ERISA-Sixth Circuit Rules That Plaintiffs Are Entitled To Pension Benefits Under The Plan’s Change In Control Provisions

In Adams v. Anheuser-Busch Companies, Inc., No. 13-3149 (6th Cir. 2014), the plaintiffs had brought suit against defendants Anheuser-Busch Companies, Inc. and others (collectively, “Anheuser-Busch”), in which they seek benefits under the terms of an employee benefits plan sponsored by Anheuser-Busch. They now appeal the district court’s decision upholding the plan administrator’s denial of their claims for benefits provided under Section 19.11(f) of the plan. That Section authorized enhanced pension benefits for plan participants whose employment with an Anheuser-Busch company is involuntarily terminated within three (3) years after a Change in Control. The district court held that the plaintiffs had not been involuntarily terminated within the meaning of Section 19.11(f), because they secured employment with a successor corporation. In analyzing the case, the Sixth Circuit Court of Appeals (the “Court”) concluded that the district court’s reading of Section 19.11(f) of the plan was flawed, and it reversed the district court’s holding.

The Court said the following. Section 19.11(f) of the Anheuser-Busch plan states that, in the event of a “change in control,” the retirement benefits of a plan participant “whose employment with the Controlled Group is involuntarily terminated within three (3) years after the Change in Control shall be determined by taking into account an additional five (5) years of Credited Service and . . . an additional five (5) years of age.” In this case, the administrator concluded that “Section 19.11(f) was intended to provide an enhanced benefit to participants who suffer an actual termination or loss of employment.” The district court concluded both that the language of Section 19.11(f) was ambiguous and that the administrator’s interpretation was reasonable.

The Court continued by saying that the scope of the parties’ disagreement is narrow: they dispute only the meaning of the phrase “involuntarily terminated.” The defendants argue that the common understanding of the phrase “involuntarily terminated” requires an actual job loss, and that the plaintiffs’ jobs were not “involuntarily terminated” because they continued to work uninterrupted in the same positions with the company’s purchaser. The plaintiffs, on the other hand, contend that their employment with Anheuser-Busch’s Controlled Group was involuntarily terminated on October 1, 2009, because, although still employed by someone, their employment with the Controlled Group was terminated, and the termination was “involuntary” because they did not choose it.

The Court concluded that a careful reading of the plan language demonstrates that the plaintiffs’ interpretation of Section 19.11(f) is the only plausible interpretation. As such, the Court ruled that the district court erred in upholding the plan administrator’s interpretation of Anheuser-Busch’s pension-benefit plan provision at issue in this case. Accordingly, the Court reversed the judgment of the district court and remanded the case for entry of judgment in favor of the plaintiffs.

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