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KULESZA v. NEW YORK UNIVERSITY MEDICAL CENTER

January 23, 2001

EDWARD S. KULESZA, ET AL., PLAINTIFFS,
v.
NEW YORK UNIVERSITY MEDICAL CENTER, A DIVISION OF NEW YORK UNIVERSITY, DEFENDANT



The opinion of the court was delivered by: Chin, U.S.D.J.

MEMORANDUM DECISION

Pursuant to an affiliation agreement with the New York City Health and Hospitals Corporation ("HHC"), defendant New York University Medical Center ("NYU") provided medical services at Goldwater Memorial Hospital ("Goldwater Hospital") until June 30, 1997. At that time, the affiliation agreement expired, and HHC entered into a new affiliation agreement with Roosevelt Island Medical Associates ("Roosevelt"). Plaintiffs, seventeen physicians employed by NYU to practice at Goldwater, were discharged by NYU on June 30, 1997. The next day, July 1, 1997, plaintiffs began working for Roosevelt as physicians at Goldwater Hospital.

Shortly before plaintiffs were laid off NYU amended its existing severance pay policy to exclude employees who lost their jobs when an affiliation contract terminated but obtained employment with the successor contractor within 30 days of the successor contract's effective date. Finding themselves seemingly ineligible for severance benefits, plaintiffs filed the instant case, which alleges violations of the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended, 29 U.S.C. § 1001 et seq., as well as various state law causes of action.

Before the Court is NYU's motion to dismiss the complaint pursuant to Fed. R.Civ.P. 12(b)(6) for failure to state a claim upon which relief may be granted. Because matters outside the complaint have been submitted, I will treat the motion as a motion for summary judgment. For the reasons set forth below, the motion is granted and the complaint is dismissed.

BACKGROUND

A. Facts

Construed in the light most favorable to plaintiffs, the facts are as follows:

For a number of years prior to 1997, NYU provided medical services at Goldwater Hospital pursuant to an affiliation agreement with HHC. During this time, NYU employed plaintiffs as physicians at Goldwater Hospital. On or about May 15, 1997, NYU learned that its affiliation agreement with HHC would not be renewed and that HHC had agreed to enter into an affiliation agreement with Roosevelt to provide services at Goldwater. (Compl.¶ 14). As a result of losing the affiliation agreement, NYU terminated plaintiffs' employment on June 30, 1997. (Id. ¶¶ 17, 68). The next day, July 1, 1997, plaintiffs began working for Roosevelt at Goldwater Hospital in the same positions they had held before. (Affirmation of Rita Aniano ("Aniano Aff."), ¶ 11).

NYU's policy regarding severance benefits is set forth in its "Human Resources Policies and Procedures" manual (the "Manual"), which includes a proviso that the "policies and statements contained in this book . . . are not a contract of any kind [and] may be changed or rescinded."*fn1 (Def. Notice of Mot., Ex. B at 1). Under the policy described in the Manual (the "Severance Plan"), NYU had, for more than twenty years prior to 1997, provided severance pay to eligible employees permanently laid off due to lack of funds or lack of work. (Compl.¶ 9). The Severance Plan listed six scenarios in which employees would not be entitled to severance pay, including, inter alia, voluntary resignation, discharge, and temporary layoff. (Id. ¶ 87).

On or about May 15, 1997, NYU modified the Severance Plan to include a seventh scenario in which employees would not be eligible for severance pay (the "Modified Severance Plan"). (Id. ¶ 88). The Modified Severance Plan provides, in relevant part:

Employees are not entitled to severance pay in the following cases: . . . Separation due to the termination of an affiliation contract when such separated employees are hired by the successor contractor within 30 days of that contract's effective date.

(Id. ¶ 88; Def. Notice of Mot., Ex. C at 10-4). On May 30, 1997, NYU issued a memorandum notifying its Goldwater Hospital staff that, due to the loss of the affiliation contract, they would be laid off no earlier than June 16, 1997. (Aniano Aff., Ex. 1). The memorandum did not mention the change in severance pay policy enacted on May 15. (Id.).

According to plaintiffs, HHC accepted a bid from Roosevelt to provide services at Goldwater Hospital in April 1997, but did not formally enter into an affiliation agreement until August 1999. (Id. ¶ 11). Therefore, plaintiffs contend, Roosevelt had not yet entered into an affiliation agreement with HHC at the time plaintiffs were hired. (Id. ¶ 13). The plaintiffs also maintain that NYU paid severance benefits to at least four "other employees similarly situated as plaintiffs." (Id. ¶ 6).

The complaint also alleges, without elaboration, that NYU wrongfully denied Augusta Alba, one of the plaintiffs, a retirement package offered to other ...


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