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Timestamp: 2019-04-24 15:54:44+00:00

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FindACase | ALSTON v. ATLANTIC ELEC. CO.
ALSTON v. ATLANTIC ELEC. CO.
Plaintiffs instituted this action to recover additional severance and pension benefits from their former employer. Defendant filed a motion for partial dismissal. We will grant defendant's motion in part and deny it in part. Plaintiffs' claims for pension benefits are dismissed for failure to state a claim upon which relief can be granted. Plaintiffs' state law claims are dismissed as preempted. Defendant's motion to dismiss plaintiffs' federal claims for additional severance benefits is denied.
Twelve former employees *fn1" of the defendant, Atlantic Electric Company ("Atlantic"), *fn2" filed the instant complaint on November 14, 1996, challenging their treatment by Atlantic in conjunction with their voluntary retirement from the company. Plaintiffs' claims stem from two disputes with Atlantic: (1) plaintiffs' eligibility for benefits under Atlantic's November 1994 severance package ("the November plan"), and (2) plaintiffs' claimed entitlement to additional pension benefits.
In March 1994, defendant announced that an "early retirement" program was available to production employees who reached age of 55 by December 26, 1995. *fn3" See Compl. P 18. All of the plaintiffs met the age requirements for the program. On April 15, 1994, defendant held a meeting to explain the terms of the program ("the April plan"). *fn4" See id. P 20. All plaintiffs except Alston and Mozitis attended the meeting. See id. During the meeting, plaintiff Loder asked whether plaintiffs would be entitled to benefits under any other more generous plans that defendant might offer in the future. See id. P 22. Plaintiffs allege that David Motil ("Motil"), an employee relations manager, responded as follows: (1) that to the best of his knowledge there would not be a subsequent retirement package, but that (2) if one were offered while the plaintiffs were still employed by Atlantic, plaintiffs could participate. See id. P 23. Plaintiffs further allege that Richard Simonini, manager of employee relations, visited Mozitis at his home, explained the terms of the package to him, and made the same representations regarding a future severance package. See id. P 26. Plaintiffs claim that Atlantic employees represented that plaintiffs would be terminated if they did not accept the package. See id. P 25.
Atlantic told the employees that they had 45 days to decide whether to accept the April plan. All twelve plaintiffs decided to retire from Atlantic pursuant to the terms of the April plan. *fn5" Each plaintiff signed a release as a condition of accepting the plan. See Compl. P 31. The release did not specifically indicate that by signing it plaintiffs became ineligible for any future severance benefits. See id. On November 15, 1994, Atlantic announced a new severance package ("the November plan"). On the face of the plan, all full-time Atlantic employees were eligible. See id. P 32. The new plan included more generous benefits than the April plan. *fn6" The November plan (1) included an additional six months of base pay in addition to severance pay; (2) set the upper limit for severance benefits at one year's salary rather than $ 50,000; (3) provided for the continuation of health benefits for six months, and (4) provided for outplacement training. See id.. Plaintiffs aver that although the November plan did not contain a disqualification provision, Atlantic determined that the employees who had accepted the April plan were ineligible. See id. PP 33, 35. Plaintiffs challenge this decision, claiming that they relied on Atlantic's representations that they would be entitled to participate in any future severance packages.
The second dispute arises from plaintiffs' alleged reliance on lump-sum pension payment estimate worksheets. Atlantic's pension plan allows employees to elect to receive their pension at retirement either in monthly installments or in a lump-sum payment. Prior to accepting the April plan, Atlantic gave each plaintiff an estimated calculation of the monthly benefit and the lump-sum payment. See Compl. P 37. Lump-sum payments are calculated by multiplying the employee's monthly earned pension by twelve and then multiplying by the "PBGC Factor." *fn7" The monthly earned pension is calculated by multiplying the number of years served by 1.6% by the employee's final average earnings, divided by twelve. See id. P 36. In providing the estimates, Atlantic used the PBGC Factor in effect at that time.
The estimate worksheets distributed to the employees contained several statements, the significance of which is hotly disputed by the parties. First, the sheets state: "Note that these are only estimates and can vary based on actual figures which will be in effect at the time of your retirement. They should not vary however more than a few dollars and are sufficiently close to be relied upon for planning purposes." Compl. P 38. Moreover, the written estimates indicate that they are "To be used 6 months prior to retirement. PBGC Factors change each January based on U.S. Govt. figures. This worksheet is for estimation and planning only." Atlantic calculated plaintiffs' estimates using the current 1994 PBGC Factor. In 1995, at the time most of the plaintiffs actually left the company, the PBGC Factor had decreased, thereby reducing plaintiffs' actual lump-sum payments. See id. P 39. The change in the PBGC Factor only affected the lump-sum payment and had no effect on the amount of the monthly pension payments.
Plaintiffs allege that they based their retirement decisions on Atlantic's representations regarding their eligibility for future severance plans and on the amount of the 1994 lump-sum pension payment estimates and now seek (1) to receive the enhanced severance benefits under the November plan and (2) to receive the larger lump-sum pension payment. Plaintiffs base their claims on the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1002, et seq., as well as on several state law theories including the New Jersey Law Against Discrimination ("NJLAD"), fraud, negligent misrepresentation, promissory estoppel, breach of contract, and a violation of the covenant of good faith and fair dealing.
Fed. R. Civ. P. 12(b)(6) provides that a court may dismiss a complaint "for failure to state a claim upon which relief can be granted." In considering a Rule 12(b)(6) motion, the court will accept the allegations of the complaint as true. See Scheuer v. Rhodes, 416 U.S. 232, 236, 40 L. Ed. 2d 90, 94 S. Ct. 1683 (1974). Dismissal of claims under Rule 12(b)(6) should be granted only if "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957).
Although the court must assume as true all facts alleged, "it is not . . . proper to assume that the [plaintiff] can prove any facts that it has not alleged." Associated Gen. Contractors of Calif., Inc., v. California State Council of Carpenters, 459 U.S. 519, 526, 74 L. Ed. 2d 723, 103 S. Ct. 897 (1983). Also, when "confronted with [a 12(b)(6)] motion, the court must review the allegations of fact contained in the complaint; for this purpose the court does not consider conclusory recitations of law." Commonwealth of Pennsylvania v. Pepsico, Inc., 836 F.2d 173, 179 (3d Cir. 1988) (emphasis added). *fn8"

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