2000 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

5-26-2000

Harte v. Bethlehem Steele

Precedential or Non-Precedential:

Docket 98-2052

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Recommended Citation

"Harte v. Bethlehem Steele" (2000). 2000 Decisions. Paper 110.

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Filed February 29, 2000 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

No. 98-2052 

ROBERT J. HARTE, Appellant 

v. 

BETHLEHEM STEEL CORPORATION; GENERAL PENSION 

BOARD OF THE BETHLEHEM STEEL CORPORATION 

AND SUBSIDIARY COMPANIES; MICHAEL P. DOPERA, 

Secretary, Employee Benefits Administration Committee 

On Appeal From the United States District Court 

For the Eastern District of Pennsylvania 

(D.C. Civ. No. 97-cv-06528) 

District Judge: Honorable Edward N. Cahn 

Argued: September 28, 1999 

Before: BECKER, Chief Judge, McKEE, and NOONAN* 

Circuit Judges. 

(Filed: February 29, 2000) 

 DONALD P. RUSSO, ESQUIRE 

 (ARGUED) 

 60 West Broad Street 

 P.O. Box 1890, Suite 300 

 Bethlehem, PA 18016 

Counsel for Appellant 

_________________________________________________________________ 

* Honorable John Noonan, United States Circuit Judge for the Ninth 

Circuit, sitting by designation. 
 G. STEWART WEBB, JR., ESQUIRE 

 (ARGUED) 

 RANDOLPH STUART SERGENT, 

 ESQUIRE 

 Venable, Baetjer and Howard, LLP 

 1800 Mercantile Bank & Trust Bldg. 

 2 Hopkins Plaza 

 Baltimore, MD 21201 

 KATHLEEN M. MILLS, ESQUIRE 

 Bethlehem Steel Corporation 

 Law Department 

 1170 Eighth Avenue 

 Bethlehem, PA 18016-7699 

 Counsel for Appellees 

OPINION OF THE COURT 

BECKER, Chief Judge. 

This appeal, arising out of a claim for pension benefits 

under ERISA, is set in the familiar factual pattern of an 

employee's being denied a more advantageous pension

because of a minor shortfall in the required period of 

service. Robert J. Harte had accrued credit for fourteen 

years, eleven months, and eleven days at Bethlehem Steel 

when the benefits plan administrator terminated his

continuous service (for pension purposes) because Harte 

had been absent from work for two years. When Harte's 

service was terminated, he was nineteen days short of 

eligibility for the "70/80" pension he now seeks. Harte 

claims that he did not learn that his service had been 

"broken," and hence that he had not accrued the fifteen 

years required for the pension, until approximately eight 

years later. After finally being notified of his shortfall, Harte 

sued, raising a host of arguments for why Bethlehem was 

required to give him the 70/80 pension, including 

arguments as to why his continuous service should never 

have been severed. The District Court granted summary 

judgment for Bethlehem. 

 2 
Harte's strongest claim is a breach of fiduciary duty 

claim. He argues that (1) the plan document was 

ambiguous about when a break in service would be 

effected, (2) he reasonably believed that he was still 

employed under the terms of the plan, and therefore (3) 

Bethlehem, as an ERISA fiduciary, should have at least 

notified him that it was about to break his service. The 

primary issue presented by this appeal is whether ERISA 

requires plan administrators, as fiduciaries, to timely 

inform plan beneficiaries that their service is being broken 

if the severance is made pursuant to an ambiguous plan 

provision that a reasonable person could interpret 

differently from the administrator. We conclude that it does, 

giving rise to the ancillary issues of whether the plan 

provision is ambiguous, whether it is material, and whether 

Harte detrimentally relied on it. 

