2006 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

10-20-2006

Hooven v. Exxon Mobil Corp

Precedential or Non-Precedential: Precedential

Docket No. 04-3773

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PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

____________

Nos. 04-3773 and 05-1610

_____________

Case No: 04-3773

JOE A. HOOVEN; MICHAEL AVERSANO; 

AINARS BLUSS; T. B. BOTTOLFSON; D. R. CLARIZIO;

STAN CONLEY; EDMUND E. DAVIS, SR.; 

PAUL E. DOXEY; JACK F. DUNLEAVY; 

CHRISTOPHER G. GIBSON; ROGER A. HENDLER; 

J. K. HOOVEN; ROMULUS VANCE HOUCK, III;

TODD HOWARD; D. HRINAK; J. D. HUMPHREYS;

WILLIAM J. HELFRICH; H. J. KLEIN; A. R. KLINE; 

R. J. KOPCHA; FRANKLIN W. LEE; R. E. LITTLE; 

JOANNE LIMA; J. LUTZ; E. T. McMURPHY; 

S. A. MENDOLIA; STEVE MERCURIO; 

CLARK D. MILLER; MICHAEL L. MILLMAN; 

G. A. MILNE; DANIEL G. MOORE; B. L. MORGAN; 

P. M. POROHNAVI; PATRICIA V. ROSE; 

JEAN VALENZA-RUBINO; SHELLY C. SHARER; 

JAMES R. SLUSHER; M. W. STUMP; D. M. SULLIVAN;

LINDA N. SUTPHIN; DARREL R. TAYLOR; 

THOMAS P. THOMPSON; JOHN TROY;

(continued)
2

 DONALD A. TWELE; CARROLL S. WAGNER; 

LAURA WAKS; JOE D. WOODWARD; 

JOHN H. WOOLFOLK; E. CHRISTINE COPLEY; 

E. JACKSON; L. YOUNG; SUZANNE MICHAUD

 v.

EXXON MOBIL CORPORATION; 

MOBIL CORPORATION EMPLOYEE SEVERANCE

PLAN,

 Appellants

____________

Case No: 05-1610

JOE A. HOOVEN; MICHAEL AVERSANO; 

AINARS BLUSS; T. B. BOTTOLFSON; D. R. CLARIZIO;

STAN CONLEY; EDMUND E. DAVIS, SR; 

PAUL E. DOXEY; JACK F. DUNLEAVY; CHRISTOPHER

G. GIBSON; ROGER A. HENDLER; J. K. HOOVEN;

ROMULUS VANCE HOUCK, III; TODD HOWARD; 

D. HRINAK; J. D. HUMPHREYS; H. J. KLEIN; 

A. R. KLINE; R. J. KOPCHA; FRANKLIN W. LEE; 

R. E. LITTLE; JOANNE LIMA; J. LUTZ; 

E. T. McMURPHY; S. A. MENDOLIA; 

(continued)
3

STEVE MERCURIO; CLARK D. MILLER; 

MICHAEL L. MILLMAN; G. A. MILNE; 

DANIEL G. MOORE; B. L. MORGAN; 

P. M. POROHNAVI; PATRICIA V. ROSE; 

JEAN VALENZA-RUBINO; SHELLY C. SHARER; 

JAMES R. SLUSHER; M. W. STUMP; 

D. M. SULLIVAN; LINDA N. SUTPHIN; 

DARREL R. TAYLOR; THOMAS P. THOMPSON; 

JOHN TROY; DONALD A. TWELE; 

CARROLL S. WAGNER; LAURA WAKS; 

JOE D. WOODWARD; JOHN H. WOOLFOLK; 

E. CHRISTINE COPLEY; E. JACKSON; L. YOUNG;

SUZANNE MICHAUD; WILLIAM J. HELFRICH

 v.

EXXON MOBIL CORPORATION; 

MOBIL CORPORATION EMPLOYEE SEVERANCE

PLAN,

 Appellants

____________

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. Civil No. 00-cv-05071)

District Judge: Honorable Cynthia M. Rufe

__________
4

Argued July 10, 2006

Before: SLOVITER, McKEE AND RENDELL, 

Circuit Judges

(Filed: October 20, 2006)

Mark S. Dichter [ARGUED]

Jeremy P. Blumenfeld

Morgan, Lewis & Bockius

1701 Market Street

Philadelphia, PA 19103

David M. Rivet

Exxon Mobil Corporation

800 Bell Street, Room 18060

Houston, TX 77002

Richard G. Rosenblatt

Morgan, Lewis & Bockius

502 Carnegie Center

Princeton, NJ 08540

Counsel for Appellants

Exxon Mobil Corporation; 

Mobil Corporation Employee Severance Plan
5

John A. Guernsey [ARGUED]

Paul J. Greco

Colleen M. Johns

Frank M. Emmerich, Jr.

