Court Opinion

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Date Created: 2015-09-21 21:16:06.480128+00
Date Added: 2024-06-11T11:42:47.163119
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USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT

                              _________________________

          No. 95-1704

                             EDMUND H. BELANGER, ET AL.,

                               Plaintiffs, Appellants,

                                          v.

                                WYMAN-GORDON COMPANY,

                                 Defendant, Appellee.

                              _________________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                   [Hon. Nathaniel M. Gorton, U.S. District Judge]
                                              ___________________

                              _________________________

                                        Before

                                Selya, Circuit Judge,
                                       _____________

                            Aldrich, Senior Circuit Judge,
                                     ____________________

                               and Cyr, Circuit Judge.
                                        _____________

                              _________________________

               Mark  I. Zarrow, with whom Lian, Zarrow, Eynon & Shea was on
               _______________            __________________________
          brief, for appellants.
               John  O. Mirick,  with  whom Mirick,  O'Connell, DeMallie  &
               _______________              _______________________________
          Lougee was on brief, for appellee.
          ______

                              _________________________

                                  December 14, 1995
                              _________________________
            

                    SELYA,  Circuit  Judge.   This  appeal  requires us  to
                    SELYA,  Circuit  Judge.
                            ______________

          decide  what constitutes  a benefit  "plan" for  purposes of  the

          Employee  Retirement Income  Security Act  (ERISA), 29  U.S.C.   

          1001-1467 (1988).   The heart  of the appellants'  case is  their

          contention that a series of four early retirement offers extended

          by  their employer  over a  four-year period constitute  an ERISA

          plan.  The  district court  thought not, and  dismissed the  suit

          after a bench trial.  We affirm.

                                          I.
                                          I.
                                          __

                                      Background
                                      Background
                                      __________

                    We  take  the  underlying  facts  principally from  the

          parties' pretrial stipulations.

                    Facing an uncertain economic future, defendant-appellee

          Wyman-Gordon Co. (the company) decided  to reduce its work  force

          in hopes of improving its overall financial outlook.  The company

          made its first move in November  1987.  Rather than simply laying

          off  loyal minions,  the company  offered all  age-qualified non-

          union workers (characterized as  all "weekly and monthly salaried

          employees") an opportunity for early retirement (Offer No.1).  To

          make departing  a sweeter  sorrow, the  company proposed  to pay,

          over  and beyond  regular retirement  benefits, a  lump-sum bonus

          amounting to one  week's pay for each  year of service, plus  two

          days' pay for each  year of service  in excess of fifteen  years,

          multiplied by 110%.   Offer No. 1 contained no  cap on the number

          of service years that could be included in calculating the amount

          of  the one-time  bonus.   Some  eligible employees  accepted the

                                          2

          offer and some did not.

                    In January  1990, the company,  still in the  throes of

          downsizing, made a similar early retirement offer (Offer  No. 2).

          It structured this offer  in much the same manner,  but devised a

          less complicated  formula for computing retirement  bonuses:  one

          week's salary for each year of  service.  Like Offer No. 1, Offer

          No. 2 did  not impose a  ceiling on the  number of service  years

          that could figure  into the calculation.  Once again,  some   but

          not all   of the eligible employees accepted the offer.

                    In   corporate   America,  financial   security   is  a

          consummation  ardently  sought but  seldom  achieved.   When  the

          company's  prognosis remained  gloomy,  it sponsored  yet another

          early retirement offer (Offer  No. 3) in January  of 1991.   This

          offer contemplated that the  amount of an individual's retirement

          bonus would be calculated  by the same formula used  for purposes

          of Offer  No. 2 (multiplying one  week's pay times the  number of

          service  years), but capped the number of years includable in the

          computation at twenty-five.  Almost  two-thirds of the weekly and

          monthly salaried employees  who were eligible  to do so  accepted

          Offer  No. 3, including the  eighteen persons who  appear here as

          plaintiffs and  appellants  (all  of  whom had  spent  more  than

          twenty-five years in the company's service).