The phrase at issue in this case is "compensable 

disability." The Bethlehem plan provides that an employee 

may receive a 70/80 pension after fifteen years of 

"continuous service." It states that although continuous 

service is broken two years after leaving work for a 

disability, it is not broken if the reason for leaving is a 

"compensable disability incurred during course of 

employment." Bethlehem represents that the plan 

administrator, within his authority, has consistently 

interpreted this phrase to apply only to work-related 

disabilities that are compensated by state worker's

compensation, which Harte did not receive. However, Harte 

applied for, received, and continues to receive, 

compensation for his disability through the company's long 

term disability program. On this ground, he contends that 

his service should never have been broken because he has 

a "compensable disability incurred during course of

employment." He submits that the term "compensable 

disability" is ambiguous as to whether it comprehends long 

term disability benefits as well as worker's compensation 

benefits. 

Although we agree with Bethlehem that the plan 

administrator had the authority to make the interpretation 

that he did and to effect the severance, our precedent 

requires us to conclude that the company also had a

 3 
fiduciary duty to timely inform Harte of its interpretation. 

We have consistently held that a fiduciary may not make 

inconsistent or confusing statements or fail to disclose 

material facts about a plan. It follows that when a material 

plan provision regarding severance is ambiguous and

beneficiaries might predictably rely on an alternate 

interpretation, a fiduciary may be held liable for failing to 

inform them that their service has been broken at a time at 

which they could attempt corrective action or seek 

alternatives. 

In short, a plaintiff may succeed on a claim under 

S 502(a)(3) of ERISA when he adduces evidence that (1) a 

plan provision is material; (2) it is susceptible of multiple 

reasonable interpretations; (3) the plaintiff relied on it to his 

detriment; and (4) the company did not timely notify the 

plaintiff of its interpretation. We therefore vacate the grant 

of summary judgment and remand the case for further

proceedings on the breach of fiduciary duty claim. 1 The 

District Court properly granted summary judgment for 

Bethlehem on all other issues, and we affirm summarily 

with respect to these claims.2 

_________________________________________________________________ 

1. Bethlehem argues that Harte should not be allowed to proceed on this 

claim because it was inadequately pled. Harte did not cite S 502(a)(3) in 

his complaint, nor did he seek to amend the complaint. His complaint 

does, however, allege the lack of notification, and his papers refer to 

several cases that revolve around S 502(a)(3) claims. Moreover, the 

District Court discussed this claim in the context of one of those cases, 

Bixler v. Central Pa. Teamsters Health & Welfare Fund, 12 F.3d 1292 

(3rd Cir. 1993) (a breach of fiduciary duty case that we discuss more 

fully infra Section II). We are satisfied that, given our broad notice 

pleading standards, Harte's breach of fiduciary duty claim has been 

adequately pled. 

2. Harte contends that, given the ambiguity of the plan provisions, 

Bethlehem could not interpret the plan in a fashion that inhered to its 

own benefit. However, under the aegis of Firestone Tire and Rubber Co. 

v. Bruch, 489 U.S. 101, 114-15 (1989), when an ERISA plan provides the 

plan administrator with fiduciary discretion, courts generally use the 

arbitrary and capricious standard to review the administrator's 

decisions. Paragraphs 5.3(a) and 8.1 of the Bethlehem plan grant the 

administrator the discretion to interpret the "continuous service" 

provision. Even where the company is both the plan sponsor and plan 

 4 
I. 

As far as is pertinent to this appeal, Harte worked at 

Bethlehem in several capacities between 1973 and 1986.3 

On January 27, 1986, Harte, then a project engineer, left 

work because of cardiac problems (angina from a prior 

anteriolateral myocardial infarction). He did notfile for, or 

receive, state worker's compensation benefits. He did, 

however, file for, and receive, long term disability (LTD) 

benefits through the company's benefits program, which he 

was still receiving as of the date he filed the present 

lawsuit. On January 27, 1988, after crediting Harte with 14 

years, 11 months, and 11 days of "continuous service," 

Bethlehem terminated his service. This left Harte nineteen 

days short of being eligible for pensions which would 

provide greater benefits than the deferred vested pension to 

which he is currently entitled. 

