Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-89-01019/USCOURTS-ca10-89-01019-0/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 

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PUBLISH 

FI LED 

U!ticcd States Courr of Appeals t.r cnth (~irD!i~ 

FEB l 6 1990 

ROBERT I... HOECKER 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

Clerk . 

PORTER H. MITCHELL, ) 

) 

Plaintiff-Appellee/ ) 

Cross-Appellant, ) 

v. ) 

) 

MOBIL OIL CORPORATION, a New ) 

York corporation; RETIREMENT ) 

PLAN OF MOBIL OIL CORPORATION; ) 

and TRUSTEES OF THE RETIREMENT ) 

PLAN OF MOBIL OIL CORPORATION, ) 

) 

Defendants-Appellants/ } 

Cross-Appellees. ) 

) _________________ ) 

) 

ERISA INDUSTRY COMMITTEE and ) 

ASSOCIATION OF PRIVATE PENSION ) 

AND WELFARE PLANS, ) 

) 

Amici Curiae. ) 

Nos. 89-1019, 89-1031 

89-1085, 89-1111 

Appeal from the United States District Court 

For the District of Colorado 

D.C. No. 86-Z-585 

Rodney Patula (Thomas L. Roberts, Peter H. Ziemke, w. Randolph 

Barnhart, and Peter w. Pryor, with him on the briefs) of Pryor, 

Carney & Johnson, Englewood, Colorado, for Plaintiff-Appellee. 

Michael E. Tigar of the University of Texas Law School (Steven J. 

Merker of Davis, Graham & Stubbs, Denver Colorado; and Loren 

Kieve, Standish F. Medina, Jr., and Jonathan E. Richman of 

Debevoise & Plimpton, Washington, D.C., with him on the brief), 

Austin, Texas, for Defendants-Appellants. 

Harris Weinstein, John 

Covington & Burling, 

Industry Committee. 

M. Vine, and Dwight C. Smith III of 

Washington, D.C., for Amicus Curiae Erisa 

Appellate Case: 89-1019 Document: 010110190705 Date Filed: 02/16/1990 Page: 1 
Paul J. Ondrasik, Melanie Franco Nussdorf, Suzanne E. Meeker, and 

Theodore E. Rhodes of Steptoe & Johnson, Washington, D.C., for 

Amicus Curiae Association of Private Pension and Welfare Plans. 

Before MOORE and ANDERSON, Circuit Judges, and DAUGHERTY, District 

Judge.* 

MOORE, Circuit Judge. 

* The Honorable Frederick A. Daugherty, Senior District Court 

Judge for the Western District of Oklahoma, sitting by 

designation. 

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In this case, the Mobil Oil Corporation and one of its former 

employees, Porter Mitchell, dispute whether changes which Mobil 

made in its employee benefit plan violated the Age Discrimination 

in Employment Act (ADEA}, 29 U.S.C. SS 621-634, and the Employment 

Retirement Income Security Act (ERISA}, 29 u.s.c. SS 1001-1461. 

At trial, Mr. Mitchell succeeded on his age-discrimination and 

ERISA claims. Mobil challenges the results below, claiming that 

Mr. Mitchell did not meet his burden of proof on the agediscrimination claim and that he did not have standing to seek 

relief under ERISA. We agree with Mobil and reverse. 

I. FACTS 

Until 1977, Mobil provided retirement benefits only in the 

form of an annuity. In 1977, Mobil added a "lump-sum option'' to 

its retirement plan, the terms of which, for the purposes of this 

case, appear in the Retirement Plan of Mobil Oil Corporation as of 

January 1, 1984 (the Plan}. Under the Plan, an employee could 

elect to receive a lump-sum payment which had the same equivalent 

actuarial value, discounted at 5%, as the annuity. In the case of 

early retirement, the Plan reduced the lump-sum payment by 5% for 

each year of retirement prior to the age of sixty. To qualify for 

the lump-sum option, an employee had to elect this option prior to 

retirement; had to be over fifty-five; and, at the date of his 

retirement, had to have a net worth of at least $250,000 or an 

accumulated lump sum in excess of $250,000. 

In February 1984, Mobil amended the lump-sum option. It 

raised the discount rate prospectively from 5% to 9.5% and 

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increased the eligibility threshold from $250,000 to $450,000. It 

also linked the new threshold to the Consumer Price Index (CPI), 

projecting a rise in the threshold to correlate with a rise in the 

CPI. These changes, however, would not take effect until at least 

six months after Mobil announced them, pending approval by the 

IRS. The delayed effective date gave employees who were eligible 

for the lump-sum payment under the old criteria, but who might not 

meet the new threshold, the opportunity to decide whether to 

retire and take the lump sum or to continue working and 

accumulating more pension benefits with the possibility that they 

might not accumulate sufficient additional benefits to meet the 

new threshold requirement at the date of their retirement. 