Conrad, O’Brien, Gellman & Rohn

1515 Market Street, 16th Floor

Philadelphia, PA 19102

Counsel for Appellees in No. 04-3773

Joe A. Hooven; Michael Aversano; Ainars Bluss; 

T. B. Bottolfson; D. R. Clarizio; Stan Conley; 

Edmund E. Davis, Sr.; Paul E. Doxey; Jack F. Dunleavy;

Christopher G. Gibson; Roger A. Hendler; J. K. Hooven;

Romulus Vance Houck, III; Todd Howard; D. Hrinak;

J. D. Humphreys; William J. Helfrich;H. J. Klein; A.

R. Kline; R. J. Kopcha; Franklin W. Lee; R. E. Little; 

Joanne Lima; J. Lutz; E. T. McMurphy; S. A. Mendolia; 

Steve Mercurio; Clark D. Miller; Michael L. Millman; 

G. A. Milne; Daniel G. Moore; B. L. Morgan;

P.M.Porohnavi; Patricia V. Rose; Jean Valenza- Rubino;

Shelly C. Sharer; James R.Slusher; M. W. Stump; 

D. M. Sullivan; Linda N. Sutphin; Darrel R. Taylor; 

Thomas P. Thompson; John Troy; Donald A. Twele;

Carroll S. Wagner; Laura Waks; Joe D. Woodward; 

John H. Woolfolk; E. Christine Copley; E. Jackson;

L.Young; Suzanne Michaud.

(continued)
6

 - and -

Counsel for Appellees in No. 05-1610

Joe A. Hooven; Michael Aversano; Ainars Bluss; 

T. B. Bottolfson; D. R. Clarizio; Stan Conley;

 Edmund E. Davis, Sr; Paul E. Doxey; Jack F. Dunleary;

Christopher G. Gibson; Roger A. Hendler; J. K. Hooven;

Romulus Vance Houck, III; Todd Howard; D. Hrinak; 

J. D. Humphreys; H. J. Klein; A. R.Kline; R. J. Kopcha;

Franklin W. Lee; R. E. Little; Joanne Lima; J. Lutz;

E. T. McMurphy; S. A. Mendolia; Steve Mercuric;

Clark D. Miller; Michael L. Millman; G. A. Milne;

 Daniel G. Moore; B. L. Morgan; P. M. Porohnavi;

 Patricia V. Rose; Jean Valenza-Rubino; 

Shelly C. Sharer; James R. Slusher; M. W. Stump; 

D. M. Sullivan; Linda N. Sutphin; Darrel R. Taylor; 

Thomas P. Thompson; John Troy; Donald A. Twele;

Carroll S. Wagner; Laura Waks; Joe D. Woodward; 

John H. Woolfolk; E. Christine Copley; E. Jackson;

L. Young; Suzanne Michaud; William J. Helfrich.

__________

OPINION OF THE COURT

__________
7

RENDELL, Circuit Judge.

This case arises out of a dispute over whether

employees divested in connection with the merger between

Mobil Corporation and Exxon Corporation are entitled to

severance benefits. In preparation for the merger, Mobil

implemented an Enhanced Change-in-Control Retention /

Severance Plan (the “CIC Plan”). 

Plaintiffs Joe A. Hooven, et al., are former Mobil

Corporation employees whose employment with the merged

Exxon Mobil Corporation was terminated when the division

for which they worked was divested to Tosco Corporation. 

Plaintiffs contend that they are entitled to benefits under the

terms of a summary plan description (the “Initial SPD”) that

Mobil distributed to employees following the announcement

of the merger. They sued Defendants Exxon Mobil

Corporation and the Mobil Corporation Employee Severance

Plan (together, “Exxon Mobil”) under the civil enforcement

provision of the Employee Retirement Income Security Act of

1974, 29 U.S.C. § 1132, asserting claims for breach of

fiduciary duty, equitable estoppel, procedural and reporting

violations and federal common law breach of contract.

After a bench trial, the District Court issued a

memorandum opinion and order granting judgment in favor of

Exxon Mobil on the fiduciary duty, equitable estoppel and

procedural and reporting claims. However, the District Court
 1

Exxon Mobil also appeals the District Court’s February 14,

2005 order awarding Plaintiffs attorneys’ fees under the terms

of the CIC Plan. See Hooven v. Exxon Mobil Corp., No. Civ. A.

00-5071, 2005 WL 417416 (E.D. Pa. Feb. 14, 2005). Because

we reverse the District Court’s decision on the merits, we will

also vacate the attorneys’ fees order and need not address the

merits of the fee dispute.

8

agreed with Plaintiffs that the Initial SPD established a

unilateral contract that obligated Exxon Mobil to provide

them with severance benefits when it terminated their

employment following the merger. Accordingly, it entered

judgment in favor of Plaintiffs on the breach of contract claim

and ordered Exxon Mobil to provide Plaintiffs with severance

benefits under the terms of the Initial SPD. Exxon Mobil

appeals this portion of the District Court’s order. 

We disagree with the District Court’s characterization

of the Initial SPD as a unilateral contract the terms of which

became fixed as the employees performed. As we will

explain, the starting point for Plaintiffs’ claim is ERISA, not

the common law of contracts. Under this framework,

Plaintiffs’ rights to benefits under the Initial SPD never

became due. Because the plan documents that were in effect

when Plaintiffs’ claim to benefits would have accrued clearly

establish that they are ineligible for severance, we will reverse

and remand with instructions for the District Court to enter

judgment for Exxon Mobil.1
 2

The parties argue as to how to characterize this mistake–as

a mere “omission,” or as a “misrepresentation” that conflicts

with the language of the CIC Plan. We need not resolve this

disagreement in light of our reasoning along different lines.

