Court Opinion

ID: 5233
Source: CourtListenerOpinion
Date Created: 2010-04-25 05:03:50+00
Date Added: 2024-06-11T13:30:18.224943
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS

                        FOR THE FIFTH CIRCUIT

                           _______________

                              No. 92-2348
                           Summary Calendar
                            _______________

                       J.R. WHITTEMORE, et al.,

                                             Plaintiffs-Appellants,

                                VERSUS

                    SCHLUMBERGER TECHNOLOGY CORP.,

                                             Defendant-Appellee.

                      _________________________

           Appeal from the United States District Court
                for the Southern District of Texas
                     _________________________

                         (September 21, 1992)

Before HIGGINBOTHAM, SMITH, and DeMOSS, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

     The plaintiffs, who are former employees of Schlumberger

Technology Corp. ("Schlumberger"), brought suit against that com-

pany for breach of an employment contract.        Schlumberger removed

to federal court on the ground that the cause of action is pre-

empted by the Employee Retirement Income Security Act of 1974

("ERISA"), 29 U.S.C. § 1001 et seq.      In a thorough and persuasive

memorandum and order, the district court granted Schlumberger's

motion for summary judgment, denying any recovery to the plain-

tiffs.   We agree with the district court's analysis and, accord-

ingly, we affirm.
                                   I.

     The plaintiffs basically claim a denial of severance pay

under a provision of the company's management policy manual that

had provided for severance pay in lieu of notice of termination.

That policy was amended on December 22, 1988, to provide that,

unlike the previous provision, an employee was not entitled to

pay in lieu of notice, where he or she was released from employ-

ment before the expiration of a prescribed period of notice of

termination, if he or she was offered full-time employment by a

company acquiring the division of Schlumberger in which the em-

ployee worked.

     The plaintiffs worked in the MACCO Division of Schlumberger,

which was purchased by Arrow Oil Tools ("Arrow") on February 28,

1989.   Apparently, the amended severance plan was adopted after

plans were made for the purchase by Arrow, although it became

effective before the sale took place.          The plaintiffs, however,

seek severance pay under the former provision.

                                  II.

     The   plaintiffs   first   argue   that   federal   jurisdiction   is

wanting because the Schlumberger plan is not an ERISA employee

welfare benefit plan.    ERISA defines a covered "employee welfare

benefit plan" as one that provides "(A) . . . benefits in the

event of sickness, accident, disability, death or unemployment

. . . or (B) any benefit described in [section 302(c) of the

Labor-Management Relations Act]."       29 U.S.C. § 1002(1).    Benefits

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under section 302(c) of the Labor-Management Relations Act in-

clude ". . . pooled vacation, holiday, severance or similar bene-

fits . . . ."   29 U.S.C. § 186(c)(6).

     The plaintiffs depart from the plain meaning of these provi-

sions to argue that Schlumberger's severance pay in lieu of no-

tice is not an ERISA plan in light of Fort Halifax Packing Co. v.

Coyne, 482 U.S. 1 (1987), and Wells v. General Motors Corp., 881

F.2d 166 (5th Cir. 1989), cert. denied, 495 U.S. 923 (1990).          As

the district observed, however, these cases are distinguishable.

Fort Halifax involved a state law requiring severance pay, with-

out establishment of a plan, and Wells involved a one-time sever-

ance obligation without the ongoing administration of benefits

that is required of an ERISA plan.        Schlumberger's plan, on the

other hand, was not created with a particular closing in mind and

had been in existence for some time.

     The   plaintiffs   concede   that   "ordinarily,   unfunded   single

employer severance policies are benefit plans within the Scope

[sic] of ERISA."    Their argument that the Schlumberger plan is

self-executing and thus does not require "administration" is to

no avail, as we perceive nothing about the Schlumberger plan to

take it out of the ordinary definition of an ERISA plan.           More-

over, the plan plainly required some sort of an administrative

set-up in order to make payments to employees.

                                  III.

     The plaintiffs assert that if the Schlumberger plan is an

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ERISA plan, Schlumberger violated it by failing fully to disclose

the terms of the amendment to the employees prior to their termi-

nation.      The plaintiffs concede, however, that the amendment

"technically occurr[ed] before the employees' termination."                     Even

if this concession were not enough, the district court specifi-

cally found that Schlumberger complied with ERISA's disclosure

requirements in that "plaintiffs admit receiving copies of the

amended severance . . . plan on February 7, and admit receiving a

summary description of this plan change on March 8, 1989."                       The

plaintiffs do not dispute these facts.

      The    plaintiffs    acknowledge        that   Schlumberger      gave    notice

within the time permitted by ERISA.             They argue only that "such a

technical reading of the disclosure provisions . . . work [sic]

an   inequitable    result      and    give     [sic]   effect    to    form    over

substance."     We conclude, to the contrary, that Schlumberger was

entitled to give notice within the statutory notice period and

was not required to provide it sooner.                The plaintiffs' argument

is without merit.

                                        IV.

      The plaintiffs aver that their right to severance benefits

had vested, precluding any amendment.                They admit, however, that

"ordinarily, severance benefits are unaccrued, unvested benefits

which   an   employer     has   no    continuing     duty   to   provide."       The

strongest argument they can muster for the proposition that the

instant severance benefits are vested is that they "have been

                                         4
unable to find any case law which conclusively holds that, under

ERISA,   severance     benefits    never     vest."     In   fact,    severance

benefits consistently have been held not to vest.                    See, e.g.,

Reichelt v. Emhart Corp., 921 F.2d 425, 430 (2d Cir. 1990), cert.

denied, 111 S. Ct. 2854 (1991); Young v. Standard Oil (Ind.), 849

F.2d 1039, 1045 (7th Cir.), cert. denied, 488 U.S. 981 (1988).

                                       V.

      The plaintiffs argue that if the amended plan does not apply

to    them   because    of   Schlumberger's       failure    to   make   proper

disclosure, they are entitled to de novo review of the denial of

their benefits.        In light of our conclusion that the district

court was correct in its determination that notice was legally

sufficient, we need not consider this issue.

      The district court properly concluded that the plaintiffs

are   entitled   to    no    relief.       Its   judgment,   accordingly,    is

AFFIRMED.

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