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February 22, 2001


The opinion of the court was delivered by: Curtin, District Judge.


Under the civil enforcement provision of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132, plaintiff Walter Salerno ("Salerno") commenced this action to collect severance benefits that he claims are owed to him by his former employer, defendant Leica, Inc. ("Leica"). Leica argues that Salerno's ERISA claims are barred by the doctrine of res judicata and moves for dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Item 3.


Between 1987 and December 1997, Salerno was an executive in the Buffalo offices of Leica's optical products division. Item 1, ¶¶ 4, 18. Salerno worked as a manager in the Buffalo Division from 1986 until 1990. Id. ¶¶ 5, 7. In 1990, he was promoted to the position of vice-president for the Buffalo Division. Id. ¶ 7. Then, in April 1992, Leica named Salerno president of the Buffalo Division. Id. ¶ 8.

In May 1996, Eric Poll, Leica's Corporate Director for Human Relations, recommended that an outside consultant be retained to work with Salerno on issues of management style. Id. ¶¶ 10-11. In light of Poll's recommendations, Leica proposed a six-month program of intensive supervision and evaluation for Salerno. Id. ¶ 11. Salerno and two Leica representatives executed a written agreement to formalize the terms of the six-month program ("the Agreement"). The Agreement provided that at the end of the six-month period Salerno either would continue to work for Leica or Leica could opt to terminate Salerno's employment. Id. ¶ 11. The Agreement further provided that if Leica chose to terminate Salerno, Leica would grant him a severance package commensurate with his experience, history, and position with Leica. Id. ¶¶ 11-14 and Exh. A. In early December 1996, approximately five months into the six-month program, Leica determined that Salerno was not making adequate progress and decided to terminate his employment immediately. Id. ¶¶ 11, 17, and 18.

Salerno now claims that Leica violated the terms of the Agreement by failing to provide him with adequate severance benefits. Salerno states that Leica offered him a severance package valued at $139,500, Item 7, p. 5, but insists that the Agreement entitles him to a severance package worth just over $287,000. See Item 1, ¶¶ 19-21. Salerno claims that Leica is liable under ERISA for its failure to pay him his properly calculated severance benefits.


The present action is the third of three lawsuits that Salerno has commenced against Leica since his termination in December 1996.

I. The State Action

Salerno commenced his first action against Leica on March 24, 1997, in New York State Supreme Court, County of Erie (Salerno v. Leica, Inc., Index No. 1997/2527) ("the State Action"). See Item 5, ¶ 4 and Exh. A. Salerno's complaint in the State Action is substantially identical to his complaint in the present action. Compare Item 1 with Item 5, Exh. A. In the State Action, Salerno asserted various breach of contract claims under State common law and also asserted a violation of the State's Wage Payment Law. Id. Exh. A, pp. 4-7.*fn1 After discovery was completed, Leica moved to dismiss Salerno's complaint. In relevant part, Leica argued that Salerno's claim for severance benefits was barred on the grounds of ERISA preemption. Item 5, ¶ 6.*fn2 Justice Thomas P. Flaherty heard oral argument on this aspect of Leica's motion to dismiss on April 26, 1999. Item 8, Exh. D. At argument, Justice Flaherty questioned Leica's counsel on the issue of ERISA preemption and on the status of an ongoing federal lawsuit involving the same parties:

THE COURT: . . . Is there an ERISA cause of action alleged [in this action] —


THE COURT: Is there in the federal action?


THE COURT: There isn't.

MR. DOREN: No. The federal action alleges the same commonality of facts but alleges that because of age and national origin somehow he was offered less than he was entitled to, but in nowhere does he allege it [i.e., an ERISA claim] and that's what he should have done and when it's combined.

THE COURT: Not in either jurisdiction.

MR. DOREN: Right.


MR. DOREN: Not yet. That's why we're here.

Item 8, Exh. D, p. 6. Later in the argument, Mr. Doren went on to state that:

an ERISA cause of action should have been brought from day one and [Salerno] has the right to amend. We ask that the complaint be dismissed, ERISA cause of action can be brought, [we will] likely remove it to Federal Court and we'll have one lawsuit. And contrary to plaintiffs contention, we didn't have the ...

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