9

I.

A. The CIC Plan and SPD

Exxon and Mobil began merger discussions in June of

1998. In September 1998, in anticipation of a possible merger

with Exxon, Mobil’s Board of Directors revoked the

company’s existing severance plan and implemented the CIC

Plan. The CIC Plan provided that employees in salary groups

19 and below, together classified as “Tier 4” employees, were

not eligible for severance benefits if their business unit or

activity was divested after the merger and they were offered

comparable employment by the acquiring entity. Plaintiffs

were all Tier 4 employees. Hooven v. Exxon Mobil Corp.,

No. 00-CV-5071, 2004 WL 724496, at *2 (E.D. Pa. Mar. 31,

2004).

After the Boards of Directors of Exxon and Mobil

formally approved the merger, Mobil prepared and mailed the

Initial SPD to its employees. The Initial SPD did not allude

to the specific non-eligibility of divested employees, or even

mention divestiture.2

 The District Court found that the Initial

SPD “failed to advise Plaintiffs that they would be ineligible
10

for severance in the event of a divestiture.” Id. at *8. 

However, the Initial SPD cautioned that it was merely “a

summary of the Plan and does not replace the official Plan

documents, which govern in all cases.” Id. at *21. See also

Id. (“If the Plan description in this handbook does not agree

with the Plan text, the Plan text will govern.”). It also stated

that, although Mobil reserved the right to “modify, suspend,

or terminate benefits at any time for any reason,” the CIC

Plan “may not be terminated or modified while a change of

control is pending, or within: [s]ix months following a

potential change in control, or [t]wo years following a change

in control.” Id. at *9. 

B. The Merger and Divestiture

On November 30, 1999, the Federal Trade

Commission approved the Mobil / Exxon merger, subject to

divestitures of various Mobil assets and other conditions. 

Exxon Mobil was created on December 1, 1999. Also on

December 1, 1999, Mobil agreed to sell its Mid-Atlantic

Marketing division, in which Plaintiffs worked, to Tosco

Corporation. Tosco agreed to offer jobs with comparable or

improved salaries and benefits to all of Mobil’s Mid-Atlantic

Marketing employees. Id. at *11. 

Mobil announced the divestiture of its Mid-Atlantic

Marketing division on December 2, 1999. At an employee

meeting that day, Mobil management discussed the divestiture
11

and explained that all affected employees would be offered

employment with Tosco. At the same time, management

advised Tier 4 employees that they would not be entitled to

severance benefits because they had been divested and would

receive comparable employment offers. In subsequent

meetings, Plaintiffs expressed surprise that they would not be

offered severance benefits and complained that Mobil had

changed the terms of the CIC Plan. Mobil management

responded by distributing copies of relevant questions and

answers from Mobil’s internal website and the divestiture

provision of the actual CIC Plan, which clearly established

Plaintiffs’ non-eligibility. Id. at *12.

In February of 2000, Mobil distributed a notice of

errata in the SPD, which acknowledged that the Initial SPD

had omitted the divestiture provision and clarified the

conditions for eligibility for benefits under the CIC Plan, as

follows:

The following text was omitted from the Mobil

Corporation Employee Severance plan Summary

for U.S. employees in salary groups 19 and

below, distributed to all employees in those salary

groups in August, 1999. Please keep this with

your Summary for future reference.
12

This bullet belongs on page 5 and

should be included as an additional

reason one is not eligible to

participate in the CIC

retention/severance package:

• you are no longer employed by

the Company or an Affiliate

due to a divestiture of any

facility or sale or outsourcing

of any business and are offered

comparable employment by the

purchaser or successor of such

facility or business, regardless

of whether you accept or reject

the employment.

Id.

Plaintiffs’ employment with Mobil was officially

terminated between March and May of 2000. The District

Court found that each Plaintiff was offered employment with

Tosco on terms comparable to his or her employment with

Mobil. After the divestiture, Plaintiffs received the same

salaries and benefits, and generally reported to the same

supervisors, as they had before the divestiture. According to

the District Court, 
 3

Plaintiffs’ counsel explained at oral argument that Plaintiffs

did not assert a claim for recovery of benefits under section

502(a)(1)(B) of ERISA, 29 U.S.C. § 1132(a)(1)(B), because

they thought that any such claim had to be maintained under the

terms of the CIC Plan itself, which clearly ruled out severance

for Tier 4 employees. Their complaint was filed before our

opinion in Burstein v. Retirement Account Plan for Employees

of Allegheny Health Education & Research Foundation, 334

F.3d 365 (3d Cir. 2003), allowed plaintiffs to state a section

502(a)(1)(B) claim based on the terms of an SPD.

13

No Plaintiff who accepted a position with Tosco

missed any work between the date he or she left

Mobil and the date he or she began working for

Tosco. Moreover, there was no break in any

Plaintiffs’ [sic] health care coverage from the date

he or she left Mobil until he or she started at

Tosco. 

