Shahid v. Ford Motor Co.

• Decision Date: 01 March 1996
• Docket Number: No. 94-1792,94-1792
• Citation: 76 F.3d 1404
• Parties: Pens. Plan Guide P 23918O Mary Legree SHAHID, Plaintiff-Appellant, v. FORD MOTOR COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 1404

76 F.3d 1404

Pens. Plan Guide P 23918O

Mary Legree SHAHID, Plaintiff-Appellant, v. FORD MOTOR COMPANY, Defendant-Appellee.

No. 94-1792.

United States Court of Appeals Sixth Circuit.

Argued Oct. 17, 1995.

Decided March 1, 1996.

Robin H. Kyle (argued and briefed), Robin H. Kyle, J.D., LL.M., Detroit, MI, for Mary Legree Shahid.

Lauren A. Rousseau, Sarah G. Tomai (argued and briefed), Ford Motor Co., Dearborn, MI, for Ford Motor Co.

Before: BATCHELDER and MOORE, Circuit Judges; ENSLEN, Chief District Judge. ^*

MOORE, Circuit Judge.

Appellant Mary Legree Shahid appeals the district court's grant of summary judgment in favor of Appellee Ford Motor Company ("Ford") on Shahid's claim that Ford terminated her employment in order to deprive her of the benefits of Ford's Voluntary Termination Plan ("VTP") in violation of Section 510 of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1140. We affirm.

I

Ford terminated Shahid in February 1991, because she violated Ford policy by accepting and coercing commissions or kickbacks from a travel company for referring Ford business to them. Before discovering Shahid's misconduct, Ford had planned to terminate her as part of company-wide "head count reductions." When Shahid was informed that her position would be eliminated, she inquired whether she could participate in the VTP, which is a severance plan through which Ford selects employees to terminate their employment voluntarily in return for severance pay, reemployment assistance, special retirement benefits, and other benefits. On December 5, 1990, Shahid met with two of Ford's Employee Relations associates, who provided her with details about the benefits offered under the VTP and offered her a 30-day "open window" period to consider voluntarily terminating her employment under the plan. On December 17, 1990, Bernard Restuccia, Shahid's supervisor, recommended that she delay her "acceptance" of the VTP because Ford was considering adopting a new special early retirement plan that might be more beneficial to her. He also extended her "open window" period until January 31, 1991.

Before Shahid formally requested that Ford allow her to participate in the VTP, Ford received from Ruby Thompson, the president of a travel company, a letter dated December 4, 1990, indicating that Shahid had accepted and coerced commissions or kickbacks from Thompson in exchange for referrals of Ford business to the travel company. On December 18, 1990, during a meeting with two Ford representatives, Shahid admitted that she had accepted "commissions" on Ford business. Later that day, Restuccia suspended Shahid with pay pending the outcome of an investigation of her conduct. Shahid inquired whether this matter would affect her eligibility for the VTP, and Restuccia told her that all employment matters were on hold pending the outcome of the investigation.

On January 2, 1991, Ford in-house counsel Nancy Schott advised Shahid's attorney by telephone that Shahid was not eligible for the VTP. Despite her ineligibility, Shahid notified Ford by letter dated January 11, 1991, that she had decided to participate in the VTP. On January 24, 1991, Schott sent Shahid's attorney a letter reiterating that Shahid was not eligible for the VTP. On February 15, 1991, Restuccia terminated Shahid's employment at Ford based on a recommendation from Employee Relations, which concluded that Shahid had violated Ford's Policy Letter C-3 governing "Standards of Corporate Conduct."

II

Shahid argues that the district court erred by granting Ford's motion for summary judgment on Shahid's claim under ERISA § 510 that Ford terminated her employment for the purpose of denying her benefits under the VTP. This court reviews a district court's grant of summary judgment de novo, applying the same test that the district court utilizes. Adkins v. United Mine Workers, 941 F.2d 392, 399 (6th Cir.1991), cert. denied, 502 U.S. 1098, 112 S.Ct. 1180, 117 L.Ed.2d 424 (1992). Pursuant to Federal Rule of Civil Procedure 56(c), summary judgment shall be granted if there is no genuine issue of material fact and if the movant is entitled to judgment as a matter of law.

Section 510 of ERISA makes it unlawful for an employer to terminate an employee for the purpose of interfering with the employee's rights under an employee benefit plan:

It shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan ..., or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan....

