Tardio v. Boston Scientific Corporation U.S. Severance Plan for Exempt Employees

Filing 30

ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT. (Written Opinion). Signed by Judge Wilhelmina M. Wright on 1/14/2020. (RJE)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Robert Tardio,

Case No. 18-cv-1446 (WMW/BRT)
Plaintiff,

v.
Boston Scientific Corporation U.S.
Severance Plan for Exempt Employees,

ORDER GRANTING DEFENDANT’S
MOTION FOR SUMMARY
JUDGMENT

Defendant.
This matter is before the Court on Defendant Boston Scientific Corporation U.S.
Severance Plan for Exempt Employees’ (BSC Severance Plan) motion for summary
judgment. (Dkt. 19.) For the reasons explained below, the Court grants the motion.
BACKGROUND
Plaintiff Robert Tardio is a former employee of Boston Scientific Corporation
(BSC).1 Between July 2003 and May 2016, Tardio worked as a sales representative for
BSC, selling medical-device products, including implantables, externals, and other
accessories. Near the end of his employment with BSC, Tardio was a Principal Sales
Representative in BSC’s Cardiac Rhythm Management division. As an employee of BSC,
Tardio participated in BSC’s severance benefits plan, an unfunded benefits plan subject to
the Employee Retirement Income Security Act (ERISA). This action arises out of a
severance-benefits dispute between Tardio and BSC Severance Plan.
The relevant language of BSC’s severance-benefits policy provides as follows:

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BSC is not named as a defendant in this action.

The Plan provides Severance Benefits only in the event of a Layoff.
If your employment terminates due to a Layoff while you are a Plan
participant, you will be entitled to receive Severance Benefits only if
you satisfy all of the following conditions:
 You are given Notice that your employment will be
involuntarily terminated due to a Layoff;
 You remain employed by the Company and actively at work
until the date determined by the Company to be your last day
of work . . .; and
 You continue to honor all contractual obligations you may
have to the Company, including, without limitation, any
confidentiality and nondisclosure agreement and restrictions
on post-employment activities.
In addition, to be entitled to receive Severance Pay under the Plan,
you must sign a Release Agreement by the deadline specified in that
document, and you must not validly revoke it within the Revocation
Period. . . .
To receive Severance Benefits, you must continue to satisfy all
applicable conditions and eligibility requirements to the date you
receive those benefits, and you must continue to honor all contractual
obligations you may have to the Company, including, without
limitation, any confidentiality and nondisclosure agreement and
restrictions on post-employment activities. . . . If you fail to satisfy
an applicable condition or eligibility requirement before all Severance
Benefits have been provided to you, you will not be entitled to any
Severance Benefits that have not been paid or otherwise provided.
Under the “Layoff” section, the policy provides that:
Regardless of whether you receive Notice, your termination of
employment will not be considered a Layoff, and you will not receive
Severance Benefits, if your employment terminates for any reason
other than a Layoff. For example, you will not be considered to have
a Layoff, and, therefore, you will not receive Severance Benefits, if
your employment terminates for any of the following reasons:
...


Misconduct or other “cause,” as determined by the Company
in its sole discretion . . . . 

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On April 4, 2016, BSC advised Tardio that he would be laid off. The layoff notice
was formalized in an April 7, 2016 letter. BSC advised Tardio that his employment with
BSC would end on May 7, 2016, and that he was “initially eligible” for severance benefits
under BSC’s severance-benefits policy, which BSC attached to the letter. The letter also
referred to “the requirements for continued eligibility,” one of which was “[Tardio’s]
agreement to a ‘Release Agreement.’ ”
BSC sent Tardio a release agreement on May 10, 2016. The release agreement
provided a 15-day period of rescission following its signing. And BSC agreed to pay
Tardio severance benefits in the amount of $182,120.27 on BSC’s regular pay date
occurring closest to 30 days after the expiration of the release agreement’s rescission
period, if Tardio had not exercised his right to rescind the agreement. Tardio signed and
returned the release agreement to BSC on May 11, 2016.
On May 4, 2016, two BSC employees arrived at Tardio’s home to retrieve the
company’s medical-device products that were in Tardio’s possession. The employees
reported that Tardio “was very unprofessional and threw his product onto the ground.” One
BSC employee recorded Tardio’s actions; and both employees reported the incident to their
supervisor, Sunil Tripathi, who also supervised Tardio. Tripathi reported the incident to
BSC’s inventory and human-resources teams the next day.
When asked about the video recording on May 11, 2016, “Tripathi stated that it was
not a big deal because most of the inventory has expired and would be scrapped anyway.”
But as of May 19, 2016, BSC had determined that Tardio’s May 4, 2016 conduct caused
BSC a total loss valued at $79,500.

