Court Opinion

ID: 74052
Source: CourtListenerOpinion
Date Created: 2010-04-26 08:38:33+00
Date Added: 2024-06-11T09:39:54.121248
License: Public Domain

[PUBLISH]

             IN THE UNITED STATES COURT OF APPEALS

                     FOR THE ELEVENTH CIRCUIT                  FILED
                                                      U.S. COURT OF APPEALS
                       ________________________         ELEVENTH CIRCUIT
                                                              09/22/99
                                                          THOMAS K. KAHN
                              No. 98-9328                      CLERK
                         Non-Argument Calendar
                      ________________________
                  D. C. Docket No. 1:96-CV-1842-HTW

D. BARRY SUTTON,

                                                           Plaintiff-Appellant,

                                  versus

BELLSOUTH TELECOMMUNICATIONS, INC.;
BELLSOUTH TELECOMMUNICATIONS, INC.,
COMPETITIVE MANAGEMENT RESTAFFING
PLAN, et al.,

                                                        Defendants-Appellees.
                       ________________________

                Appeal from the United States District Court
                   for the Northern District of Georgia
                     _________________________

                          (September 22, 1999)

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

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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:

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       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 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

       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.

                                                 4
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, 116 S. Ct. 1065, 1076-77 (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 employee rather than with an

external candidate; (3) evaluating him with someone who had no personal

       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.

                                                5
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

                                           6
employee. See Borden v. Johnson, 395 S.E.2d 628, 628-29 (Ga. Ct. App. 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., 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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