The Bethlehem Plan provides that continuous service

breaks two years after active employment ends due to layoff 

or a disability, but does not break if an employee leaves 

active employment due to a "compensable disability 

incurred during course of employment."4 Michael Dopera, 

_________________________________________________________________ 

administrator we have applied the arbitrary and capricious standard of 

Bruch. See Abnathya v. Hoffman-La Roche, Inc., 2 F.3d 40, 45 n.5 (3d 

Cir. 1993). Applying that standard, Bethlehem's plan administrator did 

not abuse his discretion when he concluded that Harte did not have a 

"compensable disability incurred during course of employment." 

Reviewing the documents available to him, there was no clear indication 

that his disability was work-based, and it was within the plan 

administrator's discretion to conclude that those on worker's 

compensation should be credited for continuous service for the time that 

they were on worker's compensation, while those who left for other 

disability-based reasons should not be so credited. The issue decided in 

the text is, of course, a different one. 

3. Harte also worked for Bethlehem briefly in 1952 and again between 

1962 and 1967. His claim that his previous service must be used to 

calculate the time he can credit towards his pension claims is patently 

without merit and we reject it without further discussion. 

4. In section 5.1 the term "continuous service" is defined (emphasis 

added): 

 5 
plan administrator of the Bethlehem Pension Plan, testified 

by deposition that he broke Harte's continuous service in 

January 1988, because he left for medical reasons but did 

not have a "compensable disability" within the meaning of 

the plan. According to Dopera, "compensable disability 

incurred during course of employment" has always been 

interpreted by his office to apply only to those disabilities 

"where the recipient is getting worker's compensation 

benefits." Dopera conceded that there was no document 

available to the employees in which this interpretation was 

_________________________________________________________________ 

 The term "continuous service" as used in this Plan means 

 continuous service in the employ of one or more of the Employing 

 Companies, except as in this Section 5 otherwise provided, prior to 

 retirement calculated from the Employee's last hiring date (this 

 means in the case of a break in continuous service, continuous 

 service shall be calculated from the date of reemployment following 

 the last unremoved break in continuous service) in accordance with 

 the following provisions; provided, however, that the last hiring 

date 

 prior to the effective date of this Plan shall be based on the 

practices 

 in effect at the time the break occurred: 

 (a) There shall be no deduction for any time lost which does not 

 constitute a break in continuous service, except that in 

 determining length of continuous service for pension purposes: 

 (1) that portion of any absence which continues beyond two 

 years from commencement of absence due to a layoff or 

 disability shall not be creditable as continuous service; 

 provided, however, that absence in excess of two years due to 

 a compensable disability incurred during course of employment 

 shall be creditable as continuous service, if the Employee is 

 returned to work or retires within 30 days afterfinal payment 

 of statutory compensation for such disability or after the end 

 of the period used in calculating lump sum payment 

 . . . 

 (b) Continuous service shall be broken by: 

 (4) absence which continue for more than two years, except 

 that (i) absence in excess of two years due to a compensable 

 disability incurred during course of employment shall not 

 break continuous service, provided the Employee is returned 

 to work or retires . . . .; (ii) if an Employee is absent on 

 account of layoff or disability in excess of two years . . . 

 6 
announced or formalized. Nor did he suggest that the plan 

mandated that interpretation, but rather that the plan 

"provides that we have the right to interpret provisions 

under the administration section. We interpret the

compensable disability occurred during course of 

employment to mean someone actually getting worker's 

compensation payments." (emphasis added). 

In November 1995, Harte received a letter stating that his 

continuous employment had been severed as of January 

27, 1988, seven years and ten months earlier, and that he 

was eligible for a deferred vested pension. He immediately 

objected and wrote several letters to the company. 

Bethlehem apologized for not informing him earlier,

blaming the lack of official notice on a "clerical error." 

