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James Boyd v. ConAgra Foods, Inc.
879 F.3d 314
| 8th Cir. | 2018
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Background

  • Boyd was a Ralcorp VP whose employer was acquired by ConAgra; ConAgra retained him as Vice President of Manufacturing and assumed the Ralcorp severance Plan governed by ERISA.
  • The Plan permits an employee to self-terminate for “Good Reason” within 90 days of the initial existence of Good Reason (and within 24 months of a Change in Control) to obtain severance; the Plan grants the Plan Administrator discretionary authority to interpret eligibility.
  • Boyd asserted after the acquisition that ConAgra materially reduced his position/duties and altered reporting relationships, sent multiple letters to notify ConAgra, and ultimately resigned January 31, 2014 claiming Good Reason.
  • ConAgra’s investigative committee reviewed Boyd’s letters, repeatedly concluded there was no Good Reason, met with Boyd (via HR representatives), and denied his administrative claim and appeal for severance benefits.
  • Boyd sued under ERISA to recover benefits and alternatively for breach of fiduciary duty based on alleged misrepresentations/omissions by ConAgra representatives; the district court granted summary judgment to ConAgra but awarded Boyd attorney’s fees under the Plan because his claims were not frivolous.
  • The Eighth Circuit affirmed: it held ConAgra did not abuse its discretion in denying benefits, Boyd failed to show reasonable detrimental reliance for the fiduciary claim, and the attorney-fee award stood because the claims were not frivolous.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether Plan Administrator abused its discretion in denying severance (Good Reason) Boyd: ConAgra materially reduced his duties/reporting and thus Good Reason existed; denial unreasonable ConAgra: Investigative committee reasonably found no material reduction or adverse reporting change; decision entitled to deference Held: No abuse of discretion—substantial evidence supports ConAgra’s determination
Proper standard of review given conflict of interest Boyd: ConAgra’s dual role required less-deferential review (sliding scale) or greater weight to conflict ConAgra: Glenn controls; conflict is a factor only and no basis to reduce deference here Held: Apply abuse-of-discretion standard; consider conflict as a factor but not dispositive
Fiduciary breach from alleged misstatements/omissions by HR (Schaefer) Boyd: Schaefer misled him about authority over the Red Card Project and withheld material info, causing detrimental reliance ConAgra: Any misstatement was not material because Boyd received the PowerPoint before resigning/filing claim; no reasonable reliance Held: No breach—Boyd did not reasonably rely to his detriment
Whether attorney’s fees are barred because claims were frivolous ConAgra: The claims were frivolous so Plan’s fee-shifting exclusion should apply Boyd: Claims had legal and factual basis, so fees recoverable under Plan Held: Claims were not frivolous; district court correctly awarded attorney’s fees to Boyd

Key Cases Cited

  • Alliant Techsystems, Inc. v. Marks, 465 F.3d 864 (8th Cir.) (abuse-of-discretion review when plan grants administrator discretion)
  • Green v. Union Sec. Ins., 646 F.3d 1042 (8th Cir.) (definition of reasonable/substantial evidence under abuse-of-discretion)
  • Admin. Comm. of Wal-Mart Stores, Inc. v. Gamboa, 479 F.3d 538 (8th Cir.) (summary-judgment review standard on ERISA benefits claims)
  • Metro. Life Ins. Co. v. Glenn, 554 U.S. 105 (U.S.) (administrator-sponsor conflict of interest is a factor in review)
  • Woo v. Deluxe Corp., 144 F.3d 1157 (8th Cir.) (older sliding-scale approach to conflicts and procedural irregularities)
  • Cooper v. Metro. Life Ins. Co., 862 F.3d 654 (8th Cir.) (examples of facts increasing weight of conflict-of-interest factor)
  • Kalda v. Sioux Valley Physician Partners, Inc., 481 F.3d 639 (8th Cir.) (fiduciary duty not to mislead plan participants)
  • Yafei Huang v. Life Ins. Co. of N. Am., 801 F.3d 892 (8th Cir.) (reasonable reliance requirement for fiduciary misrepresentation claims)
  • Neitzke v. Williams, 490 U.S. 319 (U.S.) (definition of frivolous claim)
Read the full case

Case Details

Case Name: James Boyd v. ConAgra Foods, Inc.
Court Name: Court of Appeals for the Eighth Circuit
Date Published: Jan 5, 2018
Citation: 879 F.3d 314
Docket Number: 16-1763, 16-3443
Court Abbreviation: 8th Cir.