Opinion ID: 2780763
Heading Depth: 2
Heading Rank: 1

Heading: Shutdown Benefits

Text: As already noted, shutdown benefits “are enhanced early retirement benefits for certain workers who are affected by a facility shutdown or business cessation.” RTI, 386 F.3d at 662–63. The point at which shutdown benefits vest under Deppenbrook’s pension plan turns on, inter alia, the date on which the employee experienced a break in continuous service. His pension plan defines “break in continuous service,” as relevant here, to include “[t]ermination . . . due to permanent shutdown of a plant, department or subdivision thereof.” JA 363. Based on the plan termination date of June 14, 2002, set by the Sixth Circuit in RTI, shutdown benefits were purportedly off the table. RTI and the USWA decided that the nominal shutdown date for Deppenbrook’s plant was 12 July 11, 2002, the date that the bankruptcy court approved RTI’s asset sale. And it is undisputed that Deppenbrook was not, in fact, terminated until August 16, 2002. Because he did not experience a “break in continuous service” until well after the plan termination date, shutdown benefits did not vest in time to become nonforfeitable and covered by ERISA. See 29 U.S.C. § 1322(a); see also 29 C.F.R. §§ 4022.3(a)(1), 4022.4(a)(3). Deppenbrook attempts to circumvent this result by arguing that he was effectively terminated on May 1, 2002, the date he received the WARN Act notice. 7 The notice, however, cannot bear this weight. First, the WARN Act notice spoke of shutdown as a likelihood, not a certainty. The notice stated that the company “plans to permanently” close the plant where Deppenbrook worked. JA 275 (emphasis added). It also cautioned that permanent closure was “subject to the approval of the Bankruptcy Court,” meaning the plant remained open indefinitely until the bankruptcy court acted. Id. The notice closed by reserving the employer’s rights under the WARN Act “should circumstances change.” Id. And above all, it is undisputed that Deppenbrook remained employed until August 2002, long after he received the WARN Act notice. Deppenbrook further posits that, under ERISA, the WARN Act notice period is a “required waiting period.” 7 Deppenbrook also appears to argue that he was effectively terminated when he received a 90-day advance notice of plant closure pursuant to a provision in the master collective bargaining agreement. This argument fails because, like the WARN Act notice, the 90-day advance notice period is not a “required waiting period” under ERISA. See infra pp. 13– 14. In any event, even if the 90-day advance notice period were such a waiting period, Deppenbrook had no break in continuous service before the plan termination date. 13 ERISA defines a nonforfeitable benefit as a benefit for which the plan participant has “satisfied the conditions for entitlement . . . other than . . . completion of a required waiting period.” 29 U.S.C. § 1301(a)(8) (emphasis added). Deppenbrook contends that he satisfied the conditions for shutdown benefits on May 1, the day he received the WARN Act notice. The period of time after he received the notice was simply a “required waiting period” that did not affect the vesting of his shutdown benefits on May 1. We disagree. The WARN Act 60-day period is explicitly described by statute as a “notice” period, not a “required waiting period.” See 29 U.S.C. § 2102(a). Additionally, the text of ERISA forestalls Deppenbrook’s argument. The relevant provision reads: “[N]onforfeitable benefit” means, with respect to a plan, a benefit for which a participant has satisfied the conditions for entitlement under the plan or the requirements of this chapter (other than submission of a formal application, retirement, completion of a required waiting period, or death in the case of a benefit which returns all or a portion of a participant’s accumulated mandatory employee contri- butions upon the participant’s death) . . . . Id. § 1301(a)(8) (emphasis added). The phrase “under the plan or the requirements of this chapter” modifies the circumstances in the parenthetical that follows. In other words, the “required waiting period” must be part of the pension plan or appear in chapter 18 of title 29. The WARN Act notice period, however, is not a part of Deppenbrook’s pension plan and is located in a different chapter. Compare id. § 1301 (located in chapter 18 of title 29) with id. § 2102 14 (located in chapter 23 of title 29). Consequently, the WARN Act notice period is not a mere waiting period within the meaning of ERISA’s definition of a nonforfeitable benefit. Even if it were, that would not advance Deppenbrook’s cause. That is, even if ERISA did not require Deppenbrook to wait out the WARN Act period, he nonetheless had to meet the plan’s other “conditions for entitlement” before the plan termination date—namely, the requirement that he incur a break in continuous service. As discussed earlier, he was not terminated as of the date of the WARN Act notice because he remained employed until mid-August. The PBGC therefore properly interpreted the provisions of ERISA and did not act arbitrarily or capriciously in declining to provide shutdown benefits to Deppenbrook.