Wise v. Lucent Technologies Inc. Pension Plan

• Decision Date: 22 June 2000
• Docket Number: No. CIV.A. H-99-134.,CIV.A. H-99-134.
• Citation: 102 F.Supp.2d 733
• Parties: Charles B. WISE, Plaintiff, v. LUCENT TECHNOLOGIES INC. PENSION PLAN and Lucent Technologies Inc., as successor of Western Electric Co., Defendants.
• Court: U.S. District Court — Southern District of Texas

102 F.Supp.2d 733

Charles B. WISE, Plaintiff, v. LUCENT TECHNOLOGIES INC. PENSION PLAN and Lucent Technologies Inc., as successor of Western Electric Co., Defendants.

No. CIV.A. H-99-134.

United States District Court, S.D. Texas.

June 22, 2000.

COPYRIGHT MATERIAL OMITTED

Gerald Kendrick Payte, Houston, TX, for Charles B Wise, plaintiff.

John L Collins, Seyfarth Shaw et al, Houston, TX, for Kathleen M Decou, Lucent Technologies Incorporated, successor of Western Electric Co., Lucent Technologies, Inc., Pension Plan, defendants.

MEMORANDUM AND ORDER

CRONE, United States Magistrate Judge.

Pending before the court is Defendants Lucent Technologies Inc. Pension Plan ("the Lucent Plan") and Lucent Technologies Inc.'s ("Lucent") Motion for Summary Judgment (# 20). Having reviewed the motion, the submissions of the parties, the pleadings, and the applicable law, the court is of the opinion that Defendants' motion should be granted.

I. Background

Wise is a resident of Kingwood, Texas, and is a former employee of Western Electric Company ("Western"), in Shreveport, Louisiana. Lucent is the successor-in-interest to various assets and obligations of Western. Before January 1, 1984, Western was a wholly-owned subsidiary of American Telephone & Telegraph Company ("AT & T"). From 1984 to 1996, the former manufacturing operations of Western operated as divisions or subsidiaries of AT & T. Lucent operated these businesses as subsidiaries of AT & T from February 1996 through September 1996. On October 1, 1996, Lucent became independent of AT & T.

The Lucent Plan is the successor to the Western Electric Plan for Employees' Pensions, Disability Benefits and Death Benefits ("the Western Plan") in effect on February 13, 1970. The Lucent Plan contains a claims review procedure, which benefit claimants are obligated to exhaust before seeking judicial relief. Claimants must first present their claims to the plan administrator and may then appeal the administrator's decision to the Employees' Benefit Committee ("EBC"). The Lucent Plan provides that the EBC has full discretion to consider and decide such claims and that its determinations are final and binding. Specifically, Article 3.4 of the Lucent Plan states:

3.4 Conclusive Determination by the Committee

The Committee shall be the final review committee under the Plan, with the authority to determine conclusively for all parties any and all questions arising from the administration of the Plan, and shall have sole and complete discretionary authority and control to manage the operation and administration of the Plan, including, but not limited to, the determination of all questions relating to eligibility for participation and benefits, interpretation of all Plan provisions, determination of the amount and kind of benefits payable to any participant, spouse or beneficiary, and construction of disputed or doubtful terms. Such decisions shall be conclusive and binding on all parties and not subject to further review.

Similarly, paragraphs 3 and 4 of Section 3 of the Western Plan in effect in 1970 provided that the EBC "shall determine conclusively for all parties all questions arising in the administration of the Plan" and "shall be empowered to authorize disbursements according to [the Plan's] regulations." In addition, Paragraph 3 of Section 8 of the plan provided that "[i]n all questions relating to the term of employment and rates of pay of employees, the decision of the Committee, based upon the Regulations and upon the records of the Company, shall be final."

Wise began working in an hourly manufacturing position at Western's Shreveport plant on February 21, 1949. On July 22, 1966, after seventeen years and five months of employment, he resigned from his position with Western. The pension plan in effect at the time of Wise's resignation was the 1964 Western Electric Plan For Employees' Pensions, Disability Benefits And Death Benefits ("the 1964 Plan"). The 1964 Plan provided a pension benefit only to employees who reached retirement age and met other qualifications while still employed by Western. There was no provision in the 1964 Plan for payment of a deferred vested benefit.