Porter Mitchell was one of Mobil's employees who had to make 

such a choice. He was fifty-six at the time Mobil amended the 

eligibility criteria for the lump-sum option and had elected to 

take this option instead of the annuity. He was clearly eligible 

for the lump-sum option under the $250,000 threshold but was 

uncertain whether he would be able to meet the $450,000 threshold 

since it could rise, prior to his retirement, with changes in the 

CPI. This choice was important to Mr. Mitchell because at the 

time he was making it, the market interest rate was over 9%. As a 

result, his lump sum, discounted at 5%, was worth approximately 

140% more than his annuity. 

At trial, Mr. Mitchell claimed that by forcing him to make 

this choice, Mobil had willfully violated the ADEA since it had, 

in effect, constructively discharged him because of his age. He 

also claimed that Mobil had breached its fiduciary duties under 

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ERISA and that it had violated ERISA's anti-cutback provision, 29 

u.s.c. § 1054(9), by retroactively limiting his right to the lumpsum option, an accrued benefit. The age-discrimination and ERISA 

claims were tried jointly before a jury, though, the trial court 

reserved for itself a decision on the ERISA claims. 

The jury returned a verdict in favor of Mr. Mitchell, 

awarding $405,962.76 in back-pay damages; $86,000 as compensation 

for the 20% reduction in Mr. Mitchell's lump-sum benefit; and, 

$96,740.82 in front-pay damages. Because the jury found that 

Mobil's violation of the ADEA was willful, the trial court awarded 

Mr. Mitchell $405,962.76 in liquidated damages as well. The court 

rejected Mr. Mitchell's claim for prejudgment interest on his 

ADEA claim. The trial court also ruled in favor of Mr. Mitchell 

on his ERISA claims, awarding him $588,703.58 

damages and $405,962.76 in liquidated damages. 

in compensatory 

Mobil appeals both 

the jury's verdict and the_trial court's judgment. 

cross-appeals the trial court's measure of damages. 

II. THE ADEA CLAIM 

A. MR. MITCHELL'S PRIMA FACIE CASE 

Mr. Mitchell 

The ADEA prohibits an employer from "discharg[ing] any 

individual or otherwise discriminat[ing] against any individual 

with respect to his compensation, terms, conditions, or privileges 

of employment, because of such individual's age." 29 U.S.C. 

§ 623(a)(l). To establish a prima facie case of age 

discrimination by constructive discharge, an employee must prove 

that his "employer by its illegal discriminatory acts has made 

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working conditions so difficult that a reasonable person in the 

employee's position would feel compelled to resign." Derr v. Gulf 

Oil Corp., 796 F.2d 340, 344 (10th Cir. 1986). An employee who 

claims that an offer of early retirement constitutes age 

discrimination by constructive discharge can meet this burden by 

demonstrating that the offer "sufficiently alters the status quo 

that each choice facing the employee makes him worse off" and that 

if he refuses the offer and decides to stay, his employer will 

treat him less favorably than other employees because of his age. 

Bodnar v. Synpol, Inc., 843 F.2d 190, 193 (5th Cir.), cert. 

denied, U.S. , 109 S. Ct. 260 (1988). An early retirement 

program which requires 

between retirement with 

an employee to make the difficult choice 

the receipt of previously unavailable 

incentives and continued work under the same conditions, however, 

does not result in constructive discharge because the employee is 

no worse off whichever option the employee chooses. Henn v. Nat'l 

Geographic Sec'y, 819 F.2d 824 (7th Cir.), cert. denied, 484 U.S. 

964 (1987); Schuler v. Polaroid Corp., 848 F.2d 276 (1st Cir. 

1988). 

Mobil claims that since Mr. Mitchell did not establish a 

prima facie case of age discrimination by constructive discharge, 

the trial court erred in rejecting its motion for a directed 

verdict on the ADEA claim. We will reverse the trial court's 

denial of a motion for a directed verdict only if, viewed in the 

light most favorable to the nonmoving party, the evidence and all 

reasonable inferences to be drawn therefrom point but one way, in 

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favor of the moving party. Zimmerman v. First Federal Sav. & Loan 

Ass'n, 848 F.2d 1047, 1051 (10th Cir. 1988). 

Mobil first contends that the trial court erred in denying 

its motion for a directed verdict because Derr precludes recovery 

for violations of the ADEA absent a showing that an employer 

subjected its employee to difficult or intolerable working 

conditions. 796 F.2d at 344. Mr. Mitchell himself admitted at 

trial that his working conditions were not unpleasant, that he was 

well regarded by his superiors, and that he enjoyed his work at 

Mobil. The fact that Mr. Mitchell was happy at Mobil and worked 

harmoniously with his colleagues and superiors, however, does not 

preclude a finding that Mobil's offer of early retirement 

constituted age discrimination by constructive discharge. The 

relevant question in this case is whether Mobil's amendment of the 

Plan forced Mr. Mitchell, and similarly situated employees, to 

choose between two options both of which would leave him worse off 

than the status quo. 

