Opinion
02 Civ. 1302 (GEL)
October 17, 2003
David S. Scher, Meier Franzino Scher, LLP, New York, NY, for Plaintiff
Lori Almon, Seyferth Shaw, New York, N.Y. (Brendan Sweeney, on the brief), for Defendant Vivendi Universal U.S. Holding Corp.
OPINION AND ORDER
Plaintiff Paul Criscuolo brought this action to recover certain employee benefits to which he claims entitlement under contract and the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. By order dated July 1, 2002, the Court granted the motions to dismiss of defendants Austin, Nichols Co., Inc. and Lawrenceburg Distillers Importers, LLC. The parties subsequently stipulated to discontinue this action as against defendant Joseph E. Seagram Sons, Inc. ("Seagram") and further stipulated that defendant Seagram Company, Ltd. had never been served with process. The sole remaining defendant, Vivendi Universal U.S. Holding Co., now moves for summary judgment pursuant to Fed.R.Civ.P. 56. The motion will be granted and the action dismissed.
The caption to the parties' summary judgment submissions incorrectly denominates the defendant "Vivendi Universal, Inc." (D. Rule 56.1 Stmt. ¶ 1.)
BACKGROUND
Criscuolo worked for Seagram from May 15, 1978, to November 3, 2001. (D. Rule 56.1 Stmt. ¶¶ 1, 6-7; Criscuolo Aff., Ex. S.) During most of Criscuolo's tenure, Seagram, also known as SSWG, had been an unincorporated operating division of Seagram Company Ltd. On June 20, 2000, however, Vivendi S.A., Seagram Company, Ltd., and Canal Plus, S.A., merged to form Vivendi Universal, S.A. (D. Rule 56.1 Stmt. ¶ 2.) That same month, Vivendi Universal, S.A., informed Seagram's employees that it would not maintain Seagram's liquor and beverage divisions as going concerns, and in December 2000, it told them that Seagram's brands would be sold to Diageo, PLC and Pernod Ricard, S.A. (collectively, "the Buyers"). (P. Rule 56.1 Stmt. ¶¶ 6, 10; D. Rule 56.1 Stmt. ¶ 8.) In January 2001, Vivendi Universal, S.A., formed Vivendi Universal U.S. Holding Co. ("Vivendi") as a corporate vehicle to facilitate the sale of SSWG's assets and liabilities. Vivendi thereafter assumed responsibility for employee benefit plans held by Seagram employees. (Id. ¶ 5.)
SSWG is the acronym for Seagram Spirits Wines Group, which did business in the United States as Joseph E. Seagram Sons, Inc. (D. Br. 1; D. Rule 56.1 Stmt. ¶ 2.)
To accomplish the sale of Seagram's spirits divisions with minimal disruption to its business, Vivendi Universal, S. A., concluded a number of agreements with the Buyers about employment issues. (Id. ¶ 8.) As relevant here, the Buyers agreed to "draft" certain Seagram employees before December 21, 2001, the date of the sale's closing. (Id. ¶ 9.) On that date, those employees would become employees of the Buyers. Employees of Seagram not so recruited before December 21, 2001, also would become employees of Buyers on that date, but each Buyer would at that time be entitled either to retain them in comparable positions or to discharge them at its option — subject, in the latter case, to payment of severance benefits equal to those the employees would have been entitled to receive from Vivendi. (Id. ¶¶ 10-11; P. Rule 56.1 Stmt. ¶ 15.)
The Buyers also agreed to maintain other employee benefits at the level provided by Vivendi, and previously by Seagram, for at least two years from the date of the closing, (D. Rule 56.1 Stmt. ¶ 12.)
At the same time, to encourage Seagram employees to remain until the closing rather than resign immediately after the announced sale to seek employment elsewhere, Vivendi established several internal incentives. First, it amended the existing severance plan for Seagram employees, which it had inherited from Seagram at its acquisition. Previous the Seagram severance plan did not cover terminations by reason of "a sale (whether of stock or assets) or other disposition[,] merger or other combination." (Criscuolo Tr., Ex. T at 00058, By amendment effective January 1, 2001, Vivendi extended the plan's coverage to employees discharged by reason of "a Sale, Job Elimination or Closing," subject, however, to the proviso that
an involuntary termination of employment with the Seagram Group due to a Sale, Job Elimination or Closing shall be an Eligible Termination only if the . . . Employee does not receive an offer to be employed in a Comparable Position (as defined herein) following the Sale, Job Elimination or Closing, as the case may be. The determination as to whether an offered position is a Comparable Position shall be determined by the [Severance] Committee upon consideration whether the . . . Employee is reasonably expected to earn no less than the same rate of base pay, or be within the same salary grade or pay reference group (as may be applicable), whether such position is within a reasonable commuting distance and time . . . and such other factors (if any) as the Committee, in its sole discretion, may determine to be relevant.
