HUNTER v. CELLCO PARTNERSHIP, INC., 5:18-cv-01431

Plaintiff Richard Hunter worked 15 years for Verizon (last 5 as Director of Retail) and was terminated in 2016 for cause after an alleged after-hours trip at a marketing conference.
Hunter alleges he was entitled to 30 weeks of severance pay under Verizon’s Severance Plan but Verizon refused to pay severance benefits.
Hunter sued in Pennsylvania state court asserting: violation of the Pennsylvania Wage Payment and Collection Law, breach of implied contract, and unjust enrichment; the claims seek severance benefits (and long-term incentive awards, which the parties agree are subject to arbitration).
Verizon removed the case to federal court and moved to dismiss the portions of the state-law claims seeking severance benefits on the ground they are preempted by ERISA.
The Severance Plan is an ERISA-covered employee welfare benefit plan and contains provisions superseding other severance arrangements and defining eligible employees.
Hunter argued he was not seeking benefits under the Plan but rather alternative arrangements Verizon gave to other senior managers; the court found his entitlement and eligibility nonetheless relate to the Plan and are governed by ERISA.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether state-law claims seeking severance benefits are preempted by ERISA	Hunter contends he seeks benefits outside the Severance Plan (alternative arrangements), not under the Plan	Verizon contends the claims challenge denial of severance under the Plan and are thus governed by ERISA §§502 and 514	Court held claims for severance benefits are completely preempted by ERISA and dismissed with prejudice
Whether the claims could be litigated under state law despite Plan language superseding other arrangements	Hunter argues disparate treatment claim is independent of the Plan	Verizon points to Plan language superseding other severance practices and covering eligibility	Court held eligibility and entitlement relate to the Plan; state-law claims still preempted
Whether plaintiff could amend to assert ERISA claims instead	Hunter did not allege exhaustion of Plan remedies or futility of exhaustion	Verizon notes Hunter did not exhaust administrative remedies required by the Plan	Court held amendment to assert ERISA claim would fail absent exhaustion and dismissed severance claims with prejudice
Whether any portion of claims remains outside arbitration/ERISA	Hunter sought long-term incentive awards too	Parties agree long-term incentive award claims are for arbitration	Court noted long-term incentive claims are subject to arbitration; severance claims are ERISA-governed

DiFelice v. Aetna U.S. Healthcare, 346 F.3d 442 (3d Cir.) (state-law claims challenging ERISA-plan benefit determinations are completely preempted)
Franchise Tax Bd. v. Construction Laborers Vacation Trust for S. Cal., 463 U.S. 1 (U.S.) (complete preemption doctrine)
Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (U.S.) (ERISA preemption analysis; state law that has connection with or reference to ERISA plans is preempted)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S.) (pleading standards for plausibility)
Ashcroft v. Iqbal, 556 U.S. 662 (U.S.) (plausibility standard and complaint evaluation)
Harrow v. Prudential Ins. Co. of Am., 270 F.3d 244 (3d Cir.) (requirement to exhaust administrative remedies under ERISA plan before suit)