Id. at *13 (citations omitted).

C. The District Court’s Opinion

In their complaint, Plaintiffs had asserted ERISA

claims for breach of fiduciary duty, equitable estoppel and

procedural and reporting violations, as well as a “federal

common law breach of contract” claim, as bases for the

recovery of severance benefits.3

 The District Court conducted

an eight-day bench trial. Thereafter, the District Court issued
14

a memorandum opinion granting relief based on a breach of

contract, but denying Plaintiffs’ ERISA claims.

Specifically, the District Court determined that

Plaintiffs’ breach of fiduciary duty claim failed because there

was no evidence that Plaintiffs had detrimentally relied on the

Initial SPD. Id. at *16. Detrimental reliance on a material

misrepresentation made by the defendant is a necessary

element of an ERISA breach of fiduciary duty claim. See

Daniels v. Thomas & Betts Corp., 263 F.3d 66, 73 (3d Cir.

2001). However, the District Court concluded that Plaintiffs

continued to work for Mobil after the merger was announced

“for the opportunity to work for Exxon Mobil–not to collect

enhanced severance benefits.” Hooven, 2004 WL 724496, at

*13. Moreover, 

[n]o Plaintiff proved that he or she did anything

in reliance upon the understanding that he or she

would receive enhanced severance benefits in

the event of a divestiture. No Plaintiff turned

down any specific job offer in reliance on the

belief that he or she would receive severance

benefits in the event of a divestiture.

Id.
 4

See Ackerman v. Warnaco, Inc., 55 F.3d 117, 124 (3d Cir.

1995) (noting that, “under ordinary circumstances,” ERISA

reporting and disclosure violations do not give rise to

substantive remedies); Curcio v. John Hancock Mut. Life Ins.

Co., 33 F.3d 226, 235 (3d Cir. 1994) (to sustain an equitable

estoppel claim under ERISA, a plaintiff must establish “(1) a

material representation, (2) reasonable and detrimental reliance

upon the representation, and (3) extraordinary circumstances”).

15

Plaintiffs’ equitable estoppel and reporting and

disclosure violation claims failed for the additional reason that

Plaintiffs had failed to establish “extraordinary

circumstances,”4

 which “generally involve acts of bad faith on

the part of the employer, attempts to actively conceal a

significant change in the plan, or commission of fraud.” 

Jordan v. Fed. Express Corp., 116 F.3d 1005, 1011 (3d Cir.

1997). The District Court concluded that Mobil’s failure to

include the divestiture provision in the SPD amounted to

“inartful drafting, not fraud or active concealment.” Hooven,

2004 WL 724496, at *17. The District Court noted that

Plaintiffs had not asserted a claim for recovery of benefits

under ERISA section 502(a)(1)(B) (see supra n.3), but ruled

that Plaintiffs were entitled to severance benefits on their

“federal common law breach of contract” theory. The District

Court first held that the CIC Plan was an offer of a unilateral

contract that Plaintiffs then accepted by continuing to work

for Mobil and, later, Exxon Mobil. Id. at *18. As such, the

terms of the plan or offer, as communicated to Plaintiffs
16

through the Initial SPD, became fixed as Plaintiffs performed. 

Id. (quoting Kemmerer v. ICI Americas Inc., 70 F.3d 281, 287

(3d Cir. 1995); citing Amatuzio v. Gandalf Sys. Corp., 994 F.

Supp. 253, 267 (D.N.J. 1998)). Next, the District Court

determined that the terms of the Initial SPD differed from the

terms of the CIC Plan, and that, under our decision in

Burstein v. Retirement Account Plan for Employees of

Allegheny Health Education & Research Foundation, 334

F.3d 365 (3d Cir. 2003), the terms of the SPD would control,

Hooven, 2004 WL 724496, at *18-19.

Thus, the District Court reasoned, when Plaintiffs

learned, on December 2, 1999, that their division would be

divested, their rights to severance as set forth in the Initial

SPD had accrued. “In these circumstances,” it concluded, “by

virtue of Plaintiffs’ performance on the unilateral contract, the

Court must enforce Defendants’ corresponding obligation.” 

Id. at *22.

The District Court’s March 31 memorandum opinion

and order became final on September 2, 2004, when the

District Court denied Exxon Mobil’s motion to amend the

findings of fact and conclusions of law and to alter or amend

the judgment. Exxon Mobil appealed the March 31 and

September 2 orders. Although Plaintiffs originally crossappealed the District Court’s order as to the fiduciary duty,

equitable estoppel and ERISA reporting and disclosure

claims, we dismissed the cross-appeal pursuant to a joint
17

stipulation of the parties on January 14, 2005, in accordance

with Fed. R. App. P. 42(b). Thus, we limit our review to the

portion of the District Court’s opinion and order entering

judgment in favor of Plaintiffs on the “breach of contract”

claim and ordering Exxon Mobil to pay Plaintiffs severance

benefits under the terms of the Initial SPD.

II.

The District Court exercised federal question

jurisdiction, pursuant to 28 U.S.C. § 1331, over Plaintiffs’

ERISA and “federal common law” claims. Our jurisdiction

over this appeal from the District Court’s final judgment

arises under 28 U.S.C. § 1291.

