Wallin v. Severance Plan of Electronic Data Systems , 84 F. App'x 193 ( 2003 )

Opinions of the United
2003 Decisions States Court of Appeals
for the Third Circuit
12-23-2003
Wallin v. Severance Plan Elec
Precedential or Non-Precedential: Non-Precedential
Docket No. 03-1524
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"Wallin v. Severance Plan Elec" (2003). 2003 Decisions. Paper 28.
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 03-1524
IRA WALLIN,
Individually and as Class Representative on behalf of all other similarly situated
plaintiffs,
Appellant
v.
THE SEVERANCE PLAN OF ELECTRONIC DATA SYSTEMS; THE PLAN
COMMITTEE AND ADMINISTRATOR OF THE SEVERANCE PLAN OF
ELECTRONIC DATA SYSTEMS; ELECTRONIC DATA SYSTEMS
CORPORATION
On Appeal from the United States District Court
for the District of New Jersey
(Dist. Ct. No. 01-cv-05463)
District Judge: Honorable William J. Martini
Submitted Under Third Circuit LAR 34.1(a)
November 19, 2003
Before: RENDELL, BARRY and CHERTOFF, Circuit Judges.
(Filed: December 23, 2003)
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OPINION
CHERTOFF, Circuit Judge.
Appellant Ira Wallin (“Wallin”) appeals the judgment and order of the District
Court granting summary judgment in favor of Appellees, The Severance Plan of
Electronic Data Systems; the Plan Committee and Administrator of The Severance Plan
of the Electronic Data Systems; and Electronic Data Systems Corporation (collectively
“EDS”). Wallin filed a class action suit against EDS to recover benefits from EDS’s
Severance Plan (“the Plan”) under the Employee Retirement and Income Security Act
(“ERISA”), 29 U.S.C. §§ 1001-1461 (1994). For the reasons set forth below, we will
affirm the judgment and order of the District Court.
I.
We will review the facts only briefly. Wallin was employed by Electronic Data
Systems Corporation (the “Company”) in September of 1988. On October 11, 2001, two
Company managers telephoned Wallin to inform him that he was being terminated. The
following day, on October 12, 2001, Wallin received his severance package materials in
the mail. Wallin claims that only then did he learn that the Severance Plan had been
amended on October 5, 2001, and that his severance package had been altered.
Before the October 2001 amendment, the Plan provided participants with two
weeks of Weekly Base Pay in severance benefits per each complete Year of Service, with
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a maximum of twenty-six weeks of Weekly Base Pay. After it was amended in October
2001, the Plan stipulated that participants with fewer than three Years of Service were to
be provided two weeks of Weekly Base Pay in severance. Those participants with three
or more Years of Service would be extended four weeks of Weekly Base Pay. Given his
tenure at EDS, Wallin would have received the maximum twenty-six weeks of severance
pay before October 2001, but was entitled to four weeks of severance pay under Plan
amended in October 2001.
Wallin filed suit against EDS in District Court on November 27, 2001, and filed
an amended complaint on March 22, 2002. In his amended complaint, Wallin alleged
breach of the written provisions of the Plan, breach of fiduciary duty, and a claim of
equitable estoppel against EDS. On January 23, 2003, the District Court denied Wallin’s
motion for Leave to File a Second Amended Class Action Complaint and granted EDS’s
motion for summary judgment.
II.
This Court has jurisdiction to review the grant of summary judgment under 28
U.S.C. § 1291. We exercise plenary review of the District Court’s grant of summary
judgment. See Blair v. Scott Speciality Gases, 283 F.3d 595, 602-03 (3d Cir. 2002). We
examine the facts in the light most favorable to the non-moving party and affirm the
grant of summary judgment if there is no genuine issue of material fact and if the moving
party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). Based on the record,
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we find that Wallin created no genuine issue as to any material fact relevant to his claims.
First, Wallin argues that the District Court wrongly granted summary judgment
against his claim that EDS violated the notice provisions of the Plan and that EDS
otherwise “actively concealed the purported Plan amendment, as part of a layoff
program, until they had commenced the layoffs.” (Appellant’s brief at 10). We disagree.
ERISA’s notice and disclosure requirements provide that the administrator of an
employee benefit plan must furnish participants and beneficiaries with a readily
understandable summary of any “material modifications” in accordance with the notice
and disclosure requirements contained in Section 104(b)(1) of ERISA, 29 U.S.C.
