Hoffmeister v. Michelin 1993 Early

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
KURT HOFFMEISTER,
Plaintiff-Appellant,
v.
No. 95-2070
MICHELIN 1993 EARLY RETIREMENT
AND VOLUNTARY SEPARATION PLAN;
MICHELIN TIRE CORPORATION,
Defendants-Appellees.
Appeal from the United States District Court
for the District of South Carolina, at Greenville.
Henry M. Herlong, Jr., District Judge.
(CA-94-1384-6-20)
Argued: May 7, 1996
Decided: February 9, 1998
Before WIDENER, MURNAGHAN, and MOTZ, Circuit Judges.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
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COUNSEL
ARGUED: Hal Jerome Warlick, WARLICK LAW OFFICE, Easley,
South Carolina, for Appellant. Thomas Allen Bright, HAYNS-
WORTH, BALDWIN, JOHNSON & GREAVES, P.A., Greenville,
South Carolina, for Appellant.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
Plaintiff Kurt Hoffmeister appeals the district court's entry of judg-
ment against him on the grounds that he did not obtain the manage-
ment approval necessary to receive voluntary separation benefits
under the defendant Michelin 1993 Early Retirement Incentive and
Voluntary Separation Plan (the plan), an employee benefit plan sub-
ject to the Employee Retirement Income Security Act (ERISA), 29
U.S.C. §§ 1001-1461 (West 1997), and maintained by Hoffmeister's
employer, defendant Michelin Tire Corporation (Michelin). The dis-
trict court issued its ruling orally under Fed. R. Civ. P. 52 at the con-
clusion of plaintiff's evidence at a bench trial. We affirm.
Michelin employed Hoffmeister at Michelin America Research and
Development Corporation in Greenville, South Carolina. On August
3, 1993, at a meeting held by his department manager, Martin Rem-
mick, Hoffmeister learned that Michelin had created the 1993
Michelin Early Retirement Incentive and Voluntary Separation Plan
to downsize its workforce. The plan provided that"with management
approval," certain employees who voluntarily quit could receive cer-
tain salary and some health care benefits for a period of time based
on the length of their employment. The Plan stated that Michelin "re-
serve[d] the right to deny the Voluntary Separation Benefits portion
of this program to any employee," and gave Michelin, as Plan Admin-
istrator, "the sole discretionary authority to determine benefit eligibil-
ity and to construe plan provisions." Hoffmeister decided to seek to
take advantage of the voluntary separation opportunity to pursue a
doctoral degree in mechanical engineering. He obtained a fellowship
offer from the University of Iowa commencing in January, 1994, and
submitted a written request for voluntary separation benefits on Sep-
tember 13, 1993.
During September, 1993, Hoffmeister met several times with his
2
immediate supervisor, John Hutz, and Martin Remmick, the depart-
ment manager. Their discussions related to the difficulty in Hoff-
meister departing in time to assume the university fellowship. Hutz
testified that because Hoffmeister possessed mechanical engineering
skills1 he told Hoffmeister that"[w]e needed him and wanted him to
stay on." Hoffmeister agreed Hutz told him this. Hutz told Remmick
that he did not want Hoffmeister to leave, though he did not inform
Hoffmeister of this recommendation.2 Hoffmeister testified that Rem-
mick refused to approve him for benefits "unless I was willing to stay
and give them more time to make arrangements." After an informal
conversation with Remmick on September 17, 1993, Hoffmeister
decided to decline the fellowship for January and stay until spring.
Hoffmeister believed that by that concession he had ensured his vol-
untary separation application would be approved. At trial, however,
Hoffmeister admitted that no one ever told him he had been granted
management approval for the voluntary separation benefits.
On September 21, 1993, Remmick met with his supervisor, Chris-
tophe Laprais, to discuss Hoffmeister's request, but"[n]o reasonable
way to accommodate Hoffmeister was found." On September 22,
1993, Remmick told Hoffmeister that his request had been disap-
proved by Jean-Pierre Boca, the president of Michelin America
Research and Development Corporation, and Edward Ligon, Hoff-
meister's representative in the personnel department.
Hoffmeister informally appealed the decision in meetings with
Laprais, Ligon, and Boca. In each case, he was told that the company
did not want him to leave and that the company would not approve
voluntary separation benefits for him. Hoffmeister submitted a
request for a written confirmation of the denial on November 4, 1993.
_________________________________________________________________
1 Hutz testified that Hoffmeister"has a background in finite element
analysis and [is] very highly skilled in mechanical engineering . . . he's
at a much higher level than anybody else in the group. And his key role
was to help develop analytical tools that we could use in order to do our
job quicker and better."
2 Hoffmeister testified that other employees who were considered
essential to the organization were told from the outset by their supervi-
sors that they would not be approved for voluntary separation benefits.
3
Ligon replied on November 9, 1993, setting forth the following rea-
sons for the denial:
1. You occupy a position that is required for the success
of this organization.
2. You contribute to the success of this organization.
3. Your performance and behavior are appreciated in this
organization.
4. If you were to leave, for any reason, you would have to
be replaced. There was, to my knowledge, no one
within Michelin who was available and had a profile
similar to yours who could reasonably assume your
responsibilities.