(Criscuolo Aff., Ex. E at 1-2 ¶ 3; see D. Rule 56.1 Stmt. ¶¶ 18-21.) Second, Vivendi offered an enhanced bonus to certain eligible managers who remained with Vivendi until the closing. (Id. ¶¶ 29-34.) Finally, Vivendi offered otherwise qualified employees who remained until the date of the closing the accelerating vesting of their stock options. (Id. 37.)
In June 2000, when Vivendi first announced its intention to sell Seagram, Criscuolo held the position of "Vice-President-Sales-Leader, Atlantic Pacific Region." and he had been identified as a "high potential employee," meaning that senior management believed him to be qualified for future promotion by no fewer than two levels. (Criscuoio Aff. ¶ 9.) He also enjoyed employee benefits including severance, bonus, and stock option plans. (Id. ¶ 13.) Criscuolo learned that Vivendi intended to sell Seagram's liquor and beverage divisions in June 2000, the day after the disclosure of Seagram's sale to Vivendi.Id." 23.) In November 2000, and on several subsequent occasions, Vivendi disseminated to us employees information about Vivendi's prospective sale of SSWG's assets and liabilities and the potential effects this could have on their employment. (D. Rule 56.1 Stmt. ¶¶ 39-43.) Criscuolo received this information and at times bore responsibility for presenting it to certain groups of Seagram employees. (Id.; Criscuolo Aff. ¶ 20.)
Criscuolo asserts that the information he received from management changed materially over time; that Vivendi's human resources department instructed him "not [to] put anything in writing," because management feared "that such writings could be used against them"; and that despite the veneer of structure and orderliness that senior management sought to convey, "it was clear to [him] that . . . between June 2000 and the closing in December 2001 . . . management at [Seagram]/Vivendi was unsure as to the basic answers to questions concerning job retention, potential benefits and the impact of the upcoming sale on [Seagram] employees." (Id. ¶¶ 20-22.) The record shows, however, that Vivendi's management explained the effect of its sale of SSWG in writing on more than one occasion. The April 2001 edition of a Vivendi employee newsletter, for example, which Criscuolo admits that he received, provides in relevant part:
What happens if I leave voluntarily prior to the spirits and wine sale closing or after the closing?
Voluntary separation is not one of the qualifying events to be entitled to severance, so no severance would be paid. In the United States, severance is only payable if your employment ends involuntarily because (i) your location or plant is permanently and completely closed; (ii) your job is eliminated; or (iii) you fail to consistently meet the minimal acceptable performance requirements of your job.
(Cricsuolo Tr., Ex. F at VIV 000036; see also id., Ex. D.) Also in April 2001, Vivendi's human resources department explained the "draft pool" for upper management ("Band 1") employees, including Criscuolo. (Criscuolo Aff. ¶ 27.) Briefly, each Buyer would enjoy an option to recruit Band 1 employees. The Buyers would work out for themselves which of them would be entitled to choose first with respect to each employee, and the second could not approach that employee until the first either had declined to offer him or her a job or had its offer turned down. (D. Rule 56.1 Stmt. ¶ 9; P. Rule 56.1 Stmt. ¶¶ 12-15; Criscuolo Aff. ¶¶ 27-29.)