Mobil contends that it did not confront Mr. Mitchell with 

such a choice. Instead, it gave him an extra benefit unavailable 

to employees under the age of fifty-five, the choice to elect the 

lump-sum option at the $250,000 threshold. Mobil's argument is 

disingenuous. Its program, unlike that in Henn, 819 F.2d at 826, 

did not give Mr. Mitchell a choice between the receipt of a 

previously unavailable early retirement incentive and the 

continuation of work under the status quo which preceded the offer 

of early retirement. Instead, Mobil created a choice between two 

options either of which would leave Mr. Mitchell worse off than he 

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had been prior to the change in the Plan. One choice would permit 

Mr. Mitchell to retire by February 1, 1985, at the age of fiftysix, and receive the lump-sum option under the old eligibility 

criteria. Prior to Mobil's amending the Plan, however, Mr. 

Mitchell could have worked until the age of sixty-five and still 

remain eligible for the lump-sum option under the old criteria. 

The other choice would permit Mr. Mitchell to continue working, 

but whereas prior to the Plan's amendment he could be certain to 

qualify for the lump-sum option, now, because Mobil had increased 

the threshold and linked it to the CPI, he would have to requalify 

for this benefit for which he had already become eligible at the 

age of fifty-five. Moreover, he would never be certain that he 

could achieve the potentially increasing threshold by retirement 

age. 

As Mobil points out, to establish a prima facie case of age 

discrimination by constructive discharge, Mr. Mitchell had to 

prove not only that Mobil confronted him with a choice between two 

evils but also that Mobil would have treated him and other older 

employees less favorably, because of their age, had they remained 

on the job. Mobil asserts that since all employees were subject 

to the new eligibility criteria, Mr. Mitchell cannot demonstrate 

that the amendment of the Plan adversely affected him because of 

his age. Like Mr. Mitchell, employees under the age of fifty-five 

who had accumulated pension benefits in excess of $250,000, but 

less than $450,000, or who had a net worth of between $250,000 and 

$450,000, also lost the opportunity to obtain the lump-sum benefit 

under the old criteria. Indeed, for this group of employees that 

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opportunity was irretrievably lost, whereas Mr. Mitchell could 

still take advantage of it if he chose to retire prior to 

February 1, 1985. 

Mobil's argument ignores the Plan's requirement that an 

employee be over the age of fifty-five before he can qualify for 

the lump-sum benefit. Although Mobil's employees who were under 

age fifty-five at the time Mobil amended the eligibility criteria 

might have expected to obtain the lump-sum benefit, none of them 

qualified for it at that time; consequently, only employees over 

the age of fifty-five who had already qualified to receive the 

lump-sum benefit, like Mr. Mitchell, would have to requalify for 

it under the new eligibility criteria if they decided to stay on 

the job. Since Mr. Mitchell did establish, as a matter of law, 

that he had been constructively discharged because of his age, the 

trial court properly denied Mobil's motion for a directed verdict. 

B. THE JURY CHARGE ON MR. MITCHELL'S PRIMA FACIE CASE 

This court will find reversible error in a trial court's jury 

instructions only if we have substantial doubt whether the 

instructions, taken together, properly guided the jury in its 

deliberations. Lutz v. Weld County School Dist. No. 6, 784 F.2d 

340, 341 (10th Cir. 1988). The paradigmatic instruction on the 

element of intolerability in a constructive discharge case is 

"whether the employer by its illegal discriminatory acts has made 

working conditions so difficult that a reasonable person in the 

employee's position would feel compelled to resign." Derr, 796 

F.2d at 344. A trial court should, however, tailor this 

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instruction to fit the facts of the case. See Paolillo v. Dresser 

Indus., Inc., 865 F.2d 37, 40 (2d Cir. 1989). 1 

Mobil contends that the trial court made two errors in its 

constructive discharge instructions. First, the court did not 

require the jury to find, as stated in Derr, that Mr. Mitchell's 

working conditions were intolerable or difficult. Instead, the 

court instructed the jury that it could find constructive 

discharge by forced retirement if "a reasonable person would also 

have felt compelled to retire under the circumstances with which 

Mr. Mitchell was faced in 1984 and 1985." We have no doubt that 

this instruction properly guided the jury in its deliberations. 

