Court Opinion

ID: 2965023
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:34:18.065938+00
Date Added: 2024-06-11T11:43:04.722112
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                 ____________________

          No. 97-1556

                                    LEO VARTANIAN,

                                Plaintiff - Appellant,

                                          v.

                              MONSANTO COMPANY, ET AL.,

                               Defendants - Appellees.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                    [Hon. Michael A. Ponsor, U.S. District Judge]
                                             ___________________

                                 ____________________

                                        Before

                               Torruella, Chief Judge,
                                          ___________

                                Lynch, Circuit Judge,
                                       _____________

                            and Stearns,* District Judge.
                                          ______________

                                _____________________

               John C. Sikorski, with whom Robinson Donovan Madden & Barry,
               ________________            ________________________________
          P.C. was on brief for appellant.
          ____
               Richard J. Pautler, with whom Peper, Martin, Jensen, Maichel
               __________________            ______________________________
          and Hetlage, Francis  D. Dibble, Jr. and  Bulkley, Richardson and
          ___________  _______________________      _______________________
          Gelinas were on brief for appellees.
          _______

                                 ____________________

                                  December 15, 1997
                                 ____________________

                              
          ____________________

          *  Of the District of Massachusetts, sitting by designation.

                    STEARNS,  District  Judge.    This  appeal  involves  a
                    STEARNS,  District  Judge.
                              _______________

          question  of  first  impression  in  this  circuit,  namely,  the

          standard to apply in determining when an employer's consideration

          of an employee  severance program gives rise to  a fiduciary duty

          of disclosure under  the Employee Retirement Income  Security Act

          of 1974, 29  U.S.C.    1001-1461 ("ERISA").   Plaintiff-Appellant

          Leo Vartanian alleges that his former employer, Monsanto Chemical

          Company ("Monsanto"), misled him by failing to respond adequately

          to  his  inquiries  about  a  severance  package  that  was under

          internal corporate consideration when he retired from the company

          on May  1, 1991.   A benefits package  for which  Vartanian would

          have  otherwise been eligible was  approved by the Monsanto Board

          of Directors on June 28, 1991.

                    Vartanian  filed a  complaint against Monsanto  in 1992

          alleging two counts of breach  of fiduciary duty under ERISA, one

          count of unlawful discrimination in  violation of   510 of ERISA,

          and one  count of  common law  negligent misrepresentation.   The

          district court, Ponsor, J.,1 granted Monsanto's motion to dismiss

          the  action  on  the  grounds  that,  having  taken  a  lump  sum

          distribution of all the vested benefits to which he was entitled,

          Vartanian could not qualify as a "plan participant" with standing

          to assert  ERISA violations.   Vartanian v. Monsanto Co.,  822 F.
                                         _________    ____________

          Supp.  36, 41  (D. Mass.  1993).   This Court  reversed, holding,

          inter alia, that because Vartanian was  a plan member at the time

                              
          ____________________

          1   Judge Ponsor  was at the  time a Magistrate  Judge.   He took
          office as a District Judge on March 14, 1994.

                                         -2-

          the alleged misrepresentations were made,  he had standing to sue

          under ERISA.   Vartanian v. Monsanto  Co., 14 F.3d 697,  703 (1st
                         _________    _____________

          Cir. 1994)(Vartanian I).
                     _________

                    On remand Judge Ponsor dismissed Vartanian's claim that

          Monsanto had  breached an ERISA  duty by failing to  disclose its

          prospective plans to reduce staffing, but permitted the claims of

          misrepresentation  about the  possibility of an  early retirement

          incentive plan  to proceed.   Vartanian v.  Monsanto Co.,  880 F.
                                        _________     ____________

          Supp. 63, 70-71  (D. Mass. 1995).  After  discovery, Judge Ponsor

          granted  Monsanto's motion  for  summary  judgment, holding  that

          because  no enhanced severance  package that would  have affected

          Vartanian  was under  "serious  consideration"  at  the  time  he

          retired,   no  actionable   misrepresentation   had  been   made.

          Vartanian v.  Monsanto Co., 956 F. Supp.  61, 66 (D. Mass. 1997).
          _________     ____________

          We affirm.

                                          I.
                                          I

                    Our review of a motion for summary judgment is de novo.

          Associated Fisheries of Maine, Inc.  v. Daley, ___ F.3d ___, ___,
          ___________________________________     _____

          No.  97-1327, 1997 WL  563584 at  *3 (1st  Cir. Sept.  16, 1997).

          Summary   judgment   is   appropriate   where   "the   pleadings,

          depositions,  answers to interrogatories, and admissions on file,

          together  with the  affidavits, if  any,  show that  there is  no

          genuine issue as to any  material fact and that the  moving party

          is entitled to a  judgment as a matter of law."   Fed. R. Civ. P.

