Court Opinion

ID: 74051
Source: CourtListenerOpinion
Date Created: 2010-04-26 08:38:31+00
Date Added: 2024-06-11T09:39:54.136489
License: Public Domain

D. Barry SUTTON, Plaintiff-Appellant,

                                                    v.

 BELLSOUTH TELECOMMUNICATIONS, INC.; BellSouth Telecommunications, Inc., Competitive
Management Restaffing Plan, et al., Defendants-Appellees.

                                              No. 98-9328

                                        Non-Argument Calendar.

                                     United States Court of Appeals,

                                            Eleventh Circuit.

                                             Sept. 22, 1999.

Appeal from the United States District Court for the Northern District of Georgia. (No. 1:96-CV-1842-HTW),
Horace T. Ward, Judge.

Before COX, BLACK and MARCUS, Circuit Judges.

        PER CURIAM:

        Appellant Barry Sutton brought this action pursuant to the enforcement provisions of the Employee

Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1132. He claims that Appellee BellSouth

Telecommunications, Inc. (the Company) terminated him in violation of the express provisions of the

Competitive Management Restaffing Plan (the Restaffing Plan), which is an employee welfare benefit plan

established and maintained pursuant to ERISA. The district court rejected Appellant's claims and granted

summary judgment in favor of the Company and the other Appellees. The district court reasoned that the

Company's decision to terminate Appellant occurred apart from the decision to offer him severance benefits

under the Restaffing Plan and therefore did not trigger ERISA's remedial provisions. Based upon our review

of the record, we affirm.

        We exercise a complete and independent review of the district court's grant of summary judgment

to determine whether there are any genuine issues of material fact which preclude judgment as a matter of

law in favor of the moving party. See Rayle Tech, Inc. v. DEKALB Swine Breeders, Inc., 133 F.3d 1405,

1409 (11th Cir.1998).
        The Company is engaged in an ongoing effort to reduce its management workforce to ensure it

maintains its competitive advantage in the marketplace. As part of this effort, the Company utilizes a process

known as the Management Panel Evaluation Process (the Panel Process) to continually rank and classify

employees to determine their relative abilities. Pursuant to the guidelines governing the Panel Process, the

Company identifies the group, or "universe," of employees who will be considered for termination. A

universe is a group of employees in a specific job grade who lack specific skills necessary to the Company,

such as competitive market experience or market segment expertise. Employees within the relevant universe

are then ranked by evaluators with at least six months' significant exposure to the employees within the

preceding three-year period.

        In May 1995, Charles Coe, the Group President of Customer Operations, determined that supervisory

employees at job grade 64 in the customer operations organization, which included Appellant, lacked

sufficient expertise in several areas, including competitive market experience and experience in the wireless

communications industry. Coe decided that three vacancies were necessary to address this deficit and that

the Company should offer severance pay and health insurance coverage for a specified period to employees

who terminated employment to create vacancies to be filled by individuals with the needed critical skills. At

Coe's request, the Vice-President of Human Resources, Rebecca Dunn, approved the use of the Restaffing

Plan and sent the following memorandum (Dunn Memorandum) to Company officers:

a.      The [Restaffing Plan] provides for involuntary separation of a predetermined number of managers
        in a defined group, where the group has been identified as having a deficit in understanding of
        technology, market expertise, or competitive market intelligence.

        b. Under the [Restaffing Plan],

(1)     [C]reated vacancies must be backfilled with external hires,

(2)     [C]reated vacancies may not be used for lateral or promotional movement, and

(3)     [I]ncumbents in the defined groups will be rated utilizing the [Panel Process].

        The Company thereafter identified 21 employees in the relevant universe to be evaluated by the Panel

                                                      2
Process. Three individuals evaluated Appellant and he was subsequently offered severance benefits under

the Restaffing Plan in exchange for agreeing to sign a release of all claims against the Company. Appellant

appealed the Company's decision to terminate him pursuant to an internal review procedure established under

the Restaffing Plan. His claim was denied and he subsequently signed a partial release to receive severance

benefits.1 Meanwhile, the Company filled Appellant's position by promoting a BellSouth employee rather

than by seeking an external candidate for the position.

           A beneficiary of an ERISA plan may bring an action in federal court "to recover benefits due to him

under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future

benefits under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B). Additionally, a beneficiary may seek relief

for breach of a fiduciary obligation for "any act or practice which violates any provision of [ERISA] or the

terms of an ERISA plan." 29 U.S.C. § 1132(a)(3); see also Varity Corp. v. Howe, 516 U.S. 489, 116 S.Ct.

1065, 1076-77, 134 L.Ed.2d 130 (1996).

           Appellant contends these remedial provisions provide him with a cause of action under federal law

to challenge the decision to terminate him from employment. He contends the Restaffing Plan, which is

governed by ERISA, incorporates the Panel Process by reference and thereby subjects his dismissal to review

under ERISA. He argues the Restaffing Plan incorporates the Panel Process because: (1) the Dunn

Memorandum discusses the termination process as part of the severance payments under the Restaffing Plan;

and (2) the Restaffing Plan itself refers to the process for terminating employees.2 Sutton therefore contends

the Company violated his rights under ERISA by violating its guidelines for the Panel Process by: (1)

improperly including him in the relevant universe of employees; (2) filling his position with a BellSouth

       1
     The Company permitted Appellant to sign the release and agreed not to assert it as a bar to a lawsuit
brought pursuant to ERISA, provided that the suit did not exceed the scope of the issues raised in the internal
review procedure.
   2
    For instance, the Restaffing Plan states that employees will be evaluated by a "procedure selected by the
Participating Company." Additionally, the Restaffing Plan refers to a "rat[ing] and rank[ing]" process.

                                                        3
employee rather than with an external candidate; (3) evaluating him with someone who had no personal

knowledge of his work; and (4) failing to afford a full or fair review of the Company's decision to terminate

him.

        We conclude that the termination process is not governed by ERISA because it occurred apart from

and was distinct from the process to offer severance benefits to terminated employees. Significantly, those

employees selected for termination are not even required to participate in the severance pay plan. They may

choose not to participate in the plan, in which case they are terminated without benefits and may pursue other

remedies against the Company.

        Our conclusion is also supported by the general proposition that corporate managerial decisions are

not governed by ERISA because they do not involve discretionary acts regarding plan administration. See,

e.g., Local Union 2134, United Mine Workers of America v. Powhatan Fuel, Inc., 828 F.2d 710, 713-714

(11th Cir.1987) ("One assumes fiduciary status only when and to the extent that they function in their

capacity as health plan fiduciaries, not when they conduct business that is not regulated by ERISA.")

(quotation and citation omitted). In this case, Appellant is not seeking to recover benefits or to enforce or

clarify his rights under the terms of a plan. He is seeking redress for the Company's decision to terminate

him. Such an action does not exist under state law here because Georgia courts have refused to create a claim

for wrongful termination of an at will employee. See Borden v. Johnson, 196 Ga.App. 288, 395 S.E.2d 628,

628-29 (1990) (refusing, in the absence of a relevant statute, to create a wrongful termination claim for an

at will employee). We refuse to create such a claim under ERISA in this case because the termination

decision occurred apart from the management or administration of the ERISA plan. See Varity Corp., 516

U.S. 489, 116 S.Ct. at 1072-1073.

        In sum, the Company's termination decision did not involve any aspect of an ERISA plan. We

therefore affirm the district court's grant of summary judgment in favor of Appellees.

        AFFIRMED.

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