1

The Honorable Lyle E. Strom, United States District Judge,

District of Nebraska.

___________

No. 95-4205

___________

William Jefferson, *

*

Appellant, * Appeal from the United States

* District Court for the 

v. * District of Nebraska.

*

Vickers, Inc, a Delaware *

Corporation, J. Steven *

Whitworth, *

*

Appellees. ** ___________

 Submitted: September 12, 1996

 Filed: December 17, 1996 ___________

Before FAGG, BEAM, and MURPHY, Circuit Judges. ___________

BEAM, Circuit Judge. 

In this appeal, an employment discrimination plaintiff

challenges the district court’s1 evidentiary rulings in his section

1981 jury trial and asserts error by the district court in finding

against him on his ERISA claims. We affirm.

I. BACKGROUND

Vickers, Inc. employed William Jefferson, a black male, first

as a Business Analyst and later as a Product Planning and Analysis

Manager. J. Steven Whitworth was Jefferson’s supervisor for most

of Jefferson’s employment. Vickers downsized in 1993; Jefferson

was terminated as part of that reduction in force. Jefferson
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This plan was discontinued while Jefferson was employed at

Vickers. Plan documents called for automatic vesting of

participants upon termination.

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Section 401(k) plans (also known as cash-or-deferred

arrangements or CODAs) allow participants to have a portion of

their pre-tax earnings contributed to retirement savings. Vickers’

plan provided that the employer match employees’ contributions. 

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participated in two pension plans while at Vickers: the Vickers,

Inc. Retirement Program Part A2"the Part A Plan")and the Vickers,

Inc. Retirement Savings and Profit Sharing Plan3 ("the 401(k)

Plan"). The 401(k) Plan requires that employees serve five years

in order to vest in employer contributions to their accounts. When

he was discharged, Jefferson had been employed at Vickers for four

years, eight months and fifteen days. Jefferson asked if he could

vest despite falling short of five years of service. Vickers

offered to extend Jefferson’s severance benefits until after the

vesting date which would enable Jefferson to become fully vested.

In exchange for that accommodation, however, Vickers required

Jefferson’s release of any and all claims against the company.

Jefferson refused to sign the release and filed suit alleging race

discrimination in violation of 42 U.S.C. § 1981 and interference

with rights protected by section 510 of the Employee Retirement

Security Act (ERISA), codified at 29 U.S.C. § 1140.

The section 1981 claim was tried to a jury. Jefferson sought

to introduce evidence regarding the ERISA claims on the theory that

non-minority employees had been allowed to extend their severance

benefits without signing any release. The district court sustained

a motion in limine seeking to exclude the alleged ERISA violations

(such as the offered release) under Federal Rule of Evidence 403.

The jury returned verdicts in favor of Vickers and Whitworth on

April 25, 1995.

The ERISA claim was tried to the court. The court found that

Jefferson was vested in the Part A Plan and awarded him $853.69 as
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That award has not been appealed.

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his interest in that plan.4 The court further found that Jefferson

was not vested in the 401(k) Plan. On Jefferson’s claims of

discrimination under section 510 of ERISA, the court concluded that

Vickers had not intentionally interfered with Jefferson’s

attainment of benefits and entered judgment in favor of the

defendants. 

Jefferson moved for judgment notwithstanding the jury’s

verdict or, in the alternative, for a new trial. The district

court denied both motions, and Jefferson initiated this appeal. He

argues that Vickers’ proposed settlement that required him to

release claims in exchange for continuation of benefits violated

ERISA and showed race discrimination. 

II. DISCUSSION

A. Section 1981 Claim

Jefferson appeals the district court’s exclusion of evidence

regarding the alleged ERISA violation. Specifically, the court

refused to admit the release Vickers offered in exchange for an

extension of benefits. We review evidentiary decisions very

deferentially, reversing only upon a showing that the trial court

has "clearly abused its discretion." United States v. Johnson, 857

F.2d 500, 501 (8th Cir. 1988). 

ERISA claims are properly tried to the court. Houghton v.

SIPCO, Inc., 38 F.3d 953, 957 (8th Cir. 1994). The district court

determined that evidence of unrelated ERISA claims in the section

1981 trial would have created a trial within a trial, diverting the

jury’s attention from the race discrimination claim. We cannot say

the district court abused its discretion in excluding the release

from the section 1981 trial. 
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While it may be relevant to a claim of discrimination that a

minority employee was required to execute a release while others

were not, Jefferson has not presented that kind of evidence here.

Jefferson’s offer of proof failed to offer any evidence that

Vickers’ request was unique to Jefferson or to minority employees.

The testimony indicated that this was a standard release used by

the Vickers human resources department, and that no employee had

received extended severance benefits without executing a release.

The district court did not err in excluding the release from the

section 1981 case. 

B. ERISA Claim

Jefferson first claims that he was vested in the 401(k) Plan

and that Vickers violated ERISA by refusing to pay out the

benefits. In the alternative, he argues that Vickers violated

ERISA by discharging him with the intent to prevent him from

vesting. 

1. Vested Status in 401(k) Plan

The district court found that Jefferson was not fully vested

in Vickers’ 401(k) Plan at the time of his termination. This

finding constitutes a conclusion of law. John Morrell & Co. v.

United Food and Commercial Workers Int'l Union, 37 F.3d 1302, 1303

(8th Cir. 1994), cert. denied, 115 S. Ct. 2251 (1995). It is

therefore reviewed de novo. Sawheny v. Pioneer Hi-Bred Int’l,

Inc., 93 F.3d 1401, 1407 (8th Cir. 1996). 

