Opinion
C.A. No. 03-0076.
February 26, 2004
MEMORANDUM OPINION AND ORDER
The plaintiffs brought this action claiming they were unlawfully denied severance payments and early retirement benefits by defendant Rohm and Haas Company ("Rohm and Haas"). In a seven-count Amended Complaint, plaintiffs seek legal and equitable relief to remedy the alleged violations of their rights under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. and, to the extent their claims for severance payments are deemed not covered by ERISA, they assert claims under Pennsylvania state law. Presently before the court is the motion of the defendant to dismiss the Amended Complaint for failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons which follow, the motion is granted but the complaint will be dismissed without prejudice.
In deciding a motion to dismiss for failure to state a claim, the court must "accept as true all allegations in the complaint and all reasonable inferences that can be drawn therefrom, and view them in the light most favorable to the nonmoving party." Rocks v. City of Philadelphia, 868 F.2d 644, 645 (3d Cir. 1989). The court may also consider exhibits attached to the complaint, matters of public record as well as an "undisputed authentic document that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims are based on that document." Pension Ben. Guar. Corp. v. White Consol. Ind., 998 F.2d 1192, 1196 (3d Cir. 1993).
Although the parties have submitted various affidavits to support their respective positions, we need not rely on them in order to resolve the motion to dismiss. Therefore, we need not convert the motion to dismiss to a motion for summary judgment.
All three plaintiffs are former salaried employees of Rohm and Haas. Am. Compl. at 31, 43, 47, 58, 62, 75. On January 27, 1998, each plaintiff was notified by Rohm and Haas of its divestiture of its interest in the AtoHaas joint venture; of being frozen in his/her job with no opportunity to transfer within Rohm and Haas; and of a corresponding loss of employment with Rohm and Haas following the closing of the deal. Id. at 40, 55, 68. The last day each plaintiff worked at Rohm and Haas was June 30, 1998.Id. at 43, 58, 75. Each plaintiff received an offer of employment from the acquirer of the entire joint venture, Elf Atochem, and each plaintiff began employment with Elf Atochem on July 1, 1998. Id. at 43, 58, 75.
In 1994, Rohm and Haas established a Severance Benefits Program ("SBP") for salaried employees "whose employment was jeopardized by its efforts to cut jobs and costs. Id. at 14. This SBP provided for "early retirement benefits and a one-time lump sum severance payment. Id. at 15. A Rohm and Haas Benefits Update from May, 1994 describes the purpose of the SBP as follows:
To assist employees affected by downsizing, the Company has created a formal Severance Benefits Program. The Severance Benefits Program is being offered to employees in the United States who are formally notified that their employment is being terminated due to layoff, reduction in force, plant-shutdown or other reasons not related to performance. The following explains some of the benefit specifics and serves as an amendment to your Employees Benefits Handbook. To be eligible for the program the following conditions must apply:
Eligibility
Either you are formally informed by the Company that your employment with the Company is terminated due to layoff, reduction in force, a plant shutdown or other reasons not related to performance. Such notification must occur between April 1, 1994 and March 31, 1996.
Or you voluntarily agree to terminates employment with the Company so that your position can be filled by an individual who is being terminated for the reasons listed above. To qualify under this provision, approval must be obtained from your department manager, and the individual replacing you must be qualified to discharge the functions of your position. Only if the department manger makes this determination will an employee be able to voluntarily leave the company and be covered under these benefit provisions.And . . .
You are actively employed by the Company on the date selected as the last day of active employment. A department Manager may extend the last day worked for compelling business reasons, but in any case, the last day worked must be before April 1, 1997 to qualify.
You agree to waive any claims against the Company, other than claims under a Worker's Compensation Act or benefits under those Company benefit plans that apply after termination.
You are not covered by a collective bargaining agreement.
You are employed by the parent company, or an approved subsidiary that participates in all U.S. Company benefits.
Plaintiffs' Exhibit 5 at DOO130-133.
All three plaintiffs have pled in the Amended Complaint that the last day they worked for Rohm and Haas was June 30, 1998.Id. at 43, 58, 75. In order to be eligible under the SBP, however, the last day worked must have been before April 1, 1997. Since the last day plaintiffs worked was after April 1, 1997, plaintiffs are by definition not eligible to participate in the SBP.
Perhaps belatedly realizing this defect, plaintiffs now argue in their opposition brief that they are eligible participants under three ad hoc SBP's which, as will be shown, infra, were not Company wide plans but instead were tailored to a specific Plant or to specific business units.
A Rohm and Haas Benefits Update from March, 1997 is entitled Severance Benefits Program for Polymers Resin Employees. The Update describes this particular SBP as follows:
To assist employees affected by downsizing in Polymers Resins, (PR), the Company has created a formal Severance Benefit Program. The Severance Benefit Program is being offered to salaried employees of PR who are formally notified that their employment is being terminated due to layoff, reduction in force. The following explains some of the benefit specifics and serves as an amendment to your Employee Handbook. To be eligible for the program the following conditions must apply:
Either you are formally informed by the Company that your employment with the Company is terminated due to layoff or a reduction in force. Such notification must occur between February 24, 1997 and June 30, 1997. . . . . .And you meet the following provisions. . . .
. . . . . . . the last day worked must be before March 31, 1998 to qualify. . . . . .
Plaintiffs' Exhibit 5 at DOO148-151.