BSC’s Global Security team commenced an

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investigation into the matter on May 20, 2016. The investigation included interviews with
several witnesses, as well as Tardio. During his June 29, 2016 interview, Tardio admitted
that he “emptied [BSC] product out of [his] bins” and “on the ground.”
On the same day, BSC issued a Notice of Termination for Cause, advising Tardio
that his conduct on May 4, 2016, violated the terms of his “Employment Agreement,” his
“Agreement Concerning Employment,” and the BSC Code of Conduct. The notice also
advised Tardio that his employment was “terminated for Cause effective May 4, 2016.” In
a letter also dated June 29, 2016, BSC informed Tardio that, because BSC terminated him
for cause as of May 4, 2016, Tardio was ineligible for severance benefits. In a separate
letter dated June 29, 2016, BSC offered to settle Tardio’s claims for $110,000. Tardio
rejected the offer.
Tardio subsequently requested the plan administrator’s review of the denial of his
severance benefits. In support of his request, Tardio contended that BSC was contractually
bound by the release agreement that he signed and returned on May 11, 2016, to pay Tardio
full severance benefits of $182,120.27. On November 13, 2017, Gail Beauregard, serving
as the plan administrator for BSC Severance Plan, advised Tardio in writing that she
concluded from her review of the record that, because his employment had been terminated
for cause by BSC effective May 4, 2016, Tardio was not entitled to severance benefits.
Tardio appealed the denial of severance benefits to the BSC Employee Benefits
Committee on November 17, 2017. Tardio advanced the same argument in his appeal,
namely, that BSC was contractually bound by the May 11, 2016 release agreement to pay

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him the claimed severance benefits. After reviewing the denial of his severance benefits
de novo, the committee denied Tardio’s claim on January 17, 2018.
Tardio commenced this lawsuit against BSC Severance Plan on May 25, 2018,
alleging a violation of ERISA, 29 U.S.C. § 1132, and seeking payment of severance
benefits in the amount of $182,120.27.

Tardio now argues, as he did during his

administrative review and appeal, that the May 11, 2016 release agreement entitles him to
the initial severance-benefits amount. On May 22, 2019, BSC Severance Plan brought the
pending motion for summary judgment, in which BSC Severance Plan contends that
Tardio’s claim fails as a matter of law because the plan’s decision to deny Tardio’s benefits
claim was reasonable.
ANALYSIS
Summary judgment is properly granted when the record before the district court
establishes that there is “no genuine dispute as to any material fact” and the moving party
is “entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A genuine dispute as
to a material fact exists “if the evidence is such that a reasonable jury could return a verdict
for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). On
a motion for summary judgment, a district court construes the evidence in the light most
favorable to the nonmoving party and draws all reasonable inferences in favor of the
nonmoving party. See Windstream Corp. v. Da Gragnano, 757 F.3d 798, 802–03 (8th Cir.
2014). A party opposing summary judgment on the ground that a fact is genuinely disputed
must “submit affidavits, depositions, answers to interrogatories, or admissions on file and

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designate specific facts” supporting that assertion. Gander Mountain Co. v. Cabela’s, Inc.,
540 F.3d 827, 831–32 (8th Cir. 2008); see Fed. R. Civ. P. 56(c)(1)(A).
An ERISA plan beneficiary has the right to judicial review of a benefits
determination. See 29 U.S.C. § 1132(a)(1)(B). When reviewing the denial of ERISA
benefits, courts apply a de novo standard unless the benefit plan grants the plan
administrator discretionary authority to determine benefits eligibility. Firestone Tire &
Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989); Jackson v. Prudential Ins. Co. of Am., 530
F.3d 696, 701 (8th Cir. 2008). If such discretionary authority is granted, the decision of
the plan administrator is reviewed for an abuse of discretion. Waldoch v. Medtronic, Inc.,
757 F.3d 822, 829 (8th Cir. 2014).
The severance-benefits policy at issue here provides that the “Plan Administrator
has the discretionary authority to construe and interpret all Plan provisions and to decide
all issues arising under the Plan, including issues of eligibility, coverage, and benefits.”
Because this policy language unambiguously grants the plan administrator “discretionary
authority” to determine eligibility and entitlement to benefits, the abuse-of-discretion
standard applies.
Tardio argues that the plan administrator committed an abuse of discretion by
denying him the claimed severance benefits. Tardio maintains that his severance benefits
were “due” before BSC reclassified his termination and determined that Tardio was no
longer eligible for the benefits. BSC Severance Plan counters that signing the release
agreement was only one of several conditions of Tardio’s eligibility for benefits. But
Tardio is not entitled to the severance benefits that he claims for two reasons, BSC

