Opinion ID: 504005
Heading Depth: 1
Heading Rank: 2

Heading: the erisa counts

Text: 12 Because the district court dismissed the case on the pleadings, see supra n. 1, we must determine whether in the light most favorable to [the appellants] 'it appears beyond doubt that the [appellants] can prove no set of facts in support of [their] claim which would entitle [them] to relief.'  Paolino v. Channel Home Centers, 668 F.2d 721, 722 (3d Cir.1981) (quoting Conley v. Gibson, 355 U.S. 41, 45, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957)). Our review of an order dismissing a complaint involves a question of law and is therefore plenary. D.P. Enters v. Bucks County Community College, 725 F.2d 943, 944 (3d Cir.1984). 13 In Count I, appellants alleged that they were participants in the VESP plan, and that C-E and the individual defendants breached their fiduciary duties by disclosing the development of VSIP to select employees while at the same time coercing appellants into retirement to prevent them from receiving the greater benefits of VSIP. The district court dismissed the count on the ground that appellants had elected to take retirement under VESP, and that C-E had no fiduciary duty to disclose information about VSIP because it was only in the planning stages at the time of [appellants'] retirement. J.A. at 6. However, the district court did not address the question whether C-E breached a fiduciary duty by revealing the development of the VSIP to certain employees but not appellants. On appeal, appellants raise two questions pertaining to the dismissal of Count I, only one of which requires discussion, namely, were appellants participants in VESP for the purposes of standing? 14 Under ERISA Sec. 502(a)(2), 29 U.S.C. Sec. 1132(a)(2), a civil action for the breach of a fiduciary duty may be brought by the Secretary of Labor or a plan participant, beneficiary or fiduciary. Similarly, ERISA Sec. 502(a)(1), 29 U.S.C. Sec. 1132(a)(1), restricts civil actions against a plan administrator to actions brought by a participant or beneficiary. The requirement that the plaintiff be a plan participant is both a standing and subject matter jurisdictional requirement. Molnar v. Wibbelt, 789 F.2d 244, 247 (3d Cir.1986); Stanton v. Gulf Oil Corp., 792 F.2d 432, 434 (4th Cir.1986). 15 ERISA Sec. 3(7) defines participant to include: 16 any employee or former employee of an employer, or any member or former member of an employee organization, who is or may become eligible to receive a benefit of any type from an employee benefit plan which covers employees of such employer or members of such organization, or whose beneficiaries may be eligible to receive any such benefit. 17 29 U.S.C. Sec. 1002(7). C-E contends that appellants do not qualify as participants in the VESP because they have received all of the benefits to which they are entitled under the VESP plan in a lump sum. We agree. 18 As a general rule, employees who take early retirement and elect to receive lump sum retirement benefits do not have standing to seek the increased payment later made to retirees or to challenge changes in the retirement plan. See Kuntz v. Reese, 785 F.2d 1410 (9th Cir.), cert. denied, --- U.S. ----, 107 S.Ct. 318, 93 L.Ed.2d 291 (1986); Yancy v. American Petrofina, Inc., 768 F.2d 707 (5th Cir.1985); Joseph v. New Orleans Elec. Pension & Retirement Plan, 754 F.2d 628 (5th Cir.), cert. denied, 474 U.S. 1006, 106 S.Ct. 526, 88 L.Ed.2d 458 (1985). Appellants respond that because they all are receiving on-going pension benefits under the Corporate Plan in addition to the lump sum payments received under VESP, they are participants in VESP. However, in order to have standing here, appellants must allege that they are participants in VESP, not in the underlying corporate pension plan. VESP consisted entirely of a lump sum payment to employees, based on the number of years of employment. See supra p. 668 with note 2. The Corporate Plan was a separate pension plan that existed before VESP was offered and that has continued after VESP expired. Thus, although the appellants are participants in the Corporate Plan, they no longer are participants in the VESP. We will therefore affirm the order of the district court dismissing appellants' Count I. 19 We turn next to the heart of appellants' complaint, that such actions amounted to an attempt to interfere with appellants' rights to future benefits in VSIP in violation of ERISA Sec. 510, 29 U.S.C. Sec. 1140.
20 Appellants contend that C-E discriminated against them in violation of ERISA Sec. 510, 29 U.S.C. Sec. 1140, by telling other employees of the second plan, while at the same time inducing appellants to retire under the first plan. Appellants assert that they would have been participants in VSIP but for C-E's fraudulent activity, and thus that they have standing as VSIP participants. The district court dismissed Count II because the court determined that appellants did in fact elect early retirement so as to become beneficiaries of the VESP plan and, because they were not participants in VSIP, they had no standing to claim that C-E interfered with their rights under VSIP. 21 ERISA Sec. 510 prohibits employers from penalizing employees with the purpose of interfering with certain benefits to which they are or may become entitled. Section 510 provides in pertinent part: 22 It shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan ... or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan.... 23 29 U.S.C. Sec. 1140 (emphasis added). 24 C-E contends that the appellants are not participants in or beneficiaries of VSIP since they voluntarily retired prior to the time VSIP existed and nothing they allege can change the fact that they were not eligible to participate in VSIP at the time it was offered. 6 Appellee's Br. at 24. C-E's contention, however, begs the question: appellants allege not just that C-E failed to inform them of the VSIP, but that C-E coerced the appellants into retiring while providing information to some other employees and thus, in essence, tricked the appellants into retiring early. If they had not been tricked, the argument continues, they would have been participants in the VSIP plan. Therefore, the issue is not whether appellants should be denied standing because they retired voluntarily, but rather, whether appellants have standing for the purposes of demonstrating that they were tricked into retiring, and thus would have been eligible for participation in VSIP. Appellants contend that but for the selective divulgence of information, they would have been members of VSIP, and, for the purposes of standing to bring an action under ERISA, should be considered as such. We agree with this contention. 25 This is not an instance where plaintiffs simply alleged that the employer did not inform the employees of a plan in development. Instead, appellants here argue that C-E induced appellants to retire under the VESP, while secretly informing some individuals of the more lucrative VSIP. 7 By its very nature, a Sec. 510 claim will often involve employees who claim that they did not receive benefits because of the employer's actions, and thus were denied an opportunity to become participants in the benefits. To require that the employees have the status of participant where they allege that the employers' acts effectively deprived them of such status would undercut the provision and cannot have been intended by Congress. 26 We therefore conclude that appellants have standing to demonstrate that they would have been participants absent C-E's actions. 8 Because of the procedural posture of the case, the appellants have not fleshed out the elements of their Sec. 510 claim, and it is not for us to do so here. 9 We note, however, that we have not determined that appellants will be able to establish a violation of Sec. 510, only that they have standing to pursue it. 10 We will therefore reverse the judgment and remand for further proceedings regarding Count II consistent with this opinion.