Perdue v. Burger King Corp.
Decision Date | 01 December 1993 |
Docket Number | No. 92-2577,92-2577 |
Citation | 7 F.3d 1251 |
Parties | 17 Employee Benefits Cas. 2032, Pens. Plan Guide P 23889W William R. PERDUE, Plaintiff-Appellant, v. BURGER KING CORPORATION, Craig Bushey, and The Benefits Committee, Defendants-Appellees. |
Court | U.S. Court of Appeals — Fifth Circuit |
Sylvia Davidow, William H. Bruckner, Houston, TX, for plaintiff-appellant.
Mark R. Steiner, Lee M. Simpson, Cohan, Simpson, Cowlishaw & Aranza, Dallas, TX, for defendants-appellees.
Appeal from the United States District Court for the Southern District of Texas.
Before JONES and DeMOSS, Circuit Judges, and BARBOUR 1, District Judge.
I. BACKGROUND
Burger King Corporation ("BKC") is the owner, operator and franchisor of Burger King fast food restaurants. In March of 1981, William R. Perdue ("Perdue") went to work for BKC as a restaurant manager. In 1987, Perdue was promoted to Franchise Area Manager ("FAM") for the Houston office, a position in charge of all Houston-based Franchise District Managers. In April of 1989, BKC instituted an internal reorganization to eliminate several management tiers.
To ease the impact of the reorganization on its employees, BKC created the Burger King Job Elimination Program ("Program"). The Program provides that for a period of three years from the date of implementation, any full-time employee who loses his job as a result of a job elimination plan or reduction in workforce is entitled to receive certain severance benefits.
BKC's reorganization eliminated the FAM position from all BKC regions. On April 3, 1989, Perdue was approached by Craig Bushey ("Bushey"), the operations vice-president for the Houston area, and Wes Garnett ("Garnett"), the human resources manager for that area. Bushey and Garnett explained that the FAM position had been eliminated and that Perdue could either continue with BKC as Franchise Operations Manager ("FOM") for the Houston area, or receive cash severance benefits under the Program. Perdue immediately accepted the position as FOM, and performed that job until July 31, 1989 when he was terminated by BKC.
In mid-July, 1989, Bushey received a telephone call from Rita Battistoni ("Battistoni"), an employee in the BKC accounting department in Los Angeles, California. Battistoni requested that Bushey submit in writing his approval of an extension of time for Perdue to repay a travel advance in the amount of $1,000 ("travel advance" or "advance"), outstanding since May of 1988. During this conversation, Battistoni relayed that she had been informed by Perdue that Bushey had agreed to extend repayment of the travel advance until September of 1989. Bushey denied that he had ever approved an extension or even known of the advance.
On July 31, 1989, Bushey and Garnett met with Perdue to discuss the advance. Perdue claimed he told Battistoni that he could obtain approval for an extension of the advance, not that he had already obtained approval. Bushey terminated Perdue's employment with BKC because Bushey felt that Perdue was no longer trustworthy.
Upon termination, Perdue demanded payment of severance benefits under the Program. The Burger King Corporation Benefits Committee ("Benefits Committee" or "Committee") determined that Perdue was ineligible to receive benefits under the Program because Perdue's termination did not result from either a reduction in workforce or a job elimination plan. 2 Thus, BKC denied payment.
Perdue filed suit against BKC, the Committee and Bushey on September 28, 1989, seeking, among other things, payment of severance benefits. He brought four claims under the Employee Retirement Income Security Act of 1974 3 (ERISA): (1) a section 1132(a)(1)(B) claim for benefits allegedly due him under the Program; (2) a section 1132(a)(3) claim for violation of ERISA disclosure duties; (3) a breach of fiduciary duty claim under sections 1104, 1105 and 1109; and (4) a claim for interference with ERISA benefits under section 1140. Perdue also asserted claims of common law fraud and breach of an agreement to offer him a franchise.
The defendants removed this cause to federal court on the ground that ERISA preempted the state law claims. The district court granted BKC's summary judgment motion on each and every one of Perdue's claims. On appeal, Perdue requests review of summary judgment on the section 1132(a)(1)(B) claim, the section 1140 claim, and the common law fraud and breach of contract claims.
