Bock, Kevin v. Computer Associates ( 2001 )


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  • In the
    United States Court of Appeals
    For the Seventh Circuit
    Nos. 00-2628 and 00-3348
    Kevin Bock,
    Plaintiff-Appellee,
    v.
    Computer Associates International, Inc. and
    Platinum Technology, Inc.,
    Defendants-Appellants.
    Appeals from the United States District Court
    for the Northern District of Illinois, Eastern Division.
    No. 99-C-5967--Suzanne B. Conlon, Judge.
    Argued February 12, 2001--Decided July 18, 2001
    Before Cudahy, Rovner and Williams, Circuit
    Judges.
    Cudahy, Circuit Judge. Kevin Bock sued
    Platinum Technology, Inc. (Platinum) and
    Computer Associates International, Inc.
    (Computer Associates) for breach of a
    severance pay agreement. The defendants
    removed the case to federal court,
    asserting that the agreement was part of
    an employee benefit plan under the
    Employee Retirement Income Security Act
    of 1974, 29 U.S.C. sec. 1001 et seq.
    (ERISA). The district court found in
    favor of Bock, and the defendants appeal.
    I.
    Platinum and Computer Associates are
    businesses that service computer networks
    and sell software. Platinum employed Bock
    as a salesperson from 1995 through 1999.
    During that time, he repeatedly surpassed
    his sales quotas and was ultimately
    promoted to the executive position of
    senior vice president of sales. His
    compensation plan with Platinum consisted
    of a base salary plus commissions; he did
    not receive a yearly bonus. Bock’s salary
    for 1999 was $145,000, and his commission
    from completed sales for 1998 was
    $674,333. Bock testified that in 1998, he
    was credited with $367 million in revenue
    for the company.
    In 1998, Platinum set up a severance pay
    program for its executives. An important
    purpose of the plan was to keep key
    employees working hard for Platinum in
    the face of rumors of a corporate
    takeover by another company. Under the
    agreement implementing the program, an
    employee covered by the program would
    receive severance benefits if his or her
    employment was terminated without good
    cause within two years of a corporate
    buyout. Larry Freedman, Platinum’s
    general counsel, submitted the severance
    agreement carrying out the plan to
    employees for their acceptance and
    signature in fall 1998. The severance
    agreement, as submitted to Bock, provided
    that employees would receive "aggregate
    severance pay" consisting of a "bonus
    amount" added to twice the sum of their
    highest base salary plus their highest
    12-month amount of "incentive
    compensation." "Bonus amount" was defined
    as the remaining portion of an employee’s
    expected yearly bonus. "Incentive compen
    sation" was undefined. Bock signed the
    agreement in September 1998.
    Computer Associates acquired Platinum in
    the spring of 1999. As a result of the
    change in ownership, Bock’s employment
    was terminated on June 7, 1999. Platinum
    later notified Bock that his severance
    benefits would consist of $290,000--
    double his base salary of $145,000.
    (Because Bock earned no yearly bonus, he
    received nothing from the "bonus amount"
    portion of the severance plan.)
    Bock sued to enforce the severance
    agreement as including commission income
    under the umbrella of "incentive
    compensation." He sought summary
    judgment, contending that the agreement
    unambiguously entitled him to severance
    pay equal to two times his base salary
    and commissions. He also claimed that
    Platinum was estopped to deny him
    additional severance pay, based on
    alleged oral representations about
    whether commissions were included in the
    severance pay calculation.
    The district court, finding the term
    "incentive compensation" ambiguous,
    denied Bock’s motion for summary
    judgment. Then, after a bench trial, the
    court found that Platinum’s board of
    directors, in adopting the severance
    plan, did not intend to include
    commission income in the "incentive
    compensation" portion of the severance
    agreement. This interpretation of the
    term "incentive compensation," the court
    concluded, was a reasonable one. First,
    the court concluded that it was "not
    unreasonable" for the term "incentive
    compensation" to be a reference to bonus
    alone. Second, it looked to the summary
    plan document to support the
    reasonableness of that interpretation.