          56(c).   Inferences are drawn in the  light most favorable to the

          nonmoving party.   Reich v. John Alden Life Ins. Co., 126 F.3d 1,
                             _____    ________________________

                                         -3-

          6 (1st Cir.  1997).  The nonmovant  may not, of course,  defeat a

          motion  for summary  judgment  on conjecture  alone.   "The  mere

          existence   of  a  scintilla  of   evidence  in  support  of  the

          plaintiff's position will be insufficient; there must be evidence

          on  which the  jury  could reasonably  find  for the  plaintiff."

          Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986).
          ________    ___________________

                    The  following undisputed material facts are drawn from

          the  parties'  Joint  Statement of  Stipulated  Facts, Defendant-

          Appellee Monsanto's Statement of Undisputed Facts, and Plaintiff-

          Appellant  Vartanian's  Response   to  Defendant's  Statement  of

          Undisputed  Facts.  After thirty-six years at Monsanto, Vartanian

          in December 1989 announced his  intention to retire on January 1,

          1991 (later amended to May 1, 1991).  Vartanian was then employed

          at Monsanto's plastics facility at Indian Orchard, Massachusetts.

          Vartanian elected to take a lump sum distribution of his Salaried

          Employee's  Pension Plan benefits.  During past restructurings of

          its business,  Monsanto had offered early  retirement incentives,

          sometimes  on  a  company-wide basis  and  sometimes  to specific

          groups of employees.

                    During 1990  and 1991, Monsanto's  sales stagnated  and

          net  income  shrunk.   Rumors  began  circulating  among Monsanto

          employees  that the  company was  pondering  an early  retirement

          program as  a cost-cutting  device.   These  intensified when  in

          October  of  1990  Monsanto   Agricultural  Company  (a  separate

          Monsanto operating unit)  offered a severance program to  some of

          its employees  as part  of a reorganization  plan.  In  the first

                                         -4-

          quarter of 1991, Robert Potter,  the president of Monsanto, began

          discussing  with   his  senior  managers  various   proposals  to

          streamline operations at  Monsanto Chemical.  These  included the

          closing  of several plants,  but not the  Indian Orchard facility

          where Vartanian worked.   No plans were  drawn up to implement  a

          severance  package,2  although  Frank  Reining, Monsanto's  vice-

          president of  finance,  prepared  an  estimate  of  the  cost  of

          offering severance benefits to some 400 hypothetical employees.

                    In March of  1991, Vartanian asked Charles  Eggert, his

          immediate supervisor,  if the  rumors about  an early  retirement

          plan   were  true.    After  investigating,  Eggert  reported  to

          Vartanian  that  Monsanto  was  not  contemplating any  severance

          program  for which  he would  be eligible.   On  March 25,  1991,

          Vartanian  and his wife  executed an Affidavit,  General Release,

          and  Agreement in  anticipation of  the release  of the  lump sum

          benefits.

                    During  the week  of April  15-21,  1991, after  gossip

          about a possible severance plan revived, Vartanian contacted both

          Eggert  and Lori Heffelfinger,  the personnel  representative for

          his employee group.  Eggert and Heffelfinger told  Vartanian that

          they  had  been  unable  to  confirm  the  rumors,  and  did  not

          personally believe that any early  retirement package was in  the

                              
          ____________________

          2   Vartanian  asserts  that  any  downsizing  discussions  would
          inferentially  have involved  the  issue  of  severance  benefits
          because of Monsanto's record of  offering such incentives as part
          of past restructuring.  

                                         -5-

          works.   Vartanian does  not dispute  the truthfulness  of either

          statement.

                     Between  April  21  and  May  1,  1991,  the  Monsanto

          Management  Board met six times, eventually deciding to recommend

          to  the  Board  of Directors  the  closure  of  six  plants.   No

          presentation concerning  early retirement incentives  was made at

          any of these  meetings, and no document analyzing  or proposing a

          severance program was prepared.  Three alternate plans were drawn

          up for restructuring Monsanto's multiple product lines.  None  of

          the   product  lines   in  Vartanian's   Plastics  Division   was

          recommended  for discontinuance.   Vartanian  retired  on May  1,

          1991.