§1024(b)(1). Such notification must be made within 210 days of the end of the plan
year. Id.Wallin argues that the specific terms of the Plan imposed burdens on EDS beyond
ERISA’s requirements. He points to Section 5.2 of EDS’s Severance Plan, titled
“Amendment or Termination,” that was in effect prior to the October 5, 2001,
amendments. Section 5.2 reads in part, “EDS reserves the right to modify or terminate
the Plan at any time. EDS through the Board of Directors or any committee designated
by said Board of Directors may amend the Plan pursuant to a formal resolution. If this is
done, eligible Participants will be notified of any important changes.” (App. 64)
Wallin contends that this language “constitutes an extra-ERISA commitment,
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above and beyond the statutory [210 day] notice requirement,” which “impos[ed] an
immediate notice burden on defendants.” (Appellant’s brief at 13). He argues that
“defendants undertook an extra-statutory notice obligation without which notification of
an ‘important’ change, the Plan cannot be amended.” (Appellant’s reply brief at 4)
In fact, the plain language of the Plan only states that “participants will be
notified” about “important changes” to the Plan. The record indicates that Wallin did
receive written notice of the October 5, 2001, amendments to the Plan on October 12,
2001, seven days after EDS had adopted the amended Plan. Wallin’s claim that EDS
was required to provide “immediate” notification is unfounded. No language in the Plan
states, and no evidence suggests, that EDS was obligated to provide notification of
changes within a specific period of time, or that it was required to provide simultaneous
disclosure of the Committee’s adoption of an amendment to the Plan.
Wallin also argues that the District Court should have upheld his claim that EDS
“actively concealed” changes to the Plan by “burying” the information in its intranet site
that was only accessible to management employees. This contention is frivolous. Even
if Wallin was not able to access the Company’s intranet site on October 11, 2001, when
he was first notified of his termination, he received a copy of the amended Plan the
following day on October 12, 2001. One day’s lapse in disclosure hardly constitutes
“concealment.” And the fact that EDS had on one occasion provided notice of a Board
resolution on the same day it was adopted (the “Todd Memo” of July 27, 1999) does not
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suggest that a subsequent decision not to provide simultaneous notice constitutes active
concealment by the Company.
Next, Wallin asserts that the District Court improperly granted summary judgment
in favor of EDS on Wallin’s claims of breach of fiduciary duty. This Court has held that
in order to sustain a breach of fiduciary duty complaint under ERISA, a plaintiff must
demonstrate (1) the company was acting in a fiduciary capacity; (2) the company made
affirmative representations or failed to adequately inform plan participants and
beneficiaries; (3) the company knew of the confusion generated by its misrepresentations
or its silence; and (4) there was resulting harm to the employees. Int’l Union, United
Auto., Aerospace & Agric. Implement Workers of Am., U.A.W. v. Skinner Engine Co.,
188 F.3d 130, 148 (3d Cir. 1999).
Wallin’s claim founders at the second prong of this test, i.e. “that the company
made affirmative representations or failed to adequately inform plan participants and
beneficiaries.” In support of his breach of duty claim, Wallin simply repackages his
contention that EDS “actively concealed” information on its intranet site and failed to
provide simultaneous notification of the Board resolution to Plan beneficiaries. We have
rejected these arguments already, and they become no more persuasive garbed in the
language of breach of fiduciary duty.
Wallin’s final argument is that he is entitled to relief from EDS’s October 5, 2001,
amendment to the Plan based on a theory of equitable estoppel. In order to succeed
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under this theory of relief, an ERISA plaintiff must establish (1) a material
representation, (2) reasonable and detrimental reliance upon the representation, and (3)
extraordinary circumstances. Curcio v. Hancock Mut. Life Ins. Co., 33 F.3d 226, 235-36
(3d Cir. 1994) (internal citations omitted).
A few days’ delay of notification of a Plan amendment does not rise to the level of
a material misrepresentation. Moreover, Wallin has failed to provide evidence to
substantiate a finding of substantial harm based on this delay. He argues that in the
seven-day window from the date the Board amended the Plan to the date he received
written notice of the changes, i.e. October 5, 2001 to October 12, 2001, EDS “usurp[ed]
[his] opportunity to make an informed decision regarding the future of his benefits and
employment.” (Appellant’s brief at 28). However, an excerpt from Wallin’s deposition
suggests that his complaint is grounded more in wishful thinking than reality.
Q. It is speculation on your [Wallin’s] part that the position [at Merck
Medco] was even still available as of October 5, correct?
A. Yes.
Q. And between October 5th and October 11th you did not turn down any
employment opportunities, correct?
A. Right. There were no specific opportunities offered.
Q. And during that time, between October 5th and October 11th, you were
not pursuing any opportunities, correct?
A. Correct.
Q. And nobody was pursuing you during that time frame, correct?
A. Correct.
(App. 116-17, Wallin Dep. at 73-74).
No further discussion is necessary. EDS amended its Severance Plan on
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October 5, 2001, and provided Wallin with notice of amendments to the Plan on October
12, 2001. Wallin did not provide evidence to suggest that EDS failed follow the notice
requirements of the Plan or breached its fiduciary responsibilities to him. His request for
relief under a theory of equitable estoppel is also unfounded. Accordingly, the judgment
of the District Court will be affirmed.
TO THE CLERK:
Please file the foregoing opinion.
/s/ Michael Chertoff
Circuit Judge
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