Ross v. Weyerhaeuser Company et al
Filing
25
OPINION AND ORDER by Judge Frank H. Seay granting 5 Motion to Dismiss. Plaintiff is granted until 1/23/12 in which to amend his pleadings to recast his claims under ERISA(trl, Chambers)
IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF OKLAHOMA
EDDIE ROSS,
)
)
)
)
) No. CIV-11-422-FHS
)
)
)
)
)
Plaintiff,
v.
WEYERHAEUSER COMPANY and BILLY
PIERCE,
Defendants.
OPINION AND ORDER
Before the Court for its consideration is the Motion to
Dismiss (Dkt. No. 5) filed by Defendant, Weyerhaeuser Company
(“Weyerhaeuser”), pursuant to Rule 12(b)(6) of the Federal Rules of
Civil Procedure.
Weyerhaeuser contends Plaintiff’s claims for
breach of contract and fraud should be dismissed as preempted by
the provisions of the Employee Retirement Income Security Act of
1974 (“ERISA”), 29 U.S.C. § 1001, et seq.
fully briefed and is ripe for ruling.
The matter has been
Having considered the
parties’ respective submissions, the Court concludes dismissal of
Plaintiff’s breach of contract and fraud claims is appropriate,
with leave granted for Plaintiff to amend to assert a claim under
ERISA.
On October 31, 2011, Plaintiff filed this action in the
District Court of McCurtain County, Oklahoma, against his former
employer,
Weyerhaeuser,
and
a
Weyerhaeuser
management
level
supervisor, Billy Pierce (“Pierce”), asserting claims for breach of
contract and fraud. On November 23, 2011, Weyerhaeuser removed the
case to this federal court on the basis of both diversity and
federal question jurisdiction.
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In his state court Petition, Plaintiff contends his employment
with Weyerhaeuser began in 1971 as an electrician with plant
maintenance responsibilities.
In this position, Plaintiff was
classified as an hourly employee and received an enhanced hourly
rate for overtime work pursuant to the terms of the collective
bargaining between Weyerhaeuser and Plaintiff’s union.
In October
of 1999, Plaintiff’s supervisor, Pierce, approached Plaintiff to
determine if Plaintiff would be interested in taking a salaried
position as a maintenance supervisor at the Wright City plywood
manufacturing operation.
Plaintiff contends he was hesitant to
accept this salaried position because he would be foregoing the
extensive
overtime
compensation
he
could
earn
as
an
hourly
employee.
Plaintiff asserts that as an incentive for taking the
salaried position, Pierce promised that “if Plaintiff would take
the salaried position and remain in it until his employment came to
an end, all of his years of service (all the way back to 1971)
would be credited to Plaintiff’s retirement under Weyerhaeuser’s
pension plan for salaried employees, rather than to the pension
plan for hourly employees.” Petition, ¶ 5 (emphasis in original).
Pierce informed Plaintiff that the pension plan for salaried
employees would be of substantial benefit to Plaintiff.
In
reliance upon Pierce’s representations and promises, Plaintiff
transferred to the salaried position at the Wright City plant and
remained there until the plywood manufacturing operation shut down
in 2005.
transfer.
As a salaried employee, Plaintiff was not eligible for a
Thus,
Plaintiff’s
employment
with
Weyerhaeuser
terminated in 2005.
Plaintiff applied for his retirement benefits in 2011.
Retirement benefits for hourly employees are governed by the
Weyerhaeuser Company Retirement Plan for Hourly Rated Employees
(“Hourly Plan”).
Retirement benefits for salaried employees are
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governed by the Weyerhaeuser Company Retirement Plan for Salaried
Employees (“Salaried Plan”).
Vanguard
Fiduciary
Trust
Both plans are administered by the
Company
(“Vanguard”).
In
processing
Plaintiff’s request for retirement benefits, Vanguard did not
credit all of Plaintiff’s years of service to the Salaried Plan as
promised by Pierce back in 1999 when Plaintiff accepted the
salaried position. Rather, Vanguard allocated Plaintiff’s years of
service
between
the
Hourly
and
Salaried
Plans,
resulting
in
Plaintiff being awarded retirement benefits based on 27 1/2 years
of hourly service and 5 years of salaried service.
Plaintiff
contends this allocation results in retirement benefits that are
significantly less than if calculated as promised and represented
by Weyerhaeuser, through Pierce, under a strictly salaried status.