An instruction patterned after the Derr paradigm is particularly 

apt in cases where an employee, who is a member of a protected 

class, claims that an employer forced the employee to resign by 

creating on-the-job conditions directed specifically at that 

employee. It is less suitable where, as here, an employee claims 

that the employer's offer of early retirement constitutes age 

discrimination by constructive discharge. The instruction given 

takes this distinction into account and is, therefore, properly 

tailored to the facts of the case. 

Mobil also assigns as error the trial court's failure to 

require the jury to find a link between the choice which Mobil 

imposed upon Mr. Mitchell by amending the Plan and Mr. Mitchell's 

age. It specifically objects to the following instruction: 

1 Indeed, trial judges should always avoid verbatim adoption of 

language from appellate opinions to formulate instructions. That 

which is meaningful to those with a legal education is often lost 

upon others; therefore, a carefully crafted instruction always is 

tailored to fit the case in language non-lawyers will comprehend. 

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[T)o take early retirement constitutes constructive 

discharge, one, if the decision is induced by 

withholding or reducing or threatening to withhold or 

reduce benefits from those who choose not to retire, or, 

two, if each choice facing the employee as a result of 

the change in the threshold provisions of the retirement 

plan leaves him worse off than before. 2 

Mobil ignores, however, the trial court's preliminary instruction 

that Mr. Mitchell "must prove that Mobil's specific employment 

practices or policies adversely affected people in his age group 

at a substantially higher rate than they affected those in younger 

age groups." Since these instructions, taken together, properly 

state the law governing this case, we reject Mobil's claim that 

the trial court improperly instructed the jury. 

C. RETROACTIVE APPLICATION OF PUBLIC EMPLOYEES 

RETIREMENT SYSTEM OF OHIO V. BETTS 

After trial and after Mr. Mitchell filed his Reply Brief, the 

Supreme Court decided Public Employees Retirement Sys. of Ohio v. 

Betts~ U.S. , 109 S. Ct. 2854 (1989), which redefined the 

elements of a prima facie case of age discrimination based on 

changes in an employer's benefits plan by reinterpreting 

§ 4(f)(2) of the ADEA, 29 U.S.C. § 623(f)(2). That section 

2 The Association of Private Pension and Welfare Plans, as 

amicus curiae, asserts that the first alternative in this jury 

charge would effectively outlaw voluntary early retirement 

programs by prohibiting employers from offering special incentives 

that will not be available to those who choose to remain employed. 

Read out of context, the jury charge does support this 

interpretation which would misstate the law. When the jury 

instructions are read as a whole, however, the trial court's 

reference to the "withholding or reducing or threatening to 

withhold or reduce benefits from those who choose not to retire" 

clearly addresses those situations in which the employer uses a 

stick, the reduction or withholding of benefits to which the 

employee was entitled prior to the offer of early retirement, to 

force employees to accept an offer of early retirement. 

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exempts from liability under 

"observe[s] the terms of .. 

the ADEA any employer who 

. any bona fide employee benefit 

plan such as a retirement, pension, or insurance plan, which is 

not a subterfuge to evade the purposes of'' the ADEA. Prior to 

Betts, this court and several other courts of appeal held that an 

employer had the burden of establishing as an affirmative defense 

that its early retirement program fell within the exemption of 

§ 4(f)(2) by proving that (1) its plan was bona fide; (2) its 

actions were in observance of the terms of the plan; and, (3) its 

plan was not a subterfuge to evade the purposes of the Act. 

EEOC v. Cargill, Inc., 855 F.2d 682, 684 n.2 (10th Cir. 1988); 

EEOC v. Westinghouse Elec. Corp., 725 F.2d 211, 223 (3d Cir. 

1983), cert. denied, 469 U.S. 820 (1984); Karlen v. City Colleges 

of Chicago, 837 F.2d 314, 318 (7th Cir.), cert. denied, 

U.S. , 108 S. Ct. 2038 (1988). An employer could disprove 

subterfuge by showing a cost-based justification for age-related 

reductions in benefits. See Karlen, 837 F.2d at 319; EEOC v. 

City of Mt. Lebanon, 842 F.2d 1480, 1492 (3d Cir. 1988); 29 

C.F.R. § 860.120(a)(l),(d)(l)-(3) (1980), redesignated 29 C.F.R. 

§ 1625.l0(a)(l),(d)(l)-(3) (1988). 

The Betts court implicitly overruled this prior case law. It 

held that§ 4(f)(2) is not an affirmative defense which the 

employer has the burden of proving, but rather part of the 

plaintiff's prima facie case. 109 S. Ct. at 2868. · Under Betts, 

an employee who claims that his employer's benefits program 

violates the ADEA bears the burden of proving subterfuge by 

showing "that the discriminatory plan provision actually was 

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intended to serve the purpose of discriminating in some 

nonfringe-benefit aspect of the employment relationship," such as 

hiring and firing or wages and salaries. Id. We must now 

determine whether, as Mobil contends, Betts should be 

retroactively applied to this case. 