    The summary states that the amount of the
    severance payment would be calculated
    "using the sum of base salary and bonus
    (in addition to making up a lost bonus
    opportunity)." The summary does not
    mention commissions (or "incentive
    compensation") at all. The district
    court, in addition, found that the
    company’s decision to exclude commissions
    was not effectively communicated to the
    affected employees. Thus, Bock and at
    least one other participant in the plan
    questioned Freedman as to whether their
    commission income was included; Bock did
    so before signing the agreement. The dis
    trict court concluded that Freedman, who
    had directed that all questions regarding
    the plan be submitted to him, gave
    answers in response to these questions
    that suggested, but did not state
    explicitly, that commission income
    wasincluded in the definition of
    "incentive compensation." See Tr. at 380-
    82. It thus found that Platinum had
    violated its fiduciary duty to Bock under
    ERISA to clearly disclose that exclusion.
    Consequently, the court reasoned, the
    defendants were estopped from denying
    payment of severance benefits that took
    Bock’s commission into account when
    calculating severance pay. Bock was
    awarded a total amount of $1,909,550.97,
    consisting of benefits he had been
    denied, pre-judgment interest and
    attorneys’ fees and costs.
    II.
    Platinum’s severance payment plan is
    governed by ERISA and is properly subject
    to federal jurisdiction because it is an
    employee benefit plan, which the Supreme
    Court has defined as "benefits whose
    provision by nature requires an ongoing
    administrative program to meet the
    employer’s obligations." Fort Halifax
    Packing Co. v. Coyne, 
    482 U.S. 1
    , 11
    (1987). This does not mean, however, that
    the individual severance agreements are
    to be construed entirely under trust
    principles, as Platinum argues. Platinum
    seeks to accord great weight to its own
    alleged intent through application of the
    trust principle that the settlor’s intent
    governs the interpretation of a trust
    agreement. See Firestone Tire & Rubber
    Co. v. Bruch, 
    489 U.S. 101
    , 112 (1989)
    (indicating the importance of the intent
    of the settlor in interpreting terms of
    trusts); Restatement (Third) of Trusts
    sec. 4 ("’[T]erms of the trust’ means the
    manifestation of intention of the settlor
    . . . ."). But we are dealing here with
    severance agreements, contractual in
    form, conferring benefits on the employer
    as well as the employee and quite
    distinguishable from vested benefits
    under a pension plan. See Bidlack v.
    Wheelabrator Corp., 
    993 F.2d 603
    , 616
    (7th Cir. 1993) (en banc) (plurality
    opinion) (Easterbrook, J., dissenting)
    ("Pensions vest by law . . . health and
    other welfare benefits are left to
    contract."); Taylor v. Continental Group,
    
    933 F.2d 1227
    , 1232 (3d Cir. 1991) ("But
    trust law cannot be imported wholesale
    into the ERISA context. Severance plans
    are often similar to employment
    contracts, whose interpretation requires
    determining the intent of both
    contracting parties.").
    It has been uniformly held that general
    principles of contract law--under the
    federal common law that guides
    interpretation of ERISA plans--are to be
    applied to the interpretation of the
    language of such severance agreements.
    See Anstett v. Eagle-Picher Indus., Inc.,
    
    203 F.3d 501
    , 503 (7th Cir. 2000) ("the
    claim for separation benefits [under this
    ERISA plan] is really a claim to enforce
    a contract") (citation omitted); Grun v.
    Pneumo Abex Corp., 
    163 F.3d 411
    , 419 (7th
    Cir. 1998) ("we construe [the severance
    compensation agreement] in accordance
    with the federal common law under ERISA
    and general rules of contract
    interpretation"); Collins v. Ralston
    Purina Co., 
    147 F.3d 592
    (7th Cir. 1998);
    Murphy v. Keystone Steel & Wire Co., 
    61 F.3d 560
    (7th Cir. 1995); Hickey v. A.E.
