Court Opinion

ID: 74891
Source: CourtListenerOpinion
Date Created: 2010-04-26 08:59:06+00
Date Added: 2024-06-11T09:39:44.837569
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[PUBLISH]

                 IN THE UNITED STATES COURT OF APPEALS
                                                                             FILED
                           FOR THE ELEVENTH CIRCUIT                U.S. COURT OF APPEALS
                              ____________________                   ELEVENTH CIRCUIT
                                                                         OCT 25, 2000
                                    No. 99-11734                      THOMAS K. KAHN
                                ____________________                       CLERK

                       D.C. Docket No. 97-01251-CIV-ORL-19

JAMES F. ADAMS, WILLIAM W. ADAMS, et al.,
                                                                 Plaintiffs-Appellants,

                                           versus

THIOKOL CORPORATION, administrator of Thiokol Corporation Employee
Separation Pay Plan, RICHARD T. SMITH, as Administrator of Thiokol
Corporation Employee Separation Pay Plan, et al.,

                                                                 Defendants-Appellees.

                           ___________________________

                     Appeal from the United States District Court
                         for the Middle District of Florida
                         ___________________________
                                (October 25, 2000)

Before EDMONDSON, HULL and WOOD*, Circuit Judges.

HARLINGTON WOOD, Jr., Circuit Judge:

       *
        Honorable Harlington Wood, Jr., U.S. Circuit Judge for the Seventh Circuit, sitting by
designation.
        Plaintiffs, 301 former employees of Thiokol Corporation1 (“Thiokol”),

brought an action against Thiokol, the Thiokol Corporation Employee Separation

Pay Plan (the “Plan”), and Richard T. Smith, Administrator of the Plan

(collectively referred to as the “Defendants”), seeking severance pay pursuant to

the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §

1001 et seq. The district court granted Defendants’ motion for summary judgment

and dismissed Plaintiffs’ claims. Plaintiffs timely filed this appeal. We affirm in

part and reverse and remand in part the district court’s order.

                                   I. BACKGROUND

        From 1984 to 1995, Thiokol’s Space Services division performed booster

rocket and external fuel tank assembly and recovery for the space shuttle project at

Kennedy Space Center under a subcontractor agreement with the general

contractor, Lockheed Martin (“Lockheed”). On June 26, 1995, Lockheed notified

Thiokol that as a result of a cost consolidation effort, it would not renew Thiokol’s

contract but would take over responsibility for the Space Services operations at the

Space Center. However, Lockheed stated that it planned to fill all of the required

        1
         Thiokol Corporation became Cordant Technologies, Inc. as a result of a name change in
1998.

                                              2
positions with existing subcontractor personnel.2 Lockheed stated their intent was

to offer equivalent compensation and the applicable Lockheed benefits package,

while allowing the new employees to retain their site seniority. After Lockheed

announced the contract would not be renewed, Thiokol entered into negotiations

with Lockheed to sell the operating assets of the Space Services division. The

transition was to be completed by September 30, 1995.

       Plaintiffs were notified that they would need to submit an employment

application, and were later required to interview with Lockheed and take a physical

and a drug test in order to be hired. Plaintiffs were employed by Thiokol until

12:00 a.m., September 30, 1995, and immediately went onto Lockheed’s payroll at

12:01 a.m., October 1, 1995, with no break in service and at equal or greater pay

rates.3 The contract for the sale of the assets was dated October 1, 1995, and

signed by both parties on October 2, 1995.

       Plaintiffs were all participants in Thiokol’s Plan, a self-funded severance pay

plan which is an employee welfare benefit plan as defined under § 3(1) of ERISA,

       2
       There were approximately forty Thiokol employees who were not offered positions by
Lockheed, who received separation pay and who are not part of this suit.
       3
        Plaintiffs do not disagree that the actual pay rates were equal or greater. However, they
maintain that because they paid more for equivalent medical insurance coverage, received less
vacation benefits (which were modified after the denial of separation benefits), and had their
separation pay benefits reduced (from a maximum of twenty-six weeks at Thiokol to a maximum
of four weeks at Lockheed), the resulting wages were equal or less.