In July 2001, as part of this recruitment process, Lawrenceburg Distillers and Importers, LLC ("Lawrenceburg"), a subsidiary of Pernod Ricard, S.A., offered Criscuolo a position as its Northeast Regional Manager. (P. Rule 56.1 Stmt. ¶ 20; D. Rule 56.1 Stmt. ¶ 45.) On August 3, 2001, and again on August 9, Lawrenceburg wrote to Criscuolo to confirm and clarify the terms of its offer and, in particular, to assure him that his salary, benefits, and projected bonus would b maintained at their current levels. (Criscuolo Tr., Exs. L, M.) The proposal called for Criscuolo to work from home. (Criscuolo Aff ¶ 37; D. Rule 56.1 Stmt. ¶ 48.) On September 25, 2001, Criscuolo spoke by telephone to a senior representative of Lawrenceburg. He felt that the representative had not been able to answer all of his questions about the job but had "clarifi[ed] some crucial issues." (Criscuolo Tr., Ex. N. at 751.) On September 26. 2001, following this conversation, Criscuolo declined Lawrenceburg's offer because in his view "it was not a bona fide job offer[,] nor was it a comparable job to the one [he] had at [Seagram]." (Criscuolo Aff. ¶ 44; see also id., Ex. N.) At that time, and on several subsequent occasions, Criscuolo discussed the issue of the Lawrenceburg job's comparability with Ann Giambusso, then vice-president of Vivendi's human resources department. (Giambusso Tr. 66-69., Giambusso explained "that the decision on comparability was [a] decision to be made by the [B]uyers[.] since it was their responsibility to provide the severance benefits," but in her personal opinion, "under the terms of the severance plan, [the Lawrenceburg job] would be viewed as a comparable position." (Id. 66.)
On October 22, 2001, Allied Domecq Spirits and Wine USA. Inc. ("Allied Domecq"), a competitor company not affiliated with either Buyer, offered Criscuolo a job. Allied Domecq informed him, however, that the job would not be held open after November 5, 2001 (D. Rule 56.1 Stmt. ¶ 51; P. Rule 56.1 Stmt. ¶ 30.) Criscuolo sought to dissuade Allied Domecq from imposing this deadline and to condition his acceptance on the closing of Vivendi's sale to the Buyers. Allied Domecq refused, and Criscuolo accepted its offer later that day. (Id. ¶ 31; Criscuolo Aff. ¶ 52.) On October 25, 2001, Criscuolo notified Vivendi of his resignation, effective November 3. (P. Rule 56.1 Stmt. ¶ 32; Criscuolo Aff., Ex. S.)
When he resigned, Criscuolo completed a "Job Data Change Form," which indicated the reason for his departure as "voluntary separation, resignation." (D. Rule 56.1 Stmt. ¶¶ 65, 68; Loyst Tr. 72; Almon Decl., Ex. G.) Andrew Loyst, the Vivendi severance plan administrator therefore found Criscuolo ineligible for severance benefits. ((D. Rule 56.1 Stmt. ¶ 69; Loyst Tr. 163-64.) Criscuolo was also found not to qualify for the enhanced bonus and accelerated vesting of stock options that Vivendi had offered to its Seagram employees as incentives to remain until the closing. (D. Rule 56.1 Stmt. ¶¶ 72-73.) Vivendi concedes that it did not notify Criscuolo in writing of the denial. (D. Br. 7) But Criscuolo understood no later than January 24, 2002, that he would not receive severance or the other benefits to which he claims entitlement (Criscuolo Tr. 288); and in any event, under his plan, employees were told that absent written notice to the contrary, they should deem claims denied after 180 days. (D. Rule 56.1 Stmt. ¶ 81.)
Nor, however, did Criscuolo make a formal claim or appeal in writing, except insofar as he contends that the letters from his lawyer should be construed as such. (P. Br. 3-4.)
Criscuolo does not dispute that he received a summary of his plan explaining relevant claim and review procedures. (D. Rule 56.1 Stmt. ¶¶ 80-81.)
On October 25, 2001, Allyn C. Shepard, an attorney retained by Criscuolo in May or June 2001, wrote to Giambusso to explain Criscuolo's view that his resignation had been involuntary and to put Vivendi on notice of Criscuolo's employee benefits claims. (Id. ¶ 77; Criscuolo Aff, Ex. R.) Vivendi's in-house employment counsel, Michael Coyne, who had spoken with Shepard several times earlier in October about Criscuolo's employment circumstances, replied by letter dated November 5, 2001. He explained that "separation pay" denotes discretionary payments sometimes made to departing employees; that Criscuolo, like others who elected to resign before the closing, would not qualify for separation pay; and that determinations regarding eligibility for mandatory contractual severance payments protected by ERISA would be made by the plan administrator and could be appealed under the procedures of that plan. (Criscuolo Tr., Ex. X; see also Loyst Tr. 94 (explaining that "[s]everance pay comes as a result of a severance plan that's ERISA-qualified," while "[s]eparation pay is pay made by the company at its discretion").) Criscuolo filed suit on January 24, 2002, alleging federal claims under ERISA and pendent state-law claims for breach of contract, unjust enrichment, and conversion.