On appeal from a judgment entered after a non-jury

trial, we review findings of fact for clear error, Fed. R. Civ. P.

52(a), and conclusions of law de novo, Henglein v. Colt

Indus. Operating Corp., 260 F.3d 201, 208 (3d Cir. 2001). 

Because the primary issue on appeal is the District Court’s

analysis of the legal effect of the SPD and Initial CIC Plan,

we will review its conclusions de novo.

III.

It is one thing to acknowledge that contract principles

apply in ERISA cases. Clearly, they do. Generally, “breach

of contract principles, applied as a matter of federal law,
18

govern” claims for benefits due under an ERISA plan. 

Kemmerer v. ICI Americas Inc., 70 F.3d 281, 287 (3d Cir.

1995). However, it is quite another to say that an employee’s

severance benefit can be grounded in, and enforceable based

on, a unilateral contract outside of ERISA’s remedial scheme. 

Although this approach is intuitively appealing, and

seemingly appropriate in this complex area, we conclude that

it is inconsistent with the basic framework of ERISA and,

therefore, cannot be.

The District Court, addressing this issue of first

impression, conducted a thoughtful analysis and proposed a

reasonable solution. However, upon further review, we

disagree with two aspects of its reasoning: 

First, its determination that Plaintiffs’ rights

arose by virtue of a unilateral contract whereby their

rights to severance somehow became fixed before

Plaintiffs’ employment was terminated, and 

Second, its conclusion that, based upon

Burstein, the Initial SPD governed Plaintiffs’ rights in

this factual setting.
 5

It is true that “Congress has authorized the federal courts to

create federal common law” under ERISA. Plucinski v. I.A.M.

Nat’l Pension Fund, 875 F.2d 1052, 1056 (3d Cir. 1989) (citing

Van Orman v. Am. Ins. Co., 680 F.2d 301, 311 (3d Cir. 1982)).

However, federal courts may not “lightly create additional rights

under the rubric of federal common law”; we may exercise our

common law authority to fashion new ERISA causes of action

only where we deem it “‘necessary to fill in interstitially or

otherwise effectuate the statutory pattern enacted in the large by

Congress.’” Van Orman, 680 F.2d at 312 (quoting United States

v. Little Lake Misere Land Co., 412 U.S. 580, 593 (1973)). This

is certainly not the case here. There is absolutely no need in this

case to create new remedies, either to fill in “gaps” left by the

statute or to “effectuate” congressional intent. 

19

We begin with a fundamental premise: every claim for

relief involving an ERISA plan must be analyzed within the

framework of ERISA. The District Court found, and the

parties agree, that the CIC Plan is an “employee welfare

benefit plan” covered by ERISA. Hooven, 2004 WL 724996,

at *17 (citing 29 U.S.C. § 1002(1)). ERISA is a

“comprehensive statute for the regulation of employee benefit

plans,” Aetna Health Inc. v. Davila, 542 U.S. 200, 208

(2004); it is intended “to occupy fully the field of employee

benefit plans,” Reichelt v. Emhart Corp., 921 F.2d 425, 431

(2d Cir. 1990).5

The District Court found that Plaintiffs’ claim was not

based on ERISA, but nevertheless allowed it as arising out of
20

a unilateral contract, whereby Mobil’s obligation became

fixed when Plaintiffs accepted the CIC Plan by continuing to

work for Mobil up until and after the merger. Unfortunately

for Plaintiffs, this contract-based construct just does not fit

within the ERISA structure. ERISA requires “that any

contractually accrued rights be discernible from the written

terms of the formal ERISA plan documents themselves.” 

Carr v. First Nationwide Bank, 816 F. Supp. 1476, 1490

(N.D. Cal. 1993). Although we occasionally employ

unilateral contract concepts in ERISA cases, we do so only

where “the asserted unilateral contract is based on the explicit

promises in the ERISA plan documents themselves.” Id. at

1490-91. Unilateral contract principles may not operate to

create extra-ERISA causes of action for plan benefits.

Our observation in this regard is consistent with the

case law on this issue. In Reichelt v. Emhart Corporation,

plaintiffs argued that their employer’s informal “prior

practice” of paying severance to any employee who was

involuntarily terminated created a unilateral contract that the

employer could not amend or terminate by adopting formal

severance plans. 921 F.2d at 431-32. The Second Circuit

Court of Appeals disagreed, concluding that plan documents,

not “prior practice,” governed the plaintiffs’ rights to

severance, see id. at 430-31, and that “ERISA preempts civil

actions against employers for severance pay predicated on
 6

The Reichelt court noted, further, that the plaintiffs’

argument was incompatible with ERISA’s substantive

provisions, which allow employers flexibility in structuring,

amending and terminating severance and other employee

welfare benefit plans. 921 F.2d at 432. 

21

common-law contract principles,” id. at 431 (citing Gilbert v.