29 U.S.C. § 1140. Furthermore, section 510 provides that "[t]he provisions of section 1132 of this title shall be applicable in the enforcement of this section." Id. Section 1132, ERISA § 502, states that

A civil action may be brought--

...

* * *

(3) by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan.

29 U.S.C. § 1132(a)(3). Section 510 was primarily designed to prevent "unscrupulous employers from discharging or harassing their employees in order to keep them from obtaining vested pension rights." West v. Butler, 621 F.2d 240, 245 (6th Cir.1980).

We agree with the district court's finding that the VTP is an ERISA plan. ¹ ERISA applies to any "employee benefit plan" under ERISA, which is defined as an "employee welfare benefit plan," an "employee pension benefit plan," or a "plan which is both." ERISA § 3(3), 29 U.S.C. § 1002(3). The term "employee welfare benefit plan" means

any plan, fund, or program ... established or maintained by an employer ... for the purpose of providing for its participants ... (A) medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment, or vacation benefits, apprenticeship or other training programs, or day care centers, scholarship funds, or prepaid legal services, or (B) any benefit described in section 186(c) of this title....

ERISA § 3(1), 29 U.S.C. § 1002(1). The term "employee pension benefit plan" means "any plan, fund, or program ... established or maintained by an employer ... to the extent that by its express terms or as a result of surrounding circumstances such plan, fund, or program ... provides retirement income to employees...." ERISA § 3(2)(A)(i), 29 U.S.C. § 1002(2)(A)(i). "The hallmark of an ERISA benefit plan is that it requires 'an ongoing administrative program to meet the employer's obligation.' " Swinney v. General Motors Corp., 46 F.3d 512, 517 (6th Cir.1995) (citing Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 11-12, 107 S.Ct. 2211, 2217-18, 96 L.Ed.2d 1 (1987) (finding ERISA inapplicable to a Maine statute where a "one-time, lump-sum payment triggered by a single event requires no administrative scheme whatsoever to meet the employer's obligation.")). In determining whether an ERISA plan exists, this circuit has stated that

"[s]imple or mechanical determinations do not necessarily require the establishment of ... an administrative scheme; rather, an employer's need to create an administrative system may arise where the employer, to determine the employees' eligibility for and level of benefits, must analyze each employee's particular circumstances in light of the appropriate criteria."

Sherrod v. General Motors Corp., 33 F.3d 636, 638 (6th Cir.1994) (quoting Kulinski v. Medtronic Bio-Medicus, Inc., 21 F.3d 254, 257-58 (8th Cir.1994) (holding that "golden parachute" for executives was not an ERISA plan because it did "not require establishment of an administrative scheme")). "The need for an administrative scheme may also arise when the employer 'assumes ... responsibility to pay benefits on a regular basis, and thus faces ... periodic demands on its assets that create a need for financial coordination and control.' " Swinney, 46 F.3d at 517 (quoting Fort Halifax Packing, 482 U.S. at 12, 107 S.Ct. at 2217-18)).

Severance pay plans are included in the definition of 29 U.S.C. § 1002(1)(B), which refers to section 302(c) of the Labor-Management Relations Act ("LMRA"), 29 U.S.C. § 186(c), to illustrate the types of benefits characterized as employee welfare benefit plans under ERISA. Since section 186(c)(6) describes "pooled vacation, holiday, severance or similar benefits," such benefits qualify as employee welfare benefit plans. See also 29 C.F.R. § 2510.3-1(a)(3) (plans which provide severance benefits are within definition of "welfare plan"). Thus, Ford's VTP is an ERISA plan since the "major features" of the plan "include (1) substantial severance payment; (2) professional re-employment assistance; (3) continuance of medical (excluding dental/vision) and life insurance coverages for up to one year; and (4) retirement 'grow-in' provisions." Voluntary Termination Plan Summary, J.A. at 65, 69. See, e.g., Massachusetts v. Morash, 490 U.S. 107, 116, 109 S.Ct. 1668, 1673, 104 L.Ed.2d 98 (1989) ("plans to pay employees severance benefits, which are payable only upon termination of employment, are employee welfare benefit plans within the meaning of [ERISA]").

On review, this court must determine whether Shahid is a "participant" under ERISA, which is essential to this court's jurisdiction and her standing to sue. If Shahid is a "participant," we must decide whether Ford discriminated against Shahid for the purpose of interfering with the receipt of any benefits to which she may have become entitled under the VTP. The Sixth Circuit applies the Burdine burden-shifting approach where "there is no direct evidence of the employer's motivation." Humphreys v. Bellaire...