Paul Felker v. USW LOCAL 10-901 USW LOCAL 10
697 F. App'x 746
| 3rd Cir. | 2017Background
- Sunoco idled the Marcus Hook Refinery in 2012. Mobile Work Force (MWF) maintenance employees were temporarily assigned to Sunoco’s Philadelphia Refinery pursuant to a February 2012 Settlement Agreement with the union.
- Sunoco established a severance Plan to provide benefits only to employees “terminated in connection with [Sunoco’s] idling” of Marcus Hook; the Plan gave the Plan Administrator discretionary authority to interpret the Plan.
- In mid‑2012 Sunoco agreed to sell the Philadelphia Refinery to PES; PES and the Philadelphia union executed an MOU under which PES would hire the Marcus Hook mobile workforce working at Philadelphia.
- On Sept. 7, 2012 Sunoco terminated the MWF Employees, and PES immediately rehired them under the Contribution Agreement and MOU; MWF Employees experienced no gap in employment or loss of pay.
- MWF Employees claimed severance under the Plan; the Plan Administrator denied benefits, concluding they were not terminated “in connection with” the idling and had been converted to permanent PES employees. The denial was upheld on appeal and the district court granted summary judgment for the Plan.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether denial of benefits was arbitrary and capricious | Plan’s language covers employees terminated in connection with idling; MWF were terminated by Sunoco and thus eligible | Administrator reasonably interpreted Plan to exclude employees who suffered no financial hardship and were immediately rehired by PES | Court: Not arbitrary or capricious; administrator’s interpretation reasonable and consistent with Plan goals |
| Whether substantial evidence supports finding MWF became permanent Philadelphia employees | MWF contend conversion to permanent status unsupported by record | PES MOU and Contribution Agreement show PES intended to hire the mobile workforce and MWF suffered no interruption in employment | Court: Substantial evidence supports permanent conversion finding |
| Whether denial violated federal labor law / deprived a collectively bargained benefit | MWF argue Plan denial unilaterally deprived them of a bargained benefit and that they were not represented in PES bargaining | Plan points out no labor‑law claim is asserted; ERISA plan terms control over external bargainings | Court: Labor arguments irrelevant to ERISA eligibility; plan documents control |
| Whether district court erred by excluding extra‑record evidence (bargaining notes, Termination Agreement, union statements) | MWF sought supplementation of administrative record | Plan relied on rule that arbitrary‑and‑capricious review is limited to administrator’s record and conflict‑related materials | Court: No error; review limited to administrative record except for conflict evidence |
Key Cases Cited
- Smathers v. Multi‑Tool, Inc., 298 F.3d 191 (3d Cir. 2002) (standard of review on summary judgment in ERISA appeals)
- Farrell v. Planters Lifesavers Co., 206 F.3d 271 (3d Cir. 2000) (summary judgment standards and inferences)
- Jordan v. Federal Exp. Corp., 116 F.3d 1005 (3d Cir. 1997) (discretionary‑authority triggers arbitrary‑and‑capricious review)
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (U.S. 1989) (ERISA review standards)
- Courson v. Bert Bell NFL Player Ret. Plan, 214 F.3d 136 (3d Cir. 2000) (arbitrary‑and‑capricious review limits)
- Abnathya v. Hoffmann‑LaRoche, Inc., 2 F.3d 40 (3d Cir. 1993) (standards for disturbing administrator interpretations)
- Howley v. Mellon Fin. Corp., 625 F.3d 788 (3d Cir. 2010) (factors for assessing reasonableness of plan interpretations)
- Moench v. Robertson, 62 F.3d 553 (3d Cir. 1995) (Moench factors for plan‑interpretation review)
- Bradwell v. GAF Corp., 954 F.2d 798 (2d Cir. 1992) (severance pay is a windfall where buyer retains employees and there is no break in employment)
- In re Unisys Corp. Retiree Med. Ben. ERISA Litig., 58 F.3d 896 (3d Cir. 1995) (written plan terms control over oral employer undertakings)
- Fleisher v. Standard Ins. Co., 679 F.3d 116 (3d Cir. 2012) (review limited to administrative record)
- Mitchell v. Eastman Kodak Co., 113 F.3d 433 (3d Cir. 1997) (evidence considered is what was before the administrator)
- Kosiba v. Merck & Co., 384 F.3d 58 (3d Cir. 2004) (record for arbitrary‑and‑capricious review generally cannot be supplemented)