Our determination whether to apply Betts retroactively 

requires the weighing of three factors: (1) whether Betts 

"establish[es] a new principle of law, either by overruling clear 

past precedent on which litigants may have relied ••• or by 

deciding an issue of first impression whose resolution was not 

clearly foreshadowed"; (2) whether, after looking at the prior 

history of the Betts rule and at its purpose and effect, 

"retrospective operation will further or retard its operation"; 

and, (3) whether retroactive application of the Betts rule would 

be inequitable. Chevron Oil Co. v. Huson, 404 U.S. 97, 106-07 

(1971) ·(citations omitted). Each factor need not compel 

prospective application. Jones v. Consolidated Freightways 

Corp., 776 F.2d 1458, 1460 (10th Cir. 1985). Where, for example, 

a decision "'could produce substantial inequitable results if 

applied retroactively, there is ample basis •.• for avoiding 

the 'injustice or hardship' by a holding of nonretroactivity. '" 

Chevron, 404 U.S. at 107 (quoting Cipriano v. City of Houma, 395 

U.S. 701, 706 (1969) (per curiam)). 

Betts clearly established a new principle of law by 

transforming what had been an affirmative defense into an element 

of an employee's prima facie case. Prior to Betts, every circuit 

which addressed the applicability of§ 4(f)(2) to claims of age 

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discrimination in employee benefit programs viewed it as an 

affirmative defense. Potenze v. New York Shipping Ass'n, Inc., 

804 F.2d 235, 237 (2d Cir. 1986), cert. denied, 481 U.S. 1029 

(1987}; EEOC v. City of Mt. Lebanon, 842 F.2d 1480, 1488 (3d Cir. 

1988}; Crosland v. Charlotte Eye, Ear and Throat Hosp., 686 F.2d 

208, 211 (4th Cir. 1982}; Betts v. Hamilton County Bd. of Mental 

Retardation and Developmental Disabilities, 848 F.2d 692, 694-95 

(6th Cir. 1988), rev'd sub nom. Public Employees Retirement Sys. 

of Ohio v. Betts, U.S. , 109 S. Ct. 1111 (1989}; Karlen v. 

City Colleges of Chicago, 837 F.2d 314, 318 (7th Cir.), 

cert. denied, U.S. , 108 S. Ct. 2038 (1988}; EEOC v. 

Borden's, Inc., 724 F.2d 1390, 1395 (9th Cir. 1984}; EEOC v. 

Cargill, Inc., 855 F.2d 682, 684 (10th Cir. 1988}. None even 

considered that§ 4(f}(2} established an element of plaintiff's 

prima facie case. This Chevron factor, therefore, strongly 

favors nonretroactive application of Betts. 

Retroactive application of Betts in this case would not 

further the purpose behind its new interpretation of§ 4(f}(2}: 

to exempt "the provisions of a bona fide benefit plan from the 

purview of the ADEA so long as the plan is not a method of 

discriminating in other, nonfringe-benefit aspects of the 

employment relationship." 109 S. Ct. at 2866. Mr. Mitchell 

asserts that Mobil constructively discharged him because of his 

age by manipulating the availability of the lump-sum benefit. In 

other words, Mr. Mitchell claims that Mobil used its benefit plan 

to discriminate against him in a nonfringe-benefit aspect of the 

employment relationship. His claim is exactly the type from 

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which the Betts court did not intend to insulate employers. 

Retroactively applying Betts, however, would, in effect, insulate 

Mobil from Mr. Mitchell's claim because Mr. Mitchell did not 

present as part of his prima facie case evidence of Mobil's 

intent to use the amendment of the lump-sum provision to 

discriminate against him in a nonfringe-benefit aspect of the 

employment relationship. The second Chevron factor, therefore, 

also weighs against retroactive application of Betts. 

Considerations of equity also undercut Mobil's contention 

that Betts should be applied retroactively. Mobil first 

mentioned§ 4(f)(2) in its Reply Brief, filed just over two weeks 

after Betts was decided. Despite the fact that§ 4(f)(2) was 

available to Mobil as an affirmative defense prior to Betts, 

Mobil did not plead that defense in its Answer or in its Answer 

to the Amended Complaint. Not surprisingly, Mr. Mitchell 

presented no evidence at trial on the applicability of§ 4(f)(2) 

to his claims, nor did Mobil. Since this case proceeded for over 

three years prior to Mobil's filing its Reply Brief -- through 

discovery, trial, and initial briefing on appeal -- without any 

mention of § 4(f)(2) as an affirmative defense for Mobil, it 

would work a grave injustice for us to hold that Betts applies 

retroactively. 3 This result is one which we must avoid. 