    Staley Mfg., 
    995 F.2d 1385
    (7th Cir.
    1993); 
    Taylor, 933 F.2d at 1232-33
    .
    Platinum argues that, because we are
    interpreting a plan under ERISA, the
    intent of the plan’s settlor governs the
    interpretation of the terms of the
    severance agreement. For this
    proposition, Platinum cites Firestone, in
    which the Supreme Court determined, inter
    alia, the appropriate standard of review
    of benefit determinations under 
    ERISA. 489 U.S. at 104-05
    . The Court concluded
    there that, for actions under 29 U.S.C.
    sec. 1132(a)(1)(B) challenging benefit
    eligibility determinations, courts are
    guided by principles of trust law, which
    "make a deferential standard of review
    appropriate when a trustee exercises
    discretionary powers." 
    Firestone, 489 U.S. at 111
    . However, unlike eligibility
    determinations in which an administrator
    is given the power to construe uncertain
    terms, or where a plan’s terms give the
    administrator’s eligibility
    determinations deference, where instead
    no discretion has been conferred, "other
    settled principles of trust law . . .
    point to de novo review of benefit
    eligibility determinations based on plan
    interpretations . . . ." 
    Id. at 111-12.
    The Court concluded: "As they do with
    contractual provisions, courts construe
    terms in trust agreements without
    deferring to either party’s
    interpretation." 
    Id. at 112.
    Firestone
    clearly fails to provide support for
    Platinum’s position that the intent of
    the settlor governs in the matter before
    us. It says nothing about applying the
    law of trusts to interpretation of simple
    contractual agreements governed by ERISA-
    -including severance agreements.
    Likewise, Hickey provides no assistance
    to Platinum. Platinum argues that Hickey,
    in which this court construed terms of a
    severance pay plan, demands that courts
    must rely on the intent of the plan’s
    creator. See 
    Hickey, 995 F.2d at 1389
    .
    But in that case, the plaintiffs failed
    to produce any evidence to refute the
    employer’s interpretation of the plan
    terms; it was not the intent of the
    settlor, as such, that governed in
    opposition to some other intent. Instead,
    there was no evidence of any other
    relevant intent in the case. See 
    id. at 1388.
    It is true that the opinion is
    peppered with language hinting that its
    task was to determine the "intent of the
    plan," but the ultimate conclusion rested
    on what was--in light of extrinsic
    evidence presented to explain an
    ambiguous term--"only one possible
    interpretation of the term ’participant.’"
    
    Id. at 1392.
    The question was whether the
    employer’s proposed interpretation of the
    plan language was unreasonably narrow in
    excluding the plaintiffs from the plan.
    There was no evidence of an employer’s
    secret intent that was not clear to the
    plan participants; thus, the question was
    merely a matter of interpreting the
    employer’s intent as understood by anyone
    who read the language of the plan. Hickey
    is further distinguished by the important
    fact that, as far as we can discern, the
    plan there was not submitted to the
    plaintiffs for signature--it was an
    employee welfare benefit plan but was not
    implemented by a contractual agreement.
    Thus, we proceed to evaluate the
    agreement under general contract
    principles, without giving special weight
    to the intent of either party.
    III.
    The issue in construing Bock’s severance
    agreement is whether the agreement
    included in its prescribed calculations
    the commissions that comprised a large
    part of Bock’s total compensation. The
    answer to this question turns on the
    meaning of the term "incentive
    compensation." Bock claimed that the term
    included commissions. Platinum said it
    meant bonus. The district court ruled
    that both Platinum’s and Bock’s proffered
    meanings of this term were reasonable
    and, since a contract term capable of
    more than one reasonable meaning is
    ambiguous, see Central States, Southeast
    & Southwest Areas Pension Fund v. Kroger
    Co., 
    73 F.3d 727
    , 732 (7th Cir. 1996),
    the district court found that the
    severance agreement was ambiguous and the
    court turned to extrinsic evidence to
    establish meaning. The court concluded
    that "in the context of the agreement"
    the term "incentive compensation" was
    subject to more than one interpretation.