                    On May 7, 1991, Potter met with  the Monsanto Executive

          Management Committee, which endorsed in principle his proposal to

          restructure  the company.    On  May 16,  1991,  John Manns,  the

          director of employee  benefits, was asked to develop  a severance

          program  for   potentially  impacted  employees.     Manns  asked

          Monsanto's actuaries, Towers, Perrin, Forster & Crosby ("TPF&C"),

          to gather the necessary data.  On May 24, 1991, Manns  gave TPF&C

          an  outline of  his proposal.   On May  28, 1991, Manns  met with

          Robert  Abercrombie, the  corporate benefits director,  and Barry

          Blitstein,  a corporate  vice president,  to  discuss a  concrete

          severance  plan.    It  was at  this  meeting  that  the idea  of

          extending an offer of early retirement  to all Monsanto employees

          was first raised.

                                         -6-

                    Coincidentally,  on  May  28, 1991,  a  St. Louis-based

          Plastics Division employee  who had decided to retire  on June 1,

          1991, was assured  by letter that  he would receive the  value of

          any increase in benefits if an early retirement program for which

          he would  otherwise have been  eligible was adopted  within three

          months  of his retirement  date.  On  June 12, 1991,  another St.

          Louis-based Plastics Division  employee who planned to  retire on

          July  1, 1991,  was  given  a similar  written  assurance.   Both

          employees  were  eventually  paid the  additional  benefits  from

          Monsanto's corporate treasury.

                    On  June  3,  1991,  Monsanto's  Executive   Management

          Committee  endorsed the idea  of a company-wide  early retirement

          program,  and authorized further development work on the project.

          Potter  told his  division managers  that they  were to  make the

          final decision whether to  offer the program to  their respective

          employees.   John  Tuley, the  manager  of Vartanian's  division,

          decided not to participate.  Tuley's decision was reversed by his

          successor,  Arthur  Fitzgerald,   in  mid-June  of  1991.     The

          retirement plan was  finalized on June 27, 1991,  and approved by

          Monsanto's Board  of Directors on  June 28, 1991.   Had Vartanian

          been  eligible  to   participate,  he  would  have   received  an

          additional $174,700 in pension benefits.3

                                         II.
                                         II.

                    Although  this  Court,  in  Vartanian  I,  stated  that
                                                _________

                              
          ____________________

          3   It is  unclear whether Vartanian  would have qualified  for a
          lump sum distribution had he chosen the early retirement option.

                                         -7-

          Monsanto had "a fiduciary duty not to mislead Vartanian as to the

          prospective adoption of  a plan under serious  consideration," 14

          F.3d at 702,  it had no  occasion to reach  the question of  what

          exactly constitutes "serious consideration."   The district court

          on remand adopted  the standard espoused by the  Third Circuit in

          Fischer  v.  Philadelphia  Elec.  Co.,  96  F.3d  1533  (3d  Cir.
          _______      ________________________

          1996)(Fischer II),  cert. denied,  117 S. Ct.  1247 (1997),  that
                _______       ____________

          serious consideration obtains  when "(1) a specific  proposal (2)

          is being  discussed for purposes of implementation  (3) by senior

          management with the  authority to implement the change."   956 F.

          Supp. at 66  (quoting Fischer II, 96 F.3d at 1539).  Finding that
                                _______

          "[t]he  undisputed facts  reveal that  none of  this  occurred at

          Monsanto  until weeks after  plaintiff retired," 956  F. Supp. at

          66,  Judge Ponsor granted Monsanto's motion for summary judgment.

          Id. at 67.
          ___

                    Monsanto  urges us to  follow the lead  of the district

          court and adopt the Fischer II  test.  Vartanian asks for a  more
                              _______

          flexible standard loose enough to fit the facts of his case.  For

          reasons  that  will  be  explained,  we  prefer  the  Fischer  II
                                                                _______

          approach.4

                              
          ____________________

          4   We are aware that some courts  of appeals have recognized the
          possibility  of an  affirmative duty to  advise a  beneficiary of
          potential plan changes,  regardless of the existence  of employee
          inquiry.  Antweiler  v. American Elec. Power Serv.  Corp., 3 F.3d
                    _________     _________________________________
          986, 991  (7th Cir. 1993);  Eddy v.  Colonial Life Ins.  Co., 919
                                      ____     _______________________
          F.2d 747, 750 (D.C. Cir. 1990); but see Pocchia v. NYNEX, 81 F.3d
                                          ___ ___ _______    _____
          275,  278 (2d  Cir.), cert.  denied,  117 S. Ct.  302 (1996)("[A]
                                _____________
          fiduciary is not  required to voluntarily  disclose changes in  a
          benefit plan before they are adopted.").  This issue, however, is
          not before us.