3 In Robinson v. County of Fresno, 882 F.2d 444 (9th Cir. 

1989), the Ninth Circuit applied Betts retroactively without 

resorting to the Chevron inquiry. In that case, Mr. Robinson, an 

employee of the County of Fresno, claimed that a modification to 

the County's retirement plan violated the ADEA because it resulted 

in his receiving a smaller pension than other retirees who were 

younger at the time of hiring. Id. at 445. The Ninth Circuit 

affirmed the district court's granting of the County's ·motion for 

(Continued to next page.) 

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D. MOBIL'S BUSINESS JUSTIFICATION 

AND MR. MITCHELL'S CLAIM OF PRETEXT 

If an employee establishes his prima facie case of age. 

discrimination by constructive discharge, the employer then has 

the opportunity to rebut the presumption of discrimination by 

producing evidence of a legitimate, nondiscriminatory business 

reason for its conduct. EEOC v. University of Oklahoma, 774 F.2d 

999, 1002 (10th Cir. 1985), cert. denied, 475 U.S. 1120 (1986); 

Connecticut v. Teal, 457 U.S. 440, 446-47 (1982). To prevail, the 

employee must then prove that the employer's proffered 

justification is "a mere pretext for discrimination." Teal, 457 

U.S. at 447. The employee can establish pretext "by showing that 

the employer's proffered explanation is unworthy of credence." 

University of Oklahoma, 774 F.2d at 1002. 

Mobil claims that since it forwarded a legitimate business 

justification and Mr. Mitchell failed to prove that it was a 

pretext, the trial court erred in denying its motion for a 

(Continued from prior page.) 

summary judgment because Mr. Robinson had not established, as 

Betts requires, that the county intended the modification to the 

plan to discriminate against him in an aspect of the employment 

relationship unrelated to fringe benefits. Id. at 447. 

We believe that even if the Ninth Circuit had applied the 

Chevron test, the result would have been the same. Robinson, 

nonetheless, is distinguishable from this case. Mr. Robinson did 

not assert, as Mr. Mitchell does, that the modification to the 

County's plan discriminated against him in a nonfringe-benefit 

aspect of the employment relationship such as hiring and firing or 

wages and salaries. A refusal to apply Betts retroactively, 

therefore, would have retarded the purpose behind that decision. 

In addition, since Robinson was only at the summary judgment stage 

at the time Betts was decided, applying Betts retroactively would 

not result in the high degree of injustice which retroactive 

application would cause in this case. 

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directed verdict. We will reverse the trial court's denial of a 

motion for a directed verdict only if, viewed in the light most 

favorable to the nonmoving party, the evidence and all reasonable 

inferences to be drawn therefrom point but one way, in favor of 

the moving party. Zimmerman, 848 F.2d at 1051. Alternatively, 

Mobil claims that the evidence was insufficient to support the 

jury's finding in favor of Mr. Mitchell on this issue. We will 

uphold the jury's verdict unless it is clearly erroneous, or there 

is a lack of evidence to support it. Colorado Coal Furnace 

Distribs. v. Prill Mfg., 605 F.2d 499, 502 (10th Cir. 1979). 

At trial, Mr. Mitchell claimed that Mobil's raising the 

eligibility threshold for the lump sum from $250,000 to i450,000 

and linking it to the CPI combined with its delaying for six 

months the effective date of these changes forced him to choose 

early retirement, resulting in age discrimination by constructive 

discharge. Mobil introduced evidence to justify both of these 

amendments to the Plan. It claimed that because inflation had 

eroded the real dollar value of the $250,000 threshold, which had 

been set in 1977, the number of employees who were eligible for, 

and taking advantage of, the lump-sum option had increased 

dramatically, creating a serious drain on Mobil's pension fund. 

By increasing the threshold to $450,000 and linking it to the CPI, 

Mobil would both restore the threshold to the equivalent of its 

original level in 1977 dollars and protect it from future erosion 

by inflation. These changes in turn would stop the drain on 

Mobil's pension plan resulting from the overutilization of the 

lump-sum option. 

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Mobil claimed that it delayed the effective date of these 

changes, rather than implementing them immediately, out of 

fairness to its employees. The six~month notice period would give 

Mobil employees an adequate transition period to consider their 

choice rather than simply pulling the rug out from under them. It 

would also give retiring employees, who were earning their peak 

salaries, six months to accrue additional pension benefits since 

Mobil calculated these benefits based on a retiring employee's 

highest average salary over a period of thirty-six months. 

At trial, Mr. Mitchell asserted that these justifications 

were unworthy of credence. He contended that Mobil amended the 

Plan in the manner it did to force the retirement of older Mobil 

employees who would become redundant as a result of an impending 

merger with Superior Oil Company. Mr. Mitchell asserted that 

Mobil needed to force these employees into early retirement to 

avoid large severance payments which the merger agreement required 

it to make to Superior employees laid off as a result of the 

merger. Mobil could achieve this objective only by combining an 

increase in the threshold with a notice period during which 

employees would be forced to retire early to obtain the lump-sum 

benefit. 

