The opinion of the court was delivered by: ARTHUR SPATT, District Judge
MEMORANDUM OF DECISION AND ORDER
Barry Engler ("Engler" or the "Plaintiff") filed this action in
New York State Supreme Court, Nassau County, against two of his
former employers, Cendant Corporation ("Cendant") and
International Business Machines Corporation ("IBM"), alleging
fraudulent inducement, negligent misrepresentation, and breach of
contract. Cendant removed the action to this Court, pursuant to
28 U.S.C. § 1441, stating that the Plaintiff had asserted claims
for employee benefits governed by the Employee Retirement Income
Security Act ("ERISA"). Cendant and IBM then moved for dismissal
of the complaint under Federal Rule of Civil Procedure 12(b)(6),
on the ground that Engler's common law claims are preempted by
Engler was employed by Cendant and its predecessor Avis from
1976 to 2002, a period of more than twenty-five years. On
December 17, 2001, Engler received a letter from IBM extending to
him an offer of employment with IBM Global Services ("IBM Offer
of Employment"). The complaint alleges, upon information and
belief, that the IBM Offer of Employment was part of an
outsourcing agreement between IBM and Cendant in which certain
Cendant employees were offered employment with IBM.
In conjunction with the offer of employment, Engler received a
letter from Cendant advising him of special considerations that
Cendant and IBM agreed he would be entitled to if he accepted the IBM offer of employment.
In the letter, dated December 21, 2001, stated that "IBM will
recognize all service credit that is recognized by Cendant today
for all purposes including eligibility and vesting in an IBM
pension plan." Compl. Ex. 4. The letter also references the
outsourcing agreement between Cendant and IBM. On December 26,
2001, allegedly based upon the representations contained in the
letters from Cendant and IBM, Engler accepted employment with
On February 11, 2002, Engler commenced employment with IBM. On
the same day, Engler received a letter from Cendant that
congratulated him on his new opportunity with IBM and stated that
"should IBM terminate your employment other than for `Cause'
during the first 24 months following your employment with IBM,
you shall receive severance pay from IBM under the greater of the
severance pay plans (Cendant or IBM) based on combined credited
service." Compl. Ex. 4. On March 26, 2002, Engler entered into an
Agreement and General Release not to sue Cendant. In
consideration for the Release, Cendant stated that there were
"several benefits that Cendant and IBM have worked together to
make available to you." Compl. Ex. 4. The letter went on to list
benefits such as salary, a profit sharing bonus, stock options,
health, welfare, and pension benefits, and severance pay.
On May 3, 2004, more than two years after beginning employment
at IBM, Engler received a notice that his employment would be
terminated as of June 2, 2004. Attached to the notice of termination was the IBM Global Service
Delivery Resource Action Summary Plan Description, which states
that the Plan was subject to ERISA. Engler inquired about the
severance plan referred to in the February 11, 2002 letter from
Cendant and IBM advised him that it was not applicable because
his termination occurred more than two years after his initial
employment date with IBM.
As to the benefits that Engler was entitled to at the time of
his termination, the Plaintiff alleges that IBM failed to
recognize his service at Cendant for purposes of calculating the
amount of his severance and health benefits. Engler alleges that
IBM offered him four weeks severance and three months transition
medical benefits, which were conditioned upon Engler signing a
General Release and Covenant Not to Sue IBM. Engler contends that
if IBM had included his service with Cendant, he would have been
entitled to twenty-six weeks severance and one year of transition
Engler did not sign the IBM General Release and Covenant Not to
Sue and IBM denied Engler severance and medical benefits.
Instead, Engler commenced this law suit alleging New York State
common law causes of action against Cendant for fraudulent
inducement, negligent misrepresentation, and breach of contract.
The complaint states no cause of action against IBM, but demands
$50,000 from IBM and $100,000 from Cendant. After removing the
case to this Court, IBM and Cendant both moved to dismiss, pursuant to Rule 12(b)(6), arguing that the
Plaintiff's state law causes of action are preempted by ERISA.
A. The Motion to Dismiss Standard
On a motion to dismiss for failure to state a claim pursuant to
Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court
should dismiss the complaint only if it appears beyond doubt that
the plaintiff can prove no set of facts in support of his
complaint which would entitle him to relief. King v. Simpson,
189 F.3d 284, 286 (2d Cir. 1999); Bernheim v. Litt,
79 F.3d 318, 321 (2d Cir. 1996). The Court must accept all well-pled
factual allegations in the complaint as true and draw all
reasonable inferences in favor of the plaintiff. Koppel v. 4987
Corp., 167 F.3d 125, 127 (2d Cir. 1999); Jaghory v. N.Y. State
Dep't of Educ., 131 F.3d 326, 329 (2d Cir. 1997). The issue is
not whether the plaintiff will ultimately prevail but whether the
plaintiff is entitled to offer evidence to support the claims.
Villager Pond, Inc. v. Town of Darien, 56 F.3d 375, 378 (2d
Congress enacted ERISA as a remedial statute to protect the
interests of the beneficiaries of private retirement plans by
reducing the risk of the loss of pension benefits. Geller v.
County Line Auto Sales, Inc., 86 F.3d 18, 22 (2d Cir. 1996).
"ERISA established a comprehensive federal statutory program
intended to control abuses associated with pension benefit plans." Id. In order to
achieve national uniformity in the regulation of such plans,
ERISA expressly preempts "any and all ...