My colleagues and I met every Thursday evening dur-
ing the time of the Programs window to discuss avail-
able resources. I kept very close tabs on this, and know
that no one was available.
5. The Program was not intended for those with your pro-
file.
Hoffmeister then wrote to Michelin's Director of Human Resources,
Richard Wilkerson, requesting that his application be reconsidered.
Wilkerson responded, stating "[y]ou have been told you are a valued
employee and that your skills are needed in the organization. There-
fore, the Company has decided not to offer separation benefits to you
at this time." Wilkerson pointed out that Michelin had reserved the
right to deny voluntary separation benefits to any employee and
informed Hoffmeister that, under the plan, he had a right to appeal the
denial by submitting a written request and had a right to representa-
tion in the appeal.
Hoffmeister retained counsel and filed an appeal with Michelin on
February 17, 1994. On March 21, 1994, Hoffmeister and his counsel
met to discuss the appeal with Michelin officials. On June 15, 1994,
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Michelin's Director of Human Resources sent Hoffmeister a letter
informing him the appeal was denied and stating:
The Company, having taken your request seriously, studied
the effect on the organization, and decided that it would not
be logical. If you had been permitted to accept the program,
ultimately the Company would have had to recruit and hire
another employee to fill in for the succession of moves that
your vacancy would have created. That being the case, I
must uphold the decision to deny your request.
The letter also noted that at the March 21, 1994 meeting Hoffmeister
stated that no one specifically told him that he would receive sever-
ance benefits. Hoffmeister filed this action pursuant to 29 U.S.C.
§ 1132(a)(1)(B) on May 19, 1994.
At trial, the district court heard testimony from five of plaintiff's
witnesses, including Hoffmeister himself, received numerous docu-
mentary exhibits, and heard a proffer of plaintiff's remaining evi-
dence before issuing its oral ruling. A witness who was a Michelin
department manager, Dr. Baker, testified that Peter Tkacic, an
employee who worked for him and was an "individual contributor"
like Hoffmeister, was approved for benefits, although "in a sense,
[Tkacic] had already been dealt with because an individual, Didier
Lefebvre, was there who would pick up some of his responsibilities."
In its ruling, the district court found that management approval was
a valid condition the plan placed on the receipt of voluntary separa-
tion benefits and that Hutz and Remmick, Hoffmeister's supervisor
and department head, may have tacitly approved his request. The
court held, however, that Hoffmeister failed to obtain the final man-
agement approval required under the plan to obtain a right to volun-
tary separation benefits. The court reviewed Michelin's decision to
deny benefits under the standard set out in Doe v. Group Hospitaliza-
tion & Medical Services, 3 F.3d 80, 85 (4th Cir. 1993), under which
a plan administrator's discretionary decision to deny benefits is
afforded a lower level of deference when the administrator would
benefit from the denial. The court found that Michelin denied Hoff-
meister's request because he was an essential employee whose unique
skills would have to be replaced were he to leave. It also found that
5
Hoffmeister never received management approval. The court held that
since the plan's written provisions were controlling, the fact that
lower levels of management may have implicitly approved Hoff-
meister's request did not estop the company from ultimately denying
benefits or require an award of benefits under a detrimental reliance
theory.
On appeal, Hoffmeister raises two contentions that merit mention.
First, Hoffmeister argues that the approval of his immediate supervi-
sor and departmental manager satisfied the plan's requirement that he
obtain management approval. Where voluntary separation benefits are
conditioned on management approval, however, the approval of the
employee's supervisor does not create a right to receive benefits if
benefits are denied by a higher level of company management. See
Bair v. General Motors Corp., 895 F.2d 1094, 1097-1098 (6th Cir.
1990). In this case, plaintiff's own evidence showed that the decision
that he was too valuable an employee for Michelin to pay to leave
was made at the highest level of Michelin America Research and
Development Corporation.
Second, Hoffmeister argues that the denial of benefits was arbitrary
and capricious because one Peter Tkacic received voluntary separa-
tion benefits although he, like Hoffmeister, was a valuable employee.
The evidence shows, however, that unlike Hoffmeister, Tkacic's
department manager was able to get another Michelin employee to
assume Tkacic's job responsibilities. Further, "nothing in ERISA pre-
vents [the employer] from providing its employees with benefits on
a case by case basis - as long as that limitation is explicitly stated as
part of the plan." Hamilton v. Air Jamaica, Ltd., 945 F.2d 74, 77-78
(3rd Cir. 1991), cert. denied, 503 U.S. 938 (1992). Here, Michelin
imposed an explicit limitation of obtaining management approval, and
plaintiff's evidence shows that the approval process included a review
of the employee's value to the company measured by the difficulty of
replacing his skills and that Hoffmeister, in fact, possessed certain
mechanical engineering skills. Where voluntary benefits are denied
on the ground that an employee is necessary to the company's busi-
ness, and the evidence supports this assertion, the denial "cannot be
deemed arbitrary or capricious." Murphy v. International Business
Machines Corp., 23 F.3d 719, 721 (2nd Cir. 1994).
6
In sum, essentially for the reasons expressed by the district court
in its oral opinion, the judgment of the district court is accordingly
AFFIRMED.
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