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KROSS v. WESTERN ELEC. CO.

February 1, 1982

WILLIAM J. KROSS, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
WESTERN ELECTRIC COMPANY, INC., DEFENDANT.



The opinion of the court was delivered by: Getzendanner, District Judge.

MEMORANDUM OPINION AND ORDER

Plaintiff William Kross brought this action on behalf of himself and all others similarly situated against Western Electric Company, Inc., his former employer, alleging that he and members of the class were discharged from their employment at the company's Hawthorne Division in order to prevent the vesting or continued enjoyment of his and their rights under various employee benefit plans, in violation of Section 510 of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1140.*fn1

Western Electric has substantially reduced the work force at its Hawthorne Division in the past several years. Kross was 53 years old and had 22 years employment with Western Electric at the time of his termination in September, 1975. To qualify for a service pension at Western Electric, an employee had to be either 55 years old with 20 years of service or 50 years old with 25 years of service. Thus, at termination, Kross was two years shy of qualifying for a service pension, although he does qualify for a deferred service pension. Kross alleges that Western Electric terminated him and the other class members to prevent the vesting of their rights under the service pension plan.

Kross further alleges that as an employee he received certain fringe benefits, including coverage by Company health and welfare, dental, disability and life insurance plans, and he argues that Western Electric terminated him and the other class members to avoid the continued payment for this insurance.

Kross seeks an injunction enjoining defendant from using employment and personnel policies that discriminate in violation of the Act. He further seeks reinstatement for himself and the class and damages in an amount equal to back pay and the other fringe benefits to which he and the class would have been entitled had he and they not been unlawfully discharged.

Western Electric has moved for summary judgment on the ground that Kross failed to exhaust the claim procedures under the benefit and pension plans. The motion is granted for the reasons stated herein.

To resolve the question whether exhaustion is required in this case, an examination of the statutory scheme is necessary. By its express terms, Section 510 incorporates the "provisions" of Section 502 of ERISA. Section 502, in turn, authorizes four types of civil actions, three of which are relevant here:*fn2

(a) A civil action may be brought

(1) by a participant or beneficiary —

    (B) to recover benefits due to him under the
    terms of his plan, to enforce his rights under
    the terms of the plan, or to clarify his rights
    to future benefits under the terms of the plan;
    (2) by the Secretary, or by a participant,
    beneficiary or fiduciary for appropriate relief
    under section 1109 of this title [liability for
    breach of fiduciary duty];

(3) by a participant, beneficiary, or fiduciary

    (A) to enjoin any act or practice which violates
    any provision of this subchapter or the ...

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