                    Despite  the winnowing  that  occurred  over time,  the

          company    apparently  convinced  that strength  lay  in lack  of

          numbers   undertook further cost-reduction measures in October of

          1991.     These  included  salary  cuts  and  yet  another  early

                                          3

          retirement  offer (Offer  No. 4).   As  with the  two immediately

          preceding  proposals,   the  carrot  that  the   company  dangled

          consisted of a bonus calculated on the basis of one week's salary

          for each year of  service.  This time, however,  the company made

          the offer accessible to more  employees (by lowering the  minimum

          age  for early retirement) and abjured any ceiling on the maximum

          number  of  service years  includable in  figuring the  lump sum.

          Thirty-eight of  forty-six eligible employees accepted  Offer No.

          4.

                    The  appellants  were displeased  no little  (and quite

          some)  upon learning of the more generous terms embodied in Offer

          No. 4.  Each of them had accepted a capped offer   Offer No.  3  

          as   an  inducement  to  take   early  retirement,  and  the  cap

          effectively reduced their early  retirement bonuses by an average

          of roughly $9,950 per  retiree.  They sued the  company, alleging

          inter  alia  that  the series  of  four  early retirement  offers
          _____  ____

          constituted a  plan under the  terms of ERISA, 29  U.S.C.   1002;

          that the plan failed to comply with ERISA's imperatives, e.g, the

          company had not provided a written plan description or a protocol

          for amendment,  see 29  U.S.C.     1022  & 1102;  and that  these
                          ___

          violations entitled them to damages based on what they would have

          received had Offer No. 3 not been capped, together with interest,

          counsel fees, and other redress.

                    After conducting a  non-jury trial, the district  court

          rejected  the central premise  underlying the  appellants' claim.

          The  court  held  that  the  early  retirement  offer  which  the

                                          4

          appellants accepted did not constitute a plan for ERISA purposes,

          and  that, therefore, the company was not obliged to heed ERISA's

          requirements.   See Belanger v. Wyman-Gordon Co., 888 F. Supp. 9,
                          ___ ________    ________________

          12 (D. Mass. 1995).  The appellants assign error.1

                                         II.
                                         II.
                                         ___

                                      Discussion
                                      Discussion
                                      __________

                                          A.
                                          A.
                                          __

                                  Standard of Review
                                  Standard of Review
                                  __________________

                    The question whether a given employee benefit or set of

          benefits is a plan  properly governed by the strictures  of ERISA

          requires a  certain level  of judicial  versatility.   Because an

          inquiring court must both assess the facts and apply the law, two

          different standards of review  come into play.  "For  purposes of

          appellate review, mixed questions of fact and law ordinarily fall

          along  a  degree-of-deference  continuum,  ranging  from  plenary

          review  for law-dominated  questions  to  clear-error review  for

          fact-dominated questions."   Johnson  v. Watts Regulator  Co., 63
                                       _______     ____________________

          F.3d  1129,  1132 (1st  Cir.  1995).   At  the  near  end of  the

          continuum, the district court's interpretation of the word "plan"

          as it is used in ERISA poses a question of law subject to de novo

          review.   At the  far end of  the continuum, the  court's inquiry

          into the nature  and scope of the  benefits actually at issue  in

          the instant  case  demands factfinding,  and  is to  that  extent

                              
          ____________________

               1In  the district  court, the  appellants also  raised other
          claims.   The  court  found  against  them  on  all  fronts,  see
                                                                        ___
          Belanger,  888 F. Supp. at  12-13, and only  this ERISA claim has
          ________
          been preserved for review.

                                          5

          reviewable only for clear error.  In other words, as  long as the

          trial court accurately applies  the relevant legal standards, the

          existence vel non of an  ERISA plan is principally a question  of
                    ___ ___

          fact, and the court of appeals must defer to the district court's

          judgment unless that judgment is clearly erroneous.   See Wickman
                                                                ___ _______

          v. Northwestern Nat'l Ins.  Co., 908 F.2d 1077, 1082  (1st Cir.),
             ____________________________

          cert.  denied, 498 U.S. 1013  (1990); see also  Cumpiano v. Banco
          _____  ______                         ___ ____  ________    _____

          Santander P.R.,  902 F.2d  148, 152 (1st  Cir. 1990)  (explaining
          ______________

          that there is no clear error "unless, on the whole of the record,

          [the court of appeals] form[s] a strong, unyielding belief that a

          mistake has been made").

                                          B.
                                          B.
                                          __

                                The Meaning of "Plan"
                                The Meaning of "Plan"
                                _____________________

                    The text of ERISA itself  affords scant guidance as  to

          what  constitutes a  covered "plan."   The  statute, 29  U.S.C.  