Burlington Indus., Inc., 765 F.2d 320, 328 (2d Cir. 1985)).6

Other courts of appeals have similarly “refused to

allow ERISA plaintiffs to use unilateral contract rules” as a

basis to recover benefits promised in an employee welfare

benefit plan where “the particular ERISA plan documents in

question did not provide a basis for . . . vesting or accrual of

the claimed benefits.” Carr, 816 F. Supp. at 1489-90. See

Alday v. Container Corp. of Am., 906 F.2d 660, 665-66 (11th

Cir. 1990) (rejecting plaintiff’s claim that benefit plan created

unilateral contract because plan documents unambiguously

provided that employer could terminate or modify the plan);

Musto v. Am. Gen. Corp., 861 F.2d 897, 906-07 (6th Cir.

1988) (holding that plan documents that made “perfectly clear

that no immutable insurance benefits can be said to vest upon

retirement” defeated plaintiffs’ unilateral contract claims);

Moore v. Metro. Life Ins. Co., 856 F.2d 488, 491-92 (2d Cir.

1988) (stating that plaintiffs’ theory that various

“representations” of the employer and “actions of the

employees in accepting those representations by remaining

with the Company” gave rise to an extra-ERISA “contract”
22

“would undermine ERISA’s framework,” as “plan documents

and the SPDs exclusively govern an employer’s obligations

under ERISA plans”).

Apparently recognizing that they cannot maintain a

common law claim outside of ERISA, Plaintiffs contend on

appeal that their right to relief arises out of ERISA section

502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B). They assert, further,

that “whatever title [they] may have affixed to their claim to

enforce the conflicting terms of the [Initial] SPD” in their

complaint, we must construe it to include a claim under

ERISA section 502(a)(1)(B) in accordance with the liberal

pleading standards of the Federal Rules of Civil Procedure. 

See Appellees’ Br. 53-56 (citing Fed. R. Civ. P. 8(a)). We

need not address this issue, or decide whether Plaintiffs’

repeated “disavowals” of reliance on section 502(a)(1)(B), see

Hooven, 2004 WL 724496, at *22, preclude them from taking

a different position here, as we conclude that, even under

section 502(a)(1)(B), Plaintiffs are not entitled to relief. 

A plaintiff seeking to recover under section

502(a)(1)(B) must demonstrate that the benefits are actually

“due”; that is, he or she must have a right to benefits that is

legally enforceable against the plan. See 29 U.S.C.

§ 1132(a)(1)(B) (“A civil action may be brought – (1) by a

participant or beneficiary – . . . (B) to recover benefits due to

him under the terms of his plan.” (emphasis added)). Benefits

must have “vested” in order to be legally “due.”
23

ERISA exempts severance and other welfare benefit

plans from its vesting requirements, see 29 U.S.C. § 1051(1),

so that benefits offered under such plans are typically

“unaccrued and nonvested,” Reichelt, 921 F.2d at 430. As a

result, “[e]mployers or other plan sponsors are generally free

under ERISA, for any reason and at any time, to adopt,

modify or terminate welfare plans.” Curtis-Wright Corp. v.

Schoonejongen, 514 U.S. 73, 78 (1995). However, an

employer may offer accrued or vested severance benefits, or

cede its freedom to amend or cancel a welfare benefit plan,

through the terms of the plan itself. See Inter-Modal Rail

Employees Ass’n v. Atchison, Topeka & Santa Fe Ry. Co.,

520 U.S. 510, 515 (1997); Hansen v. White Motor Corp. (In

re White Farm Equip. Co.), 788 F.2d 1186, 1193 (“[T]he

parties may themselves set out by agreement or by private

design, as set out in plan documents, whether . . . welfare

benefits vest, or whether they may be terminated.”). Where

the plan provides that an employee is irrevocably entitled to a

certain benefit, and where all of the conditions precedent to

the employee’s receipt of that benefit have been satisfied,

“that benefit is said to have accrued (or ‘vested’ or ‘ripened’)

and cannot be taken away by plan amendment or

termination.” ABA Section of Labor & Employment Law,

Employee Benefits Law 1052 (2d ed. 2000). At that point, but

not before, the employee’s rights to benefits become

enforceable through a typical ERISA section 502(a)(1)(B)

action. 
24

The District Court’s analysis is incompatible with this

statutory scheme. Relying on another district court decision

that held that an employee’s “rights to receive severance pay .

. . vest as she works,” Amatuzio v. Gandalf Sys. Corp., 994 F.

Supp. 253, 267 (D.N.J. 1998), the District Court concluded

that Plaintiffs’ rights to benefits became fixed when they

accepted Mobil’s “offer” by staying in their jobs. See

Hooven, 2004 WL 724496, at *18. However, treating

Mobil’s adoption of the CIC Plan as the juncture at which a

purported offer of severance was made, and Plaintiffs’

“acceptance” through continued employment as the point at

which their right to benefits became fixed, undercuts the very

concept of “vesting” that is crucial to a claim under ERISA. 

Whether and how a severance plan provides an employee

with enforceable benefits must be determined on a case-bycase basis, according to the terms of the plan itself–not

through the automatic application of “unilateral contract

principles.” See Carr, 816 F. Supp. at 1490. Plaintiffs’ rights

to severance were not fixed as a result of Plaintiffs’

“performance,” but, rather, at such time as all the conditions

to their entitlement, as specified in the CIC Plan documents,

had occurred. 