                                               3
29 U.S.C. § 1002(1).4 The Plan originated in 1992 and provided for benefits to be

paid from Thiokol’s general assets to employees who would involuntarily lose

their jobs due to a reduction in work force (“RIF”). Master Plan, pp. 1, 4. The

language of the Plan excluded severance benefits for “[t]ermination of employment

resulting from . . . (ii) the sale of all or part of the business assets of the Company

or a subsidiary or a business unit; . . . or (iv) any other form of reorganization

including a spinoff; and the employee is offered a position (whether or not such

position is comparable to the prior position) by the acquiring or resulting company;

. . . .” Master Plan, General Exclusions, pg. 3(5). The company reserved the right

to amend or terminate the Plan at any time and “to modify or change the schedule

of benefits . . . for any specific reduction in force or for any business unit or

subsidiary of the Company if economic conditions or other business reasons

warrant such change.” Master Plan, pp. 2, 4. The Plan also designated a Plan

Administrator as the person who was responsible for interpreting the terms of the

Plan and who determined eligibility for benefits.

       Pursuant to the modification clause in the Plan, in July 1995, a Separation

       4
          29 U.S.C. § 1002(1) states in relevant part that an “employee welfare benefit plan” is “any
plan, fund, or program . . . maintained by an employer . . . to the extent that such plan, fund, or
program was established or is maintained for the purpose of providing for its participants . . . (A)
. . . benefits in the event of . . . unemployment . . . .” Thus, a severance pay plan is an “employee
welfare benefit plan,” as defined under ERISA.

                                                 4
Allowance Amendment (the “Amendment”) was published for employees of Space

Services (all of Plaintiffs herein) which raised the separation allowance benefits

from sixteen weeks as designated in the original Plan to a maximum of twenty-six

weeks and introduced the language of a “comparable position” in reference to

accepting a position with a successor company in the case of a sale, merger or

reorganization. However, the Amendment did not define “comparable.” The

Amendment stated that a separation allowance would not be paid for

“[t]ermination resulting from any sale, merger or reorganization of the company,

and the workteam member terminates rather than accept a comparable position.”

(emphasis added).

      In addition, a “Questions and Answers” memo regarding the transition of the

division to Lockheed was issued to Space Services employees in July 1995. This

memo posed the question, “Will I receive any severance benefits from Thiokol if I

accept a position from [Lockheed] as of October 1, 1995?” The answer was, “No.”

The memo also stated that an employee who was not offered a comparable job with

Lockheed would receive severance benefits, and defined a comparable job as “one

that is within 10% of your current pay or one that is more than your current pay.”

This memo also informed employees that anyone who did not submit a job

application to Lockheed or who rejected a comparable job offer would be

                                          5
considered as having voluntarily terminated and would not be eligible for any

severance benefits.

      After commencing employment with Lockheed, 305 former Thiokol

employees made a request for separation pay under the Plan. All requests were

denied. As required by the Plan, the employees first appealed to the Plan

Administrator for review. The Administrator denied all but four of the claims.

The remaining 301 employees brought this suit.

      Due to the numerosity of plaintiffs and in the interest of judicial expediency,

all parties agreed to bifurcate discovery into two phases, based on the expectation

that the case could be wholly or partially resolved on cross motions for summary

judgment. Phase One narrowed the focus to a review of the specific language in

the Plan and to the decision made by Smith, as Administrator, in which he declined

to pay separation benefits to the Plaintiffs. Phase Two, if necessary, would

determine if the employment offered by Lockheed was “comparable” as defined by

the Plan.

      The district court granted Thiokol’s motion for summary judgment and the

Plaintiffs appeal. Plaintiffs argue that there was no “sale, merger or reorganization

of the company,” but maintain they were involved in the closing of the Space

Services division and a subsequent RIF, which would be governed by Thiokol

                                          6
policy statement, “Facility Closing and Reduction of Work Force.” Plaintiffs

assert that the terminations did not result from any sale because the sale of assets

contract was not signed until after the employee changeover occurred.

       Plaintiffs also claim that four of their number are owed separation pay as the

situations of the four fall within Smith’s stated criteria for awarding separation

benefits. Plaintiffs assert that employees Granberry, Krengel, Reasoner, and

Wylie, all of whom transferred to Lockheed with comparable positions, were laid

off prior to completing one year of service with Lockheed and should have

received separation pay as defined by Smith.