Thus, this SBP by its own terms plainly applied to only those employees who were terminated due to layoff or reduction in force at Rohm Haas's Polymers Resins Business Unit. As plaintiffs do not allege anywhere in the Amended Complaint that any of them worked in the Polymers Resins Business Unit or that the last day any of them worked was before March 31, 1998, they are not eligible under this particular SBP
Amendment # 5 to the Rohm and Haas Pension Plan, effective December 31, 1994 is entitled Involuntary Early Retirement Date-Monomers
6.9.1. For purposes of this Section 6.9, the term `Monomers SBP Participant' means:
(i) a vested Participant, including such Participant covered under the OCAW collective bargaining agreement with the Company, who is employed in the Company's Monomer's Business Unit, and who, between December 1, 1997 and June 30, 1998, is formally informed that his or her employment with the Company is scheduled for elimination as a result of restructuring within the Monomers Business Unit; or
(ii) any other Company employee (a `Volunteer') who voluntarily agrees to terminate employment with the Company, so that the Volunteer's position can be filled by an individual described in (i) immediately above, who can capably, as determined by the Volunteer's Department Manager, discharge the functions of the Volunteer's position with the Company. An individual cannot become a Volunteer without the consent of the individual's Department Manager. . . . . . .
Notwithstanding anything herein to the contrary, an individual shall not be A Monomer SBP Participant if:
(iii) the individual is not a Volunteer and is not formally notified that the termination of his or her employment is in connection with the restructuring of the Monomer Business Unit; or
(iv) the individual's termination of employment with the Company is the result of a commercial transaction, involving the Company and one or more third parties, such as a sale of a subsidiary, plant location or a business unit or the formation of a joint venture, commercial alliance, strategic partnership or other similar transaction, if the individual is offered employment by a party to any such transaction or under a contract between the Company and another party to the transaction, the individual is guaranteed an offer of employment.
Plaintiff's Exhibit 4 at D00111-112.
Plaintiffs do not qualify under this SBP because none of them allege in the Amended Complaint that they were terminated because of restructuring in the Monomers Business Unit or that they were "Volunteers" as that term is described above. Even more significant is the fact that all three plaintiffs' termination's were the result of a commercial transaction (Rohm and Haas's divestiture in the AtoHaas joint venture) involving Rohm and Haas and a third party, Elf Atochem
Yet another ad hoc SBP from Rohm and Haas states:
To assist employees affected by downsizing at the Bristol Plant, the Company has created a formal Severance Benefit Program. The Severance Benefit Program is being offered to hourly employees of Bristol Plant who are formally notified that their employment is being terminated due to layoff or a reduction in force. The following explains some of the benefit specifics and serves as an amendment to your Employee Handbook. To be eligible for the program the following conditions must apply:
Either you are formally informed by the Company that your employment with the Company is terminated due to layoff or a reduction in force. Such notification must occur between March 14, 1997 and December 31, 1998.
Or you voluntarily agree to terminate employment with the Company so that your position can be filled by an individual who is being terminated for the reasons listed above. To qualify under this provision, approval must be obtained from your department manager, and the individual replacing you must be qualified to perform the functions of your position. Only if the department manager makes this determination will an employee be able to voluntarily leave the company and be covered under these benefit provisions. . . . . . . .
Plaintiffs' Exhibit 5 at DOO144-147.
Plaintiff Schreiber does not allege in the Amended Complaint that he worked at the Bristol Plant. Therefore, the Bristol SBP does not apply to him. Plaintiffs Wood and Clark do allege that they worked at the Bristol Plant, that they were notified of their termination between March 14, 1997 and December 31, 1998 and that they were terminated before June 30, 1999. However, neither plaintiff alleges that they were terminated due to a layoff or a reduction in force or that either voluntarily agreed to terminate employment. Rather, plaintiffs were terminated due to a commercial transaction between Rohm and Haas and a third party Elf Atochem. Plaintiffs were thereafter immediately hired by Elf Atochem. Therefore, plaintiffs Wood and Clark do not qualify under the Bristol SBP as well.
In sum, none of the plaintiffs alleges that he/she was terminated from Rohm and Haas due to a layoff or reduction in force. Rather each plaintiff alleges that he/she was terminated because of Rohm and Haas's decision to divest itself from the Echo Haas joint venture. Plaintiffs also allege that they were immediately hired by the third party Elf Atochem and that they continued their employment without interruption. As such, they are not eligible for severance benefits under any of defendant's SBPs
We are somewhat concerned by plaintiffs' allegations that "while professing to be unable as a result of the divestiture to provide the plaintiffs with any of the benefits of the SBP, Rohm and Haas made a number of exceptions for certain AtoHaas executives and employees to whom the plaintiffs were similarly situated. Rohm and Haas provided these executives and employees with severance pay, unreduced pension benefits and other considerations it did not accord [plaintiffs]" Amended Complaint at 78-79. Plaintiffs further allege that "in December 1997 Rohm and Haas announced its intention to divest itself of another joint venture called RohMax. The divestiture of RohMax did not close until March 1998. Unlike its decisions to freeze plaintiffs' jobs and not allow them to participate in the SBP program, Rohm and Haas allowed RohMax employees to retire under the terms of the Rohm and Haas Pension Plan and receive severance pay, early retirement and other benefits despite the fact that the RohMax employees were also offered employment with the successor employer to that joint venture." Id. at 80-81.
Accepting these allegations as true, we believe plaintiffs are entitled to a limited period of discovery on the very narrow issue of whether similarly situated executives or employees to the plaintiffs at Rohm and Haas were in fact allowed to participate in any of the SBP's in effect despite losing their jobs as a result of a divestiture entered into by Rohm and Haas.
ORDER
The motion of the defendant to dismiss the Amended Complaint (Doc. #9) is GRANTED.The Amended Complaint is DISMISSED in its entirety WITHOUT PREJUDICE to plaintiffs right to refile the Amended Complaint if, after a brief period of discovery, they believe they can, within the strictures of RULE 11, satisfy the condition set forth in the attached Opinion.
IT IS SO ORDERED.