DISCUSSION
I. Standard for Summary Judgment
Summary judgment must be granted where "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). A fact is "material" if it "might affect the outcome of the suit under the governing law"; an issue of fact is genuine where "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242.248 (1986). On a motion for summary judgment, the evidence must be viewed in the light most favorable to the nonmoving party, and the Court must resolve all ambiguities and draw all reasonable inferences in its favor. Id. at 255: Cronin v. Aetna Life Ins. Co., 46 F.3d 196, 202 (2d Cir. 1995).
To defeat summary judgment, however, the nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). "[C]onclusory allegations or unsubstantiated assertions" will not suffice. Scotto v. Almenas, 143 F.3d 105, 114 (2d Cir. 1998). Rather, the nonmoving party must "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e); Matsushita, 475 U.S. at 587 ("Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no `genuine issue for trial.'") (quoting First Nat'l Bank v. Cities Service Co., 391 U.S. 253, 289 (1968)).
II. The ERISA Claim for Severance Benefits
Criscuolo's federal claim for severance benefits arises under ERISA, which preempts any analogous common-law claims under New York law that might otherwise avail him. Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41 (1987). With few exceptions not relevant here, ERISA governs employee benefit plans offered and administered "by any employer engaged in commerce or in any industry or activity affecting commerce." 29 U.S.C. § 1003(a)(1). Vivendi does not dispute that Criscuolo's severance plan, which it inherited from Seagram, falls within ERISA's purview. (D. Rule 56.1 Stmt. ¶ 16.)
Congress enacted ERISA in order to protect "participants in employee benefits plans and their beneficiaries" by mandating disclosure of certain plan information, "establishing standards of conduct, responsibility, and obligation for fiduciaries," and enabling participants aggrieved by violations of ERISA's provisions to sue in federal court. 29 U.S.C. § 1001(b). ERISA therefore "requires administrators of all covered pension plans to file periodic reports with the Secretary of Labor, mandates minimum participation, vesting and funding schedules, establishes standards of fiduciary conduct for plan administrators, and provides for civil and criminal enforcement of the Act." Nachman Corp. v. Pension Benefit Guar. Corp., 446 U.S. 359. 361 n.l (1980).
As relevant here, employers subject to ERISA must provide their employees with benefit plan summaries "written in a manner calculated to be understood by the average plan participant and . . . sufficiently accurate and comprehensive to apprise participants and beneficiaries of their rights and obligations under the plan." Burke v. Kodak Retirement Income Plan, 336 F.3d 103, 110 (2d Cir. 2003). Each plan summary must explain both "eligibility requirements" and "`the circumstances which may result in disqualification, ineligibility or denial or loss of benefits.'" Id. (quoting 29 U.S.C. § 1022(b)). ERISA also gives participants in covered employee benefit plans the right to "full and fair review by the appropriate named fiduciary of [any] decision denying [a] claim" made under one of those plans. 29 U.S.C. § 1133 (2).
Criscuolo argues that Vivendi violated ERISA by discharging him without providing him the severance payments to which his plan entitled him and by applying eligibility standards contrary to those set forth in his plan summary. Before turning to the merits, however, Vivendi raises two threshold issues: the exhaustion requirement and the proper standard of review to be applied to the determination of the Vivendi plan administrator.
Where the summary of an employee benefit plan conflicts with the actual terms of the plan, the summary controls because "`employees are entitled to rely on the descriptions contained in the summary.'"Burke, 336 F.3d at 110 (quoting Heidgerd v. Olin Corp., 906 F.2d 903, 907 (2d Cir. 1990)).
First, Vivendi argues that Criscuolo forfeited his right is judicial review because he failed to exhaust his administrative remedies. (D. Br. 4-10.) In generation benefits claims brought under ERISA must be exhausted, meaning that before bringing a federal action, claimants "must pursue all administrative remedies provided by their plan pursuant to statute Chapman v. ChoiceCare Long Island Term Disability Plan, 288 F.3d 506, 511 (2d Cir. 2002 see also Kennedy v. Empire Blue Cross and Blue Shield, 989 F.2d 588, 594 (2d Cir. 1993) (emphasizing "the firmly established federal policy favoring exhaustion of administrative remedies in ERISA cases") (internal quotation marks omitted). Exhaustion furthers three principal objectives:
(1) [to] uphold Congress' desire that ERISA trustees be responsible for their actions, not the federal courts; (2) [to] provide a sufficiently clear record of administrative action if litigation should ensue; and (3) [to] assure that any judicial review of fiduciary action (or inaction) is made under the arbitrary and capricious standard, not de novo.Kennedy, 989 F.2d at 594. But "[w]here [the] claimant make[s] a clear and positive showing that pursuing available administrative remedies would be futile, the purposes behind the requirement of exhaustion are no longer served, and thus a court will release the claimant from the requirement." Id. (internal quotation marks omitted); see also Davenport v. Harry N. Abrams, Inc., 249 F.3d 130, 133 (2d Cir. 2001) (same). Criscuolo argues that the futility exception applies here. (P. Br. 10-11.)