                               II. STANDARD OF REVIEW

       In Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989), the Supreme

Court discussed the appropriate standard of review in 29 U.S.C. § 1132(a)(1)(B)5

actions challenging a denial of benefits based on plan interpretations. A review

under the arbitrary and capricious standard is appropriate where “the benefit plan

gives the administrator or fiduciary discretionary authority to determine eligibility

for benefits or to construe the terms of the plan.” Bruch, 489 U.S. at 115.

However, “if a benefit plan gives discretion to an administrator or fiduciary who is

       5
        29 U.S.C. § 1132(a)(1), provides that a “civil action may be brought . . . by a participant or
beneficiary [of a covered plan] . . . (A) for the relief provided for in
[§ 1132(c)], [or] (B) to recover benefits due to him under the terms of his plan.”

                                                  7
operating under a conflict of interest, that conflict must be weighed as a ‘facto[r] in

determining whether there is an abuse of discretion.’” Id. (quoting RESTATEMENT

(SECOND) OF TRUSTS § 187, Comment d (1959)). “[T]he beneficiary need only

show that the fiduciary allowed himself to be placed in a position where his

personal interest might conflict with the interest of the beneficiary.” Brown v. Blue

Cross and Blue Shield of Alabama, Inc., 898 F.2d 1556, 1565 (11th Cir. 1990)

(quoting Fulton Nat’l Bank v. Tate, 363 F.2d 562, 571 (5th Cir. 1966) (emphasis in

original)). “A conflicted fiduciary may favor, consciously or unconsciously, its

interests over the interests of the plan beneficiaries.” Id. (citation omitted). The

standard of review for a fiduciary operating under a conflict of interest remains

arbitrary and capricious with a significantly diminished degree of deference. Id. at

1568. Although “[e]ven a conflicted fiduciary should receive deference when it

demonstrates that it is exercising discretion among choices which reasonably may

be considered to be in the interests of the participants and beneficiaries,” id., “the

burden shifts to the fiduciary to prove that its interpretation of plan provisions

committed to its discretion was not tainted by self-interest.” Id. at 1566. If the

fiduciary succeeds in proving this burden, the opposing party “may still succeed if

the action is arbitrary and capricious by other measures.” Id. at 1568.

                                III. APPLICATION

                                           8
A. Interpreting the Plan

       The Thiokol Plan designates the Administrator, Smith, as the person who is

responsible for interpreting the terms of the Plan and determining eligibility under

the Plan. The district court found that Smith was operating under a conflict of

interest because he “was not only an employee of Thiokol, but was also an officer

and stockholder.” This circuit has noted that ERISA does not prohibit an

individual from “serving as a fiduciary in addition to being an officer, employee,

agent, or other representative of a party in interest.” Newell v. Prudential Ins. Co.,

904 F.2d 644, 649 (11th Cir. 1990) (quoting 29 U.S.C. § 1108(c)(3) (West Supp.

1990)). However, as we have noted, in reviewing factors such as self-interest as

pertains to the legal standard for reviewing benefits determinations, “This task

reaches the height of difficulty in a case . . . where an insurance company serves as

the decisionmaking fiduciary for benefits that are paid out of the insurance

company’s assets.” Brown, 898 F.2d at 1561.

       In the case of Brown, which dealt with a health insurance company, we held

that “[b]ecause an insurance company pays out to beneficiaries from its own assets

rather than the assets of a trust, its fiduciary role lies in perpetual conflict with its

profit-making role as a business.” Id.; see also Newell, 904 F.2d at 650 (citation

omitted). Similar circumstances arise in the present case. Thiokol is a profit-

                                             9
making business; the Plan provides that the payment of separation pay would be

made from the general assets of the corporation; and the Administrator, a Thiokol

employee, acknowledged that the cost could amount to millions of dollars. There

is clearly a conflict of interest which requires a heightened scrutiny for abuse of

discretion. See Newell, 904 F.2d at 651; see also Brown, 898 F.2d at 1569

(“Because Blue Cross profits from such forfeitures, we should demand strong

justification for an interpretation which produces [a forfeiture] result.”).