    The district court erred in apparently
    finding intrinsic ambiguity in the
    language of the agreement. The term
    "incentive compensation," which is the
    operative term, considered within the
    four corners of the severance agreement,
    is not ambiguous. The issue of ambiguity
    here revolves around whether the term
    "incentive compensation" includes or
    excludes "commissions." Since under no
    theory that has been advanced do
    "commissions" fail to share the
    characteristics common to all examples of
    the generic category, "incentive
    compensation," we can perceive no
    ambiguity in the use of the latter term.
    Ambiguity can be present only if it is
    reasonable to read "incentive
    compensation" as excluding commissions.
    There is nothing in the language of the
    agreement itself to make this a
    reasonable interpretation.
    There is no evidence that the term
    "incentive compensation" had any special
    meaning to contradict its plain and
    ordinary meaning as reflected in the
    dictionary. Platinum general counsel
    Larry Freedman testified that, as far as
    he knew, the term "incentive
    compensation" had no defined content in
    the software industry. Tr. at 146.
    Outside the context of the severance pay
    program, "incentive compensation" did not
    have a pre-defined meaning for Platinum
    either, Freedman testified. Tr. at 64-65,
    146. Far from undermining the unambiguous
    meaning that we have found for the term,
    we think that this testimony merely
    establishes that "incentive compensation"
    is not some term of art requiring
    departure from the plain dictionary
    definition.
    In fact, although some authorities have
    questioned the efficacy of recourse in
    many cases to dictionaries, see 2 E.
    Allan Farnsworth, Farnsworth on Contracts
    sec. 7.10 at 275 (2d ed. 1998) (citing,
    inter alia, Giuseppe v. Walling, 
    144 F.2d 608
    , 624 (2d Cir. 1944) (L. Hand, J.,
    concurring)), the question here involves
    a plainly descriptive term that lends
    itself straightforwardly to dictionary
    definition. Thus, "compensation" means
    "payment for value received or service
    rendered." Webster’s Third New
    International Dictionary 463 (1981).
    "Incentive" means "serving to encourage,
    rouse, or move to action." 
    Id. at 1141.
    Combining these two words means payments
    that serve to move the payee to increase
    his or her efforts or output. Incentive
    compensation is thus an umbrella term
    that includes, at least as relevant here,
    commissions and bonuses. It may also
    include, for example, for industrial
    workers, piecework compensation. Sales
    "commissions" are the paradigmatic form
    of incentive compensation for
    salespersons and, applying the plain and
    ordinary meaning of words, "commissions"
    would necessarily be included in
    "incentive compensation" unless
    "commissions" were expressly excluded.
    Supporting the plain meaning of the term
    is the definition adopted by labor
    experts. The term "wage-incentive
    systems" has been defined as "a method of
    relating wages directly to productivity,
    e.g., a piecework system, with a fixed
    payment for each unit produced." Labor
    Relations Expediter 751:106 sec. 10
    (BNA). Further, commission payments have
    been defined as "a simple form of
    incentive practice in the distribution
    industries." 
    Id. This determination
    is reinforced by the
    merger clause in the severance agreement.
    Paragraph 10(e) of the agreement
    provides:
    Subject to the rights, benefits and
    obligations provided for under any
    executive compensation . . . plan[ ] of
    the company, this Agreement represents
    the entire agreement and understanding of
    the parties . . . [and] . . . supersedes
    all prior . . . agreements . . . except
    as set forth under any executive
    compensation plan.
    In this connection, Bock had a
    "compensation plan" that was revised on a
    yearly basis. The plan defined his
    compensation as a combination of base
    salary and "incentives" in the form of
    commissions. Platinum argues that this
    does not demonstrate that under the plan
    "incentive compensation" included
    commissions because that term itself does
    not appear in the compensation plan. This
    may be correct, but his compensation plan
    is certainly consistent with the plain
    meaning we have ascribed to the term
    "incentive compensation."