Bethlehem represents that it has a policy of notifying plan 

participants that their service has been broken shortly after 

the severance and there is no evidence that it does not 

generally do so, or that Bethlehem was acting in bad faith 

when it failed to notify Harte in 1988. 

Harte filed suit in District Court advancing several 

claims. As far is as is relevant for this appeal, the Court 

rejected Harte's contention that Bethlehem had an 

obligation to notify him when he was severed because: (1) 

it concluded that there was no evidence that Bethlehem 

had acted in bad faith; and (2) it believed that there was no 

fiduciary obligation to inform Harte that his service had 

broken. The Court granted summary judgment across the 

board for Bethlehem, and this appeal followed.5 

_________________________________________________________________ 

5. We exercise plenary review over such a decision, see Olson v. General 

Elec. Astrospace, 101 F.3d 947, 951 (3d Cir. 1996), and apply the same 

test the District Court should have applied in thefirst instance, see 

Lawrence v. National Westminster Bank, New Jersey , 98 F.3d 61, 65 (3d 

Cir. 1996). We must therefore determine whether the record, when 

viewed in the light most favorable to Harte, shows that there is no 

genuine issue of material fact and that defendants are entitled to 

judgment as a matter of law. See Salley v. Circuit City Stores, Inc., 160 

F.3d 977, 980 (3d Cir. 1998). 

 7 
II. 

Harte seeks equitable relief under ERISA S 502(a)(3) 

(codified at 29 U.S.C. S 1132(a)(3)), a"catchall" provision, 

which "act[s] as a safety net, offering appropriate equitable 

relief for injuries caused by violations that S 502 does not 

elsewhere adequately remedy," including violations of S 404. 

Varity v. Howe, 516 U.S. 489, 512 (1996). The alleged 

violation of ERISA involves S 404 (codified at 29 U.S.C. 

S 1104), which defines fiduciary duties owed by plan 

administrators to their beneficiaries.6 

 In its declaration of policy, ERISA states: 

 [O]wing to the lack of employee information and 

 adequate safeguards concerning their operation, it is 

 desirable in the interests of employees and their 

 beneficiaries . . . that disclosure be made and 

 safeguards be provided with respect to the 

 establishment, operation, and administration of such 

 plans. 

 . . . 

 It is hereby declared to be the policy of this chapter to 

 protect . . . the interests of participants in employee 

 benefit plans and their beneficiaries, by requiring the 

 disclosure and reporting to participants and

 beneficiaries of financial and other information with 

 respect thereto, by establishing standards of conduct, 

_________________________________________________________________ 

6. Section 404(a)(1) provides that: 

 a fiduciary shall discharge his duties with respect to a plan 

solely in 

 the interest of the participants and beneficiaries and-- 

 (A) for the exclusive purpose of: 

 (i) providing benefits to participants and their beneficiaries; and 

 (ii) defraying reasonable expenses of administering the plan; 

 (B) with the care, skill, prudence, and diligence under the 

 circumstances then prevailing that a prudent man acting in a like 

 capacity and familiar with such matters would use in the conduct 

 of an enterprise of a like character and with like aims; 

 . . . 

 8 
 responsibility, and obligation for fiduciaries of 

 employee benefit plans, and by providing for

 appropriate remedies, sanctions, and ready access to 

 the Federal courts. 

29 U.S.C. SS 1001(a),(b). 

In interpreting similar claims, we have looked to these 

statements and noted that ERISA was enacted, in part, to 

ensure that employees receive sufficient information about 

their rights under employee benefit plans to make wellinformed employment and retirement decisions. See Jordan 

v. Federal Express Corp., 116 F.3d 1005, 1012 (3rd Cir. 

1997). The goals of the "fiduciary duty jurisprudence" 

arising out of ERISA are " `to protect and strengthen the 

rights of employees, to enforce fiduciary standards, and to 

encourage the development of private retirement plans.' " Id. 

at 1014 (quoting In re Unisys Savings Plan Litig., 74 F.3d 

420, 434 (3d Cir. 1996)). 