                                         -8-

                                          A.
                                          A.

                    It has been said that employers who offer benefit plans

          wear  "two  hats,"    because  of  the  "distinction  between  an

          employer s prerogative to initiate discretionary policy decisions

          such as creating, amending,  or terminating a particular plan  as

          compared  to  its  fiduciary  responsibilities  to  administer an

          existing plan for  the benefit and interests of  its participant-

          employees."  Drennan  v. General Motors Corp., 977  F.2d 246, 251
                       _______     ____________________

          (6th Cir.  1992).  When  a prospective change  in a benefit  plan

          will  adversely impact  some or  all  plan participants,  tension

          often  arises between the employer s fiduciary obligations to its

          employees  and  its  institutional desire  to  keep  its internal

          deliberations  confidential.  This conflict is, in many respects,

          an  inherent  feature of  ERISA.5    As  one district  court  has

          observed, "[w]hen acting on behalf  of the pension fund, there is

          no   doubt  that  [the  employer]  must  act  solely  to  benefit

          participants and  beneficiaries.  However, . . . . the  mere fact

          that a company has named  itself as pension plan administrator or

          trustee  does not restrict  it from pursuing  reasonable business

          behavior . .  . ."  Sutton v.  Weirton Steel Div. of  Nat'l Steel
                              ______     __________________________________

          Corp., 567 F.  Supp. 1184, 1201 (N.D.W.Va.), aff'd,  724 F.2d 406
          _____                                        _____

                              
          ____________________

          5  The conflict has generated a fair amount of scholarly comment.
          See Mary O.  Jensen, Separating Business Decisions  and Fiduciary
          ___                  ____________________________________________
          Duty in ERISA  Litigation?, 10 BYU J. Pub. L.  139 (1996); Steven
          __________________________
          Davi,  To Tell  the  Truth: An  Analysis of  Fiduciary Disclosure
                 __________________________________________________________
          Duties and Employee Standing to Assert Claims under ERISA, 10 St.
          _________________________________________________________
          John's  J. Legal Comment. 625  (1995); Edward E. Bintz, Fiduciary
                                                                  _________
          Responsibility under  ERISA: Is  There Ever  a Fiduciary  Duty to
          _________________________________________________________________
          Disclose?, 54 U. Pitt. L. Rev. 979 (1993).
          _________

                                         -9-

          (4th Cir. 1983).   We are called  upon in this case  to delineate

          the  point at  which  one form  of reasonable  employer behavior,

          namely the  confidential consideration  of an  employee severance

          proposal,  is  overbalanced by  the corresponding  fiduciary duty

          imposed by ERISA.

                    Early decisions grappling with the employer's duties in

          this context focused mainly  on the extent of the cause of action

          engendered by an employer's material misrepresentations regarding

          prospective  changes  in plan  benefits.   See  Maez  v. Mountain
                                                     ___  ____     ________

          States  Tel.  &  Tel.,  Inc.,  54 F.3d  1488  (10th  Cir.  1995);
          ____________________________

          Vartanian I, 14  F.3d at 703; Fischer v.  Philadelphia Elec. Co.,
          _________                     _______     ______________________

          994 F.2d 130  (3d Cir. 1993)(Fischer I); Berlin  v. Michigan Bell
                                       _______     ______     _____________

          Tel. Co., 858 F.2d 1154 (6th Cir.  1988).  As a consensus on that
          ________

          issue developed, attention began to shift to the question of when

          the  consideration of  a change  in benefits  reached a  point of

          seriousness sufficient to trigger a fiduciary duty of disclosure.

          See Hockett v.  Sun Co., Inc., 109 F.3d  1515, 1522-24 (10th Cir.
          ___ _______     _____________

          1997);  Muse v.  I.B.M., 103  F.3d 490,  493-94 (6th  Cir. 1996),
                  ____     ______

          cert.  denied, 117 S.  Ct. 1844  (1997); Fischer  II, 96  F.3d at
          _____________                            _______

          1538-41.

                    Vartanian  urges  us  to reject  the  Fischer  II test,
                                                          _______

          ostensibly  because  it  is  too  deferential  to  an  employer's

          corporate interests.   Citing  Varity Corp. v.  Howe, 116  S. Ct.
                                         ____________     ____

          1065  (1996),  Vartanian advocates  a more  diffuse test  of when

          corporate   deliberations   achieve   the   level   of   "serious

          consideration."  But he fails to  suggest much by way of  content

                                         -10-

          for his  proposed test.  It  is true that  Varity Corp. reaffirms
                                                     ____________

          the  common law  principle  that a  fiduciary must  discharge its

          duties  "with respect  to a plan  solely in  the interest  of the

          participants  and beneficiaries."   116 S.  Ct. at  1074 (quoting

          ERISA  404(a),  29 U.S.C.  1104(a)).  Varity Corp.'s relevance to
                                                ____________

          the  facts of  this case,  however, is  questionable.   In Varity
                                                                     ______