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Severance Plan argues. First, Tardio’s employment was terminated for cause, not as a
result of a layoff. And second, Tardio failed to honor all of his contractual obligations with
BSC.
When applying the abuse-of-discretion standard of review, a district court upholds
a plan administrator’s benefits-eligibility and benefits-entitlement determinations when the
plan administrator offers a “reasonable explanation for its decision, supported by
substantial evidence.” Ratliff v. Jefferson Pilot Fin. Ins. Co., 489 F.3d 343, 348 (8th Cir.
2007). This analysis requires a court to determine whether a “reasonable person could have
reached a similar decision . . . not that a reasonable person would have reached that
decision.” Phillips-Foster v. UNUM Life Ins. Co. of Am., 302 F.3d 785, 794 (8th Cir. 2002)
(internal quotation marks omitted). The plan administrator’s decision must be supported
by substantial evidence, which is more than a scintilla of evidence, but less than a
preponderance of the evidence. House v. Paul Revere Life Ins. Co., 241 F.3d 1045, 1048
(8th Cir. 2001). The district court also considers the financial conflict of interest that the
plan administrator may have when, as here, the plan administrator also is the insurer
responsible for paying benefits claims. Whitley v. Standard Ins. Co., 815 F.3d 1134, 1140
(8th Cir. 2016). But this conflict of interest does not alter the abuse-of-discretion standard
of review. Spizman v. BCBSM, Inc., 855 F.3d 924, 928 (8th Cir. 2017).
BSC Severance Plan explained that Tardio is ineligible for severance benefits under
BSC’s severance-benefits policy because Tardio’s conduct on May 4, 2016, led to the
reclassification of his termination as “for cause” effective on the same date.

BSC

Severance Plan issued Tardio a summary of the facts surrounding the May 4, 2016 incident

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and notified Tardio of BSC’s subsequent reclassification of his termination from “due to a
layoff” to “for cause” as a consequence of his conduct on that day. BSC Severance Plan
also recited the relevant provision of the severance-benefits policy, which states that:
Regardless of whether you receive Notice, your termination of
employment will not be considered a Layoff, and you will not receive
Severance Benefits, if your employment terminates for any reason
other than a Layoff. For example, you will not be considered to have
a Layoff, and, therefore, you will not receive Severance Benefits, if
your employment terminates for any of the following reasons:
...
 Misconduct or other “cause,” as determined by the Company
in its sole discretion . . . .
(Emphasis in original.) Applying this provision to the facts of Tardio’s termination, which
BSC reclassified as “for cause” on June 29, 2016, BSC Severance Plan concluded that
Tardio is ineligible for severance benefits. And BSC Severance Plan maintained this
position after a de novo review of the matter on Tardio’s administrative appeal.
Although it was not required to do so, BSC Severance Plan also evaluated the basis
for BSC’s reclassification of Tardio’s termination. See Farhner v. United Transp. Union
Discipline Income Prot. Program, 645 F.3d 338, 345 (6th Cir. 2011) (holding that, when a
condition for benefits is clearly stated in the plan policy, the plan administrator “need[s] to
look only at the stated reason for [the employee]’s termination, not the underlying conduct,
to determine if such reason fell under the list of exclusions outlined by the Plan”). After
reviewing the extensive documentation from the investigation of the May 4, 2016 incident
that BSC’s Global Security team conducted between May 20, 2016, and June 29, 2016,
BSC Severance Plan concluded:

