Raines v. Owens-Brockway ( 1998 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
JAMES C. RAINES,
Plaintiff-Appellant,
v.
No. 97-2431
OWENS-BROCKWAY GLASS
CONTAINERS, INCORPORATED,
Defendant-Appellee.
Appeal from the United States District Court
for the Southern District of West Virginia, at Huntington.
Joseph Robert Goodwin, District Judge.
(CA-94-1039-3)
Argued: September 22, 1998
Decided: December 29, 1998
Before NIEMEYER, HAMILTON, and LUTTIG, Circuit Judges.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
ARGUED: James William St Clair, ST CLAIR & LEVINE, Hunting-
ton, West Virginia, for Appellant. Robert Kemp Morton, III, HUD-
DLESTON, BOLEN, BEATTY, PORTER & COPEN, Huntington,
West Virginia, for Appellee. ON BRIEF: Daniel J. Konrad, HUD-
DLESTON, BOLEN, BEATTY, PORTER & COPEN, Huntington,
West Virginia, for Appellee.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
James C. Raines (Raines), a former employee of Owens-Brockway
Glass Containers, Inc. (Owens), brought this action against Owens
pursuant to § 502(a)(1)(B) of the Employee Retirement Income
Security Act of 1974 (ERISA), 29 U.S.C. § 1132(a)(1)(B), seeking to
recover (1) early retirement benefits under the Sixth Amended and
Restated Owens-Illinois Salary Retirement Plan (the Retirement Plan)
and (2) severance pay benefits under a document entitled "Termina-
tion Benefits For Salaried Employees due to the closing of the Hun-
tington, West Virginia Owens-Brockway Glass Container Plant" (the
Termination Document). (J.A. 37). The district court subsequently
granted summary judgment in favor of Owens, and we now affirm.
I.
Owens owns and operates several glass manufacturing facilities in
the United States. Until December 31, 1993, one of these manufactur-
ing facilities was located in Huntington, West Virginia. Raines began
his employment with Owens in May of 1961 at its facility in Hunting-
ton and continued his employment at the Huntington facility for
thirty-two and one-half years until March of 1994. Raines began his
career with Owens as a controller in charge of the accounting depart-
ment at the Huntington facility. For the last year of his career with
Owens, however, Raines worked as an administrative manager in
charge of the accounting, purchasing and service departments at the
Huntington facility.
On September 28, 1993, Owens announced its decision to close its
facility in Huntington. The facility was scheduled to and did officially
close on December 31, 1993, although Owens asked a few employees
to remain at their jobs past that date to clear the inventory and transfer
the fixed assets of the Huntington facility to other facilities owned by
2
Owens. Raines was one of the employees asked to stay on after the
plant closed.
As part of the closure process, Owens distributed to its Huntington
employees the Termination Document, which outlined the benefits to
which the employees were entitled upon their departure from the
company, including early retirement benefits as provided by the terms
of the Retirement Plan and severance pay. The Termination Docu-
ment consisted of a number of commonly asked questions with
answers. Question and Answer four addressed the issue of severance
pay:
What if I am offered a transfer to another Company facility,
but I refuse?
Normally, if you are offered another job of an equal or
higher evaluation level but refuse, no severance payment is
permitted. However, since this is a plant closing, you will be
eligible for severance pay regardless of your decision.
(J.A. 39). Under the Retirement Plan, early retirement benefits were
available
to any Participant with ten or more years of Credited Service
whose employment with an Employer is terminated as a
result of a change in the organization or operation of the
Employer or as a result of a Reduction in Force and whose
combined age and Years of Credited Service equals the
number 65 or greater.
(J.A. 53-54). Early retirement benefits were not available if an
employee voluntarily resigned from Owens. The parties agree that the
Retirement Plan vested the Benefits Committee with discretion to
determine an employee's eligibility for early retirement benefits.
While Owens terminated many of its Huntington employees, it
offered to transfer Raines to a similar position, which he accepted, at
its manufacturing facility in Zanesville, Ohio. Accordingly, on Octo-
ber 17, 1993, Owens posted a notice at the Zanesville facility that
3
read "Jim Raines will be transferring from Huntington and will
assume the Plant Controller Position. Jim will be traveling between
Zanesville and Huntington for a period of time." (J.A. 42). The trans-
fer became effective on November 1, 1993.
From October 1993 until March 1994, Raines split his time
between the Huntington and Zanesville facilities, working a few days
each week at the Huntington facility transferring inventory and fixed
assets to other manufacturing facilities owned by Owens and working
the remainder of the week at the Zanesville facility receiving training
from the out-going controller. In Zanesville, Raines occupied the out-
going controller's office. During this same time, Raines applied to
receive a relocation allowance from Owens, which Owens granted.