    Written contracts are presumptively
    complete in and of themselves; when
    merger clauses are present, this
    presumption is even stronger. See L.S.
    Heath & Son, Inc. v. AT&T Info. Sys.,
    Inc., 
    9 F.3d 561
    , 569 (7th Cir. 1993)
    ("the presence of a merger clause is
    strong evidence that the parties intended
    the writing to be the complete and
    exclusive agreement between them");
    Sunstream Jet Exp., Inc. v. International
    Air Serv. Co., Ltd., 
    734 F.2d 1258
    , 1265
    (7th Cir. 1984) (noting under Illinois
    law that "’if the contract imports on its
    face to be a complete expression of the
    whole agreement, it is presumed that the
    parties introduced into it every material
    item, and parol evidence cannot be
    admitted to add another term to the
    agreement’") (quoting Pecora v. Szabo, 94
    Ill.App.3d 57, 63, 
    418 N.E.2d 431
    , 435-36
    (1981)).
    IV.
    However, here we must find the term
    "incentive compensation" to be ambiguous
    based on extrinsic evidence, in spite of
    the merger clause. Extrinsic evidence
    can, in some circumstances, be admissible
    to establish an ambiguity when it is
    objective and does not depend on the
    credibility of the testimony of an
    interested party. See Mathews v. Sears
    Pension Plan, 
    144 F.3d 461
    , 467 (7th Cir.
    1998). "’Objective’ evidence is
    admissible to demonstrate that apparently
    clear contract language means something
    different from what it seems to mean . .
    . ." AM Int’l, Inc. v. Graphic Mgmt.
    Assoc., Inc., 
    44 F.3d 572
    , 575 (7th Cir.
    1995). This is called the doctrine of
    extrinsic ambiguity, which allows the
    consideration of extrinsic evidence "to
    demonstrate that although the contract
    looks clear, anyone who understood the
    context of its creation would understand
    that it doesn’t mean what it seems to
    mean." 
    Mathews, 144 F.3d at 466
    (citations omitted).
    We do not mean to belittle the
    importance of the terms outlined in the
    original agreement. Under the objective
    theory of contract, agreements are
    generally analyzed in terms of the
    objective (plain and ordinary) meaning of
    the terms they contain. See 1 Farnsworth,
    Farnsworth on Contracts sec. 3.6 (2d ed.
    1998); 2 Farnsworth sec. 7.9. This is the
    meaning that is ascribed to the promisor,
    and the meaning that creates an
    expectation in the promisee. Judge
    Learned Hand has instructed:
    It makes not the least difference whether
    a promisor actually intends that meaning
    which the law will impose upon his words.
    The whole House of Bishops might satisfy
    us that he had intended something else,
    and it would make not a particle of
    difference in his obligation . . . .
    Indeed, if both parties severally
    declared that their meaning had been
    other than the natural meaning, and each
    declaration was similar, it would be
    irrelevant, saving some mutual agreement
    between them to that effect. When the
    court came to assign the meaning to their
    words, it would disregard such
    declarations, because they related only
    to their state of mind when the contract
    was made, and that has nothing to do with
    their obligations.
    Eustis Mining Co. v. Beer, Sondheimer &
    Co., 
    239 F. 976
    , 984-85 (S.D.N.Y. 1917).
    This is the staunchest objectivist
    stance, but even more lenient jurists
    agree that the fact that one party to the
    agreement intends that the terms have
    something other than their plain and
    ordinary meaning is irrelevant unless
    both parties share the same meaning, see
    2 Farnsworth sec. 7.9 at 265-67;
    Restatement (Second) of Contracts sec.
    201(1) (1981), or one party knew, or had
    reason to know, the meaning intended by
    the other party, see 2 Farnsworth sec.
    7.9 at 268-69; Restatement (Second) of
    Contracts sec. 201(2). "[I]ntent does not
    invite a tour through [the plaintiff’s]
    cranium, with [the plaintiff] as the
    guide." Skycom Corp. v. Telster Corp.,
    
    813 F.2d 810
    , 814 (7th Cir. 1987). See
    also Laserage Technology Corp. v.