These ends are partially served through ERISA's 

reporting requirements. But the fiduciary duty to disclose 

and explain is not achieved solely by technical compliance 

with the statutory notice requirements. In In re Unisys 

Corp. Retiree Med. Benefit "ERISA" Litig. , 57 F.3d 1255 

(1995), we stated that 

 satisfaction by an employer as plan administrator of its 

 statutory disclosure obligations under ERISA does not 

 foreclose the possibility that the plan administrator 

 may nonetheless breach its fiduciary duty owed plan 

 participants to communicate candidly, if the plan 

 administrator simultaneously or subsequently makes 

 material misrepresentations to those whom the duty of 

 loyalty and prudence are owed. 

Id. at 1264. 

The contours of these duties must be defined by the

courts in "develop[ing] a federal common law of rights and 

obligations under ERISA-regulated plans." Varity, 516 U.S. 

at 497 (citing Firestone Tire & Rubber Co. v. Bruch, 489 

U.S. 101, 110-11(1989)). Administrators have a fiduciary 

duty "not to misinform employees through material 

misrepresentations and incomplete, inconsistent or 

 9 
contradictory disclosures." Unisys, 57 F.3d at 1264. Not all 

misleading statements or omissions by a fiduciary are 

actionable, only those that are material. A representation or 

omission is material if "there is a substantial likelihood that 

it would mislead a reasonable employee in making an

adequately informed retirement decision." Unisys, 57 F.3d 

at 1264. The issue of materiality is a matter for the factfinder if reasonable minds can differ on whether a 

misleading statement or omission would affect a reasonable 

employee's retirement decision. See Fischer v. Philadelphia 

Elec. Co., 994 F.2d 130, 135 (3d Cir. 1993). 

This case does not involve affirmative misrepresentations. 

However, we have made clear that a fiduciary not only has 

a negative duty not to misrepresent material facts to plan 

beneficiaries, but also a corresponding affirmative duty to 

speak "when the trustee knows that silence might be

harmful." Bixler v. Central Pa. Teamsters Health & Welfare 

Fund, 12 F.3d 1292, 1300 (3rd Cir. 1993). The duty 

extends to "those material facts, known to thefiduciary but 

unknown to the beneficiary, which the beneficiary must 

know for its own protection." Glaziers & Glassworkers 

Union Local No. 252 Annuity Fund v. Newbridge Sec., Inc., 

93 F.3d 1171, 1182 (3rd Cir. 1996). "The duty to disclose 

material information is the core of a fiduciary's 

responsibility." Id. at 1281 (quoting Bixler, 12 F.3d at 

1300). 

In Bixler, a widow sued her husband's former employer 

for failing to provide complete and accurate information 

about her insurance options, a failure which she claimed 

harmed her by leading her not to select a particular option. 

See 12 F.3d at 1296. We held that an ERISA fiduciary who 

explains insurance benefits has a "duty to convey complete 

and accurate information," and remanded part of the case 

to the district court to determine whether material facts 

were withheld from her and if the defendant was acting as 

a fiduciary. Id. at 1302. 

In Jordan v. Federal Express Corp., 116 F.3d 1005, 1006- 

10 (3rd Cir. 1997), the plaintiff learned--only after 

retirement and divorce--that he could not transfer the 

benefits of his plan to his new wife, and that the plan was 

irrevocable. These details about the plan were in the plan 

 10 
document itself, but Jordan never requested nor received a 

complete copy of the plan, and he claimed that he would 

have chosen a different plan had he known. He did receive 

a written summary of his retirement options that did not 

include a reference to irrevocability. Nonetheless, we held 

that a reasonable fact finder could conclude that, despite 

its full compliance with ERISA and plan-based reporting 

requirements, the plan administrator had breached its 

fiduciary duty by failing to provide him this information. 

See id. at 1016. 