He also argues that the Vivendi severance plan did not mandate that he appeal the denial of his claims in the particular manner suggested because it uses permissive rather than mandatory language. It says that an employee " may seek review . . . by sending a written request." (P. Br. 4 (quoting an employee handbook provided to Criscuolo and other Vivendi employees) (emphasis added).) Resolution of this issue would not affect the disposition of this motion.
Second, Vivendi argues that even were the Court to reach the merits, it should review the Vivendi plan administrator's adverse determination of Criscuolo's claim under an "arbitrary and capricious" standard, disturbing it only if it appears to be "unsupported by substantial evidence or erroneous as a matter of law." Pagan v. NYNEX Pension Plan, 52 F.3d 438, 442 (2d Cir. 1995) (internal quotation marks omitted). (D. Br. 10-11.) A decision denying benefits to a participant in a plan covered by ERISA must be reviewed de novo "`unless [the plan] gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.'" Kinstler v. First Reliance Standard Life Ins. Co., 181 F.3d 243, 249 (2d Cir. 1999) (quoting Firestone Tire Rubber Co. v. Bruch, 489 U.S. 101, 115(1989)). Because Criscuolo's plan gives the severance committee and plan administrator discretionary authority (D. Rule 56.1 Stmt. ¶ 25), the "arbitrary and capricious" standard would ordinarily apply See Bruch, 489 U.S. at 115. Here again, however, Criscuolo takes exception to the general rule, arguing that because the plan administrator and severance committee members labored under conflicts of interest, the Court should review his ERISA claim de novo (P. Br. 11-12.)
To obtain de novo review in cases where an alleged conflict of interest exists, the claimant must establish more than a potential conflict. He or she must show that "`the administrator was in fact influenced by the conflict of interest.'" Pulvers v. First UNUM Life Ins. Co., 210 F.3d 89, 92 (2d Cir. 2000) (quotingSullivan v. LTV Aerospace Defense Co., 82 F.3d 1251, 1256 (2d Cir. 1996)) (emphasis in Pulvers). Even then, the Court does not necessarily review the claim de novo; rather, "if a benefit plan gives discretion to an administrator or fiduciary who is operating under a conflict of interest, that conflict must be weighed as a factor in determining whether there is an abuse of discretion."Bruch, 489 U.S. at 115 (internal quotation marks and alterations omitted).
The Court need not resolve either of these issues because even were Criscuolo correct that the futility exception applies and that the Court must review Loyst' s determination de novo, his claim nevertheless fails on the merits. The "Severance Pay Plan of Joseph E. Seagram Sons, Inc.," in effect from November 22, 1988, until January 2001. guaranteed Criscuolo benefits if Seagram terminated his employment for enumerated reasons. In particular, Article I, section 5, provided in relevant part:
"Eligible Termination" shall mean only involuntary termination of employment with the Seagram Group . . . due to: the permanent and complete closing of a location, a permanent plant shutdown or job elimination or (ii) the failure to consistently perform at a level that meets the minimum acceptable requirements for the position. . . . Eligible termination shall not include a termination with the Seagram Group due to: (a) a sale (whether of stock or assets) or other disposition; merger or other combination. . . .
(Criscuolo Tr., Ex. T at 00058 (emphases added).) After Vivendi assumed responsibility for the administration of the Seagram severance plan, it amended that plan to establish an incentive for employees, such as Criscuolo, to remain with Vivendi until the closing date. The new Article I, section 5, provided in relevant part:
"Under ERISA it is the general rule that an employee welfare benefit plan is not vested and that an employer has the right to terminate or unilaterally to amend the plan at any time." Schonholz v. Long Island Jewish Med. Ctr., 87 F.3d 72, 77 (2d Cir. 1996).
