Barnett v. SKF USA, Inc.
38 A.3d 770
| Pa. | 2012Background
- Appellees Barnett, Cookenback, Defeo, and Laurent sued SKF for breach of contract under Pennsylvania law.
- Plaintiff employees were salaried, non-unionized, at SKF's Philadelphia plant; union workers at the same plant were covered by a separate ERISA pension plan with a creep provision.
- SKF shut down the Philadelphia plant; the creep provision allowed certain union workers with 20 years of service and 45 years of age to retire immediately with full benefits as of March 1993; Appellees were not eligible under the union creep rules.
- Before closure, SKF orally indicated that salaried employees would receive the creep benefits if the union received them, which the plaintiffs allege induced them to stay until closure.
- The Plan for salaried employees contained specific retirement provisions; Appellees later sought to obtain early or full pension rights under that Plan, arguing entitlement through the creep concept.
- Appellees filed suit in 1993; SKF argued the claim was preempted by ERISA § 514(a); trial court denied, and the Superior Court affirmed the denial of summary judgment for SKF.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the state-law breach of contract claim is preempted by ERISA § 514(a). | Barnett argues the claim is contractual, not about plan administration. | SKF contends the claim relates to ERISA benefits and is preempted. | Preempted under ERISA § 514(a). |
| Does the alleged oral promise relate to an ERISA plan or to a standalone contract? | Appellees frame it as a standalone severance promise, not ERISA benefits. | SKF argues it undercuts ERISA and relates to plan administration. | Relation to an ERISA plan established; preemption applies. |
| Does Hooven-level reasoning control the outcome in this Pennsylvania action? | Appellees urge non-applicability of Hooven to this context. | SKF asserts Hooven controls as a basis for preemption. | Hooven not controlling; Travelers-based framework governs preemption. |
| Is Greenblatt persuasive to avoid preemption in this context? | Appellees rely on Greenblatt to argue non-preemption. | SKF rejects Greenblatt as inapt post-Travelers reformulation. | Greenblatt rejected as non-determinative for ERISA preemption here. |
Key Cases Cited
- Travelers Ins. Co. v. cutoff, 514 U.S. 645 (1995) (establishes object-oriented preemption analysis via ERISA goals)
- Dillingham Construction N. A., Inc. v. Dillingham, 519 U.S. 316 (1997) (two-part test: relates to if it has connection to or reference to plan)
- Boggs v. Boggs, 520 U.S. 833 (1997) (conflict with ERISA survivor benefits supports preemption)
- Egelhoff v. Egelhoff, 532 U.S. 141 (2001) (automatic designation statutes preempted when they affect ERISA plan administration)
- Hooven v. Exxon Mobil Corp., 465 F.3d 566 (3d Cir. 2006) (contract-based claims seeking ERISA benefits not allowed under Hooven)
- Stevenson v. Bank of New York, Inc., 609 F.3d 56 (2d Cir. 2010) ( ERISA preemption analysis different when claims neutral toward ERISA plans)
- Pappas v. Asbel, 555 Pa. 342 (Pa. 1998) (state-law preemption guided by Travelers framework; early view of 514(a))
- Pappas v. Asbel, 724 A.2d 889 (Pa. 1998) (Pa. Supreme Court decision applying Travelers guidance)
- Pappas II, 564 Pa. 407 (Pa. 2001) (refined analysis of ERISA preemption beyond textual breadth)