Opinion ID: 458553
Heading Depth: 1
Heading Rank: 3

Heading: Application of Policy

Text: A. Payroll Severance--All regular full-time salaried employees who meet eligibility requirements are paid payroll severance. 1 Eligibility--Employees are eligible to receive payroll severance if they are regular full-time salaried employees who are involuntarily terminated from the Company. Eligibility requirements are: a. Job Elimination--This category consists of terminations due to circumstances such as elimination or modification of operations or other job elimination due to bona fide organizational changes. 3 An action arising out of these same facts was filed in the Southern District of New York. The Second Circuit recently affirmed the district court's findings that the plan was within ERISA and that state law was preempted. Gilbert v. Burlington Industries, Inc., 765 F.2d 320 (2d Cir.1985). The case was remanded for consideration of whether the denial of severance pay was arbitrary and capricious 4 The exceptions allow continued operation of state insurance, banking, and securities laws, 29 U.S.C. Sec. 1144(b)(2)(A), within limits defined by the statute, 29 U.S.C. Sec. 1144(b)(2)(B), (b)(6), and generally applicable criminal laws, 29 U.S.C. Sec. 1144(b)(4). The Commissioner does not assert any of these exceptions to ERISA's preemption 5 ERISA does not contain a body of contract law to govern the interpretation and enforcement of employee benefit plans. Instead, Congress intended for the courts, borrowing state law where appropriate, and guided by the policies expressed in ERISA and other federal labor laws, to fashion a body of federal common law to govern ERISA suits. Scott, 754 F.2d at 1501-02 (citing cases) Any hope of uniformity in employer obligations would be lost were we to allow various states' common law governing these obligations to coexist with federal common law under ERISA. Under such a scheme, employers would not only be faced with dual requirements within a single state, but with different state requirements wherever they do business. ERISA surely contemplates a different result. 6 We reject the Commissioner's argument for a Tenth Amendment exemption from ERISA's preemption, see Garcia v. San Antonio Metropolitan Transit Authority, --- U.S. ----, 105 S.Ct. 1005, 83 L.Ed.2d 1016 (1985), or an exception based on the state's police power, effectively rejected in Gilbert, 765 F.2d at 327 We further reject the appellant's reliance on Livernois v. Warner Lambert Co., Inc., 723 F.2d 1148 (4th Cir.1983). There the court resolved severance pay issues on state law grounds and noted that cases arising under ERISA were not pertinent and presented a different question. 723 F.2d at 1152-3, n. 6.