"Eligible Termination" shall mean only involuntary termination of employment with the Seagram Group . . . due to: (x) the permanent and complete closing of a location, a permanent plant shutdown or job elimination or (y) the failure to consistently perform at a level that meets the minimum acceptable requirements for the position. . . . Eligible Termination also shall not include a termination of employment due to: (a) except as otherwise provided under a purchase and sale agreement, a sale (whether of stock or assets) or other disposition, merger or other combination. . . . Notwithstanding the foregoing, an involuntary termination of employment with the Seagram Group due to a Sale, Job Elimination or Closing shall be an eligible termination . . . if the . . . Employee does not receive an offer to be employed in a Comparable Position (as defined herein) following the Sale, Job Elimination or Closing, as the case may be.
(Criscuolo Tr., Ex. V at 000133 (emphases added).) Neither the Seagram plan nor Vivendi's modification of it ever gave employees an entitlement to severance benefits in the event of their voluntary resignation. Criscuolo resigned voluntarily. Loyst, his plan's administrator, therefore correctly found him ineligible for severance benefits, under any standard of review.
Against this straightforward conclusion, Criscuolo objects that he did not, in fact, resign voluntarily. Rather, he claims, Vivendi effectively forced him to resign because "his department was in disarray, the company which hired him no longer existed, his employees were resigning[,] and the entire organization would disappear as soon as the Vivendi/Diageo/Pernod sale closed." (P. Br. 18.) Criscuolo thus contends that it is a question of fact whether a reasonable person in [his] position would have resigned" (id. 20), and he relies on construction discharge cases to support this contention. This argument is misguided.
The cases Criscuolo cites to support his constructive discharge claim (see P. Br. 19-20), which arise under New York law or in the context of federal anti-discrimination legislation, are not controlling. The question here is whether Criscuolo qualifies for severance benefits under the specific terms of his plan, which is governed by ERISA. The general doctrine of constructive discharge under federal law originated in the labor relations context, "but has been extended and held applicable to civil rights claims.'" Lojek v. Thomas, 716 F.2d 675. 681 (1983). In the ERISA context, the issue of constructive discharge most often arises in connection with claims under § 501 of ERISA, 29 U.S.C. § 1140, which makes it unlawful for employers
to discharge, fire, suspend, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan . . . or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan.See, e.g., Garratt v. Walker, 164 F.3d 1249, 1255-56 (10th Cir. 1998): Joyce v. RJR Nabisco Holdings Corp., 126 F.3d 166, 177 (3d Cir. 1997); Seaman v. Arvida Realty Sales, 985 F.2d 543 (11th Cir. 1993). See also Lojek, 716 F.2d at 680 (analyzing "what constitutes constructive discharge in the context of a pension plan governed by the provisions of ERISA"). In principle, there is no reason why the constructive discharge doctrine should not apply in interpreting the meaning of "involuntary termination" in an ERISA-governed benefits plan. Presumably, an employee forced to resign because "his employer, rather than discharging him directly, intentionally create[d] a work atmosphere so intolerable that he [wa]s forced to quit, "Terry v. Ashcroft, 336 F.3d 128, 152 (2d Cir. 2003), could claim to be eligible for severance pay under the terms of an ERISA plan, like this one, that conditions eligibility on involuntary termination.
Even assuming, however, that a "constructive discharge" could constitute an "involuntary termination" within the meaning of the Vivendi plan, there is no basis on this record for finding that such a discharge occurred here. Vivendi did not create the conditions about which Criscuolo complains (that is, that "his department was in disarray, the company which hired him no longer existed, his employees were resigning and the entire organization would disappear as soon as the Vivendi/Diageo/Pernod sale close" (P. Br. 18)), in an effort to make Criscuolo's work atmosphere so intolerable that he would be compelled to resign. See Terry, 336 F.3d at 152. Those conditions were inherent in the transition that motivated Vivendi's decision to establish enhanced employee benefits in the first place. Far from trying to force him to resign, Vivendi amended Criscuolo's severance plan and created other incentives, such as the aptly named "stay bonus," precisely in order to encourage him and comparable employees to remain despite the "disarray" occasioned by Vivendi's imminent sale of Seagram to the Buyers. As a matter of law, no reasonable fact-finder could conclude that under these circumstances Vivendi "intentionally create[d] a work atmosphere so intolerable that [Criscuolo was] forced to quit."Terry, 336 F.3d at 152.