          1002(2)(A), merely  constructs a tautology, defining  an employee

          benefit  plan  as "any  plan,  program  or  fund" established  or

          maintained  by  an employer  that  provides  certain benefits  to

          employees.   Relying on the purposes undergirding  the statute to

          give meaning to this cryptic language, the Supreme Court has made

          it very clear that an employee  benefit may be considered a  plan

          for  purposes of  ERISA only  if it  involves the  undertaking of

          continuing  administrative  and  financial  obligations   by  the

          employer  to the behoof of employees or their beneficiaries.  See
                                                                        ___

          Fort  Halifax Packing Co.  v. Coyne, 482  U.S. 1,  12 (1987); see
          _________________________     _____                           ___

          also District of Columbia  v. Greater Wash. Bd. of  Trade, 113 S.
          ____ ____________________     ___________________________

                                          6

          Ct.  580, 584 n.2 (1992) (construing Fort Halifax as holding that
                                               ____________

          a  plan exists  only if  an employer  has "some  minimal, ongoing

          `administrative' scheme or practice").

                    Fort  Halifax is  the beacon  by which  we  must steer.
                    _____________

          There, the  Court  rejected an  ERISA preemption  challenge to  a

          Maine statute requiring employers  to tender a one-time severance

          payment to displaced employees  in the event of a  plant closing.

          The  Court held that Maine's plant-closing law did not succumb to

          ERISA's  preemptive  force  because  the  legislatively  mandated

          tribute  comprised no  more  than a  "one-time, lump-sum  payment

          triggered by a single event."  482 U.S. at 12.  Consequently, the

          state statute neither "establishe[d], nor require[d] an  employer

          to  maintain,  an employee  benefit  plan."    Id.  (emphasis  in
                                               ____      ___

          original).

                    Two of ERISA's cardinal goals   protection of employers

          and  protection  of employees     appear to  have  influenced the

          Court's interpretation of  what constitutes  a plan.   As to  the

          former  goal,  the  Court  acknowledged  that  Congress  designed

          ERISA's preemption provision partially to protect employers  from

          a  "patchwork  scheme"  of  regulations in  respect  to  employee

          benefits.   Id.   This concern has  little or no  pertinence, the
                      ___

          Court  reasoned, in  a one-time  payment situation  in  which the

          employer's only obligation is  to draw a  single check.  See  id.
                                                                   ___  ___

          By  contrast, this  concern  is highly  pertinent  in respect  to

          employee  benefits  that  place  "periodic  demands" on  employer

          assets,  "creat[ing]  a  need  for  financial  coordination   and

                                          7

          control."  Id.
                     ___

                    As  to ERISA's  other, more  important goal,  the Court

          recognized that, in general, ERISA's  substantive protections are

          intended to safeguard the financial integrity of employee benefit

          funds, to permit employee monitoring of earmarked  assets, and to

          ensure that employers' promises are kept.   See id. at 15.  Since
                                                      ___ ___

          a single-shot benefit requires no greater assurance than that the

          check  will  not  bounce,  ERISA's  panoply  of  protections  has

          virtually nothing to do with such a  simple task.  See id. at 16.
                                                             ___ ___

          More elaborately structured benefits, however,  raise a different

          set  of concerns.  As the Court observed, ongoing investments and

          obligations are uniquely vulnerable to employer abuse or employer

          carelessness, and thus require  ERISA's special prophylaxis.  See
                                                                        ___

          id.
          ___

                    The  upshot is that, in the albedo of Fort Halifax, the
                                                          ____________

          existence  of  a plan  turns  on  the  nature  and extent  of  an

          employer's  benefit obligations.   Withal,  making particularized

          judgments in this area on  the basis of vague etchings  of policy

          is no mean feat.  As we wrote on an earlier occasion, "so long as

          Fort  Halifax prescribes  a definition  based on  the extent  and
          _____________

          complexity  of administrative obligations, line drawing  . . . is

          necessary and  close  cases  will approach  the  line  from  both

          sides."   Simas v. Quaker Fabric Corp., 6 F.3d 849, 854 (1st Cir.
                    _____    ___________________

          1993).