The CIC Plan and Initial SPD clearly provide that,

even after a change in control, a Tier 4 employee is not

entitled to severance benefits until (1) his employment is

terminated within two years of the change in control, (2) he

continues to work for the Company until “released” and (3) he
25

signs a separation agreement. It is only after all of these

requirements are met, i.e., his employment is terminated, he

has satisfied his obligation to continue working for the

company and he signs a separation agreement, that we can say

that a Mobil employee’s right to the benefits would have

accrued and become fixed and enforceable.

The District Court found that “Plaintiffs’ Mobil

employment was terminated between March and May 2000,”

Hooven, 2004 WL 724496, at *13, and that all Plaintiffs

continued their employment with Mobil up until that date, see

id. (“No Plaintiff who accepted a position with Tosco missed

any work between the date he or she left Mobil and the date

he or she began working for Tosco.”). Although the District

Court did not enter any findings as to whether or when

Plaintiffs signed separation agreements, we conclude from

these other findings that Plaintiffs’ rights to severance would

have accrued, at the earliest, in March of 2000.

This brings us to the question of whether Plaintiffs are

entitled to severance benefits at all. As noted above, the

language of the CIC Plan clearly excludes Plaintiffs from the

class of employees entitled to receive severance:

An Eligible Employee will not be considered to

have incurred a Severance . . . (ii) in case of a Tier

4 employee, by reason of the divestiture of a

facility, sale of a business or business unit, or the
26

outsourcing of a business activity with which the

Eligible Employee is affiliated if the Eligible

Employee is offered comparable employment by

the entity which acquires such facility, business or

business unit or which succeeds to such

outsourced business activity.

Hooven, 2004 WL 724496, at *2 (emphasis omitted). 

The District Court acknowledged that, “[u]nder the

terms of the CIC Plan, . . . Tier 4 employees continued to be

ineligible for severance benefits in the event of a divestiture,”

id., but held that Plaintiffs were nonetheless entitled to

severance benefits because the Initial SPD conflicted with the

CIC Plan and led Plaintiffs to “reasonably expect that Mobil

intended to offer severance benefits” in the event of a

divestiture, id. at *19. This conflicting language, it held,

“‘superseded and modified’” the Plan. Id. (citation omitted).

The District Court looked to the terms of the Initial

SPD believing that certain language we employed in Burstein

v. Retirement Account Plan for Employees of Allegheny

Health Education & Research Foundation, 334 F.3d 365 (3d

Cir. 2003), required it to do so. However, Burstein presented

a very different set of facts.
27

The Burstein plaintiffs were former employees of

Allegheny Health Education and Research Foundation

(“AHERF”) and participants in its Retirement Account Plan,

an ERISA defined benefit pension plan that was terminated

after AHERF filed for bankruptcy. The plaintiffs sought

benefits under the plan based upon a summary plan

description and a plan brochure. Although the AHERF plan

itself generally provided that a participant’s interest did not

vest until he had completed five years of service with

AHERF, the SPD clearly and unequivocally stated that a plan

participant’s interest in his account vested upon the plan’s

termination:

If the Plan is terminated, you will

automatically become vested in your

account, regardless of how many years of

service you have earned. No more annual

retirement credits will be made to your

account, but you will continue to receive

interest credits until payments from your

account begin.

Id. at 375. 

The language of the plan, however, described the

impact of a plan termination differently, imposing “a

significant qualification,” id., on a participant’s vesting rights,

and essentially contradicting the SPD:
28

Upon the termination or partial termination of the

Plan, the right of all affected participants to

benefits accrued to the date of such termination or

partial termination shall become nonforfeitable .

. . to the extent funded as of such date.

Id. at 376 (emphasis in original). Contrary to the

“impression” given by the plan brochure and SPD, the plan

was funded only at the minimum level prescribed by ERISA,

which did not require AHERF to fund accounts for

participants who had not yet met the five-year service

requirement. Id.

We ruled that the Burstein plaintiffs had stated a

section 502(a)(1)(B) claim for benefits due under the plan,

and that, under the given facts, the language of the SPD

would govern. Noting that Congress intended the SPD to be

“the primary document on which plan participants must rely,”

and that ERISA specifically requires employers to make the

SPD “transparent, accurate, and comprehensive,” we stated

that, “where a summary plan description conflicts with the

plan language, it is the summary plan description that will

control.” Id. at 379 (citing 29 U.S.C. § 1022(a)). We then

observed that claims under section 502(a)(1)(B) for benefits

due under a plan are “contractual in nature.” Under these

circumstances, we held, “[i]f an SPD conflicts with a plan

document, then a court should read the terms of the ‘contract’
29

to include the terms of a plan document, as superseded and

modified by conflicting language in the SPD.” Id. at 381.