Bethlehem argues that Jordan is distinguishable because 

in Jordan the plan administrator had already acted and 

provided incomplete information. See id. at 1016-17. It 

contends that sending Jordan information triggered a duty 

to provide complete information about the plan, and since 

Bethlehem did not provide any information, a duty of 

completeness cannot have been triggered here. This 

argument fails for two reasons. First, the Jordan panel did 

not base the duty to inform completely on the company's 

prior limited effort at communication. See id. Second, 

providing a written plan is itself an affirmative act. In a 

plan, as in a summary plan document, beneficiaries have 

reason to expect that complete information about all 

material provisions is available to them when they review 

the document. Confusing or incomplete information in a 

plan is at least as likely to cause reliance on a reasonable 

misinterpretation as is confusing or incomplete information 

in a summary of the plan. Indeed, when a summary plan or 

letter includes incomplete information, the employee retains 

the possibility of reviewing the entire plan, whereas there 

are no more authoritative documents to review when the 

ambiguous provision is in the plan itself. 

Therefore, we conclude that there is an incomplete 

disclosure when, as in this case, a material plan provision, 

easily accessible by a beneficiary, uses terms that are 

susceptible to reasonable misinterpretation and detrimental 

reliance thereon. Naturally, in considering the 

"reasonableness" of a beneficiary's interpretation, the 

company's own pronouncements and widely-known 

company practice must be taken into account; if a company 

adequately informs beneficiaries of its interpretation of a 

 11 
term (when it retains discretion to interpret), it would be 

patently unreasonable to understand it otherwise. 7 The 

"duty to convey complete and accurate information," Bixler, 

12 F.3d at 1302, logically encompasses a duty to use clear 

language when describing material terms in a plan, or 

explain it when it is unclear. The failure to notify a 

beneficiary that his or her service is being broken pursuant 

to an ambiguous provision falls within the category of 

breaches of duty for "failure to disclose" outlined in Bixler, 

Jordan, Glaziers, and Unisys. 

III. 

Applying this framework, we conclude that Bethlehem

should not have been granted summary judgment on 

Harte's breach of fiduciary duty claim. The term 

"compensable disability incurred during the course of 

employment" is a material term in the context of the plan. 

The meaning of the phrase affects whether one's 

employment is considered continuous or broken off, and a 

fiduciary acting with care, skill, and prudence would know 

that an employee would want--and need--to know whether 

his or her disability fell within this category. It is the kind 

of phrase that is likely to "mislead a reasonable employee in 

making an adequately informed retirement decision."

Unisys, 57 F.3d at 1264. If Harte knew that he was not 

included in this category, he could have tried to return to 

less strenuous work for at least nineteen days, or 

attempted to find work, either at Bethlehem or elsewhere, 

that would allow him to receive better insurance, or he 

could have encouraged his wife to seek employment that 

would better insure them both. 

 The disputed phrase is: 

 [A]bsence in excess of two years due to a compensable 

 disability incurred during course of employment shall 

 not break continuous service. 

_________________________________________________________________ 

7. Although we focus on Bethlehem's failure to notify in this case, we 

note that it could just as easily have fulfilled its fiduciary duties by 

using 

clear language in the plan--i.e., a statement that"compensable 

disability" only applied to individuals receiving state worker's 

compensation. 

 12 
Bethlehem claims that this phrase has consistently been 

interpreted to cover only those cases where a participant 

applied for and received worker's compensation for a workrelated injury. However, Dopera himself called his reading 

of the phrase an "interpretation," suggesting that the 

language did not mandate a particular result. Although the 

phrase could refer only to those disabilities arising out of 

work, a reasonable person could also read this phrase to 

apply to any disability, illness, or injury that came upon an 

employee during the broad time frame of "active 

employment." Certainly, someone such as Harte who was 

actually receiving compensation for his medical condition 

through Bethlehem's long term disability program could 

think that he had suffered a "compensable disability."8 

There is a genuine issue of material fact as to whether the 

phrase is susceptible of multiple reasonable interpretations. 

