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Lamantia v. Keyspan Energy

September 26, 2007


The opinion of the court was delivered by: Dora L. Irizarry, U.S. District Judge


Plaintiff Jack Lamantia ("Plaintiff" or "Lamantia") commenced this action against his former employer Keyspan Energy ("Defendant" or "KeySpan") alleging violations of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 100 et seq, stemming from Defendant's denial of severance benefits to Plaintiff when he left Defendant's employ in May 2004.*fn1 Defendant moved for summary judgment on the grounds that (1) as a matter of law, the severance package offered to management employees who suffered involuntary job loss is not an ERISA covered plan, and (2) there are no genuine issues of material fact with respect to Plaintiff's ineligibility to receive the severance package. For the reasons set forth below, Defendant's motion for summary judgment is granted.

I. Facts

Plaintiff began working for the Brooklyn Union Gas Company ("Brooklyn Union"), predecessor to Defendant KeySpan Energy, on August 1, 1974. Complaint ¶ 6. During his tenure with Brooklyn Union and then with Defendant, Plaintiff held a number of different positions. From June 1998 until he officially retired on May 1, 2004, Plaintiff held the title of "Lead Analyst in Health and Safety." Defendant's Statement of Undisputed Material Facts ("Def. Stat. of Facts") ¶ 3. This was a management position and, therefore, Plaintiff was not a party to any collective bargaining agreement. Id. ¶ 4.

Prior to September 2003, KeySpan's retirement plans for management employees allowed management employees to retire with a full pension after age fifty-five, assuming they had worked for Defendant for thirty years (the "Rule of 85"). Affidavit of Justin Orlando ("Orlando Aff.") ¶ 4. In September 2003, Defendant amended its management retirements plans to allow management employees who were at least fifty-two years old to retire as long as they had been working for Defendant for twenty-eight years (the "Rule of 80 Amendment"). Id. A copy of the Rule of 80 Amendment is annexed to the Orlando Aff. as Exhibit 1. The Rule of 80 Amendment was meant to encourage voluntary retirements of older workers in an effort to "achieve reductions in KeySpan's overall staffing levels and cost structure." Id.

In addition to the Rule of 80 Amendment, in an effort to encourage eligible management employees to take the early retirement option, KeySpan offered an "enhanced" retirement plan that guaranteed the amount of a retiree's medical and dental contributions would not increase for ten years (through December 31, 2013). Id. The enhanced retirement plan was only available for eligible management employees who opted to retire between September 1, 2003, and January 1, 2004. Orlando Aff. ¶ 6.

The amendments to the management retirement plan and the plan enhancement were communicated to Plaintiff at sometime between September 1, 2003, and December 16, 2003. Def. Stat. of Facts ¶¶ 6-7. During that time, Plaintiff realized that he was eligible for the early retirement and the plan enhancement because he was fifty-three years old and had worked for KeySpan and Brooklyn Union for a total of twenty-nine years. Affidavit of Jack Lamantia ("Lamantia Aff.") ¶ 4. On December 16, 2003, Plaintiff decided to retire and submitted the in the necessary paperwork. Id; Def. Stat. of Facts ¶ 13; Orlando Aff. Exhibit 2.

While Plaintiff was considering early retirement with the enhanced benefit, he also was actively searching for another job. Def. Stat. of Facts ¶ 15. As January 1, 2004 approached, however, Plaintiff still had not secured another job. Orlando Aff. Exhibit 3. Plaintiff realized that he had two options -- either take the early retirement option with the enhancement without securing another job, or keep working for Defendant and thereby forfeit the enhancement. Id. Not please with either option, Plaintiff requested that Defendant extend the enhancement for a few more weeks, which would allow him to secure another job and receive the enhancement. Id; Orlando Aff. ¶ 9. Orlando, KeySpan's Vice President for Human Resources, explained to Plaintiff that, in order to be eligible for the enhancement, he would have to retire by January 1, 2004, and that, if he was paid as an employee in January 2004, he would lose the enhancement. Id; Orlando Aff. Exhibit 3. Plaintiff decided not to retire and thereby forfeited the enhancement. Lamantia Aff. ¶ 4.

