to the district court's fact section in the summary judgment order. The cite to the official record simply refers to the complaint. The employees do not cite factual support for their assertions that they approached the company about early retirement in February and March only to be told that it was too late.
After receiving the complaint and before filing an answer, Allsteel filed a combined motion to dismiss/motion for summary judgment. The district court granted Allsteel's motion for summary judgment. The court agreed with Allsteel's position that the definition of retirement date in the 1974 pension plan controlled the meaning of retire as used in the 1988 and 1991 collective bargaining agreements. Based on its interpretation of these terms, the court ruled that even if the employees had retired in March 1988, their official retirement date would have been April 1, and they would not have been entitled to early retirement benefits. The court also disposed of various other theories upon which the employees sought recovery. For the purposes of this appeal, only two of those theories are important. The court determined that the 1991 agreement did not violate ERISA Section 204(g), 29 U.S.C. Sec. 1054(g), by reducing an accrued benefit, and that Allsteel did violate ERISA Section 104(b)(1), 29 U.S.C. Sec. 1024, by failing to provide an updated summary plan description.
The employees appeal, contending: 1) that the district court erred by confining the meaning of the word retire in the 1988 and 1991 collective bargaining agreements to the plan's definition of retirement date; and that, contrary to the district court's legal determinations, 2) the 1991 agreement violated ERISA section 204(g) by reducing an accrued benefit; and 3) Allsteel violated ERISA section 104(b)(1) by failing to provide an updated summary plan description. Allsteel disputes all of these points, and raises an alternative basis for granting summary judgment. Allsteel points out that the employees have failed to introduce affidavits or other evidence showing that they approached the company in February or March expressing an intent to retire in March, only to be informed that the plan did not allow them to do so. Allsteel argues, therefore, that we should affirm because the employees have failed to demonstrate a genuine factual issue regarding their attempts to retire.
The employees' theory of recovery is premised on their assertion that they were entitled to receive early retirement benefits if they left their jobs in March 1988, but did not do so because of Allsteel's misinformation. It follows that if they really were not entitled to benefits if they retired in March 1988, their theory crumbles. The first inquiry, therefore, is whether the employees were entitled to early retirement benefits if they left their jobs in March 1988.
The district court rested its summary judgment upon its interpretation of the words retire and retirement date, concluding that even if the employees had retired in March, they could not receive early retirement benefits because their official retirement date would not have been until April 1. The employees contend that this reasoning misinterprets the plain meaning of the word retire. They contend that the unambiguous language of the 1988 and 1991 collective bargaining agreements granted early retirement benefits if they retired in March, even if the official plan calculated their retirement date as April 1.
Allsteel argued below that the district court should give some deference to the plan administrator's interpretation of the pension plan, in accordance with Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). The district court did not do so, and instead conducted a de novo review of the employees' claim for benefits. Allsteel does not resurrect this argument on appeal. Accordingly, the...
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