Sunwoo v. JPMorgan Chase & Co., 20-CV-5410 (VSB)

• Decision Date: 15 June 2021
• Docket Number: 20-CV-5410 (VSB)
• Parties: Richard Sunwoo, Plaintiff, v. JPMorgan Chase & Co., JPMorgan Chase Bank, National Association, and JPMorgan Chase Severance Pay Plan Administrator, and Does 1-50, Defendants.
• Court: U.S. District Court — Southern District of New York

Richard Sunwoo, Plaintiff, v. JPMorgan Chase & Co., JPMorgan Chase Bank, National Association,and JPMorgan Chase Severance Pay Plan Administrator,and Does 1-50, Defendants.

20-CV-5410 (VSB)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

June 15, 2021

OPINION & ORDER

Appearances:

Robert Walter Ottinger, Jr.

Benjamin D Weisenberg

The Ottinger Firm, P.C.

New York, NY

Counsel for Plaintiff

Melissa D Hill

Tyler James Hill

Morgan, Lewis & Bockius LLP

New York, NY

Counsel for Defendants

VERNON S. BRODERICK, United States District Judge:

Plaintiff Richard Sunwoo ("Plaintiff") brings this action against Defendants JPMorgan Chase & Co. ("JPMC"), JPMorgan Chase Bank, National Association ("JPMCNA"), JPMorgan Chase Severance Pay Plan Administrator ("JPMCSPPA"), and Does 1-50, unascertained individuals who are and/or were in active control and management of JPMC and regulated the employment of persons employed by JPMC (collectively, "Defendants"), for: (1) breach of a September 3, 2018 Release Agreement between Defendants and Plaintiff; (2) fraudulent misrepresentation; and (3) improper denial of benefits under JPMC's Severance Plan, pursuant to the Employee Retirement Income Security Act ("ERISA") of 1974, § 502 et seq., 29 U.S.C. § 1132 et seq. Before me is Defendants' motion to dismiss Plaintiff's Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). Plaintiff requests that I deny Defendants' motion or, in the alternative, grant him leave to amend his complaint.

Because Plaintiff's state law claims essentially emanate from and require review and analysis of JPMC's Severance Plan so as to require ERISA preemption and Plaintiff has failed to state a remaining claim for relief under ERISA, Defendants' motion is GRANTED. Plaintiff's request for leave to file an amended complaint is DENIED without prejudice to refiling his request accompanied by a proposed amended complaint.

1. Factual Background¹

Plaintiff began his employment with Defendant JPMC in 2002 and, after several promotions, assumed the role of Private Client Advisor. (Doc. 1, Compl. 2, ¶ 5.)² On August 3, 2018, Plaintiff received a notice of termination from Defendant JPMC informing him that his employment with the company would end on September 16, 2018, due to changes in staffing needs ("Notice Letter"). (Id. at 3, ¶ 1.) This Notice Letter states, in relevant part:

If you do not secure a position within the Firm by your termination date, provided you comply with your employment obligations described herein, you will be eligible for a payment equal to 48 weeks of severance-eligible compensation, based on annual eligible compensation of $400,000, reduced by any non-working notice period, in accordance with the terms of the Severance Plan. Your severance payment will be paid to you in one lump sum, provided that you timely execute theRelease Agreement ("Release"), and further provided you comply with your employment obligations described herein.

The severance pay and related benefits and services outlined in this letter (which are conditioned upon signing the Release), exceed any pay and/or benefits you would be eligible to receive if you do not sign the Release.

If the Firm receives your executed Release within the required time frame, subject to your compliance with your employment obligations described herein, your severance payment will be made within two regularly-scheduled pay periods after your termination date.

. . .

If for any reason the number of weeks of severance pay described in this letter differs from the number of weeks that you are eligible to receive under the Severance Plan, you will receive the number of weeks specified in the Severance Plan.

(Id.; Doc. 28, Pl.'s Decl. Ex. 1, at 1-2.)³

The Severance Plan referenced in the Notice Letter is governed by ERISA, and provides for a Plan Administrator with

full, sole and absolute discretion to interpret and administer the Plan, including, but not limited to determining whether an eligible termination has occurred, whether the circumstances of any particular separation makes payment of severance pay under the Plan appropriate, the amount of severance pay, and the form of the Release Agreement to be signed by the participating employees. . . . The decisions of the Plan Administrator or its delegates shall be final and binding on all employees.