      Under the heightened standard, we must first determine the legally correct

interpretation of the disputed plan provision. Brown, 898 F.2d at 1570; Newell,

904 F.2d at 651. If the administrator’s interpretation was legally correct, the

inquiry ends. Collins v. American Cast Iron Pipe Co., 105 F.3d 1368, 1370 (11th

Cir. 1997). If the administrator’s interpretation differs, we must then determine

whether the administrator was arbitrary and capricious in employing a different

interpretation. Brown, 898 F.2d at 1570; Newell, 904 F.2d at 651.

      The original 1992 Plan document specifically excluded severance benefits

for “[t]ermination of employment resulting from . . . (ii) the sale of all or part of the

business assets of the Company or a subsidiary or a business unit; . . . or (iv) any

other form of reorganization including a spinoff; and the employee is offered a

position (whether or not such position is comparable to the prior position) by the

                                           10
acquiring or resulting company; . . . .” However, the July 1995 Amendment states

that a separation allowance will not be paid for termination “resulting from any

sale, merger or reorganization of the company and the workteam member

terminates rather than accept a comparable position.” The Amendment language

states that severance benefits will not be paid for an employee who terminates

when there is sale, merger or reorganization (while implying that there is no

restriction on severance benefits for an employee who accepts a comparable

position).6 (emphasis added). This language contradicts the language in the 1992

Plan and creates an ambiguity. The Amendment also conflicts with the

explanations set forth in the Questions and Answers memo.

       ERISA requires that employee benefit plans be “established and maintained

pursuant to a written instrument.” 29 U.S.C. § 1102(a)(1). In addition, by

requiring that each plan specify the procedure for amending the plan, id. §

1102(b)(3), “Congress rejected the use of informal written agreements to modify

an ERISA plan.” Nachwalter v. Christie, 805 F.2d 956, 960 (11th Cir. 1986) (citing

Johnson v. Central States, Southeast

       6
         Although we suspect the language of the Amendment was a simple misstatement-presuming
that Thiokol intended to state no separation allowance would be paid for: “Termination resulting
from any sale, merger or reorganization and the workteam member accepts a comparable position
or terminates rather than accept a comparable position”-the ambiguity which arises from the
conflicting language of the Plan and the Amendment must be addressed.

                                              11
and Southwest Areas Pension Funds, 513 F.2d 1173, 1174-75 (10th Cir. 1975)

(stating that benefits may not be enforced according to a company booklet and

letter that are inconsistent with the terms of a written pension plan)). Although the

Amendment is a formal, written document as prescribed under ERISA, see 29

U.S.C. §§ 1102(a)(1), 1102(b)(3), which modified the Plan as allowed, its primary

purpose was to raise the separation benefit amounts as pertains to the Space

Services division. In all other respects, it repeats the language of the Plan except

for the one contradictory statement.7

       Under the decisions of this court and the laws of Florida, where the meaning

of a term is unclear or ambiguous, a reviewing court can consider extrinsic

evidence to explain the ambiguity. See Stewart v. KHD Deutz of America, Corp.,

980 F.2d 698, 702 (11th Cir. 1993); Hurt v. Leatherby Ins. Co., 380 So.2d 432, 433

(Fla. 1980); see also Vencor Hosp. South, Inc. v. Blue Cross and Blue Shield of

Rhode Island, 86 F.Supp.2d 1153, 1160 (S.D. Fla. 2000). We find this also applies

in determining ambiguous language in an ERISA plan such as the one in this case.

 As the Supreme Court noted in Bruch, where the plan did not delegate

discretionary or final authority to construe uncertain terms, the reviewing court

       7
      The Questions and Answers memo is not controlling as it is simply an informal employee
communication. See Nachwalter, 850 F.2d at 960.

                                            12
could “look[] to the terms of the plan and other manifestations of the parties’

intent.” 489 U.S. at 112-13 (citations omitted). Although Smith was delegated

final authority, he also looked to “other manifestations of the parties’ intent.”