II. DISCUSSION
We concur in the district court's determination that the BKC Program is a limited benefits plan within the meaning of section 1002(1) of ERISA. 4 Therefore, subject matter jurisdiction to review appellant's ERISA and pendant state claims is proper. 5
A denial of benefits under an ERISA plan is reviewed either de novo or, where the plan delegates discretionary authority to an administrator or fiduciary to determine eligibility for benefits or to interpret the terms of the plan, for an abuse of discretion. Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 956, 103 L.Ed.2d 80 (1989). Perdue contends that the district court committed reversible error in reviewing the Committee's denial of benefits under "summary judgment standards," instead of under either of the two ERISA standards.
The parties agree that the district court should have reviewed the Committee's determination for an abuse of discretion. Although this standard was not applied, the district court's de novo review accorded the Committee's determination no deference and thus, could not possibly have harmed Perdue. The district court's error is harmless and not a ground for reversal.
Section 1132(a)(1)(B) of ERISA provides a private right of action for persons alleging entitlement to benefits, or seeking to enforce or clarify rights, pursuant to the terms of an ERISA plan. 6 Perdue's section 1132(a)(1)(B) claim alleges that the Committee abused its discretion in denying him eligibility to receive severance benefits under the Program. On appeal, he argues that material fact issues were raised before the district court.
The district court held that Perdue is precluded from bringing a section 1132(a)(1)(B) claim for benefits because his termination did not result from either a workforce reduction or a job elimination plan. We agree. The plain language of the BKC Program limits eligibility to employees involuntarily terminated in connection with either a workforce reduction or job elimination plan. 7 Because Perdue does not allege that his termination as FOM occurred under either of these two circumstances, he fails to allege entitlement to benefits within the eligibility provision of the Program. 8
A BKC employee terminated for cause, or for reasons unrelated to a workforce reduction or job elimination, is expressly ineligible to receive benefits under the Program, and, therefore, does not have a claim for benefits under section 1132(a)(1)(B) of ERISA. The summary judgment evidence establishes that Perdue's employment was terminated for cause, specifically because Bushey no longer considered Perdue trustworthy following the travel advance incident. 9 Thus, summary judgment on Perdue's section 1132(a)(1)(B) claim is proper.
Section 1140, in applicable part, makes it "unlawful for any person to discharge, ... expel, or discriminate against a participant ... for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan...." 10 Perdue claims that Bushey induced his acceptance of the FOM position and subsequently terminated his employment under the pretext of cause, so that BKC could avoid payment of severance benefits. He appeals the district court's failure to consider "suspect" circumstances surrounding his termination. 11
Section 1140 is concerned with acts taken against employees to prevent rights from ripening. The prohibitions under the statute do not extend per se to an employer who retains an employee so as to avoid payment of severance benefits under an ERISA plan. 12 See Garavuso v. Shoe Corp. of America Industries, Inc., 709 F.Supp. 1423 (S.D.Ohio 1989), aff'd 892 F.2d 79 (6th Cir.1989). Instead, a section 1140 claimant is required to demonstrate that the employer discharged the claimant "with the specific intent of interfering with ... ERISA benefits." Simmons v. Willcox, 911 F.2d 1077, 1081-82 (5th Cir.1990), citing Clark v. Resistoflex Co., 854 F.2d 762, 770 (5th Cir.1988) ( ). Perdue has failed to point to specific facts which indicate that Bushey induced Perdue's acceptance of the FOM position, or terminated Perdue's employment, with the specific intent of interfering with Perdue's attainment of rights under the Program.
Furthermore, at the time of Perdue's discharge, Perdue did not have rights under the Program with which the defendants could interfere. Upon acceptance of the FOM position, Perdue's right to severance benefits under the Program ceased to exist. Thereafter, any Program rights which Perdue might have would arise only if BKC were to institute either a workforce reduction or a job elimination plan involving the FOM position. Thus, Bushey and BKC did not interfere with Perdue's rights within the meaning of ERISA section 1140. Summary judgment on this claim is proper.
Perdue appeals the district court's ruling that his common law fraud and breach of contract claims are preempted by ERISA, or, alternatively, are void as within the statute of frauds. The district court correctly decided that ERISA preempts Perdue's common law fraud claim because the only damages...
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