(Doc. 22, Hill Decl. Ex. A, at 15, 13.)⁴ "The Plan Administrator has delegated to Corporate Employee Relations Americas the authority to decide initial claims under the Plan." (Id., Ex. A, at 11.) Employees eligible for severance pay under the Plan are entitled to receive "a number of weeks of severance pay calculated based upon [their] Eligible Compensation and years ofContinuous Service as of [their] termination date," (id., Ex. A, at 8), subject to the following formula:

For salaried employees, your weekly base salary, including any applicable shift differential and language differential, but excluding all bonuses, commissions, overtime, and other forms of special or incentive remuneration. This amount is multiplied by 52 to determine your annual eligible compensation.

Note: Compensation greater than $400,000 per year is disregarded for purposes of determining Eligible Compensation.

(Id., Ex. A, at 5.) Included in the Plan is a table for ascertaining the number of weeks of severance due based upon an employee's years of service. (Id., Ex. A, at 8.) The Plan unambiguously provides that "[o]nly the official Plan documents are used to determine severance pay eligibility or resolve claims disputes." (Id., Ex. A, at 13.) The means of contesting a severance pay decision by the Administrator is detailed in the Plan: an employee who disputes the amount of severance pay received "may write to Corporate Employee Relations," although a written claim "received more than 60 days after the event giving rise to the claim will be denied." (Id., Ex. A, at 11.) An employee whose initial claim for severance pay is denied "may appeal the decision in writing to the Plan Administrator" within 60 days of the denial. (Id., Ex. A, at 12.)

After receiving the Notice Letter, Plaintiff spoke by telephone with an authorized representative of Defendants, who stated that the call was being conducted on a recorded line. (Compl. 3, ¶¶ 2-3.) The representative clearly and repeatedly confirmed, at Plaintiff's request, that Plaintiff would receive forty-eight weeks of pay calculated upon an annual eligible base compensation of $400,000—that is, $369,230.77—in exchange for executing the Release Agreement described in the notice letter. (Id. at 3-4, ¶¶ 4-5.)

On September 3, 2018, Plaintiff entered into a Release Agreement ("Release") with JPMC, pursuant to which he released all claims related to his employment with the company in exchange for the severance payment described in the Notice Letter. (Id. at 4, ¶ 6.) The Release states, in relevant part, that:

I, Richard Sunwoo (U432310), sign this Release Agreement ("Release") in exchange for the severance pay, severance related benefits and career services described in the Notice Letter to me dated August 3, 2018 (the "Notice Letter"). The notice letter is incorporated into this release by reference.

I understand that this Release will be binding on me, my heirs, assigns, representatives and estate. I hereby release JPMorgan Chase & Co. (and any predecessor or successor entities thereof), . . . any fiduciaries of any employee benefit plan (collectively, the "Company") from all liability for any claims or potential claims relating to my employment with the Company and/or the termination of my employment, subject to the exceptions listed below. I understand that "claims" includes claims I know about and claims I do not know about, as well as the continuing effects of anything that happened before I sign below.

The claims covered by this Release include but are not limited to the following, to the extent such claims may be waived or released under applicable law:

• any claims under any federal, state or local law, including, but not limited to, . . . the Employee Retirement Income Security Act of 1974 ("ERISA") including, but not limited to, breach of fiduciary duty and equitable claims arising under 1132(a)(3) of ERISA, . . .

The following are claims that I am not releasing:

• any rights or claims . . . (ii) under the terms of the Notice Letter . . .

(Id.; Pl.'s Decl. Ex. 2.) The Release provided for a seven-day window after signing for Plaintiff to revoke his agreement to the Release. (Id., Ex. 2, at 5.) According to the terms of the Release, the "Release and the Notice Letter set forth the entire agreement and fully supersede any and all prior agreements or understandings between the Company and [Plaintiff]" and could not be "altered, amended, modified, superseded, canceled or terminated except by an express written agreement signed by both the Company and [Plaintiff]." (Id.) The Release also advised thatPlaintiff "discuss this Release with an attorney of [his] choosing (at [his] own expense) prior to the execution of this Release." (Id.) By signing, Plaintiff confirmed that he had "read this Release, under[stood] it, agree[d] to it and sign[ed] it knowingly and voluntarily," and that he was "given a reasonable period of time (at least forty-five (45) calendar days) to review, consider and sign this Release." (Id.)

According to an April 14, 2020 letter from Defendants, (Pl.'s Decl. Ex. 5), Plaintiff was provided a notice on September 7, 2018 "which indicated an earlier administrative error in calculation of the number of weeks of severance to which he [was] entitled (the 'Revised Notice')." This Revised Notice purportedly "indicated that Mr. Sunwoo was entitled to 40 weeks of severance, which matched the timeframe for employees with Eligible Compensation of Less than $150,000/Year and the Revised Notice referenced page 8 of the Plan." (Id., at 2.)⁵

Plaintiff did not revoke the Release within the seven-day window after signing the agreement; the Release...