Burstein must be understood in context. There, we

construed an SPD that was in effect when the plaintiffs’

benefits actually vested, i.e., when the AHERF plan

terminated. Based on the terms of the SPD, all of the

conditions precedent to their receipt of such benefits had been

satisfied. As discussed above, once a benefit accrues, “the

employer is contractually and statutorily obligated to provide

that benefit and may not retrospectively amend the plan to

divest the plan participant of a payment that he was already

entitled to receive.” Algie v. RCA Global Commc’ns, Inc.,

891 F. Supp. 875, 884 (S.D.N.Y. 1994).

Until the vesting or accrual date, however, the

summary plan description is just that–a summary of the plan’s

terms. Although it is the “primary document on which plan

participants must rely,” Burstein, 334 F.3d at 379, it is not the

Plan, and thus not the authoritative source of plan terms. This

is particularly true where, as here, the SPD contains specific

language stating that “the official Plan documents . . . govern

in all cases.” For this reason, we read Burstein’s holding as

limited to its facts: where an SPD in effect when the plaintiffs’

benefits vest (under the terms of the plan or the SPD, if it

differs from the plan in this respect) clearly contradicts the

plan, the terms of the SPD can be held to control for purposes
 7

We reject the District Court’s view that the provision of the

SPD and CIC Plan prohibiting Mobil from amending or

terminating the Plan somehow also prohibited Exxon Mobil

from correcting the SPD to conform to the terms of the Plan.

See Hooven, 2004 WL 724496, at * 22. In fact, we note that an

agreement not to amend an SPD, of the sort that the District

Court found here, would likely violate ERISA; the statute’s SPD

provisions implicitly require employers and plan administrators

to correct misleading or incomplete SPDs:

The provision of ERISA which requires the

publication and distribution of an “accurate”

summary plan description, 29 U.S.C.

§ 1022(a)(1), when taken in conjunction with the

fiduciary duties of the employer, 29 U.S.C.

§ 1104(a), imposes . . . [a] “duty to correct” an

employer if and when the employer knows or

should know that a statement in a Summary Plan

30

of a claim for plan benefits pursuant to ERISA

section 502(a)(1)(B). 

Here, even assuming that the Initial SPD did contradict

the CIC Plan as of December 1999, that would be irrelevant

because Plaintiffs’ right to severance benefits did not accrue

while the Initial SPD was in effect. In February 2000, before

Plaintiffs’ employment terminated and their rights vested,

Exxon Mobil recognized the conflict between the CIC Plan

and the Initial SPD, and distributed an errata notice,

effectively amending the Initial SPD7

 to make it specific and
Description has become misleading to potential

participants.

McAuley v. Int’l Bus. Machs. Corp., 165 F.3d 1038, 1046 (6th

Cir. 1999). Moreover, while we made a leap in Burstein to

conclude that, under those unique facts, the SPD terms

superseded the terms of the plan, we cannot accept the premise

advanced here, that Mobil’s agreement not to change the Plan

somehow also limits its ability to correct an incorrect SPD.

31

consistent with the Plan provision stating that divested Tier 4

employees offered comparable employment with the acquirer

were ineligible for severance. The District Court found that

the errata notice “clearly and accurately referred to the

divestiture provision” of the CIC Plan. Hooven, 2004 WL

724496, at *12. It thus cured any defect in the August 1999

SPD. By the time that Plaintiffs would have become entitled

to benefits under section 502(a)(1)(B), the SPD and CIC Plan

were consistent; both made clear that employees in Plaintiffs’

position were not entitled to benefits. Accordingly, Plaintiffs’

rights to severance never arose.

IV.

We note in closing that Plaintiffs protested at oral

argument that holding that they were not entitled to benefits

on a unilateral contract theory would leave them without a

remedy for Mobil’s material omission in the Initial SPD. A

remedy for this omission is essential, they urged, to give
32

effect to “Congress’s desire that the SPD be transparent,

accurate and comprehensive.” Burstein, 334 F.3d at 378-79

(citing 29 U.S.C. § 1022(a)-(b)). 

We find Plaintiffs’ concerns to be misplaced here. 

Contrary to their assertion, employees injured by a mistake in

a summary plan description have “a panoply of remedial

devices at [their] disposal.” Mass. Mut. Life Ins. Co. v.

Russell, 473 U.S. 134, 146 (1985). Section

502(a)(1)(B) provides a cause of action for benefits accrued

under an ERISA plan or SPD. See supra Part III; Burstein,

334 F.3d at 379. Moreover, any plaintiff who has relied on an

inaccurate or misleading term of an SPD to his or her

detriment can recover on a claim for breach of fiduciary duty,

see Burstein, 334 F.3d at 387, or, in “extraordinary

circumstances,” an equitable estoppel claim, see Curcio, 33

F.3d at 235, under ERISA section 502(a)(3)(B), 29 U.S.C.

§ 1132(a)(3)(B). 

In this case, Plaintiffs were unable to maintain a breach

of fiduciary duty claim or a claim based on the equities

because the District Court held that they never relied on the

Initial SPD. By the time that benefits due under the Initial

SPD would have accrued, the error was corrected and

Plaintiffs were well aware that they were not entitled to them. 

Under these facts, we will not bootstrap the error in the Initial

SPD, which the District Court characterized as one of
33

“inartful drafting,” and on which Plaintiffs did not rely, into a

cause of action for benefits due under the CIC Plan.

V.

We will accordingly REVERSE the judgment of the

District Court and REMAND with instructions to enter

judgment in favor of Exxon Mobil.

_____________________