Of course, this phrase cannot be read in a vacuum, and 

it is possible that Bethlehem will present evidence at trial 

that will demonstrate that in the context of employment 

with that company, it was not reasonable to expect that the 

phrase would be differently interpreted. However, 

construing the facts in the light most favorable to Harte, as 

we must at this juncture, we conclude that the phrase was 

susceptible to at least two reasonable interpretations, one 

of which would cover someone like Harte, who was 

receiving compensation through long term disability

benefits. 

As to the detrimental reliance question, Bethlehem 

argues that there is insufficient evidence that Harte relied 

on his misinterpretation of the plan. Therefore, the 

argument continues, since no harm flowed from the failure 

of communication, the failure to notify should not be 

actionable. Harte counters that had he learned of his 

severance, either immediately or within a short time 

afterwards, he would have taken several steps. He submits 

_________________________________________________________________ 

8. Harte also claims that his illness was due in part to the stress of 

work, and adduced evidence that his doctor, at the time he left 

Bethlehem, concurred in this view. This evidence adds weight to his 

claim that he reasonably believed that his disability was "incurred 

during the course of his employment." 

 13 
that he could have gone back to work for nineteen days and 

then attempted to join those days to his previous fourteen 

odd years (as the plan allows), or, alternatively, he could 

have applied for different pensions or invested in separate 

insurance. Although Harte has not put evidence in the 

record of alternate pensions for which he could have 

applied, we believe that he could have at least attempted to 

return to work. 

Bethlehem notes that he had no absolute right to return 

to work, and that Harte was physically infirm and 

incapable of working according to his own physician. 

However, just as we cannot assume that Bethlehem would 

have accepted a petition for such a brief tour of duty, we 

similarly cannot assume that it would not have. Harte had 

cardiac troubles, and now claims that he has Parkinson's 

disease. Although these disabilities may be incompatible 

with long term labor, Harte might have been able to put in 

a few weeks of consulting (his work did not require heavy 

labor) to achieve his desired pension, and Bethlehem might 

have accommodated him. Moreover, as noted above, Harte 

could have sought out alternate sources of insurance. We 

are satisfied that although Harte had no absolute right to 

return to work and possibly lacked the ability to do so, a 

reasonable jury could conclude, even on this spare record, 

that had he known that he was no longer receiving credit 

for "continuous service" he could have acted in a way to 

protect himself.9 Now, eight years later, his physical 

condition may have deteriorated such that he can no longer 

obtain the protections he might previously have sought. 

_________________________________________________________________ 

9. Bethlehem also argues that even if it had a duty to notify Harte, it 

would not apply to the moment of discharge, but rather, as is its policy, 

"within a reasonable period following a break in service." Therefore, 

"[t]he 

date on which Plaintiff received a Notice of Deferred Vested Pension 

could not possibly alter the benefits to which he is entitled under the 

Plan." However, Bethlehem's internal policy of notification does not 

circumscribe its fiduciary duties under ERISA. If ERISA requires that 

fiduciaries notify individuals of ambiguities in plan documents if they 

might reasonably be respected to rely, to their detriment, on an incorrect 

reading of an ambiguity, a company may not avoid this duty by 

establishing a lesser reporting requirement for itself. 

 14 
It may seem that any one who was away from the 

company as long as Harte was would have to know that 

they had been severed. But Harte continued to receive long 

term disability payments, and considered himself a disabled 

employee, instead of a disabled ex-employee. In sum, we 

believe that a jury could conclude that Harte was not even 

on constructive notice of Bethlehem's policy of interpreting 

the plan provision, or of his own severance. 

In view of the foregoing, the judgment with respect to the 

claim for a breach of fiduciary duty for failure to notify will 

be vacated, and the case remanded to the District Court for 

further proceedings. In all other respects the judgment will 

be affirmed. Parties to bear their own costs. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

 15