Source: https://litigation.consusgroup.com/2017/10/02/navistar-wins-skirmish-with-former-svp-sharp-v-navistar-international-corporation-et-al/
Timestamp: 2019-04-23 06:46:05+00:00

Document:
10-02-2017 – This battle over severance will stay in federal court.
Corporation and Navistar Inc. (collectively, “Navistar”) in connection with his termination from Navistar, where he served as a Senior Vice President. Sharp contends that Navistar failed to pay him what he was entitled to under the severance agreement between the parties. Sharp initially filed suit in the Circuit Court of Cook County, Illinois, Law Division, and Navistar removed the case to this Court. Before the Court is Sharp’s renewed motion to remand (“Motion”) (Dkt. No. 32). For the reasons stated below, the Court finds that this case was properly removed and therefore denies the Motion.
Under the ESA, the amount of severance due to Sharp would depend on a variety of factors, including whether he was terminated within the 36 months following a “Change in Control of the Company.” (Id. ¶¶ 6–8; Notice of Removal ¶ 6, Dkt. No. 1.) In the summer or fall of 2012, according to Sharp, such a change in control occurred. (Compl. ¶¶ 10–13, Dkt. No. 1-1.) He was terminated several months later, which he felt entitled him to certain enhanced severance payments and other benefits under the ESA. (Id. ¶ 14.) Navistar disagreed, and paid him only the severance he would be due in the absence of a change in control, prompting Sharp to bring suit in the Circuit Court of Cook County, Illinois, Law Division asserting claims for violation of the Illinois Wage Payment and Collection Act and breach of contract.
Navistar removed to the case to this Court, asserting that Sharp’s causes of action are preempted by the Employee Retirement Income Security Act of 1974 (“ERISA”). In particular, Navistar asserts that Sharp’s claims are preempted because “[u]nder the ESA, Navistar cannot prepare for one exclusive situation that would trigger its severance liability,” “the ESA requires Navistar to exercise discretion in determining what its obligations to ESA executives are in the event they terminate employment,” and Navistar “has an ongoing obligation to monitor its ability to pay various compensation amounts” and “an ongoing responsibility to pay other benefits ‘on a regular basis’ even after the executive’s employment is terminated.” (Notice of Removal ¶¶ 20– 25, Dkt. No. 1.) Sharp filed a motion to remand and requested permission to conduct discovery on the issue of remand, which the Court granted. After that discovery was completed, Sharp filed a renewed motion to remand, which is the motion currently before the Court.
10, Dkt. No. 32; Notice of Removal ¶¶ 6, 22, Dkt. No. 1; Def. Opp’n at 4, 12, Dkt. No. 38.) In addition to lump sum payments, the ESA provides that, if terminated, Sharp would receive 24 months of continued healthcare coverage and life insurance coverage, outplacement benefits, and other benefits. (Pl. Mot. at 7, Dkt. No. 32; Notice of Removal ¶ 5, Dkt. No. 1; Def.
“When a plaintiff files suit in state court but could have invoked the original jurisdiction of the federal courts, the defendant may remove the action to federal court. . . . The party seeking removal has the burden of establishing federal jurisdiction, and federal courts should interpret the removal statute narrowly, resolving any doubt in favor of the plaintiff’s choice of forum in state court.” Schur v. L.A. Weight Loss Ctrs., Inc., 577 F.3d 752, 758 (7th Cir. 2009) (citing 28 U.S.C.
536, 543 (7th Cir. 2006).
Pursuant to Section 502(e) of ERISA, 29 U.S.C. § 1132(e), federal jurisdiction exist in this case if the claims at issue fall within the scope of the ERISA statute. “Complete preemption, really a jurisdictional rather than a preemption doctrine, confers exclusive federal jurisdiction in certain instances where Congress intended the scope of a federal law to be so broad as to entirely replace any state-law claim. ERISA is such an area.” Franciscan Skemp Healthcare, Inc. v. Cent. States Joint Bd. Health & Welfare Trust Fund, 538 F.3d 594, 596 (7th Cir. 2008). “[T]he preemptive force of ERISA is so powerful that it converts ‘a state law claim into an action arising under federal law,’ even if the plaintiff does not want relief under ERISA. This is true even though the same facts might be sufficient to state a state law cause of action.” Jass v. Prudential Health Care Plan, Inc., 88 F.3d 1482, 1490 (7th Cir. 1996) (quoting Metro. Life Ins. Co. v.
plan is preempted by ERISA or it is not.” Collins v. Ralston Purina Co., 147 F.3d 592, 597 (7th Cir. 1998). For a plan to be preempted by ERISA, it must require an “ongoing administrative scheme” and its terms must be “reasonably ascertainable.” Cvelbar v. CBI Illinois Inc., 106 F.3d 1368, 1374 (7th Cir. 1997) abrogated by Int’l Union of Operating Engineers, Local 150, AFLCIO v. Rabine, 161 F.3d 427 (7th Cir. 1998). There does not appear to be any meaningful dispute in this case that the terms of the ESA are reasonably ascertainable.
F.3d 622, 631 (7th Cir. 2001) (internal citations and quotation marks omitted; substitutions in original).
The Court notes that Navistar’s failure to explicitly characterize the ESA as an ERISA plan does not have much bearing on the issue—the actual characteristics of the plan, not any party’s characterization, determines whether it is an ERISA plan. See Cornell v. BP Am. Inc., No.
Collins v. Ralston Purina Co., 147 F.3d 592, 596 (7th Cir. 1998) (distinguishing Fort Halifax Packing Co. v. Coyne, 482 U.S. 1 (1987)). Nor is this a plan under which the only determination to be made would be whether Sharp was terminated “for cause.” See Bowles v. Quantum Chem.
Cornell, 2015 WL 5766931, at *7. In addition, pursuant to the ESA, Navistar would also have to monitor Sharp’s compliance with his restrictive covenants—further evidence of the necessity of an ongoing administrative scheme. Cvelbar, 106 F.3d at 1377.
Navistar would make even in the absence of a severance scheme. (See Pl. Mot. at 10–11, Dkt. No.
resulted in this litigation regarding whether there was a “change in control” and what Sharp is actually due under the ESA.
For the foregoing reasons, Navistar has shown that removal of this action was proper and thus Sharp’s renewed motion to remand (Dkt. No. 32) is denied.
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