Under the terms of ERISA, a "vested right" is one that is

"nonforfeitable." See, e.g., 26 U.S.C. § 411(a)(2). Vickers’

401(k) Plan required employees to have five years of service with

the company before vesting. There is no dispute that at the time

of Jefferson’s termination, he had worked for Vickers for four

years, eight months and fifteen days. Since Jefferson had not
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completed five years of service, he had not vested and therefore

forfeited the employer contributions to his 401(k) account. 

Jefferson argues that the Vickers plan does not meet the

minimum vesting standards set by Congress. Section 203(b)(2)(A) of

ERISA provides:

[T]he term "year of service" means a calendar year, plan

year, or other 12-consecutive month period designated by

the Plan . . . during which the participant has completed

1,000 hours of service.

29 U.S.C. § 1053(b)(2)(A). 

Jefferson’s position is that under the latter provision, if a

participant completed 1000 hours of service in the "12-consecutive

month period designated by the Plan," he or she would accrue one

year of service for vesting purposes. Jefferson argues that he is

entitled to credit for a year of service even though he was not

employed for an entire twelve-consecutive month period because he

had performed over 1000 hours of service since his last employment

anniversary date. In essence, Jefferson contends that ERISA itself

requires qualified pension plans to determine vesting by

calculating an employee’s hours of service rather than the time

elapsed since employment. 

This argument ignores the Treasury Regulations which expressly

allow use of the elapsed-time method. See 26 C.F.R. § 1.410(a)-7.

The argument Jefferson makes here has already been rejected.

"ERISA was a carefully considered statute, and if its framers had

intended to wipe out the elapsed-time method of computing pension

entitlements we think they would have chosen a more conspicuous

method than the obscure wording of the definitional provision on

which [the plaintiff] relies." Coleman v. Interco Inc. Divisions’

Plans, 933 F.2d 550, 552 (7th Cir. 1991). We agree. We conclude

that ERISA allows vesting to be calculated by either the hours of
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service method or the elapsed-time method. The Vickers plan had

selected the elapsed-time method, and Jefferson had not fulfilled

the plan’s vesting requirements.

2. Intentional Interference Under Section 510 

The district court found that Vickers had not discharged

Jefferson with the intent to interfere with his pension rights. It

therefore entered judgment in favor of the defendants on

Jefferson’s section 510 claim. Jefferson asserts this finding was

erroneous. 

Claims brought under section 510 of ERISA are analyzed under

the three-stage burden-shifting paradigm articulated by the United

States Supreme Court in McDonnell Douglas Corp. v. Green, 411 U.S.

792, 802-05 (1973). Rath v. Selection Research, Inc., 978 F.2d

1087, 1089-90 (8th Cir. 1992). The district court found that

Jefferson had established a prima facie case of discrimination

under McDonnell Douglas, thus creating a presumption of

discrimination. The court went on to find that Vickers had

rebutted that presumption by articulating a legitimate, nondiscriminatory reason for Jefferson’s discharge in that it was

undergoing a reduction in force. Jefferson does not challenge that

finding on appeal. 

Section 510 plaintiffs are "required to present evidence that

[an employer] acted with "specific intent" to interfere with their

rights" to overcome an employer’s legitimate, non-discriminatory

reason. Brandis v. Kaiser Aluminum & Chemical Corp., 47 F.3d 947,

950 (8th Cir. 1995). This specific intent can be shown with

circumstantial evidence, but must be more specific than mere

conjecture. Kinkead v. Southwestern Bell Tel. Co., 49 F.3d 454,

456 (8th Cir. 1995). Jefferson has failed to adduce this evidence

of intent. 
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Jefferson relies on three facts to establish specific intent.

First, he argues that Vickers’ offer to extend his benefits in

exchange for a release is evidence of intentional interference. An

employer does not violate ERISA when it conditions the receipt of

early retirement benefits upon the participants’ waiver of

employment claims. Lockheed Corp. v. Spink, 116 S. Ct. 1783, 1791

(1996). The requested release alone does not establish the intent

to violate ERISA.

Second, Jefferson argues that Vickers’ intent is demonstrated

by the extensions granted other employees who did not execute a

release. As noted above, Jefferson submitted no evidence to

support his assertion that other employees received extensions

without executing releases. Furthermore, even if proven, the

incidents would not impose section 510 liability. As the court in

McGath v. Auto-Body North Shore, Inc., 7 F.3d 665 (7th Cir. 1993)

explained: 

Because the plan must be administered according to its

terms, [plaintiff] cannot complain because he is held to

those terms; this is true even if the rules were bent for

another individual. ERISA § 510 affords protection from

discrimination that interferes "with the attainment of

any right to which such participant may become entitled

under the plan." [Plaintiff] does not have a right to

treatment that is contrary to the terms of the plan, even

if those terms are breached for others. 

Id. at 670 (emphasis added) (footnote omitted). Vickers offered to

allow Jefferson to vest in benefits to which he was not legally

entitled. An employer does not violate ERISA by offering a

gratuity to one employee that is less generous than a gratuity

bestowed on another. Such an offer itself does not establish

intentional interference with ERISA rights. 

 

Finally, Jefferson claims that Vickers’ refusal to pay his

(now admittedly) vested Part "A" Plan benefits is evidence of
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intent to interfere with his pension rights. Jefferson offers no

evidence on this point other than Vickers’ failure to pay. Were

this evidence alone enough to state a claim under section 510,

every error in determining entitlement to benefits would be

actionable under section 510. That is clearly not the purpose of

this section of ERISA. 

III. CONCLUSION

For the foregoing reasons, the decision of the district court

is affirmed. 

A true copy.

Attest:

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