    Laserage Laboratories, 
    972 F.2d 799
    , 802
    (7th Cir. 1992) ("[W]hether [the parties]
    had a ’meeting of the minds’ . . . is
    determined by reference to what the
    parties expressed to each other in their
    writings, not by their actual mental
    processes.").
    That said, "the overriding purpose in
    construing a contract is to give effect
    to the mutual intent of the parties at
    the time the contract was made." Alliance
    to End Repression v. City of Chicago, 
    742 F.2d 1007
    , 1013 (7th Cir. 1984) (en
    banc). Thus, strong extrinsic evidence
    indicating an intent contrary to the
    plain meaning of the agreement’s terms
    can create an ambiguity--provided that
    the evidence is objective./1 This is
    what happened here. Along with the
    severance pay agreement, Platinum
    submitted to its executives a one-page
    summary of the agreement to "explain to
    people what was included in the package .
    . . ." Tr. at 125 (Freedman
    testimony)./2 The summary was submitted
    simultaneously with the agreement to all
    eligible employees. It indicated that the
    "amount of severance benefit" is
    calculated "using the sum of base salary
    and bonus, in addition to making up lost
    bonus opportunity." This document
    supports the notion that Platinum
    intended that "incentive compensation"
    meant "bonus." It explained:
    The payout period for the salary
    component of the severance benefit
    program is . . . calculated using the sum
    of base salary and bonus (in addition to
    making up lost bonus opportunity). The
    amount of base salary and bonus is
    determined based on the maximum amount
    paid to the executive during any trailing
    12 month period during the 36 months
    prior to the termination of employment.
    Nowhere are commissions mentioned as part
    of the severance pay calculation. Thus,
    the summary plainly evinces Platinum’s
    intent to exclude commissions (although
    the summary language does not expressly
    exclude commissions). More important, had
    Bock read the summary, he could
    potentially have known of Platinum’s
    intent when he signed the agreement.
    Summaries have an established
    significance in benefits cases:
    Our third illustration of the need to
    tailor the federal common law of
    contracts to the special characteristics
    of ERISA plans is the principle that the
    plan summary generally controls in the
    case of a conflict with the plan itself
    because the summary is what the plan
    beneficiaries actually read.
    
    Mathews, 144 F.3d at 466
    (citations
    omitted). Because the summary has
    introduced an ambiguity into the term
    "incentive compensation," we are obliged
    to resolve that ambiguity--to determine
    the true meaning of the term in this
    context. We already know, from the
    district court’s findings (which we
    choose not to disturb), that Platinum
    intended to exclude commissions. But
    Platinum’s undisclosed intentions are not
    controlling. Thus, Platinum’s persistent
    plea that it did not intend "incentive
    compensation" to include commissions is
    beside the point. The key here is whether
    both parties shared the same meaning for
    the term "incentive compensation," or
    whether Bock knew, or had reason to know,
    Platinum’s intended meaning. See 2
    Farnsworth sec. 7.9.
    The district court apparently did not
    attempt to resolve this ambiguity, but
    instead proceeded directly to the
    equitable reasons it might find in Bock’s
    favor. Perhaps this is because the court
    accepted Platinum’s argument that the
    intent of the settlor governs. But, as we
    have noted, the intent of the "settlor"
    does not govern the interpretation of
    this contract. Regardless of the reasons
    for the district court’s conclusions, it
    never resolved the ambiguity created by
    the summary. Nor was the contract fully
    interpreted, except for the finding that
    ERISA principles required that Platinum
    be estopped to deny Bock’s purported
    understanding of the agreement. On
    remand, the district judge therefore must
    now make findings on the question whether
    Bock knew, or had reason to know,
    Platinum’s intent with respect to
    commissions (or shared Platinum’s intent
    in this respect). The findings of the
    district court may be based either on
    evidence already received or on
    additional evidence to be adduced. We
    therefore must remand this case for that
    purpose.