Mr. Mitchell contends that several circumstances which he 

proved support his claim of pretext. In September 1983, mid-level 

Mobil executives began considering alternatives to the $250,000 

threshold. In mid-December, the Mobil executive primarily 

responsible for changes to the Plan informed his superior -- the 

Vice President for Employee Relations, who was also a member of 

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the Executive Committee of Mobil's Board of Directors -- that an 

increase in the threshold would require notice to employees and a 

transition plan to control the accelerated retirements of 

employees eligible for the lump sum. On January 9, 1984, the 

Executive Committee requested the Vice President for Employee 

Relations to continue the evaluation of an increase in the 

threshold and directed him to incorporate into future proposals 

for change a reasonable transition period between the announcement 

of the increased threshold and its effective date during which 

employees could take advantage of the old eligibility criteria. 

On February 9, 1984, Mobil's Executive Committee adopted the 

increase in the threshold to $450,000 and linked it to the CPI. 

It also decided to give employees at least six months' notice of 

this change so they could retire and obtain the lump su~ under the 

old eligibility requirements. The Executive Committee recognized 

that the announcement of an increase in the threshold 

approximately six months prior to the effective date of the change 

would lead to the early retirement of between 1000 and 1300 

employees. 

One week prior to its February 9 meeting, the Executive 

Committee reviewed "at length114 the possibility of a merger with 

Superior and authorized Mobil's President to proceed with 

negotiations. Mr. Mitchell contends that because the Executive 

4 See "Excerpt from Minutes of Executive Committee Meeting held 

on Thursday, February 2, 1984." (Addendum to Brief of Mobile Oil 

Corporation, Plaintiff's Exhibit 177). The term "at length" is 

not defined in the minutes, and we find no other description in 

the record indicating ,the length of the review or what it 

entailed. 

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Committee reviewed the opportunity to merge with Superior at 

length on February 2, 1984, one can reasonably infer that the 

Executive Committee knew about the redundancy problem which would 

result from the merger prior to January 9, 1984, when it directed 

the Vice President for Employee Relations to incorporate a notice 

period into any future proposals for changes to the Plan. Mr. 

Mitchell produced no evidence to support this inference, however, 

and the record does not otherwise indicate any link between 

Mobil's merger with Superior and the Executive Committee's 

decision at its January 9 meeting to incorporate a notice period 

into any future changes in the Plan. In fact, the evidence points 

the other way since the Executive Committee adopted the transition 

period just one week after it authorized Mobil's President to 

negotiate with Superior and over one month before Mobil and 

Superior signed the merger agreement. The inference which Mr. 

Mitchell asks us to draw, therefore, is not a reasonable one, and 

his claim of pretext must fail. See Sunward Corp. v. Dun & 

Bradstreet, Inc., 811 F.2d 511, 521 (10th Cir. 1987) (quoting 

Tose v. First Pennsylvania Bank, N.A., 648 F.2d 879, 895 (3d 

Cir.), cert. denied, 454 U.S. 893 (1981)) ("An inference is 

reasonable where 'there is a reasonable probability that the 

conclusion flows from the proven facts.'") 

Since Mr. Mitchell did not meet his burden of production on 

the issue of pretext, the onerous effects of the changes in the 

plan notwithstanding, we reverse the trial court's denial of 

Mobil's motion for a directed verdict. Because we hold that Mobil 

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did not violate the ADEA, we need not review Mr. Mitchell's crossappeal on issues relating to the measure of damages. 

III. THE ERISA CLAIMS 

At trial, Mr. Mitchell claimed that Mobil's amendments to the 

Plan violated both§ 204(g) of ERISA, 29 U.S.C. § 1054(g), which 

prohibits employers from reducing the accrued benefits of 

participants in a benefit plan, and§ 510 of ERISA, 29 u.s.c. 

§ 1140, which prohibits an employer from discriminating against a 

participant "for the purpose of interfering with the attainment of 

any right to which such participant may become entitled under the 

plan." Mr. Mitchell also claimed that Mobil breached its duty as 

the fiduciary of the Plan by amending the Plan in the manner that 

it did. After determining that Mr. Mitchell met ERISA's 

requirements for standing, the district court held in his favor on 

all of his ERISA claims and awarded him $588,703.58 in 

compensatory damages and $405,962.76 in liquidated damages. Mobil 

challenges the district court's conclusion that Mr. Mitchell had 

standing as well as its holdings in his favor. Since Mobil's 

appeal involves pure questions of law, our review of the trial 

court's holdings is de novo. Sage v. Automated, Inc. Pension Plan 

and Trust, 845 F.2d 885, 890 (10th Cir. 1988). 

