The Honorable John B. Jones, United States District Judge for the District of 1

South Dakota, sitting by designation.

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

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No. 97-2428

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Franklin Mange, Philip R. Corneli, *

Keith F. Ball, Darwin L. Kraft, *

Joseph L. Jost, Herbert M. Emerson, *

and Delbert C. Scranton, *

*

Appellants, * Appeal from the United States

* District Court for the Eastern

v. * District of Missouri.

*

Petrolite Corporation, *

*

Appellee. *

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Submitted: January 14, 1998

Filed: February 2, 1998

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Before BOWMAN and MORRIS SHEPPARD ARNOLD, Circuit Judges, and

JONES, District Judge. 1

___________

MORRIS SHEPPARD ARNOLD, Circuit Judge.

The plaintiffs were employees of Petrolite who accepted either a voluntary

retirement program or a voluntary separation program that Petrolite offered in order
The Honorable Stephen Nathaniel Limbaugh, United States District Judge for 2

the Eastern District of Missouri.

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to reduce the size of its work force. Employees accepting either of the programs were

to receive certain benefits in return for voluntarily leaving the company on October 31,

1994.

Under Petrolite’s ordinary vacation policy, an employee earned vacation benefits

during one fiscal year that vested at the close of that fiscal year, that is, on October 31,

and were available for use during the following fiscal year. The plaintiffs point out that

vacation benefits vested on their final day of employment -- October 31, 1994 -- and

they maintain that, either under the program that they accepted or under Petrolite's

ordinary vacation policy, Petrolite has an obligation to pay them the value of their

vested vacation benefits. Petrolite disagrees. The district court granted summary

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judgment to Petrolite, and the plaintiffs appeal. We affirm. 

I.

The employees originally brought suit to recover the disputed vacation benefits

in the Missouri state courts, but Petrolite removed the matter to federal court. The

employees argue that the district court lacked subject matter jurisdiction to hear the

case. They assert that because the dispute involves an unfunded vacation benefits

program provided by Petrolite, it is not covered by federal law. We disagree. 

The Employee Retirement Income Security Act (“ERISA”), see 29 U.S.C.

§§ 1001-1461, governs severance benefits plans even if those plans are not separately

funded. See Holland v. Burlington Industries, Inc., 772 F.2d 1140, 1145-46 (4th Cir.

1985), aff’d sub nom. Brooks v. Burlington Industries, Inc., 477 U.S. 901 (1986).

ERISA therefore governs the two voluntary termination programs at issue in this case,

and beneficiaries seeking to recover benefits owed under the terms of those programs

have a cause of action under ERISA, see 29 U.S.C. § 1132(a)(1)(B). See also
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Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 62-63, 66-67 (1987). Thus the

district court had jurisdiction to hear the former employees' claim that they are entitled

to the vacation benefits in question under the terms of the programs. The district court

also had supplemental jurisdiction, see 28 U.S.C. § 1367(a), to hear the plaintiffs' claim

that they were entitled to the vacation benefits in question under Petrolite's ordinary

vacation policy. 

II.

Turning to a consideration of the merits of this case, we hold that the plaintiffs'

claim that they are entitled to the vacation benefits in question under the relevant

programs fails because those programs do not include those vacation benefits. The

Summary Plan Description for each program provides, under the general heading of

“Vacation,” that employees electing to participate in the plan are to receive payment

for earned but unused vacation not taken prior to October 31, 1994. The vacation for

which the employees seek benefits now could not have been taken prior to October 31,

1994, as the relevant benefits would not have vested until that time. Accordingly, the

vacation benefits that would have vested on October 31, 1994, are not included among

the benefits provided by Petrolite to its departing employees in its programs. 

The plaintiffs' claim that they are entitled to the vacation benefits in question

under Petrolite's ordinary vacation policy also fails, because, by accepting either of the

programs, the former employees waived any rights that they might have had to bring

an action against Petrolite with respect to accrued vacation rights. The Summary Plan

Description for each program states: "If you accept this program, you ... waive any

claims you may have against Petrolite related to your employment at Petrolite or your

participation in this program." The program agreements themselves provide that, in

exchange for the benefits provided by the programs, the employee "agrees not to

commence any lawsuit against the Company and, without any reservation whatsoever,

forever releases and waives any claim or liability against the Company arising out of

or in any way related to his or her employment with the Company." Since a claim for
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vacation benefits that accrued to the plaintiffs prior to their separation from Petrolite

is one that manifestly arises out of their employment with Petrolite, the plaintiffs have

no cause of action to recover any vacation benefits other than those included in the

programs.

We therefore conclude that the district court did not err in holding that the

employees knowingly and voluntarily released Petrolite from any obligation to pay

them for vacation benefits that would have vested on October 31, 1994. Accordingly,

we affirm the judgment of the district court.

A true copy.

Attest:

 CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.