Opinion
No. HHB CV 06-5002524
April 13, 2007
Ruling on Motion to Dismiss and/or Strike
I
The principal part of the defendant's motion claims that counts seven, eight, nine, and ten are preempted under the Federal Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq., because the enhanced severance package at issue in this case constitutes an ERISA "plan." A finding that a particular program is a "plan" under ERISA depends in part upon whether that program "requires an ongoing administrative program to meet the employer's obligation." Fort Halifax Packing Co., Inc. v. Coyne, 482 U.S. 1, 11 (1987). A program that simply pays "a one-time, lump-sum payment triggered by a single event requires no administrative scheme whatsoever to meet the employer's obligation," and is therefore not a "plan" under ERISA. Id., 12. The Second Circuit, while not deciding "which . . . factors will be determinative in every case," has found that "an ongoing administrative program" may exist "(1) where an employer's undertaking requires managerial discretion, that is, where the undertaking could not be fulfilled without ongoing, particularized, administrative analysis of each case . . .; (2) where a reasonable employee would perceive an ongoing commitment by the employer to provide some employee benefits; and (3) where the employer was required to analyze the circumstances of each employee's termination separately in light of certain criteria." (Internal quotation marks and citations omitted.) Kaskow v. New Rochelle Radiology, 274 F.3d 706, 737 (2d Cir. 2001). The court has held that receipt of benefits in biweekly payments instead of a lump sum does not change the basic approach. See James v. Fleet/Norstar Financial Group, Inc., 992 F.2d 463, 466-67 (2d Cir. 1993).
In the present case, under the defendant's 2006 enhanced severance package, there is little managerial discretion required. Determination of the amount of benefits is merely an arithmetic calculation based on the employee's length of service and prior salary. See id., 467. It is true that there is some discretion involved in determining whether an employee was offered a substantially similar total compensation package and reasonable work location so as to decide whether a new position offered is a "comparable job" under the package. However, that discretion is limited, essentially based on objective, quantifiable factors, and decidedly less complicated than a determination of whether an employee was offered a "substantially similar role" under the 2003 severance plan, which required an examination of the nature of the position and the job requirements.
Second, there are no ongoing commitments by the employer to provide employee benefits, at least after the employee receives his severance-based salary and health benefits. There is no obligation, for example, to rehire the employee or to monitor the employee's future work activity. Cf. Tischmann v. ITT/Sheraton Corp., 145 F.3d 561, 566-67 (2d Cir. 1998).
Third, the 2006 severance package does not require the employer to analyze the circumstances of each employee's termination. The package, for example, does not require a determination of whether the company terminated the employee for cause or whether he performed his work in a satisfactory manner. Cf. Sheer v. Israel Discount Bank of New York, 2007 U.S. Dist. LEXIS 16488, at *8-*9 (S.D.N.Y. Mar. 6, 2007).
The Second Circuit has not precluded "the possibility that other factors might be relevant in different factual settings." Tischmann v. ITT/Sheraton Corp., supra, 145 F.3d 566. Here, there were "none of the usual earmarks of an ERISA plan." (Internal quotation marks omitted.) Sheer v. Israel Discount Bank of New York, supra, 2007 U.S. Dist. Lexis 16488, at *10 The enhanced severance package contains no references to a plan administrator, a claims procedure, a right of appeal, or to ERISA itself. Although the 2003 severance plan, which explicitly identified itself as an ERISA plan, allowed for amendments, there is no indication in the enhanced severance package that it is an amendment of the plan. Indeed, it does not refer to the 2003 plan.
On balance, while the matter is not free from doubt, the court concludes that the enhanced severance package is not an ERISA plan. Therefore, the court denies the motion to dismiss counts seven, eight, nine, and ten.
II
The defendants move to dismiss and/or strike counts three and four on the ground that the plaintiff is a New Jersey resident whose work was based in New Jersey and that he therefore cannot recover under General Statutes § 31-72, which authorizes a civil action to collect wages. The defendants present no authority for their position and do not analyze the statute. The statute itself contains no language limiting the beneficiaries to Connecticut residents or workers. The term "employee" is defined broadly, without any geographical restriction, to include "any person suffered or permitted to work by an employer." General Statutes § 31-71a(2). While this definition literally applies "[w]henever used in sections 31-71a to 31-71i, inclusive," and thus does not explicitly refer to § 31-72, the latter section incorporates §§ 31-71a to 31-71i by reference and thus would have to rely on its terms. See Mytych v. May Department Stores Co., 260 Conn. 152, 161, 793 A.2d 1068 (2002). Given the remedial purpose of the statute; see id., 160-62; there is no basis to conclude that it does not apply to nonresident workers employed by Connecticut employers such as the defendants.
In part, § 31-72 provides: "When any employer fails to pay an employee wages in accordance with the provisions of sections 31-71a to 31-71i, inclusive, or fails to compensate an employee in accordance with section 31-76k or where an employee or a labor organization representing an employee institutes an action to enforce an arbitration award which requires an employer to make an employee whole or to make payments to an employee welfare and, such employee or labor organization may recover, in a civil action, twice the full amount of such wages, with costs and such reasonable attorneys fees as may be allowed by the court, and any agreement between him and his employer for payment of wages other than as specified in said sections shall be no defense to such action."
III
The motion to dismiss and/or strike is denied.
It is so ordered.