          Corp., the employer  deliberately misled its employees  about the
          _____

          actuarial soundness of a benefit  plan to induce them to transfer

          to  a new division which had been tacitly created for the purpose

          of consolidating  the company's  money losing  ventures.   Id. at
                                                                     ___

          1068-70.  Because of the  deception, the Court determined that it

          "need not reach  the question of  whether ERISA fiduciaries  have

          any fiduciary duty to disclose truthful information  on their own

          initiative, or in response to employee inquiries."  Id. at 1075.
                                                              ___

                    Vartanian proposes that, in  the alternative, we  adopt

          the multiple factors  test used by the Second  Circuit to analyze

          the materiality of an employer's misleading statements in Ballone
                                                                    _______

          v. Eastman Kodak  Co., 109 F.3d 117,  125 (2d Cir. 1997).   These
             __________________

          factors  include  "[h]ow   significantly  [the  false]  statement

          misrepresent[ed]  the present  status  of internal  deliberations

          regarding  future plan changes, the special relationship of trust

          and confidence  between a plan  fiduciary and beneficiary, .  . .

          and the  specificity of the assurance."  Id. (citations omitted).
                                                   ___

          Ballone,  however, is  also inapposite.    Although the  district
          _______

          court in Ballone,  like the district court here,  dismissed ERISA
                   _______

          claims  because  of   the  lack  of  any   evidence  of  "serious

                                         -11-

          consideration,"    109 F.3d  at  122,  the complaint  in  Ballone
                                                                    _______

          alleged  that   the  employer  falsely  informed   the  inquiring

          plaintiff  that the  company had  decided not  to offer  an early

          retirement plan for at  least two years.   Id. at 121.   It seems
                                                     ___

          reasonable that where an allegation of positive misrepresentation

          is involved, that "aspect of the assurance can render it material

          regardless of whether  future changes are under  consideration at

          the time the misstatement is made."  Id. at 124.  We are not here
                                               ___

          presented  with  facts  that  suggest  a  deliberate  attempt  on

          Monsanto's part to affirmatively mislead Vartanian, and therefore

          have no occasion to consider whether we would apply Ballone in an
                                                              _______

          appropriate case.

                    It is  true  that in  considering  the scope  of  ERISA

          fiduciary duties,  we are  counseled "to  apply common-law  trust

          standards [while] 'bearing in mind the special nature and purpose

          of employee  benefit plans.'"  Varity Corp., 116  S. Ct.  at 1075
                                         ____________

          (quoting  H.R. Conf.  Rep.  No. 93-1280,  at  302, 3  Legislative

          History of the Employee Retirement Income Security Act of 1974 at

          4569 (1976)).  The common law impresses on a trustee the  duty to

          give a beneficiary "upon his request at reasonable times complete

          and accurate information as to the nature and amount of the trust

          property .  . . ."  Restatement (Second)  of Trusts   173 (1957).

          "[T]he beneficiary is always  entitled to such information as  is

          reasonably necessary to  enable him to  enforce his rights  under

          the  trust or to prevent or  redress a breach of  trust."  Id. at
                                                                     ___

          cmt. c.   Any application of trust principles in an ERISA context

                                         -12-

          must, however, as the Supreme Court cautioned in Varity Corp., be
                                                           ____________

          tempered by a scrupulous regard for the delicate balance Congress

          struck in enacting ERISA.

                    [C]ourts   may  have   to  take   account  of
                    competing  congressional  purposes,  such  as
                    Congress' desire to  offer employees enhanced
                    protection  for their  benefits,  on the  one
                    hand,  and, on the  other, its desire  not to
                    create  a  system  that is  so  complex  that
                    administrative costs, or litigation expenses,
                    unduly discourage employers from offering . .
                    . benefit plans in the first place.  

          Varity Corp., 116 S. Ct. at 1070.
          ____________

                    The Third  Circuit, in  our view,  carefully reconciled

          these competing concerns in shaping the Fischer II test. 
                                                  _______

                      The  concept  of   "serious  consideration"
                    recognizes and moderates  the tension between
                    an  employee's right  to  information and  an
                    employer's need  to operate  on a  day-to-day
                    basis.      Every   business   must   develop
                    strategies,   gather  information,   evaluate
                    options, and make decisions.  Full disclosure
                    of each step  in this process is  a practical
                    impossibility.     Moreover   .  .   .  large
                    corporations regularly  review their  benefit
                    packages as  part of  an on-going  process of
                    cost-monitoring and personnel management. . .
                    . A corporation  could not function if  ERISA
                    required complete  disclosure of  every facet
                    of these on-going activities. . . .