Accordingly, Owens paid Raines' moving expenses and advanced
him the equity in his Huntington home subject to repayment upon his
selling the home, in order that he could promptly purchase a home
near the Zanesville facility. Raines did promptly purchase a home
near the Zanesville facility.
On March 1, 1994, Owens transferred Raines from the Huntington
payroll to the Zanesville payroll. Raines remained on the Zanesville
payroll for two pay periods. On Tuesday, March 15, 1994, Raines
informed the Zanesville plant manager, Jim Kunkle, that he "was not
going to move to Zanesville." (J.A. 115). This conversation was
memorialized in a letter sent by Kunkle to Raines on March 18, 1994.
Owens treated Raines' statement as his resignation from the company.
Raines never returned to either the Huntington or Zanesville facility.
On April 7, 1994, Raines wrote Owens requesting the paperwork
necessary to apply for early retirement. Additionally, he stated his
belief that he "was still on the Huntington plant's payroll when [he]
decided not to go to Zanesville." (J.A. 56). Further, he stated that he
"was suppose [sic] to be on Huntington's payroll until [he] cleared the
inventories and transferred all fixed assets." Id. Later in the same let-
ter, Raines stated that "[a]ny monies [he] received for relocating to
Zanesville is [sic] being repaid [and he] would like to be given the
same options that the rest of the salary employees received when the
plant closed." Id.On April 15, 1994, Owens denied Raines' request for early retire-
ment benefits under the Retirement Plan on the ground that Raines'
4
acceptance of the transfer to Zanesville and subsequent resignation
from that position made him ineligible for such benefits. Specifically,
Owens informed Raines by letter,
Since you are under 55 years of age, the only way in which
you would be able to retire under the plan would be as a
result of a reduction in force where you had not been offered
or accepted an assignment elsewhere. In checking our
records, I understand that you had accepted assignments in
Zanesville and, in fact, had transferred to the Zanesville sal-
ary payroll on March 1, 1994. Your subsequent resignation
would make you ineligible for any benefit that you might
have received as a result of the Huntington plant closing.
(J.A. 57).
Raines appealed to Owens' Benefits Committee, arguing by letter
dated May 6, 1994,
I did not resign and was not an employee of the Zanesville
plant. If I had resigned, I would have written a letter saying
so. . . . I was told that I had been put on the Zanesville plant
as of March 1, 1994. Why was this done? I was told that I
was to be on Huntington's payroll until all accounting,
inventories and fixed assets were closed out. I was still
working several days in Huntington each week doing this.
* * * *
I did accept the transfer to Zanesville but after working
there I found out I had made a mistake. . . . I could not with-
stand the pressures required in the job. It was not the job I
expected when I accepted the transfer.
* * * *
My transfer was not completed when I turned down the
transfer. Relocation expenses were not completed. . . . If I
had transferred, these transactions would have been com-
5
pleted. I did get an advance on my old home to purchase a
house in Zanesville. I am in the process of paying this back
to Owens as I sell the two houses.
(J.A. 59-60) (emphasis added).
On May 18, 1994, Owens' Benefits Committee held a meeting to
discuss, among other matters, the issues raised in Raines' letter. The
minutes of the meeting read as follows:
The Committee reviewed James C. Raines' request for
Reduction In Force for retirement benefits and concluded
that Mr. Raines had transferred to the Zanesville location
and had resigned on his own volition; therefore, was not
entitled to this provision of the plan. REQUEST DENIED.
(J.A. 63). The Benefits Committee informed Raines of its denial by
letter dated May 19, 1994.
Raines subsequently filed this action against Owens to recover
under ERISA early retirement benefits under the Retirement Plan and
severance pay under the Termination Document.* According to
Raines' complaint, he is entitled to a total of $400,000.00. Both par-
ties subsequently moved for summary judgment. On September 17,
1997, the district court granted Owens' motion and denied Raines'
motion. This appeal followed.
II.
Raines first contends that the district court erroneously granted
summary judgment in favor of Owens on his claim for early retire-
ment benefits under the Retirement Plan. We review the district
court's grant of summary judgment in favor of Owens de novo,
employing the same standards applied by the district court. See
Sheppard & Enoch Pratt Hosp. v. Travelers Ins. Co. , 32 F.3d 120,
_________________________________________________________________
*Raines initially brought this action in the Circuit Court of Cabell
County, West Virginia. Owens subsequently removed the case to the
United States District Court for the Southern District of West Virginia
on the basis of federal question jurisdiction. See 28 U.S.C. § 1331.
