Opinion ID: 786114
Heading Depth: 2
Heading Rank: 1

Heading: Entitlement to Severance Benefits

Text: 15 The trial court conducted a de novo review of Koons' claim for severance benefits. That standard of review is unchallenged here and we express no opinion on its use. After a bench trial in an ERISA case in which the trial court conducts a de novo review, we review the trial court's factfinding for clear error and its legal conclusions de novo. Donatelli v. Home Ins. Co., 992 F.2d 763, 765 (8th Cir.1993); Fed.R.Civ.P. 52(a). 16 Koons' entitlement to severance benefits turns on both questions of fact and of law. The trial court found that Koons was terminated for violating company policy. Under the terms of the Plan, as construed by the trial court, those who were terminated for violating company policy were ineligible for severance benefits. Koons challenges the trial court's finding that he violated company policy and its construction of the Plan's terms. 17 We review the trial court's interpretation of the Plan de novo. Melvin v. Yale Indus. Prods., Inc., 197 F.3d 944, 947 (8th Cir.1999). The Plan's description states: 18 A participant is eligible for a Separation Package if ... the participant's employment is terminated by the Company as a direct result of the elimination of his or her position due to the Company's reorganization and such termination is not a direct result of the associate's voluntary resignation, death, disability, unsatisfactory performance or violation of Company policy. 19 Koons argues that if he was terminated for violating company policy, he should still be eligible for severance benefits under the Plan because the Summary Plan Description (SPD) 4 does not contain the same language. The SPD states that eligible associates include those who are terminated as a result of the reorganization and goes on to state: 20 Note: In order to receive benefits under the Separation Plan, eligible associates must perform satisfactorily during the notice period .... 21 Koons' argument rests on the notion of conflicting plan documents. That is, where an SPD conflicts with the terms of another plan document, it has often been said that the SPD governs. E.g., Jensen v. SIPCO, Inc., 38 F.3d 945, 952 (8th Cir.1994). This general rule, though, is qualified. Specifically, this rule of construction does not apply when the plan document is specific and the SPD is silent on a particular matter. Id. And, if the SPD does conflict with other plan documents, a participant must generally show that he relied on or was prejudiced by the SPD's description of the plan's benefits. Dodson v. Woodmen of the World Life Ins. Soc'y, 109 F.3d 436, 439 (8th Cir.1997). Reliance or prejudice, however, is not required if the SPD is not faulty. Palmisano v. Allina Health Sys., Inc., 190 F.3d 881, 887 (8th Cir.1999). 22 We see no conflict between these two descriptions of the Plan's eligibility requirements. On the issue of whether being terminated for a violation of company policy is a condition of eligibility, the Plan's description includes such a condition, while the SPD is silent, as it is with death, disability, and resignation. 23 Even if we define the relevant issue more broadly, the outcome does not change. Koons claims the issue of eligibility was addressed in both the SPD and the Plan's description. He argues that, to the extent the SPD stated fewer eligibility requirements, it should govern. As support, he cites to 29 C.F.R. § 2520.102-3, claiming the SPD was inadequate. This regulation provides that an SPD for an employee benefit welfare plan like the one involved here must include a statement of the conditions pertaining to eligibility to receive benefits. Id. at § 2520.102-3(j)(2). And the SPD must contain a statement clearly identifying circumstances which may result in disqualification, ineligibility, or denial, loss, [or] forfeiture ... of any benefits that a participant or beneficiary might otherwise reasonably expect the plan to provide on the basis of the description of benefits required by paragraph[] (j). Id. at § 2520-102-3( l ). These regulations clarify the statutory SPD requirements of 29 U.S.C. § 1022. 24 Aventis' SPD likely violates ERISA and the regulations promulgated thereunder. This makes the SPD faulty. Marolt v. Alliant Techsystems, Inc., 146 F.3d 617 (8th Cir.1998). Neither ERISA nor the regulations state the consequences of issuing such a faulty SPD. Our cases, though, have clearly established that a claimant can only recover under a faulty SPD if he can show reliance on or prejudice from the faulty plan description. See Palmisano, 190 F.3d at 887-88 (collecting cases). Koons testified that he knew from the seven-page Plan description, despite the one-page SPD purportedly to the contrary, that if he was terminated for violating company policy, he would not be entitled to severance benefits. The fact he did not refrain from his misconduct despite this knowledge, may indicate he did not know his conduct violated company policy (the existence of which we address below), but it in no way establishes reliance on or prejudice from the faulty SPD. 25 Thus, under the terms of the Plan, Koons would be entitled to severance benefits if (1) he was terminated (2) as a direct result of the elimination of his position due to the company's reorganization and (3) his termination was not a direct result of his violation(s) of company policy. 26 Koons was terminated. And his termination likely would not have occurred had Aventis not reorganized and relocated the security division to New Jersey. The fighting issue is whether Koons violated company policy. 27 The trial court concluded that Koons had violated company policy by allowing Jan Kneib to retain her cell phone after her employment was terminated, by using his cell phone for an inordinate amount of personal calls, and by using a confidential list of associate addresses to mail out promotional material concerning his real-estate endeavors. We review this factfinding exercise for clear error. Donatelli, 992 F.2d at 765. 28 There is abundant evidence in the record in support of the trial court's findings, at least with regard to Koons' personal use of his cell phone and his unauthorized personal use of the associate address list. As to each, a reasonable factfinder could conclude that there was a policy in place and that the policy was violated. Therefore, we cannot conclude that the trial court clearly erred in finding that Koons violated company policy. 29 As to Aventis' disagreement with Koons' decision to allow Jan Kneib to retain her cell phone after her termination date, we believe the record only establishes that Koons did not exceed his authority in making this decision. Aventis allowed various employees to retain cell phones post-termination. And Koons himself was allowed to retain his cell phone after he began working from home. While each situation does not present the same circumstances as Kneib's, each does show the propriety of the business necessity that Koons felt justified his decision with regard to Kneib — to stay in touch with those individuals who are no longer around and who have knowledge that is useful to the company. While this finding may be clearly erroneous, the trial court's factfinding with regard to the other violations of company policy is not, and those violations adequately support the result reached. We therefore conclude that the trial court properly held that Koons had violated company policy. 30 Koons claims at various points in his brief that the decision to terminate him was arbitrary and capricious or otherwise unreasonable. We pause to note that we are not charged with evaluating the wisdom of the particular employment action. See Hutson v. McDonnell Douglas Corp., 63 F.3d 771, 781 (8th Cir.1995). ERISA, through its protection of certain benefits, is not a mechanism through which general claims of wrongful termination can be brought. Whether the decision to terminate Koons was arbitrary and capricious is irrelevant to whether Koons was entitled to benefits under the Plan. The ability to claim benefits is set by the plan's terms and, here, Koons was simply not entitled to benefits because the trial court found his termination, however unfair or unwise, was for violating company policy. 31