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Bogue v. Ampex Corp.

filed: October 7, 1992.

DONALD F. BOGUE, PLAINTIFF/APPELLANT,
v.
AMPEX CORPORATION AND ALLIED-SIGNAL, INC.; DOES 1-10, INCLUSIVE, DEFENDANTS/APPELLEES.



Appeal from the United States District Court for the Northern District of California. D.C. No. CV-89-0682-CAL. Charles A. Legge, District Judge, Presiding.

Before: John Minor Wisdom,*fn* Robert R. Beezer, and Stephen S. Trott, Circuit Judges. Opinion by Judge Wisdom.

Author: Wisdom

WISDOM, Circuit Judge:

The plaintiff/appellant, Donald Bogue, seeks severance payments denied him by his former employer. The district court upheld that denial under the Employee Retirement Income Security Act ("ERISA").*fn1 We find that ERISA controls this case, supports the denial of benefits, and offers Bogue no other opportunity to challenge the decisions below. We AFFIRM, but decline to award attorney fees to the appellees.

I. BACKGROUND

Donald Bogue was a Vice President of the Audio-Video Systems Division of Ampex Corporation, a Redwood City manufacturer of sound equipment. Allied-Signal owned Ampex between September 1976 and May 1987. During November 1986 Allied-Signal informed ten executives of Ampex (including Bogue) that it intended to sell Ampex. To retain those executives, at least temporarily, Allied-Signal established the "Allied-Signal/E & I Sector Special Compensation Program for Designated Key Executives".*fn2 The program provided for severance benefits if neither Allied-Signal nor the Buyer [of Ampex] offers you "substantially equivalent" employment and your employment is terminated.

"Substantially equivalent employment" was defined as a job that included "responsibilities similar" to those while Allied-Signal still owned Ampex. Allied-Signal would determine whether the benefits were appropriate in each case. The program would end on March 31, 1988.*fn3

Allied-Signal sold Ampex in May 1987. Ampex (through its new owner) assumed liability for paying severance benefits under the program. The new president of Ampex reorganized the business and offered Bogue a position as Vice President of Marketing, Sales & Service. He accepted the offer in the hope that it would help his career; he told Ampex, however, that he considered the position one that was not "substantially equivalent" to his old job. Citing the same complaint and seeking severance pay under the program, he resigned from Ampex in January 1988. Allied-Signal, which had obligated itself to administer the program after the sale of Ampex, denied Bogue's request for severance pay. It based that decision on Ampex's argument that Bogue's new position was substantially equivalent to his previous job.

Bogue later filed a lawsuit against Ampex and Allied-Signal in state court. The defendants successfully removed the case to federal court based on ERISA preemption; the district court denied Bogue's request for remand to state court, and later granted summary judgment in favor of Allied-Signal and Ampex. The district court concluded that Allied-Signal's denial did not abuse its fiduciary discretion, that no conflict of interest existed between Allied-Signal and Ampex that would require the court to apply a more stringent standard of review, and that Bogue had not made out a violation of 29 U.S.C. § 1140, which prevents an employer from intentional discrimination in depriving its employees of plan benefits.*fn4 Bogue appeals these decisions. The defendants "intend to seek attorney fees for the appeal"; we read that intent as a request for those fees.

II. Discussion

A. ERISA Preemption

ERISA preemption*fn5 provides for the removal to federal court of lawsuits involving employee benefit plans. Because ERISA preemption is the sole basis of federal jurisdiction in this case we must decide whether the "Special Compensation Program for Designated Key Executives" is an "employee benefit plan" under ERISA.

ERISA preemption is notoriously broad, but several recent cases have held that it has reasonable limits. In the leading case on this question the Supreme Court held that ERISA did not preempt a state plant-closure law that provided for a lump sum severance payment, triggered by a single event that may never occur.*fn6 In Fort Halifax the Court found that such a law "simply creates no need for an ongoing administrative program for processing claims and paying benefits".*fn7 Bogue contends that the Allied-Signal severance payment program should be similarly exempt from ERISA preemption. It had a very short term (17 months); it applied only contingently, if Ampex were sold, and if the employee were denied substantially equivalent work by the buyer; and it would apply only once to any individual employee. Allied-Signal contends that the program, by its own terms, required the sort of discretionary decision-making by the plan's administrator that is the hallmark of an ERISA plan. We agree with Allied-Signal. The program before us involved more than what Fort Halifax describes as "the theoretical possibility of a one-time obligation in the future".*fn8

Bogue finds support in the Fifth Circuit's post -Fort Halifax opinion in Wells v. General Motors Corp.*fn9 Wells held that the General Motors "procedure by which employees could elect to receive a one-time lump payment if they ceased working at the plant"*fn10 was not an ERISA plan. The Court found that

the plan was not ongoing, nor was there any need for continuing administration of the payment program . . . . The facts that GM made the payments pursuant to a Voluntary Termination of Employment " Plan " and that the employees received a benefit do not convert ...


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