6
123 (4th Cir. 1994). That we should only review the Benefits Com-
mittee's decision to deny Raines early retirement benefits for abuse
of discretion is not in dispute. See Ellis v. Metropolitan Life Ins. Co.,
126 F.3d 228, 232 (4th Cir. 1997) (holding that where the benefit plan
grants the administrator or the plan fiduciary discretionary authority
to determine eligibility or to construe the terms of the plan, the deci-
sion to deny benefits must be reviewed for abuse of discretion).
Accordingly, as long as the Benefits Committee's decision to deny
Raines' claim for early retirement benefits is the result of "a deliber-
ate, principled reasoning process and if it is supported by substantial
evidence," we must affirm the district court's grant of summary judg-
ment in favor of Owens with respect to that claim. Brogan v. Holland,
105 F.3d 158, 161 (4th Cir. 1997).
Under the Retirement Plan, early retirement benefits were available
to any Participant with ten or more Years of Credited Ser-
vice whose employment with an Employer is terminated as
a result of a change in the organization or operation of the
Employer or as a result of a Reduction in Force and whose
combined age and Years of Credited Service equals the
number 65 or greater.
(J.A. 53-54). The Retirement Plan further provided that if an
employee resigns, such employee is not eligible for early retirement
benefits. From the record before it, the Benefits Committee found that
Raines accepted a transfer to Owens' Zanesville facility as controller
and subsequently resigned from that position, thus making himself
ineligible for early retirement benefits under the terms of the Retire-
ment Plan.
Raines argues that the Benefits Committee abused its discretion in
finding that his transfer to Zanesville became effective prior to his
informing Kunkle that he no longer desired to work at the Zanesville
facility. According to Raines, the only plausible findings the Benefits
Committee could have made from the evidence is that he either
revoked his acceptance of the transfer offer prior to such transfer
becoming effective or that he never actually completed the transfer.
If the transfer never became effective, Raines reasons, he could not
have possibly tendered a resignation from Owens when he informed
7
Kunkle that he no longer desired to work at the Zanesville facility.
Raines' arguments are without merit.
The Benefits Committee's decision to deny Raines' claim for early
retirement benefits is the result of a deliberate, principled reasoning
process and is supported by substantial evidence. The Benefits Com-
mittee had before it evidence that at or near the time of the closure
of the Huntington facility, Raines split his time between that facility
and the Zanesville facility. Indeed, on October 17, 1993, Owens
posted a notice at the Zanesville facility stating that Raines' transfer
would be effective as of November 1, 1993. At the Zanesville facility,
Raines occupied an office held by the former controller at that facility
and the former controller trained Raines in the duties of that position.
Raines applied for relocation expenses and purchased a home in the
Zanesville area. Finally, in his May 6, 1994 letter to the Benefits
Committee, Raines twice admits that he accepted a transfer to the
Zanesville facility. Because Raines accepted the transfer to Zanesville
in October 1993 and informed Kunkle that he no longer desired to
work in Zanesville in March 1994, such admissions, taken with the
other evidence, support the Benefits Committee's finding that Raines
resigned from Owens. Accordingly, the Benefits Committee did not
abuse its discretion by concluding that Raines was not entitled to
early retirement benefits under the explicit terms of the Retirement
Plan.
III.
Raines also contends that he is entitled to severance pay under the
terms of the Termination Document distributed at the time of the
Huntington facility's closing. Again, we review the district court's
entry of summary judgment de novo, applying the same standards as
the district court. See Sheppard, 32 F.3d at 123. The parties agree that
the Termination Document does not confer discretion on the Benefits
Committee with respect to determining an employee's eligibility for
severance pay under that document. Accordingly, we review the Ben-
efits Committee's decision denying Raines' claim for severance pay
under the Termination Document de novo. See Firestone Tire & Rub-
ber Co. v. Bruch, 489 U.S. 101, 114-15 (1989)("[A] denial of benefits
. . . is to be reviewed under a de novo standard unless the benefit plan
8
gives the administrator or fiduciary discretionary authority to deter-
mine eligibility for benefits or to construe the terms of the plan.").
Of significance here, Question and Answer Four of the Termina-
tion Document provides,
What if I am offered a transfer to another Company facility,
but I refuse?
Normally, if you are offered another job of an equal or
higher evaluation level but refuse, no severance payment is
permitted. However, since this is a plant closing, you will be
eligible for severance pay regardless of your decision.
(J.A. 39). The Benefits Committee concluded that this language limits
severance pay to Huntington employees who either declined transfers
and thus left Owens, or who were never offered transfers, and were
thus terminated by Owens. The issue before this court is whether the
Benefits Committee's decision to deny Raines severance pay conflicts
with the plain language of the Termination Document in its ordinary
sense. See Jenkins v. Montgomery Indus., Inc. , 77 F.3d 740, 743 (4th
Cir. 1996) ("Federal courts interpret ERISA regulated benefit plans
without deferring to either party's interpretation, by using ``ordinary
principles of contract law and enforcing the plan's plain language in
its ordinary sense.'" (internal citations omitted)) (quoting Bailey v.