    We make this remand with several
    caveats. First, knowledge, or
    constructive knowledge, may not be based
    solely on the fact that Platinum
    furnished the summary. Bock testified
    under cross-examination that, although
    the summary clearly meant commissions
    were excluded, he could not recall when
    he first read it. Tr. at 293. For Bock
    was under no duty to read the summary,
    although the fact that Freedman invited
    employees’ attention to it may be
    relevant. See Tr. at 77 (Freedman
    testimony). Further, even if the court
    were to determine that Bock had read the
    summary prior to signing the agreement,
    that fact supports, but does not mandate,
    a finding that he had reason to know
    Platinum’s intent.
    Second, other factors might shed light
    on the meaning of this now-ambiguous
    term. For example, Platinum has suggested
    that its interpretation of the agreement
    is supported by evidence that Platinum
    designed the severance program primarily
    for salaried managers who received
    bonuses, and not for commissioned
    salespersons. Platinum suggests that
    within this context "incentive
    compensation" has a more restrictive
    meaning--one that excludes commissions.
    This sort of restrictive meaning could
    prevail if both parties intended that a
    term in a contract have a meaning other
    than its most plain and ordinary meaning.
    See Alliance to End 
    Repression, 742 F.2d at 1013
    . Thus, interpreting a consent
    decree requires an understanding of the
    context in which the decree was entered.
    Cf. Alliance to End 
    Repression, 742 F.2d at 1013
    ("[C]ontext, in the broadest
    sense, is the key to understanding
    language."). But evidence of context is
    only of moment if both parties to the
    contract shared the special meaning
    imported by the context or if one party
    conferred a special meaning on language,
    and the other party knew, or had reason
    to know, the first party’s special
    meaning.
    Here, the only evidence in the record
    that Bock knew, or had reason to know,
    Platinum’s intent--i.e., knew that the
    context of the document indicated that
    "incentive compensation" was directed at
    non-sales executives’ bonuses, rather
    than at sales executives’ commissions--is
    the fact that he questioned several
    persons about whether his commissions
    were included. Shortly after Bock
    received the agreement, in early
    September 1998, he called Freedman to ask
    what was included in the severance pay
    calculation. Bock testified that Freedman
    told him "yes, everything is included,
    Kevin, you’re covered, everything is
    fine, and that was about the extent of
    the conversation." Tr. at 235. Bock then
    signed and returned the agreement. In May
    1999, a few months after Computer
    Associates announced its intent to
    acquire Platinum, Bock became suspicious.
    Bock contacted Freedman, Executive Vice
    President of Sales Tom Slowey and
    President and Chief Executive Officer
    Andrew Filipowski to ask whether the
    severance pay calculation included
    commissions. However, these are not
    necessarily the actions of an employee
    who knew, or had reason to know, that
    "incentive compensation" did not include
    commissions. Absent additional evidence,
    it would be inequitable to regard an
    employee’s simple search for reassurance
    as a sufficient basis for concluding that
    he shared his employer’s intent. Such a
    search for reassurance, however, if
    fortified by other evidence, might help
    support an inference of knowledge of the
    employer’s intent.
    As we understand the facts at this
    point, there is a likely sequence of
    events. Platinum intended to exclude
    commissions from the calculation of
    incentive compensation for sales
    executives and wanted to recognize only
    bonus (not generally or substantially
    applicable to salespersons). However,
    Platinum made an apparently egregious
    drafting error in preparing the agreement
    for presentation to Bock. Platinum made
    what can be described as a
    unilateralmistake in failing to exclude
    commissions. Platinum therefore may have
    created an expectation in Bock, which he
    acknowledged by signing the agreement.
    See 1 Farnsworth sec. 3.9./3 But we
    have no way of knowing the ramifications
    of these events without exploring Bock’s
    understanding of them. We do not adopt
    the view (although we do not foreclose
    the possibility) that Platinum’s drafting
    was intentionally misleading in its
    effort to avoid forthrightly delivering
    the bad news to the salespersons. We
    leave the district court free to make
    appropriate findings on this point.