Criscuolo also argues that because he knew that Vivendi regarded the Lawrenceburg job as "comparable" under the terms of his severance plan, and therefore anticipated that the Buyers would not pay him severance benefits after the closing date pursuant to their arrangement with Vivendi, he should have been entitled to resign before the closing to accept a new job. This argument proceeds from a mistaken premise. Under the arrangement between Vivendi and the Buyers, what Vivendi thought about the comparability of a job did not matter. The determination of comparability would be made by the Buyer if and when the Buyer did not offer the former Vivendi employee a comparable position with one of its own subsidiaries or affiliates. If, at that point, Criscuolo felt that the Buyer mistakenly denominated the job offered to him "comparable," and therefore denied him severance benefits, he could bring an ERISA claim against the Buyer, not Vivendi. Criscuolo's argument that he left because he did not expect he would receive severance benefits from the Buyer effectively concedes the conclusion to which the evidence inescapably points: Criscuolo resigned voluntarily to take a new job. not because of any pressure from Vivendi to leave.
Finally, Criscuolo devotes considerable argument to disputing that Lawrenceburg offered him a genuinely "Comparable Position" under the terms of the plan. But the question whether a Seagram employee received an offer of a "Comparable Position" from one of the Buyers, making him or her ineligible for severance benefits under the "mirror plans" that the Buyers established pursuant to their contractual arrangements with Vivendi, does not arise unless that employee remained with Vivendi until the closing date, in which case the employee would automatically become a participant in one of the Buyers' plans. Criscuolo did not remain until the closing date. Whether the Lawrenceburg job he declined would qualify as a "Comparable Position" relative to the position he held at Seagram before the sale is irrelevant. The comparability inquiry would be relevant only if Criscuolo remained until the date of the closing, and in that event, it would be relevant in the context of a claim against the Buyer, not Vivendi. In short, the unambiguous language of Criscuolo's severance plan makes clear that he enjoys no entitlement to severance benefits because he resigned voluntarily.Cf. Ebenstein v. Ericsson Internet Applications, Inc., 263 F. Supp.2d 636, 643 (E.D.N.Y. 2003) (granting summary judgment to the defendant on a severance claim brought pursuant to ERISA where, "upon hearing of a reduction in force and a possible termination, [the plaintiff] voluntarily left the company to assume a position with a different company").
Were it necessary to reach the question, Criscuolo's allegation that he did not receive an offer of a "Comparable Position" from a Buyer would in any event fail. The Lawrenceburg job, whatever its subjective desirability to Criscuolo, clearly satisfied the objective criteria for a "Comparable Position," which is a term of art under the Vivendi severance plan. A "Comparable Position" denotes a job with one of the Buyers in which the "[e]mployee [could] reasonably [be] expected to earn no less than the same rate of base pay, or [to] be within the same salary grade or pay reference group (as may be applicable), [and where] such position is within a reasonable commuting distance and time." (Criscuolo Aff., Ex. E at 1-2 ¶ 3.) The undisputed evidence establishes that the Lawrenceburg position met both criteria: It guaranteed Criscuolo an equivalent salary and benefits package, and working from home can hardly be deemed an unreasonable commuting distance. (See Criscuolo Tr., Exs. L, M.; Criscuolo Aff. ¶ 37.) Thus, the Court need not decide whether the affidavit of George Mauze, whom Criscuolo proffers as an expert to support his claim that the Lawrenceburg job was not a "Comparable Position," satisfies the standard for expert testimony set forth in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), because Mauze's testimony is irrelevant. Mauze based his opinion on general criteria of "job comparability," rather than on the specific definition set forth in Vivendi's severance plan. Indeed, Mauze conceded that had he applied only the criteria relevant under Criscuolo's plan, he would have found the Lawrenceburg job to be comparable. (Mauze Aff. 76-77.)
II. Criscuolo's Claim for Vested Stock Options
On his claim for vested stock options, Criscuolo's brief says only that "[t]he decision to deny Mr. Criscuolo severance had an impact upon related benefits such as stock options as well. In discussing severance, this brief is also meant to cover the decision to deny Mr. Criscuolo the right to retain his stock options[,] which was tied into severance." (P. Br. 3 n. 2.) Criscuolo does not clarify whether he asserts this claim under ERISA — based on the theory that ERJSA covers his stock options plan — or under New York State common law. But the basis of the claim does not ultimately matter, for the claim fails either way. To the extent that Criscuolo intends to advance this claim under ERISA, it fares no better than his claim for severance benefits. The Seagram Company Ltd. 1996 Stock Incentive Plan, which he held as a Seagram, and later as a Vivendi, employee, provided that
[i]f a Participant shall cease to be employed by the Company other than by reason of Retirement, Disability, death or Termination for Cause, each Award held by the Participant shall be cancelled to the extent not previously exercised and all rights hereunder shall terminate at the end of the three-month period commencing on the last day of the month in which the cessation of employment occurred.