                      Equally importantly,  serious consideration
                    protects  employees.   Every  employee has  a
                    need for material  information on which  that
                    employee  can   rely  in   making  employment
                    decisions.  Too low  a standard could  result
                    in an avalanche of notices and disclosures. .
                    . . [T]ruly material information could easily
                    be  missed if the flow of information was too
                    great.  The warning that a change in benefits
                    was under serious  consideration would become
                    meaningless if cried too often.

          Fischer II, 96 F.3d at 1539.
          _______

                                         -13-

                    The   Third    Circuit   concluded    that   "[s]erious

          consideration  of a  change in  plan benefits  exists when  (1) a

          specific   proposal  (2)  is  being  discussed  for  purposes  of

          implementation (3)  by senior  management with  the authority  to

          implement that change."   Id.6  Notably important  to the Fischer
                                    ___                             _______

          II court was the effect that a less definite standard might  have

          on the availability of employee severance packages.

                    Finally,  as a matter of policy, we note that
                    imposing liability too quickly for failure to
                    disclose  a potential  early retirement  plan
                    could harm  employees by  deterring employers
                    from   resorting   to   such  plans.      Our
                    formulation  avoids  forcing  companies  into
                    layoffs,   the    primary   alternative    to
                    retirement   inducements.      This   further
                    protects the interests of workers.

          Id. at 1541 (internal citations omitted).
          ___

                    Those  of our sister circuit courts that have addressed

          the issue have  generally followed the  reasoning of Fischer  II.
                                                               _______

          The Tenth Circuit recently applied  the Fisher II test in holding
                                                  ______

          that "serious  consideration" of a  severance plan did  not occur

          until a meeting was convened that "gathered together the heads of

          all  departments related  to  employee  benefits"  to  discuss  a

          specific proposal.  Hockett,  109 F.3d at 1524.   In Hockett, the
                              _______                          _______

          Sun Company's vice  president of human resources was contacted by

          the  plaintiff-employee  regarding  the possibility  of  an early

                              
          ____________________

          6  We add a gloss to the Fischer II court's formulation by way of
                                   _______
          clarification.  To prevail under the Fischer II test, a plaintiff
                                               _______
          must  show that a  specific proposal under  serious consideration
          would  have affected  him.    This we  recognize  is implicit  in
          _________________________
          Fischer II and  the rules governing ERISA standing,  but to avoid
          _______
          any misunderstanding it is best said explicitly.

                                         -14-

          retirement  program.   Id. at 1519.   The vice  president did not
                                 ___

          respond to the employee's inquiry,  despite the fact that he knew

          that the subject  was being discussed by senior  management.  Id.
                                                                        ___

          at  1521.   Because of  the  employer's frequent  need to  review

          retirement  plans, the Hockett panel determined that the "Fischer
                                 _______                            _______

          II  formulation appropriately narrows  the range of  instances in

          which  an employer  must  disclose,  in  response  to  employees'

          inquiries,  its tentative  intentions regarding  an  ERISA plan."

          Id. at 1523.
          ___

                    Although  the Sixth Circuit's opinion in Muse v. I.B.M.
                                                             ____    ______

          did  not directly  refer to  Fischer II,  it advocated  a similar
                                       _______

          test,  holding that "serious  consideration" exists only  when "a

          company focuses on a particular  plan for a particular  purpose."

          103  F.3d at 494.  The Muse court  was guided by what it found to
                                 ____

          be  Congress's main object in imposing disclosure requirements on

          ERISA  fiduciaries, namely,  to  "ensure  that 'employees  [would

          have]  sufficient information  and data  to enable  them to  know

          whether the plan was financially sound and being administered  as

          intended.'"   Id. at  494 (alteration  in original)(quoting  H.R.
                        ___

          Rep. No. 533, at 11  (1974), reprinted in 1974 U.S.C.C.A.N. 4639,

          4649).  Because  an early disclosure requirement  would "increase

          the likelihood  of  confusion on  the part  of the  beneficiaries

          [and] .  . . management would be unduly burdened by the continued

          uncertainty of  what to  disclose and when  to disclose  it," the

          court  required  the  existence  of  a  "particular  plan  for  a

          particular purpose."   Id.   It also  found that "there  [was] no
                                 ___

                                         -15-

          convincing  evidence   that  suggest[ed]  that  IBM  studied  the

          possibility  of enhanced benefit plans for  any reason other than

          to gain a general appreciation of its options."  Id.
                                                           ___