As part of its continuing effort to reduce its work force, KeySpan introduced a severance plan for management employees who were involuntarily terminated between January 1, 2004, and March 31, 2004. Orlando Aff. ¶ 13 and Exhibit 5. Under the management severance plan effective January 1, 2004, management employees were eligible for a one-time severance payment if he experienced "[i]nvoluntary (other than for cause) termination of service"between then and March 31, 2004. Id. The amount of the benefit was commensurate with the amount of time that the employee had worked at KeySpan with the employee's salary as of the date of involuntary termination. Id. Plaintiff had worked at KeySpan and Brooklyn Union for a total of twenty-nine and one-half years as of January 1, 2004, and was earning $108,200. Thus, if Plaintiff was involuntarily terminated between January 1, 2004, and March 31, 2004, he would be eligible for fifty-six weeks of base pay. Orlando Aff. Exhibit 5; Affidavit of Vincent Brandi ("Brandi Aff.") Exhibit 1.

Plaintiff alleges that he learned about the management severance plan "in or about the same time" he learned about the other modifications to the retirement plan and the plan enhancement -- between September 2003 and December 2003. Lamantia Aff. ¶ 5. Indeed, the materials circulated to management employees regarding the Rule of 80 Amendment and the enhancement alludes to the possibility that severance would be offered after January 1, 2004 to management employees whose positions were terminated. The Rule of 80 Amendment, however, explicitly states that "[t]here is no guarantee that your position will be deemed excess and targeted for severance. . ." Orlando Aff. Exhibit 1. According to Defendant, only those management employees whose positions were to be involuntarily terminated were given the details of the severance plan. Def. Stat. of Facts ¶ 24. Plaintiff never states that he was provided the details of the severance package through official channels.

In March or April 2004, Plaintiff asked his direct supervisor, Vincent Brandi, the manager of the Heath & Safety -- Financial and Employee Related Services Department, whether KeySpan was considering eliminating his position, thereby making him eligible for the severance package. Id. at ¶ 25. Brandi told Plaintiff that he was unaware of any plans to eliminate Plaintiff's position but that he would check with his supervisor. Brandi Aff. ¶ 12. Stephanie Shepard, Brandi's supervisor, told Brandi that there were no plans to eliminate Plaintiff's position, and, if Plaintiff remained with KeySpan, there would be a position available for him. Id. at 14. Indeed, on January 14, 2004, Brandi reviewed Plaintiff's work and found that Plaintiff "creates exceptional value." Brandi Aff. Exhibit 2. It is undisputed that Plaintiff was never told that his position would be eliminated and that he would be entitled to severance. Lamantia ¶ 8.

Effective May 1, 2004, Plaintiff voluntarily retired from KeySpan and, although he received an unreduced retirement benefit pursuant to the Rule of 80 Amendment, he did not receive the enhanced benefit. Id. ¶ 9; Def. Stat. of Facts ¶ 40.

Subsequent to his May 2004 retirement, Plaintiff learned that his position, Lead Analyst in Health and Safety, was never filled. Lamantia Aff. ΒΆ 10. Based on the fact that the position had not been filled, Plaintiff "suspected that it was in fact eliminated." Id. Plaintiff wrote a letter to Defendant's chief executive officer, Bob Catell, inquiring why he did not receive a severance package since his position was never "filled" and, in fact, may have been split into two lower paid positions. A copy of Plaintiff's Letter dated January 20, 2005 is annexed to the Lamantia Aff. The letter goes on to note that "I was further informed that it appears that due to budgetary reductions that my position may be eliminated in 2005, as I predicted." Id. Defendant wrote back several weeks later to explain that "your previous position has not yet been filled . . . not because the position has been excised but rather that the area has gone through a major reorganization. A great deal of the work for ...

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