(Criscuolo Tr., Ex. HH at 7.) Under the plain language of his stock options plan, Criscuolo's voluntary resignation divested him of the right he now asserts. Vivendi modified this plan to provide for the accelerated vesting of stock options for employees who remained with Vivendi until the closing date, thereby facilitating Vivendi's sale of Seagram to the Buyers. But Criscuolo decided not to remain. He cannot claim the benefit of a bargain he failed to honor. To the extent that Criscuolo intends to advance his claim to stock options under New York State contract law, it fails for substantially the same reason: The relevant contract gives him no right to vested stock options because he resigned voluntarily before the closing date.
IV. The "Stay Bonus" Claim
Finally, Criscuolo claims a right to the enhanced bonus offered to Seagram Employees who remained until the closing date. Management-level Seagram employees, such as Criscuolo, generally had received a bonus at the end of each fiscal year under a Management Incentive Plan ("MEP"), and Criscuolo received his MDP bonus for the fiscal year that ended on June 30, 2001. (D. Rule 56.1 Stmt. ¶¶ 30-31.) In October 2001, Criscuolo received a letter explaining that an "Enhanced Bonus Award" would "be awarded [to Seagram employees] in lieu of th[e] stub period bonus . . . as soon as practicable following the closing or in April 2002, whichever is earlier." (Criscuolo Aff., Ex. H at 00725 (emphasis added).) The letter stated, however, that employees who "le[ft] voluntarily" would "forfeit" the enhanced bonus. (Id.)
Criscuolo's claim to this bonus cannot be based on ERISA. ERISA applies only to "employee welfare benefit plans," which the statute defines as "any plan, fund, or program . . . established or maintained by an employer or by an employee organization . . . for the purpose of providing for its participants or their beneficiaries." 29 U.S.C. § 1002(1). To qualify as an ERISA plan, an employee benefit plan must "require the creation of an ongoing administrative program." Schonholz v. Long Island Jewish Med. Ctr., 87 F.3d 72, 75 (2d Cir. 1996); see also Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 12 (1987) ("The theoretical possibility of a onetime obligation in the future simply creates no need for an ongoing administrative program for processing claims and paying benefits."). Hence, inJames v. Fleet/Norstar Fin. Group, Inc., 992 F.2d 463 (2d Cir. 1993), the Second Circuit held that "an employer's undertaking to give employees sixty days of pay following their last day of work if the employees would remain on the job until an internal consolidation was completed" did not create an "employee welfare benefit plan" covered by ERISA. Id. at 464. Vivendi's enhanced "stay bonus" plan, similarly, required no ongoing administrative program. It offered qualifying employees a one-time payment as an incentive for them to "remain on the job" until Vivendi had consummated its sale of Seagram to the Buyers.
Criscuolo's claim to the "stay bonus" must therefore arise under New York State contract law. He argues that he merits this enhanced bonus because he did not resign voluntarily. (P. Br. 23). The Court has already rejected that contention. Criscuolo's contractual claim therefore fails because he failed to fulfill the condition on which Vivendi offered the enhanced bonus: that he remain with Vivendi until the closing date. The court rejects Criscuolo's alternative theories that sound in quasi-contract — quantum meruit and unjust enrichment — because "where there is an express contract, no recovery can be had on a theory of implied contract." Hoenberg Co. v. Iwai New York, Inc., 180 N.Y.S.2d 410, 412 (1st Dep't 1958); see also Clark-Fitzpatrick, Inc. v. Long Island R.R. Co., 70 N.Y.2d 382, 388 (1987).
While Criscuolo did not raise a statutory state-law claim in this context, the Court notes that bonuses do not qualify as "Wages" for purposes of § 193 of the New York Labor Law, which proscribes any deductions from wages except for certain enumerated reasons.Truelove v. Northeast Capital Advisory, Inc., 95 N.Y.2d 220, 222 (2000); see also Hall v. United Parcel Serv., 76 N.Y.2d 27, 36 (1990) ("An employee's entitlement to a bonus is governed by the terms of the employer's bonus plan.") (citation omitted).
CONCLUSION
Because Criscuolo resigned voluntarily, neither his ERISA claims nor any of his contract claims have merit. Accordingly, Vivendi's motion for summary judgment is granted and this action is dismissed.
SO ORDERED.