While the Questions and Answers memo clearly supports the language of the Plan,

Smith looked further in examining extrinsic evidence which would explain

Thiokol’s intent. As indicated in the record, he spoke with current and former

Thiokol employees, who stated that the Plan was created to formalize Thiokol’s

prior administrative policies with regard to separation pay and to establish basic,

uniform standards. The management policy memo which predated the 1992 Plan

provided that separation benefits would not be paid in the case of a “[t]ermination

as a result of any sale or transfer of business, in whole or in part, or in cases of

merger, consolidation, or other reorganization where the individual is offered the

opportunity to remain in the same or a substantially equivalent position with the

new employer.” Management Policy, Morton Thiokol, Inc. Aerospace Group

Support Services, Separation Allowance, February 27, 1989. Smith also reviewed

the employment and termination history of Thiokol and found that Thiokol had

consistently denied separation pay to employees who were displaced and accepted

comparable employment with a successor. See Anderson v. Ciba-Geigy Corp., 759

F.2d 1518, 1522 (11th Cir. 1985) (“The Plan was consistently interpreted because

                                           13
in every other divestment situation where Ciba-Geigy employees were retained in

their old positions by the purchasing entity, no severance pay was given.”). All of

the extrinsic evidence points to the fact that the language of the Plan policy, not the

Amendment, is controlling.

       The Plan language denies severance benefits where there is a sale of all or

part of the business assets of a subsidiary or business unit of Thiokol or where

there is a reorganization, and the employee is offered a position by the acquiring or

resulting company. Thiokol sold the assets of the Space Services division to

Lockheed, which then took over the division with all but approximately forty of

the previous employees. Thiokol Space Services ceased to be an operating unit

when Lockheed purchased a substantial portion of the Space Services assets and

began operating the division as its own. Smith determined that the loss of the

contract resulted in a reorganization of Thiokol because the Space Services

division ceased to exist as a Thiokol division and an internal restructuring of

Thiokol operations took place. Smith correctly interpreted the sale or

reorganization language to apply to Thiokol “as a whole or to any subcomponent

thereof.”8

       8
        Smith also took into account the fact that the transaction had been treated as a sale of
substantially all of the assets of a separate trade or business under Thiokol’s 401(k) plan, thus
allowing Plaintiffs to receive distribution of their 401(k) plan accounts.

                                               14
       In making his initial determinations as to who might or might not be eligible

for separation pay, Smith also reviewed the positions and pay of all of the Plaintiffs

with respect to “comparability.” Smith used a broader definition of comparability

than “90% or more of an employee’s Thiokol wages,” as stated in the Questions

and Answers memo, but took into account the wage amount, benefits, and job

duties. He determined that 303 employees were employed by Lockheed at either

the same or a higher initial base salary.

       Smith also consulted two independent firms for advice. There is no

requirement that an administrator who occupies the dual role of fiduciary and

employee of the party in interest, such as Smith, must seek independent counsel in

interpreting and administering an ERISA plan. See Newell, 904 F.2d at 650 (citing

Ashenbaugh v. Crucible Inc., 1975 Salaried Retirement Plan, 854 F.2d 1516,

1531-32 (3rd Cir. 1988) (holding that a plan fiduciaries’ reliance on in-house

counsel to aid in interpreting and administering the plan, rather than hiring

independent counsel, was not a violation of ERISA)).9 Smith commissioned

Towers Perrin, an international benefits consulting firm, to conduct an actuarial

analysis of the two benefit programs. The principal of the firm reported that “there

       9
         The Third Circuit notes that the only ERISA cases which require independent counsel have
to do with the conduct of fiduciaries in connection with the investment and management of plan
assets, an area in which ERISA fiduciaries are uniformly held to stricter standards. Ashenbaugh,
854 F.2d at 1532 (citations omitted).

                                               15
is not a material difference in the actuarial value of the benefits provided by

Thiokol Space Services and Lockheed Martin Space Operations.” While Smith

found the non-salary benefit programs to be somewhat different, he concluded that

Thiokol’s benefits and Lockheed’s benefits were “comparable in the aggregate.”

We note the evenhandedness of Smith’s decision-making process, as evidenced by

Smith’s extensive efforts to make informed and knowledgeable decisions,

including input from two independent firms, in interpreting the Plan. While we do

not address the merits of Smith’s “comparable job” findings, this showing of

evenhandedness is evidence of Smith’s good faith efforts. See Anderson, 759 F.2d

at 1522.

