845 F. Supp. 2d 444
D.P.R.2012Background
- Gautier-Figueroa sued Bristol-Myers Squibb Puerto Rico in state court for breach of contract related to a severance agreement and related releases.
- The May 2010 Notice of Termination and Severance Agreement promised substantial severance payments if Gautier signed a General Release and accepted terms that waived ERISA rights.
- Bristol later suspended and reduced severance payments, offering a New Agreement; Gautier rejected it and sought compliance with the original Severance Agreement.
- Bristol invoked ERISA, presenting the Severance Plan as the basis for severance benefits; Gautier maintained the dispute involved a contract, not ERISA.
- The district court previously held complete preemption under ERISA and granted removal, but the court later reconsidered and remanded, holding the Severance Plan did not constitute an ERISA plan.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the Severance Plan an ERISA plan? | Gautier contends the plan lacks ongoing administration and is not an ERISA plan. | Bristol asserts the Severance Plan constitutes an ERISA plan due to ongoing benefits and administration. | Not an ERISA plan; severance is a one-shot incentive with minimal ongoing administration. |
| Does ERISA preemption apply to Gautier's claim? | ERISA preemption does not apply because the claim is contract-based and not a plan. | ERISA preemption applies if the severance benefits fall under an ERISA plan with ongoing administration. | ERISA preemption does not apply; state-law contract claims remain; no complete preemption. |
| Should the case be remanded to state court given lack of federal jurisdiction? | With no ERISA plan, federal question jurisdiction is absent; the case should be remanded. | Removal was proper under ERISA preemption theories and federal question jurisdiction. | Remanded to state court; district court declines supplemental jurisdiction over state-law claims. |
Key Cases Cited
- Fort Halifax Packing Co. v. Coyne, 482 U.S. 1 (U.S. 1987) (ERISA applies to plans requiring ongoing administration; one-time payments do not constitute plans)
- Simas v. Quaker Fabric Corp., 6 F.3d 849 (1st Cir. 1993) (ongoing administrative obligations determine ERISA coverage; 'tin parachute' concerns)
- Belanger v. Wyman-Gordon Co., 71 F.3d 453 (1st Cir. 1995) (no ERISA plan where no ongoing administrative burden exists)
- O’Connor v. Commonwealth Gas Co., 251 F.3d 262 (1st Cir. 2001) (extent of employer discretion; unlinking simple boilerplate from ERISA plan)
- Rodowicz v. Mass. Mut. Life Ins. Co., 192 F.3d 162 (1st Cir. 1999) (voluntary termination programs not ERISA plans due to lack of ongoing administration)