ERISA and its legislative history emphasize Congress's intent 

to provide those protected by the Act "ready access to the federal 

courts," 29 U.S.C. § lOOl(b), and liberal remedies. See S. Rep. 

No. 127 93d Cong., 2d Sess., reprinted in 1974 U.S. Code Cong. & 

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Admin. News 4639, 4838, 4871; 5 H.R. Rep. No. 533, 93d Cong., 2d 

Sess., reprinted in 1974 U.S. Code Cong. & Admin. News 4639, 

4647. 6 Although the Act has a broad remedial purpose, only 

participants, beneficiaries, and fiduciaries of an employee 

benefit plan may avail themselves of its protections. 29 u.s.c. 

§ 1132(a). This limitatfon on the group of potential claimants is 

necessary to avoid the creation of uncertainties about an 

employer's obligations under ERISA and to prevent the imposition 

of "great costs on pension plans for no legislative purpose." 

Saladino v. I.L.G.W.U. Nat'l Retirement Fund, 754 F.2d 473, 476 

(2d Cir. 1985). 

ERISA defines a ''participant" as "any employee or former 

employee of an employer •.• who is or may become eligible to 

5 This report of the Senate Labor and Public Welfare 

states: 

Committee 

The enforcement provisions [of ERISA] have been designed 

specifically to provide both the Secretary [of Labor] 

and participants and beneficiaries with broad remedies 

for redressing or preventing violations of the [Act] .• 

The intent of the Committee is to provide the full 

range of legal and equitable remedies available in both 

state and federal courts and to remove jurisdictional 

and procedural obstacles which in the past appear to 

have hampered effective enforcement of fiduciary 

responsibilities under state law or recovery of benefits 

due participants. 

(Emphasis added.) 

6 This report of the House Committee on Education and Labor 

states: 

[T]he Committee recognizes the absolute need that 

safeguards for plan participants be sufficiently 

adequate and effective to prevent the numerous 

inequities to workers under plans which [inequities] 

have resulted in tragic hardship to so many. 

(Emphasis added.) 

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( 

( 

receive a benefit of any type from an employee benefit plan which 

covers employees of such employer." 29 u.s.c. § 1002(7). This 

definition includes ''former employees who 'have 

expectation of returning to covered employment' or 

. a reasonable 

who have a 

colorable claim' to vested benefits." Firestone Tire and Rubber 

Co. v. Bruch, U.S. , 109 s. Ct. 948, 958 (1989) (quoting 

Kuntz v. Reese, 785 F.2d 1410, 1411 (9th Cir.) (per curiam), cert. 

denied, 479 U.S. 916 (1986)). It excludes, however, former 

employees who have received a lump-sum payment of all their vested 

benefits because "these erstwhile participants have already 

received the full extent of their benefits and are no longer 

eligible to receive future payments." Joseph v. New Orleans 

Electrical Pension & Retirement Plan, 754 F.2d 628, 630 (5th 

Cir.), cert. denied, 474 U.S. 1006 (1985). These claimants seek a 

damage award, not vested benefits improperly withheld. Kuntz, 785 

F.2d at 1411. The fact that an employee takes his lump sum under 

protest does not preserve his standing as long as an employer 

properly pays out all the vested benefits owed to the employee. 

Yancy v. American Petrofina, Inc., 768 F.2d 707, 708-09 (5th Cir. 

1985). 

Mobil claims that the trial court erred in granting Mr. 

Mitchell standing because he has never had a reasonable 

expectation of returning to covered employment, nor does he have a 

colorable claim to vested benefits. We agree. After Mr. Mitchell 

retired on January 1, 1985, he received all of his vested pension 

benefits in a single lump sum. Although he filed a protest under 

Mobil's internal procedures, he did not claim that Mobil had 

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improperly withheld vested benefits. He also did not make such a 

claim in his complaint, nor did he seek reinstatement. Instead, 

he claimed that Mobil's violation of ERISA entitled him to 

additional benefits which he would have received had Mobil's 

amendments to the Plan not compelled him to retire at fifty-six, 

rather than sixty. Since these benefits had not yet vested, Mr. 

Mitchell could not have a colorable claim to vested benefits, but 

only a claim for compensatory damages. Furthermore, Mr. Mitchell 

never sought reinstatement; therefore, he also could not have a 

reasonable expectation of returning to covered employment. 

Because Mr. Mitchell failed to prove that he was still a 

participant in the Plan, it is inescapable that he did not have 

standing to seek enforcement of his ERISA claims. The trial 

court's holding that Mr. Mitchell is entitled to recover under 

ERISA, therefore, must be reversed. 

For the foregoing reasons, we REVERSE the judgments of the 

district court. 

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