                    As  we have  already  indicated,  our  embrace  of  the

          Fischer II  approach is influenced by similar appreciation of the
          _______

          conflicting interests that ERISA  seeks to reconcile.   A primary

          concern of  Congress  in enacting  ERISA  was not  to  discourage

          employers from  offering employee  pensions.   "We know  that new

          pension plans  will not be  adopted and that existing  plans will

          not  be expanded  and liberalized  if the  costs are  made overly

          burdensome, particularly for employers who generally foot most of

          the bill."   120  Cong. Rec.  29,945 (1974)(statement of  Senator

          Long)(reprinted  in Jensen, supra  note 5,  at 155-56).   Equally
                                      _____

          important,  the practical constraints of a severance program, and

          the  very  purpose for  which  it is  designed,  counsel delaying

          disclosure   of  a  company's  plans  until  a  proposal  becomes

          sufficiently firm.  "Changing circumstances,  such as the need to

          reduce labor  costs, might  require  an employer  to sweeten  its

          severance package, and an employer should not be forever deterred

          from giving its employees a better deal merely because it did not

          clearly indicate to a previous  employee that a better deal might

          one  day be proposed."  Swinney  v. General Motors Corp., 46 F.3d
                                  _______     ____________________

          512,  520 (6th  Cir. 1995).   Indeed, it is  not implausible that

          imposing  a  threshold  lower  than  that  of  Fischer  II  would
                                                         _______

          frustrate  the  very  purposes  for  which  a  severance  program

          typically is designed: to reduce  a workforce by voluntary means.

                                         -16-

          See Pocchia, 81 F.3d at 279 ("Employees simply would not leave if
          ___ _______

          they  were  informed  that  improved  benefits  were  planned  if

          workforce reductions were insufficient.").

                    At  the  same time,  the fiduciary  concerns underlying

          ERISA are not to  be ignored.  "After all, ERISA's  standards and

          procedural   protections    partly   reflect    a   congressional

          determination that  the  common  law  of  trusts  did  not  offer

          completely satisfactory protection."  Varity Corp., 116 S. Ct. at
                                                ____________

          1070.  ERISA's  primary goal is  to "protect[] employee  pensions

          and  other  benefits by  .  .  .  setting forth  certain  general

          fiduciary duties applicable to the management of both pension and

          nonpension  benefit  plans."   Id.    The  Fischer II  court  was
                                         ___         _______

          therefore  careful to emphasize  that "this formulation  does not

          turn on  any single factor; the determination is inherently fact-

          specific.   Likewise,  the factors  themselves  are not  isolated

          criteria; the  three interact  and coalesce to  form a  composite

          picture of serious  consideration."  Fischer II, 96  F.3d at 1539
                                               _______

          (citation omitted).

                    Thus,  "[a]  specific   proposal  can  contain  several

          alternatives,  and the  plan as  finally  implemented may  differ

          somewhat from the  proposal.  What  is required, consistent  with

          the  overall test, is  a specific  proposal that  is sufficiently

          concrete  to support consideration  by senior management  for the

          purpose of implementation."  Id. at 1540.  Correspondingly, while
                                       ___

          "[c]onsideration by senior  management is . . .  limited to those

                                         -17-

          executives  who possess the  authority to implement  the proposed

          change," id., this prong
                   ___

                    should  not  limit serious  consideration  to
                    deliberations by  a quorum  of  the Board  of
                    Directors . . . .   It is sufficient for this
                    factor that the plan  be considered by  those
                    members    of    senior    management    with
                    responsibility for  the benefits area  of the
                    business,  and   who  ultimately   will  make
                    recommendations   to   the   Board  regarding
                    benefits operation.

          Id.  This emphasis on flexibility permits a  trial court to apply
          ___

          the three-pronged  standard without slighting the  core fiduciary

          principle that "[l]ying is inconsistent  with the duty of loyalty

          owed  by all  fiduciaries  and codified  in section  404(a)(1) of

          ERISA."    Varity  Corp.,  116  S. Ct.  at  1074  (alteration  in
                     _____________

          original) (quoting Peoria  Union Stock Yards Co.  Retirement Plan
                             ______________________________________________

          v. Penn Mut. Life Ins. Co., 698 F.2d 320, 326 (7th Cir. 1983)).
             _______________________

                    Our  primary reason  for  emphasizing  the  Fischer  II
                                                                _______

          test's flexibility is  to remove any temptation that  might exist

          to deliberately  evade one  of its three  factors as  a means  of

          subverting ERISA's fiduciary  commands.  If it is  clear from the

          totality of the facts that a severance package is, in fact, under

          serious consideration, we  do not think that  clever manipulation

          of  the Fischer  II test  should relieve  a wrongdoer  from ERISA
                  _______

          liability.  The ultimate question is whether "a composite picture

          of serious consideration" has developed.   Fischer II, 96 F.3d at
                                                     _______

          1539.     We recognize, of  course, that this cautionary  note is

          directed to  the exceptional  case.  Thus,  in the  typical case,

          where there is no evidence  of a deliberate attempt to circumvent

                                         -18-

          ERISA, a  straightforward application of  the Fischer II  test is
                                                        _______

          all that is required.