    V.
    Bock prevailed in the district court
    because the court concluded that Platinum
    breached a fiduciary obligation to fully
    disclose the terms of the severance plan.
    The court concluded that "the legal
    principle remains under both contract and
    ERISA law that one cannot induce an
    employee to enter into an agreement
    without disclosing material facts." Tr.
    at 384-85. But the district court did not
    appear to consider whether, or to what
    extent, the summary may have put Bock on
    notice that commissions were not included
    in the severance plan. The alleged breach
    turns entirely on the question for which
    we are remanding to the district court:
    did Bock know, or have reason to know,
    that Platinum intended to exclude
    commissions? If he did, Platinum may be
    rescued from the plain and ordinary
    meaning of the severance agreement
    itself. If he did not, Bock may prevail
    as a matter of pure contract
    interpretation.
    The district court ruled that Platinum
    was estopped from denying Bock the full
    severance benefits, defined as including
    commissions. The court reasoned that
    Freedman’s assurances that "everything is
    included . . . you’re covered" induced
    Bock to sign the agreement. However,
    Platinum correctly points out that ERISA
    estoppel claims require a plaintiff to
    show "(1) a knowing misrepresentation;
    (2) made in writing; (3) with reasonable
    reliance on that misrepresentation . . .
    (4) to [the plaintiff’s] detriment."
    Coker v. Trans World Airlines, Inc., 
    165 F.3d 579
    , 585 (7th Cir. 1999). We need
    not consider all Platinum’s objections to
    the district court’s conclusion because
    one will suffice: Bock does not prevail
    on an estoppel theory because there was
    no showing of detrimental reliance. That
    element of the estoppel claim requires a
    showing of economic harm. See Shields v.
    Local 705, Int’l Brotherhood of
    Teamsters, 
    188 F.3d 895
    (7th Cir. 1999);
    Panaras v. Liquid Carbonic Indus. Corp.,
    
    74 F.3d 786
    , 794 (7th Cir. 1996). Bock
    argues that his continuing in Platinum’s
    employ when put at risk of termination by
    a threatened takeover is sufficient
    detrimental reliance. However, there has
    been no showing, for example, that Bock
    refused alternative employment on account
    of his belief in a generous severance
    provision. If Bock has additional
    evidence to proffer on this point or a
    related one on remand, the district court
    in its discretion may receive additional
    relevant evidence.
    VI.
    For the foregoing reasons, we VACATE and
    REMAND to the district court for further
    proceedings consistent with this opinion.
    FOOTNOTES
    /1 To be "objective," extrinsic evidence "must not
    depend on the credibility of testimony (oral or
    written) of an interested party-- either a party
    to the litigation or . . . an agent or employee
    of the party." 
    Mathews, 144 F.3d at 467
    . Thus,
    the evidence "can be supplied by disinterested
    third parties: evidence that there was more than
    one ship called Peerless, or that a particular
    trade uses ’cotton’ in a nonstandard sense." AM
    
    Int’l, 44 F.3d at 575
    . Summaries of benefits
    plans appear to meet this criterion. See 
    Mathews, 144 F.3d at 468
    .
    /2 To preclude consideration of the plan summary
    under the present circumstances, the merger
    clause would presumably have had to explicitly
    exclude the summary. It did not.
    /3 Farnsworth illustrates the doctrine of unilateral
    mistake well:
    [S]o complete is the acceptance of the objective
    theory that courts unhesitatingly allow recovery
    for loss of expectation if one party has simply
    made a mistake in the use of language. If a
    seller misspeaks and offers to sell "two hundred
    fifty" bushels of apples at a stated price,
    meaning to say "two hundred fifteen," a buyer
    that accepts, neither knowing nor having reason
    to know of the seller’s mistake in expression,
    can recover for loss of expectation should the
    seller fail to deliver 250 bushels.