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While the Plan provides for [BSC] “in its sole discretion” to define the
conduct that can provide cause for termination, the Committee finds that
the totality of the evidence, particularly the video footage of Mr. Tardio
throwing and dumping [BSC] medical device products that he was
required to return, amply supports the underlying [BSC] decision that
Mr. Tardio’s employment should be terminated for cause retroactively
effective as of the date that conduct occurred, May 4, 2016.
BSC Severance Plan also considered, and rejected, Tardio’s argument that the
release agreement, which he signed on May 11, 2016, required BSC to pay him severance
benefits that he had acquired as of that date. In rejecting this argument, BSC Severance
Plan advised Tardio that ERISA preempts state-law contract claims and requires BSC
Severance Plan to follow the terms of the written plan document. Indeed, BSC Severance
Plan’s determination is legally sound. See, e.g., Fink v. Dakotacare, 324 F.3d 685, 688–
89 (8th Cir. 2003) (observing that the Supreme Court of the United States has held that
ERISA’s section 1132(a) is “the exclusive vehicle for actions by ERISA-plan participants
and beneficiaries asserting improper processing of a claim for benefits” (quoting Pilot Life
Ins. Co. v. Dedeaux, 481 U.S. 41, 52 (1987)).
The Court also finds Tadio’s argument unpersuasive. Here, Tardio persists in
arguing that, because he signed the release agreement on May 11, 2016, his severance
benefits were “due” sometime after the expiration of the agreement’s rescission period, but
before June 29, 2016, when BSC reclassified his termination and determined that he was
no longer eligible for the benefits. 2 This argument, which is based on contract-law
2

The parties dispute the date when Tardio should have received the severance
benefits. Under the release agreement, BSC agreed to pay Tardio severance benefits on
BSC’s regular pay date occurring closest to 30 days after the expiration of the release
agreement’s rescission period, provided that Tardio had not exercised his right to rescind.
Because Tardio signed the release agreement on May 11, 2016, the expiration of the release
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principles, is unsupported by the express terms of the plan policy that state, “If [Tardio]
fail[s] to satisfy an applicable condition or eligibility requirement before all Severance
Benefits have been provided to [him], [Tardio] will not be entitled to any Severance
Benefits that have not yet been paid or otherwise provided.” For these reasons, the Court
rejects Tardio’s argument.
BSC Severance Plan has provided a reasonable explanation for its decision that is
supported by the facts in the record. Under the express terms of the severance-benefits
policy, signing the release agreement is only one of several conditions that must be met to
render Tardio eligible for severance benefits. In addition, the policy expressly conditions
benefits eligibility on a policy-holder’s employment not being terminated for cause. Tardio
does not, and cannot, dispute that the termination of his employment was reclassified as
“for cause” effective May 4, 2016. And upon its review of BSC’s investigation record,
BSC Severance Plan concluded that BSC did not abuse its discretion by terminating
Tardio’s employment for cause or misconduct based on Tardio’s conduct on May 4, 2016.
A reasonable person could reach the same determination that BSC Severance Plan
reached—specifically, that Tardio is not entitled to the claimed severance benefits.

agreement’s rescission period was May 26, 2016. Thus, under the release agreement, the
severance benefits should have been paid to Tardio on the regular pay date occurring
closest to June 25, 2016.
Tardio maintains that this pay date was June 24, 2016, but he cites nothing in the
record to support his position. BSC Severance Plan asserts that June 24, 2016, was not a
regular pay date at BSC; instead, the regular pay date occurring closest to June 25, 2016,
was July 1, 2016. BSC Severance Plan cites Beauregard’s declaration to support its
position. Even under Tardio’s contract theory, however, it cannot be disputed that
severance benefits would not have been “due” until July 1, 2016, i.e., after BSC had
reclassified Tardio’s termination.
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Because the record strongly supports the reasonableness of the BSC Severance Plan
determination, as well as the decision to reclassify Tardio’s termination as “for cause,”
BSC Severance Plan’s potential conflict of interest does not tip the scale in Tardio’s favor.
See, e.g., Estate of Schwing v. Lilly Health Plan, 562 F.3d 522, 526 (3rd Cir. 2009) (holding
that where “an abundance of evidence” of the claimant’s misconduct supports the denial
of the claim, analysis of any structural conflicts of interest or procedural irregularities is
unnecessary, because such factors would not “tip[ ] the scales” in favor of finding an
administrator’s abuse of discretion).

The Court upholds BSC Severance Plan’s

determination because the determination is supported by a “reasonable explanation” and
more than “substantial evidence” in the record. See Ratliff, 489 F.3d at 348.
As no material fact is genuinely disputed, summary judgment is proper in this case.
The Court grants summary judgment in favor of BSC Severance Plan and upholds BSC
Severance Plan’s benefits determination under ERISA.
ORDER
Based on the foregoing analysis and all of the files, records, and proceedings herein,
IT IS HEREBY ORDERED that Defendant Boston Scientific Corporation U.S.
Severance Plan for Exempt Employees’ motion for summary judgment, (Dkt. 19), is
GRANTED.
LET JUDGMENT BE ENTERED ACCORDINGLY. 

Dated: January 14, 2020

s/Wilhelmina M. Wright
Wilhelmina M. Wright
United States District Judge

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