On November 16, 1966, Western's Board of Directors passed a resolution authorizing the EBC to permit credit for prior service if the employee worked continuously for a five-year period following reemployment. Effective June 1, 1969, the Western Plan was amended to provide a deferred service benefit payable at age 65 for employees who attained age 40 and had 15 years of service and whose employment terminated on or after June 1, 1969 ("the 1969 Plan"). The 1969 Plan specifically provided, however, that without contrary authorization from the Board of Directors, an employee's absence would generally be considered a break in service and, therefore, would not be added to any period of later employment. The 1966 Board resolution authorized an exception to the break-in-service provision for employees who had five years of continuous service after a period of absence.

Wise was rehired by Western on August 8, 1969. He worked for only six months and five days before he resigned again on February 13, 1970. For the next twenty-five years, Wise had no contact with Western or any of its successor entities.

Wise attained age 65 on April 1, 1991, and sought a pension from Lucent four or five years later, sometime in 1996 or 1997. Wise applied for benefits under the Lucent Plan, claiming entitlement to a deferred service pension under the 1969 Plan due to his seventeen years of service with Western between 1949 and 1966 and his subsequent reemployment for six months in 1969 and 1970.

On January 14, 1998, Kathleen M. DeCou ("DeCou"), Lucent's Pension Plan Administrator, denied Wise's claim. DeCou's letter to Wise explains, in part:

As Lucent Technologies Pension Plan Administrator, I have the responsibility to adjudicate claims arising under the Lucent Technologies Inc. Pension Plan (LTPP). After a full review of all available information (including the material submitted with your claim, if any) and the terms of the LTPP, I have determined that I must deny your claim for eligibility for a deferred service pension.

* * * * * *

When you resigned from the Company on July 22, 1996 you did not meet the age and service requirements under the pension plan covering Western Electric employees for an immediately payable service pension. There was no provision in the pension plan at that time for payment of a vested pension. The only pension available at that time was a service pension for those employees terminating with the requisite age and service combination. Provision for a "deferred service pension" was first introduced into the pension plan effective June 1, 1969, which was a date subsequent to your resignation from Western Electric's active payroll on July 22, 1966. As stated above, the deferred service pension provision of the pension plan only applied to those employees on the active payroll on or after June 1, 1969, who were at least age 40 with a minimum of 15 years term of employment (commonly referred to as Net Credited Service).

Company records indicate that you were rehired on August 8, 1969 and resigned again on February 13, 1970. On February 13, 1970 you had only six months, five days of term of employment as defined by the Pension Plan, so although you were then over age 40, you did not meet the Plan's minimum 15 years of term of employment requirement. It is important to note that Company policy with respect to service bridging required that you would have had to work five consecutive years following your reemployment on August 8, 1969 in order for your prior 17 years of service to be bridged. Since you returned to work for less than five years, you did not meet the service bridging eligibility requirements prior to your resignation on February 13, 1970.

Accordingly, per the terms of the then current Plan, on February 13, 1970 your term of employment was six months, 5 days. Since you did not meet the requirement of at least 15 years of term of employment when you left the active payroll on February 13, 1970, in accordance with the provisions of the Plan, you are not eligible for a deferred service pension.

Because the LTPP is a qualified pension plan under the Internal Revenue Code, the Company is required by federal law to administer the Plan in strict accordance with its terms and provisions. Therefore, the Company simply cannot make exceptions to the provisions of the Plan for you or other individuals in similar situations.

At deposition on January 12, 2000, Wise claimed that, sometime after he left Western in 1966 and while he was working elsewhere, he had a meeting at Western's Sheveport plant with Jack Banks ("Banks"), a production superintendent, and Stan Schneider ("Schneider"), an assistant superintendent. According to Wise, the parties discussed the possibility of his returning to work at the plant. Wise further testified that he informed Banks and Schneider that he wanted his past service bridged so that he would be eligible for a deferred vested pension. The parties allegedly discussed the possibility of bridging Wise's past service if he worked at the plant for another six months. At deposition, Wise stated that he told Banks and Schneider, "When you send off to the benefit service committee and get it approved and everything like that, I'll come back."

According to Wise, in 1970, during a subsequent conversation with Banks and Schneider, they showed him a piece of paper and said, "Here it is. It's all been signed. You've been approved, and your service will be bridged." Although Wise testified at deposition that the paper had the words Western Electric "written all over it" and was signed by the secretary of the benefits service committee, he could not remember any of the specific language of the purported document. Wise further admitted that he never had a copy of...