      We find that Smith’s decision was a fair and reasonable reading of the Plan

language. Id. Notwithstanding the contradictory statement contained in the

Amendment, the Plan clearly states no severance pay was to be awarded when

there is a sale or reorganization and the employee accepts a comparable position

with the new entity. See Harris v. Pullman Standard, Inc., 809 F.2d 1495, 1498

(11th Cir. 1987); Anderson, 759 F.2d at 1520 (holding that plan administrator’s

decision to deny severance benefits was not arbitrary or capricious when

company’s ERISA plan provided for an exception to severance pay provision).

Contrary to Plaintiffs’ assertion that this was a RIF, the record shows that Thiokol

                                          16
acted as if this was a sale or reorganization, not a RIF. Lockheed and Thiokol

informed Plaintiffs of the terms and conditions under which they would be

transferred to Lockheed. Plaintiffs were placed on notice by the Questions and

Answers memo, which stated that those employees accepting a comparable job

would not receive severance benefits. See Anderson, 759 F.2d at 1522. Plaintiffs

had a reliable document which explained the affect of his or her decision to accept

a position with the new company in relationship to eligibility for severance

benefits from the old company. See Sharron v. Amalgamated Ins. Agency Services,

Inc., 704 F.2d 562, 566-67 (11th Cir. 1983) (upholding denial of benefits where

company distributed booklet which discussed the effect of breaks in service as to

pension plan benefits and which contained hypothetical questions and answers and

addressed plaintiff’s specific situation).

      One of the primary goals of an ERISA plan should be the protection of the

employees’ interests. See Shaw v. Delta Airlines, Inc., 463 U.S. 85, 90 (1983).

However, an ERISA plan administrator is required to administer a plan “in

accordance with the documents and instruments governing the plan insofar as such

documents and instruments are consistent with the provisions [of ERISA].” 29

U.S.C. § 1104(a)(1)(D). Smith noted the Plan’s stated purpose was to “provide

unemployment income assistance,” and concluded that the employees who

                                             17
transferred to Lockheed were not unemployed and did not experience a material

loss of income. As Smith stated, “It is not the intent of the severance pay Plan to

provide bonus payments to individuals who have experienced no income loss.”

See Bradwell v. GAF Corp., 954 F.2d 799, 801 (2nd Cir. 1992).

      In this case, we agree with the Eighth Circuit’s holding in Harper v. R.H.

Macy & Co. Inc., which stated, “[W]hen terminated employees are immediately

rehired by a departing [employer’s] successor under terms that are comparable to

those received from their initial employer, the employees are not entitled to

severance benefits.” 920 F.2d 544, 545-46 (8th Cir. 1990) (citations omitted). The

Thiokol Plan anticipated and addressed this type of situation. See Bradwell, 954

F.2d at 800 (“By its plain language and evident intent, the Severance Pay Policy

does not entitle appellants to recover.”); Headrick v. Rockwell Int’l. Corp., 24 F.3d

1272, 1276 (10th Cir. 1994). Any severance pay from Thiokol would have been the

equivalent of a windfall recovery for the Plaintiffs, who never suffered a day of

decreased pay or unemployment.10

      As to Plaintiffs’ assertion that the sale of assets did not occur until after the

transition, Smith stated that he had been told of Lockheed’s intent to purchase the

      10
       This does not address those employees who are terminated but may then find alternate
employment on their own. See Bradwell, 954 F.2d at 800.

                                            18
division’s assets and retain the personnel prior to July 1995 in order to prepare the

severance pay communications given to the employees. The Lockheed letter and

Special Report to Employees support this contention. An affidavit given by

Thiokol’s contracts manager also stated that Lockheed was contractually obligated

to purchase the Space Services assets upon termination of the subcontract. Given

the fact that negotiations regarding the sale of Space Services assets had been

ongoing after Lockheed announced it would not renew Thiokol’s employment

contract, we do not find the fact that the sale of assets contract was signed on

October 2, 1995 to be determinative.

