Opinion ID: 3011431
Heading Depth: 2
Heading Rank: 1

Heading: Unisys and Plaintiffs Basom and Tre aster

Text: In this case, as in Unisys, the plaintiffs do not deny that there is an explicit reservation of the right to terminate or amend at any time within the booklets for active employees. They contend, however, that they reasonably believed that the active employees' booklets did not apply to them. In support of this contention, the plaintiffs presented evidence that Freedom Forge distributed separate booklets summarizing the benefits of pensioners and surviving spouses that included no explicit reservation of the power to amend or change the programs.18 Freedom Forge responds that the lack of reservation clauses in the booklets is immaterial because the booklets were not _________________________________________________________________ 18. Although some of those booklets did contain a reference to the possible termination of the programs by Freedom Forge, these references did not describe a process for unilateral program termination that would alert a potential retiree to the instability of his or her benefits: This continuation provision does not apply if Standard Steel - Division of Titanium Metals Corporation of America replaces this Program with another program. In this event, all benefits will cease on the date this Program is terminated. See supra note 7. 27 actually summary plan descriptions. Although we agree that the form and title of a document may be considered when determining whether a beneficiary could reasonably rely on the statements therein, conflicting assertions cannot be ignored because they are not in the formal ERISA document. Unisys did not rely on the official nature of the SPDs to conclude that the company had breached its duty, and based its decision in part on the informal communications of Unisys management. See id. at 126165. Freedom Forge further contends that the booklets directed at Eligible Salaried Employees, which included explicit reservations of rights, applied to both those who were active employees and those who were on pensions. It notes the absence, in the informal booklets introduced into evidence by the plaintiffs, of ERISA-required details, such as the name of the plan administrator and the means of complaint, the lack of which makes them something less than SPDs. The question before us, however, is not what the booklets actually were, but what they would appear to be to a reasonable employee. The informal booklets that the plaintiffs introduced into the record are titled Programs, suggesting a parallel status with the formal booklets, also entitled Programs. Furthermore, the plaintiffs presented testimony of several retirees who stated they were told and believed that the Salaried Employees booklets did not apply to them. Gerald Sieber, whose responsibility it had been to explain retirement benefits, testified that he thought that the retiree booklets, and not the Salaried Employees booklets, defined the rights of the retirees. Finally, the plaintiffs note that theSalaried Employees booklets include descriptions of several benefits (such as dental) that do not apply to pensioners, suggesting that they were not relevant to retirees. In response to these arguments, Freedom Forge acknowledges that were it to eliminate benefits altogether, that might make the misrepresentations actionable. It submits, however, that since it only intends to amend the Plan and shift the costs, there was no actual misrepresentation when its representatives promised health benefits . . . for life. Freedom Forge also 28 emphasizes that health care itself has never beenfree in that beneficiaries have always had to pay copayments and deductibles. However, some of the testimony at the hearing indicated that the Freedom Forge employees' understanding of the promise of life-long health insurance was that they would never have to pay premiums. The District Court found this testimony credible, and it is supported by the record; hence, we do not disturb its conclusion. Given the substantial rearrangement of the rights and duties regarding health insurance proposed by Freedom Forge, we are convinced that there was sufficient evidence that the proposed changes, if effected, would countermand the promises of health care for life. Finally, Freedom Forge suggests that it should not be liable because it did not anticipate that it would change the plans, so that the misleading statements were made without the requisite scienter. We encountered, and rejected, a like defense in Unisys. See 57 F.3d at 1265 n.15. There, we recognized that the company had no reason to expect, at the time it distributed the misleading SPDs, that the plans would be modified. However, because Unisys was aware that it retained the right to modify, a knowing failure to clarify the material information about the retention of power was a breach of its fiduciary duty. We indicated that in order for a company to avoid liability on the grounds that it did not expect to change or eliminate a plan, the change or elimination would have to be, at least, completely unanticipated. Id. As in Unisys, Freedom Forge had sufficient awareness of the power to change the Plan. See id. ([T]he company had the foresight to draft and incorporate reservation of rights clauses into its retiree medical plans, which expressly gave the company the right to terminate the plans if they became onerous.). Based on Unisys, we conclude that the plaintiffs presented sufficient evidence of statements that would cause a substantial likelihood of misleading a reasonable employee in making an adequately informed retirement decision and hence that Basom and Treaster are 29 reasonably likely to succeed on the merits of their breach claim. See id.19