Peck v. Selex Systems Integration, Inc., 071718 FEDDC, 17-7138
|Opinion Judge:||Srinivasan, Circuit Judge|
|Party Name:||Ronald E. Peck, Appellant v. SELEX Systems Integration, Inc. and SELEX Sistemi Integrati, Inc. Key Employee Deferred Compensation Plan, Appellees|
|Attorney:||William R. Wilder argued the cause and filed the briefs for appellant. Timothy A. Hilton argued the cause for appellees. With him on the brief were Julianne P. Story, Michael T. Raupp, and Steven A. Neeley.|
|Judge Panel:||Before: Henderson and Srinivasan, Circuit Judges, and Edwards, Senior Circuit Judge.|
|Case Date:||July 17, 2018|
|Court:||United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit|
Plaintiff filed suit against SELEX, alleging that its denial of benefits violated the Employee Retirement Income Security Act of 1974 and breached its contractual duty to provide severance pay to eligible employees. The DC Circuit vacated the district court's grant of judgment in favor of SELEX with regard to the deferred-compensation claim where the company acted unreasonably in determining that ... (see full summary)
Argued March 23, 2018
Appeal from the United States District Court for the District of Columbia (No. 1:13-cv-00073)
William R. Wilder argued the cause and filed the briefs for appellant.
Timothy A. Hilton argued the cause for appellees. With him on the brief were Julianne P. Story, Michael T. Raupp, and Steven A. Neeley.
Before: Henderson and Srinivasan, Circuit Judges, and Edwards, Senior Circuit Judge.
Srinivasan, Circuit Judge
After working at SELEX Systems Integration, Inc. for over fifteen years, Ronald Peck was terminated for refusing to transfer to a different position in the company. He filed separate claims for benefits under SELEX's deferred-compensation plan and its severance policy. Both claims were denied on the same ground: that Peck's termination for refusing to transfer positions rendered him ineligible for benefits.
Peck filed suit against SELEX and its Key Employee Deferred Compensation Plan (together, SELEX), alleging that the denial of benefits violated the Employee Retirement Income Security Act of 1974 and breached SELEX's contractual duty to provide severance pay to eligible employees. The district court granted judgment in SELEX's favor on both the deferred-compensation claim and the severance-pay claim. We vacate the district court's judgment with regard to deferred compensation but affirm with regard to severance pay.
For over fifteen years, Ronald Peck worked at SELEX Systems Integration, an international company that designs and produces aviation navigation, defense, and surveillance systems for governments, militaries, and industrial operators. Peck began his tenure with SELEX as the Director of Quality at the company's U.S. headquarters in Overland Park, Kansas. Peck rose through the ranks of the quality department over the next eleven years, eventually assuming the role of Vice President of Quality and Engineering.
Peck transitioned away from quality-control positions in conjunction with SELEX's implementation of a five-year plan to expand its U.S. market. In March 2008, Peck became the Vice President of Business Development, responsible for all marketing and sales in the U.S. market. Two years later, SELEX opened an office in Washington, D.C., to establish a presence near the Federal Aviation Administration and other D.C.-based clients. In connection with the opening, Peck became Vice President of Strategy and Product Planning, another marketing role. For the first year in the new position, Peck traveled frequently between Kansas and D.C. In October 2011, Peck moved to D.C. full time, and in February 2012, he officially transferred to the company's D.C. office.
On August 23, 2012, SELEX's Chief Executive Officer, Mike Warner, held a meeting with Peck. Warner informed Peck that he was being removed from the marketing position in D.C. due to poor performance. Warner offered Peck the option to transfer back to the Kansas office and assume the position of Vice President of Quality Control and Business Improvement. Warner memorialized the offer in a letter to Peck dated August 29, 2012. The letter confirmed that Peck's removal from the "marketing leadership role" resulted from "recurring deficiencies in [his] performance" that could have "jeopardize[d] the continued success of the company's business initiatives." J.A. 86. The letter said that the company therefore "need[ed Peck] to transfer immediately back to Overland Park to assume the [quality-control] position," which was "well suited to [his] expertise." Id.
After initially declining Warner's offer on the telephone, Peck confirmed his decision in a letter dated September 3, 2012. Peck explained in the letter that the new position was "not an equivalent position to [his] current role," did not "represent a logical step in [his] career progression," and "would . . . effectively [have] be[en] a regression in [his] career with the Company." J.A. 87. Peck nonetheless expressed his willingness to continue in the D.C. marketing position.
Warner responded in a letter dated September 14, 2012, explaining that there was no longer a position for Peck in D.C. Warner sought to assure Peck that the new position was not a "regression" because Peck would report directly to Warner and take on the new responsibility of directly supervising others. J.A. 88. Warner thus urged Peck to "reconsider [his] refusal to accept [the] new assignment" within two weeks. J.A. 89. Warner expressed that Peck's refusal to do so "would constitute 'cause'" for his termination. Id. Although Peck, as an at-will employee, could be terminated without cause, a for-cause termination would affect his eligibility for certain deferred-compensation and severance benefits.
Peck and Warner exchanged a few more letters, with Peck maintaining that his refusal to accept the quality-control position could not be considered "cause" for his discharge, and Warner maintaining the opposite stance. On September 30, 2012, Warner terminated Peck's employment with SELEX, and his marketing responsibilities were distributed among Warner and two D.C. consultants.
After Peck's termination, he submitted a claim for benefits under SELEX's "Key Employee Deferred Compensation Plan." Peck had joined the Plan as a "Key Employee" in July 2008, when serving as the Vice...
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