       Nothing in the record indicates Smith acted in anything other than good

faith. See Anderson, 759 F.2d at 1522. Although he alone was given the authority

to interpret the Plan, he requested an independent actuarial evaluation and solicited

an independent review from an outside law firm. We find that Smith’s

interpretation was legally correct and therefore affirm this portion of the district

court’s finding of summary judgment.11

B. Granberry, Krengel, Reasoner, and Wylie

       11
         Plaintiffs argue that this court’s decision in Bedinghaus v. Modern Graphic Arts, 15 F.3d
1027, 1032 (11th Cir. 1994), which awarded severance pay to employees from one company who
were retained with a successive corporation, requires reversal of the district court’s order. We
disagree. The panel itself distinguished Bedinghaus in noting that the termination benefits policy
had no exception to severance pay eligibility based on a sale or reorganization where the employees
remained in comparable positions. 15 F.3d 1032.

                                                19
      We find, however, there is a dispute of material fact as to the Plaintiffs’

claim for severance benefits owing to Plaintiffs Granberry, Krengel, Reasoner, and

Wylie. In his deposition, Smith stated that he would consider awarding severance

pay to any employee who had accepted a comparable position, but who was then

terminated with less than a year of employment at Lockheed. Also in his

deposition, Smith discussed the fact that in one of his letters to Plaintiffs’ counsel,

he requested information on any Thiokol employee who had been laid off by

Lockheed through December 1996. He stated that he would be willing to consider

severance benefits for any previous Thiokol employee who had been laid off or let

go from Lockheed prior to December 1996, provided there was no unusual

problem or provocation on the employee’s part, such as violence.

      Plaintiffs argue that Granberry, Krengel, Reasoner, and Wylie accepted

comparable positions with Lockheed but were terminated prior to one year’s

employment. Notice of Granberry, Krengel, and Reasoner having been laid off on

May 31, 1996, May 1, 1996, and May 1996, respectively, was submitted in an

attachment to a letter dated February 26, 1997, from Plaintiffs’ counsel to Smith.

There was no notice of Wylie having been laid off in that correspondence. In his

letter of March 31, 1997 to Plaintiffs’ counsel, Smith acknowledges having

received information that Granberry and Krengel were laid off by Lockheed

                                           20
between December 1995 and October 1, 1996. Defendants mistakenly argued that

Plaintiffs’ counsel never disclosed when Granberry and Krengel were terminated.

In a follow-up letter to Smith dated April 25, 1997, Plaintiffs’ counsel repeated that

Granberry, Krengel, and Reasoner had been laid off, in addition to noting that

Wylie had also been laid off by Lockheed in May of 1996.

       While there is evidence in the record supporting Plaintiffs’ assertions on this

issue, we find no evidence that Smith individually addressed the situation of these

four employees and no specific indication of the grounds on which he determined

they were not eligible for severance benefits. In his letter of June 13, 1997, Smith

stated he was awarding severance benefits to employees DeSantis and St. John

based upon the premise that, because DeSantis was laid off by Lockheed in

December 1995 and St. John’s offer of employment was retracted in November

1995, the two “were not offered continued employment.” Because Smith has

stated he would, and did, consider eligibility for employees who were terminated

from Lockheed prior to a year’s employment, yet did not distinguish why these

four employees who fell within his stated exception were denied benefits,12 we

       12
          Plaintiffs also argued this issue in their Motion for Summary Judgment. However, in their
response, Defendants did not offer any further information to resolve Smith’s apparent contradiction
in stating that he would consider granting severance benefits to any employees who were terminated
by Lockheed prior to December 1996 but why he did not do so in the case of these four employees.
Nor did Defendants’ appellate brief offer any specific information on this issue.

                                                21
reverse the order of summary judgment as to these four Plaintiffs and remand this

issue to the district court for further findings and a determination as to whether or

not these four were exceptions under Smith’s stated criteria and should or should

not have received separation benefits.

                                IV. CONCLUSION

      We affirm in part the district court’s order of summary judgment denying

Plaintiffs separation benefits and reverse and remand in part for further findings as

to the four Plaintiffs who were terminated from Lockheed prior to one year’s

service with the company.

      AFFIRMED in part; REVERSED and REMANDED in part.

                                          22