Blue Cross & Blue Shield of Virginia, 67 F.3d 53, 57 (4th Cir. 1995)).
In addressing this issue, we must consider the Termination Document
in its entirety, being careful not to read any of its language out of con-
text. Alexander S. v. Boyd, 113 F.3d 1373, 1383 (4th Cir. 1997).
We hold that the Benefits Committee's decision does not conflict
with the Termination Document in its ordinary sense, inasmuch as
such language can only be read to provide that severance pay is not
normally given to employees who are offered another job of equal or
higher value but, since the Huntington plant was closing, employees
offered lateral employment with Owens would not forfeit their sever-
ance pay benefits if they did not accept such an offer to transfer. To
accept Raines' argument requires us to wholly ignore the meaning of
the term "severance" in its ordinary sense, which New Webster's Dic-
tionary of the English Language 883 (1985), defines as "the act of
severing." Indeed the root word of severance,"sever," means "to part
9
or divide." Id. Obviously, Raines' remaining employed by Owens is
at complete odds with these definitions.
The Termination Document, when viewed in its entirety, is clear
that the severance pay provisions are meant to compensate displaced
employees who either did not receive or did not accept offers of
employment in other Owens facilities. Question and Answer Two of
the same Termination Document states,
What if I obtain other employment and have to leave prior
to December 31?
In order to qualify for severance and a part of next year's
vacation pay as well as notice pay, you are expected to work
until you are officially released. Based upon individual situ-
ations, you may be able to arrange an early release date with
your supervisor. . . . In this case, you would qualify for sev-
erance, vacation payment and notice pay only up to the last
day you worked.
(J.A. 39) (emphasis added). Obviously, for an employee to qualify for
severance pay, Owens must sever the employment relationship with
that employee by means of an official release. Viewing both Question
and Answer Two and Four together, in accordance with our duty to
view the Termination Document in its entirety, the Termination Doc-
ument clearly provides that severance pay is meant only for displaced
employees and not for employees like Raines who remained
employed with Owens, albeit for a short period of time. Raines was
not officially released from Owens, he accepted a transfer to its
Zanesville facility and subsequently voluntarily resigned from Owens.
Accordingly, under the explicit terms of the Termination Document,
he does not qualify for severance pay.
In sum, we conclude that the district court properly granted sum-
mary judgment in favor of Owens on Raines' claim for severance pay
under the Termination Document.
IV.
For the reasons stated herein, the judgment of the district court is
affirmed.
AFFIRMED
10
NIEMEYER, Circuit Judge, concurring in part and dissenting in part:
In connection with the closing of its Huntington, West Virginia,
plant, Owens-Brockway offered its employees at that plant various
options with respect to benefits, including its retirement plan and sev-
erance plan. Ordinarily when an employee of Owens-Brockway was
transferred from one plant to another, the employee was not entitled
to receive severance pay. But in connection with the closing of its
Huntington plant, Owens-Brockway modified its standard policy to
provide a special benefit. In the Termination Document that Owens-
Brockway circulated to the Huntington plant employees, it stated that
the employees there would receive severance pay whether or not they
elected to transfer to another plant. The document provided explicitly:
What if I am offered a transfer to another Company facil-
ity, but I refuse?
Normally, if you are offered another job of an equal or
higher evaluation level but refuse, no severance pay is per-
mitted. However, since this is a plant closing, you will be
eligible for severance pay regardless of your decision.
(Emphasis added).
I agree with the majority opinion that in this case Raines accepted
a transfer to Owens-Brockway's Zanesville, Ohio, facility and contin-
ued there as an employee of Owens-Brockway. Accordingly, I concur
in Part II of the majority opinion that denies Raines early retirement
benefits. However, the conclusion that Raines transferred from West
Virginia to Ohio does not deny him the special plant-closing sever-
ance pay provided to all employees, "regardless of [the employee's]
decision" to accept a transfer or not. Denying Raines the benefits
promised by Owens-Brockway's Termination Document is particu-
larly unfortunate for him given ERISA's mandate that any summary
description of an employee benefit plan "be written in a manner cal-
culated to be understood by the average plan participant, and . . . be
sufficiently accurate and comprehensive to reasonably apprise such
participants and beneficiaries of their rights and obligations under the
plan." 29 U.S.C. § 1022(a)(1). I would award Raines $32,237.52, the
amount of his severance benefits as described in the Termination
11
Document. Accordingly, I dissent from Part III of the majority's opin-
ion.
12