                    There  is  no  authoritative  checklist  that   can  be

          consulted to determine conclusively if an employer's  obligations

                                          8

          rise to  the level  of an  ERISA plan.   While  a  wide array  of

          factors may  be suggestive,  typically "no  single act  in itself

          necessarily constitutes  the establishment  of the plan,  fund or

          program."   Donovan v. Dillingham, 688 F.2d 1367, 1373 (11th Cir.
                      _______    __________

          1982) (en banc).  Yet, some factors tend to be more indicative of

          the existence of a plan than others.

                    One very important consideration  is whether, in  light

          of  all the  surrounding  facts and  circumstances, a  reasonable

          employee would perceive an ongoing  commitment by the employer to

          provide  employee benefits.   See Henglein  v. Informal  Plan for
                                        ___ ________     __________________

          Plant Shutdown Benefits for Salaried Employees, 974 F.2d 391, 400
          ______________________________________________

          (3d Cir. 1992);  Donovan, 688 F.2d at 1373;  cf. Johnson, 63 F.3d
                           _______                     ___ _______

          at  1135 (advocating  that courts  should judge  the  question of

          whether an  employer "established  or maintained" a  benefit plan

          within  the   scope  of  ERISA  "from  the  employees'  place  of

          vantage").  Thus, evidence that an  employer committed to provide

          long-term or  periodic benefits  to its employees  will often  be

          telling.   See  Henglein, 974  F.2d at  400;  see also  Kenney v.
                     ___  ________                      ___ ____  ______

          Roland Parson Contracting Corp., 28 F.3d 1254, 1258-59 (D.C. Cir.
          _______________________________

          1994) (explaining that a plan may be created, even in the absence

          of formal documentation, by  "an employer's representation that a

          plan  has been established, in  conjunction with any action, such

          as  withholding wages for contribution to such a plan, that tends

          to  confirm  its representations").   Anticipating  this reality,

          this court stated in Wickman, 908 F.2d at 1083, that the "crucial
                               _______

          factor in determining if a `plan' has been established is whether

                                          9

          the [proffering of an  employee benefit] constituted an expressed

          intention  by the employer to  provide benefits on  a regular and

          long term basis."

                    We  end where we began.   In this  cloudy corner of the

          law, each case must be  appraised on its own facts.  All that can

          be stated with assurance is that Fort Halifax controls.  Thus, so
                                           ____ _______

          long as a proffered benefit does not involve employer obligations

          materially beyond those  reflected in Fort Halifax, see  Simas, 6
                                                ____________  ___  _____

          F.3d at 853-54,  the benefit will not amount to  a plan under the

          ERISA statute.2

                                          C.
                                          C.
                                          __

                                       Analysis
                                       Analysis
                                       ________

                    Viewed  against this  backdrop,  the  district  court's

          conclusion  that ERISA  did  not apply  to  the series  of  early

          retirement  offers  is eminently  supportable.    Nothing in  the

          offers,  whether  they  are   assessed  individually  or  in  the

          aggregate,  reflects  the  company's  assumption  of  an  ongoing

          administrative  or financial obligation  to its  employees within

          the purview of Fort Halifax.
                         ____________

                    Taken  singly,  the  early  retirement  offers  involve

                              
          ____________________

               2Simas  involved a  situation in  which an  employer  had to
                _____
          fulfill,  under   state  law,  obligations   analogous  to,   but
          materially beyond, those imposed under the Maine statute at issue
          in Fort  Halifax.  The Massachusetts statute  addressed in Simas,
             _____________                                           _____
          unlike  the  Maine   statute,  required  individualized  employer
          determinations, based  on at  least one nonmechanical  criterion,
          over a prolonged time period.  See  Simas, 6 F.3d at 853.   Thus,
                                         ___  _____
          we held  that ERISA  preempted the Massachusetts  statute because
          the  statute imposed  obligations on  the employer  equivalent to
          those involved in an ERISA plan.  See id. at 853-54.
                                            ___ ___

                                          10

          precisely the kind  of one-time, lump-sum  payment that the  Fort
                                                                       ____

          Halifax Court clearly excluded from  the pantheon of ERISA plans.
          _______