                    We thus  conclude, modifying  Fischer II,  that serious
                                                  _______

          consideration  of a  change in  plan benefits  exists when  (1) a

          specific proposal which would affect  a person in the position of

          the   plaintiff  (2)   is  being   discussed   for  purposes   of

          implementation (3)  by senior  management with  the authority  to

          implement that change.

                                          B.
                                          B.

                    Turning to the facts of this  case, it is clear that no

          early  retirement  plan  affecting  Vartanian was  under  serious

          consideration  by Monsanto's senior management on April 21, 1991,

          the day  when  Vartanian began  his final  inquiries.   President

          Potter had  begun conferring with  his senior managers  about the

          possibility of  a corporate restructuring.   He had asked  for an

          estimate of the  cost that Monsanto would incur  if 400 employees

          were laid off.  But  these corporate ruminations, precipitated by

          the   downturn  in  Monsanto's  business,  did  not  trigger  any

          contemporaneous duty of disclosure.

                    First,   there   was   no   specific   proposal   under

          consideration.  At most, there  was a suggestion that an enhanced

          severance package  might be  one way to  deal with  the company's

          fiscal woes.  Second,  although Potter was certainly among  those

          individuals qualifying  as "senior management with  the authority

          to implement the  change," there is no evidence  that anything of

          substance was, in fact, being  discussed for implementation.  The

                                         -19-

          ideas that were  floating among top management were  only that --

          ideas.  As a result, the answers that Vartanian received in March

          and April of 1991, that no material changes affecting his benefit

          plan were being considered, were not misrepresentations.

                    Potter received an endorsement  on May 7, 1991, of  his

          restructuring  proposal  from the  Monsanto  Executive Management

          Committee.  Nine days later,  he ordered the director of employee

          benefits   to  begin  planning  a  severance  program  for  those

          employees who  would be displaced.   Not until  the May 28,  1991

          meeting of  senior managers was  it proposed to extend  the early

          retirement plan to all Monsanto employees.  This is  the point at

          which "the three [factors] interact[ed] and coalesce[d] to form a

          composite picture  of serious  consideration," giving  rise to  a

          fiduciary duty of disclosure.  Fischer II, 96 F.3d at 1539.7
                                         _______

                                      Conclusion
                                      Conclusion

                    Vartanian's additional  arguments on  appeal are  of no

          merit.8  While  we recognize that the outcome  of this protracted
                              
          ____________________

          7  It  appears that Monsanto went further than  we might require.
          After serious consideration  had occurred, two employees  who had
          announced  their  intention  to retire  without  inquiring  about
          possible  changes in  their  retirement plans  were retroactively
          paid the value of the benefits enhancement.

          8   Vartanian  asserts error  in  the district  court's grant  of
          summary judgment  to Monsanto on  his claim under  510  of ERISA,
          which makes it unlawful for  any person to discriminate against a
          plan participant for purposes of interfering with any right under
          a benefit plan.   Vartanian's assertion, however,  depends upon a
          finding of a material misrepresentation.

             He also  suggests that,  because a  determination of  "serious
          consideration" is  fact-specific, it  can only  be resolved by  a
          jury.  At  the summary judgment stage, however,  only disputes of
          material fact need be resolved by a fact-finder.  Fed. R. Civ. P.

                                         -20-

          litigation is  an unhappy one  for Vartanian, benefit  plan rules

          and  practices  "inevitably  hurt   'some  individuals  who  find

          themselves on the wrong side of the  line.'"  Palino, 664 F.2d at
                                                        ______

          859 (quoting  Rueda v. Seafarers  Int'l Union, 576 F.2d  939, 942
                        _____    ______________________

          (1st Cir.  1978)).   While it may  be small  comfort, Vartanian's

          perseverance  has resulted in  the clarification of  an important

          area of ERISA law in this circuit.

                    For the foregoing reasons, the judgment of the district

          court is affirmed.  Costs to appellees.
                   affirmed
                   ________

                              
          ____________________

          56(c).

             Finally, Vartanian asserts error in the district court's grant
          of a  motion to strike  his jury demand.   Because we  affirm the
          district court's grant of summary judgment, we need not reach the
          issue of Vartanian's  failure to file a timely  notice of appeal.
          See Smith  v. Barry,  502 U.S.  244, 248  (1992)(noncompliance is
          ___ _____     _____
          jurisdictional and fatal).

                                         -21-