Faced with this reduced retirement benefit, Plaintiff filed this
action against Weyerhaeuser and Pierce for breach of contract and
fraud.
ERISA
is
a
statutory
scheme
regulating
employee
welfare
benefit plans and its broad and comprehensive provisions preempt
state laws which are "related to" such plans. Pilot Life Insurance
Company
v.
Dedeaux,
481
U.S.
41,
45
(1987).
In
regard
to
preemption, ERISA provides, in part:
Except as provided in subsection (b) of this section, the
provisions of this subchapter and subchapter III of this
chapter shall supersede any and all State laws insofar as
they may now or hereafter relate to any employee benefit
plan . . . .
29 U.S.C. § 1144(a).
Weyerhaeuser’s Hourly and Salaried Plans are
undeniably “employee benefit plan[s]” falling within the scope of
section
1144(a).
See
29
U.S.C.
§
1002(2)(A),(3).
The
determinative issue, therefore, is whether Plaintiff’s state law
3
claims for breach of contract and fraud “relate to” those Plans.
The Supreme Court has held that the scope of ERISA preemption
under
the
"relate
to"
phrase
of
§1144(a)
is
"deliberately
expansive, and designed to ‘establish pension plan regulation as
exclusively a federal concern.’"
Pilot Life, 481 U.S. at 46
(quoting Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 523
(1981)); see also Shaw v. Delta Air Lines, 463 U.S. 85, 97-98
(1983); Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724,
739 (1985); Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 13839(1990). The Supreme Court has explained the scope of the “relate
to” language of ERISA’s preemption clause by stating that “[a] law
‘relates to’ an employee benefit plan, in the normal sense of the
phrase, if it has a connection with or reference to such a plan.”
Shaw, 463 U.S. at 96-97.
The Tenth Circuit has adhered to this expansive interpretation
of the "relate to" phrase in holding that ERISA preempts state law
claims for breach of contract and negligent misrepresentation
brought by participants in an employer’s pension plan.
Straub v.
Western Union Telegraph Co., 851 F.2d 1262, 1263 (10th Cir. 1988).
In Straub, the Plaintiff asserted a breach of contract claim
against his former employer for not including him in an increase in
pension benefits and a negligent misrepresentation claim for his
former employer’s failure to inform him that his pension benefits
might be affected by his transfer of employment to a wholly owned
subsidiary of the former employer.
In affirming the district
court’s ruling that Plaintiff’s claims were preempted by ERISA, the
Tenth Circuit relied on the holding in Anderson v. John Morrell &
Co., 830 F.2d 872 (8th Cir. 1987) that “principles of common law
governing a claimed contract right to have the plan modified
clearly ‘relates to’ [sic] the plan and that state law in that area
4
is preempted.”
Id. at 875; see also Milton v. Scrivner, Inc., 53
F.3d 1118, 1121 n. 3 (10th Cir. 1995)(claims “alleging fraud with
intent to deprive plaintiff of retirement benefits . . . preempted
by ERISA”).
Similar to the factual setting in Straub, Plaintiff’s
claims herein “relate to” the Plans because he is attempting to
modify the terms of the subject Plans by superimposing the promises
allegedly made by Pierce, in his position as a management level
supervisor
for
Weyerhaeuser,
during
the
Plaintiff’s transfer to a salaried position.
discussions
about
Because the factual
bases for such claims necessarily implicate Weyerhaeuser’s Plans,
they are preempted by ERISA and must be recast as ERISA claims
under
29
U.S.C.
§
1132(a)(1)(B).
See
Miller
v.
Coastal
Corporation, 978 F.2d 622 (10th Cir. 1992)(ERISA action was brought
under 29 U.S.C. § 1132(a)(1)(B) to recover benefits a retired
employee would have received had his years as an hourly union
employee been credited as years of service under salaried pension
plan.
Employee contended that at the time of his promotion to the
salaried position, he was told by his employer that all his prior
service as a hourly union employee would be computed as if he had
been a salaried employee).
Based on the foregoing reasons, the Court finds Plaintiff’s
breach of contract and fraud claims are preempted by ERISA.
Weyerhaeuser’s Motion to Dismiss (Dkt. No. 5) is therefore granted.
Plaintiff is granted until January 23, 2012, to amend his pleadings
to recast his claims under ERISA.
It is so ordered this 17th day of January, 2012.
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