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ALAIRE v. AMOCO CORP.
February 15, 1991
JOSEPH ALAIRE; MICHAEL ROWAN; ALFRED LEWIS; SCOTT KOS; RONALD JANKOSKI; LOUIS REEDY; RUSSELL JOEDICKER; EDWARD VACIK; EDWIN SOCHACKI; JOHN JURIS; JEROME O'HALLORAN; STEVEN WARD; BOBBY GARRISON; DORIS VAN DYKE, EXECUTOR OF THE ESTATE OF THOMAS VAN DYKE; KENNY ROGAL; E. MIKE JURIJCUK, Plaintiffs,
AMOCO CORPORATION, Defendant
The opinion of the court was delivered by: SHADUR
MILTON I. SHADUR, UNITED STATES DISTRICT JUDGE
This action seeks severance benefits allegedly due by reason of the termination of 16 ex-employees of Amoco Corporation ("Amoco").
Amoco's nonpayment of such benefits assertedly violates the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001-1461. Amoco now moves for summary judgment under Fed. R. Civ. P. ("Rule") 56. For the reasons stated in this memorandum opinion and order, its motion is granted.
Plaintiffs' claim rests on their purported right to participate in Amoco's Severance Allowance Policy (the "Policy," Complaint Ex. B). These are the relevant provisions of the Policy:
The purpose of this Policy is to provide severance allowances for employees whose services are permanently terminated for causes which are no fault of the employee involved. The Policy may be implemented for a particular employee-reduction situation for a limited period of time, and an employee affected by it will be informed as to its provisions.
"Company" means Standard Oil Company and any of its subsidiary companies whose management elects to apply the Policy to a particular employee-reduction situation for a limited period of time.
"Employee" means any person giving his full-time services to the Company who is designated as being covered by the Policy at the time it is made effective but shall not include temporary, part-time or casual employees, not any classification of employees designated by the management of a Company as not eligible to participate.
By letter dated November 12, 1984 (Complaint Ex. A), Amoco informed plaintiffs and other employees at the Facilities that the locations would be converted from company to dealer operations effective December 1, 1984 and that the services of each employee would no longer be required after November 30, 1984. As a result, all employees covered by the collective bargaining agreement between Amoco and Local 705 were terminated. At least some of the plaintiffs were offered employment at a lower level of compensation by the new operator of the Facilities.
Pursuant to "effects bargaining" between Amoco and Local 705, Amoco agreed to pay wages to each employee through December 31, 1984 and also to provide them with vacation pay for 1985 if they remained on the job through November 30, 1984. Neither the applicable collective bargaining agreement nor the effects bargaining included any undertaking by Amoco to cover the Local 705 employees under the Policy, nor did Amoco ever advise the employees that they were covered by the Policy. On the contrary, any employees who asked were explicitly told that they were not covered by the Policy.
Plaintiffs initially sued Amoco in the Cook County Circuit Court of Illinois. Amoco timely removed the action to this Court on the ground that plaintiffs are asserting a claim for benefits under an "employee welfare benefit plan" as defined in ERISA (29 U.S.C. § 1002(1)). Although this opinion holds that plaintiffs lose on the merits, Amoco is right in its ...
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