          See 482  U.S. at  12.   The company's offers  hinged on  a purely
          ___

          mechanical  determination  of   eligibility  and,  if   accepted,

          required  no  complicated  administrative  apparatus   either  to

          calculate or  to distribute  the promised  benefit.   The  offers

          pivoted on a single,  time-specific event.  They did  not involve

          promises that had to be  kept over a lengthy period, nor  did the

          company thereby make  any lasting financial commitment  of a type

          that might implicate ERISA's substantive protections.  The bottom

          line is  that the company  did no  more than propose  to write  a

          single  check to  each  eligible employee  who accepted  an early

          retirement  offer.   If this  is not  Fort Halifax  redux,  it is
                                                ____________

          sufficiently  close  to  the  Fort Halifax  model  that  it falls
                                        ____________

          outside  ERISA's sphere.  See  Fort Halifax, 482  U.S. at 12; see
                                    ___  ____________                   ___

          also Kulinski v.  Medtronic Bio-Medicus, Inc.,  21 F.3d 254,  258
          ____ ________     ___________________________

          (8th Cir. 1994) (holding  that a severance plan involving  a one-

          time payment is not an  ERISA plan); Angst v. Mack  Trucks, Inc.,
                                               _____    __________________

          969  F.3d 1530,  1539 (3d  Cir. 1992)  (similar); Fontenot  v. NL
                                                            ________     __

          Indus., Inc., 953 F.2d 960, 962-63 (5th Cir. 1992) (similar).
          ____________

                    The more  intriguing question  in this case  is whether

          the incidence of serial  offers   the fact that the  company made

          not a  lone offer but  a succession  of offers over  a period  of

          roughly four years   changes the  result.  We do not believe that

          it does.   Each of the  four early retirement  offers, in and  of

          itself, is  beyond  ERISA's  reach.    The  appellants  have  not

                                          11

          advanced  any convincing  reason why the  sheer number  of ERISA-

          exempt early retirement offers, without more, serves to alter the

          Fort  Halifax  analysis.   To be  sure,  in some  circumstances a
          _____________

          parade  of early retirement offers  might constitute a plan under

          ERISA    where,  for example,  employees rely  on the  promise of

          future offers.  Cf. Moeller v. Bertrang, 801 F. Supp. 291, 294-95
                          ___ _______    ________

          (D.S.D. 1992) (emphasizing the importance of employee reliance on

          employer promises of  future benefits).  But this  record reveals

          no  such concatenation of circumstances.   Here, the  whole is no

          greater than the sum of the parts.

                    Three  pieces of  information confirm  this conclusion.

          First,  the  administration  of  the offers  neither  required  a

          special   mechanism  nor  engendered  a  need  for  nonmechanical

          decisionmaking.   Second, the  record is  devoid of  any evidence

          that the serial offers  were the product of a  prearranged design

          or that the company ever represented  to its work force that they

          were linked in  a defined sequence.  Consequently,  the employees

          had  no promises of financial  obligation on which  to rely, and,

          thus, no need for ERISA's substantive protection.  The  finishing

          touch is the district court's factual finding that the offers did

          not impose continuing obligations  of either an administrative or

          a  financial nature.   See  Belanger, 888  F. Supp.  at 12.   The
                                 ___  ________

          appellants have pointed to no facts that remotely contradict this

          factual finding.

                    To sum up,  it appears  that the  company devised  each

          offer  without giving thought to possible future offers, and that

                                          12

          each  offer was motivated  by a bona  fide need to  reduce costs.

          Just as four eggs,  without more, do not  make an omelette,  four

          independent early retirement offers, without visible ties to each

          other and without  proof of  an enduring obligation  owed by  the

          employer to the employees, do not make an ERISA plan.3

                                         III.
                                         III.
                                         ____

                                      Conclusion
                                      Conclusion
                                      __________

                    We need go no further.   The district court found, as a

          matter of fact,  that the company's four  early retirement offers

          involved no continuing administrative or  financial obligation on

          its part, and thus concluded, as a matter of law, that the offers

          together did not constitute a plan under ERISA.  On this  record,

          we emphatically agree.

                    Affirmed.
                    Affirmed.
                    ________

                              
          ____________________

               3Although the  appellants press heavily on the fact that the
          same executive designed each  retirement offer, this does nothing
          to prove that he did  so as part of  an ERISA plan.  Indeed,  the
                                   _________________________
          uncontroverted evidence strongly  suggests that successive offers
          were   necessary  only  because   the  corporate  profit-and-loss
          statement failed to recuperate in the projected time frame.

                                          13