Tolbert v. RBC Capital Markets Corporation
4:11-cv-00107
S.D. Tex.Mar 27, 2013Background
- Tolbert worked for RBC from 1971 to 2009; in 2001 RBC created the WAP, later called Amended and Restated Wealth Accumulation Plan.
- WAP is a nonqualified deferred compensation plan with mandatory and voluntary deferrals, plus matching and discretionary employer contributions.
- Voluntary deferrals are fully vested; mandatory deferrals and employer contributions vest at the Committee's discretion but vest immediately upon death, disability, or certain agreed separations; forfeiture occurs if terminated for cause before distribution.
- Distributions are governed by detailed plan provisions, including multiple distribution options and timing, with vesting rules and separation/retirement definitions.
- Tolbert seeks approximately $27,000 in forfeited company contributions, arguing WAP is an ERISA employee pension benefit plan; RBC contends WAP is non-ERISA and, if ERISA, an unfunded top hat plan.
- The court engages in an ERISA § 1002(2)(A) analytical framework, examining express terms first, then surrounding circumstances, to determine whether WAP provides retirement income or defers income to/after termination.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether WAP is an ERISA employee pension benefit plan | Tolbert asserts WAP is ERISA-covered and constitutes a pension plan. | RBC contends WAP is non-ERISA and, if ERISA, a top hat plan exempt from non-forfeiture. | WAP is not an ERISA employee pension benefit plan. |
| Whether express terms of WAP provide retirement income or deferral to/after termination | Tolbert argues express terms show retirement income/deferral to termination. | RBC contends express terms do not provide retirement income or post-termination deferral. | Express terms do not establish WAP as an ERISA plan. |
| Whether surrounding circumstances establish ERISA status for WAP | Tolbert claims surrounding conduct and communications show deferral to termination/retirement. | RBC argues surrounding circumstances do not convert WAP into an ERISA plan. | Surrounding circumstances do not make WAP an ERISA plan; option to defer distributions was participant-driven, not plan-initiated. |
| Whether the WAP is a top hat plan exempt from ERISA non-forfeiture provisions | Tolbert contends WAP is an ERISA pension plan and not a top hat. | RBC maintains WAP is an unfunded top hat plan exempt from ERISA non-forfeiture rules. | WAP is not an ERISA pension plan; even if ERISA were triggered, it is not shown to be a nonforfeitable top hat for Tolbert. |
Key Cases Cited
- Murphy v. Inexco Oil Co., 611 F.2d 570 (5th Cir. 1980) (ERISA plan status requires design for retirement income; cannot be extended by broad deferral.)
- Emmenegger v. Bull Moose Tube Co., 197 F.3d 929 (8th Cir. 1999) (Existence of an option to defer until termination may negate ERISA coverage; surrounding circumstances matter.)
- In re Meinen, 228 B.R. 368 (Bankr. W.D. Pa. 1998) (Tax penalties and retirement focus affect ERISA analysis; early withdrawal does not by itself determine ERISA status.)