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Wahlin v. Sears

March 19, 1996

ALAN PERRY WAHLIN,

PLAINTIFF-APPELLANT,

v.

SEARS, ROEBUCK & COMPANY, BARRY H. PIKE, IN HIS OFFICIAL CAPACITY AS THE SEARS PENSION PLAN ADMINISTRATOR AND SEARS LOGISTICS SERVICES, INCORPORATED,

DEFENDANTS-APPELLEES.



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 94 C 1518--John F. Grady, Judge.

Before COFFEY, EASTERBROOK, and RIPPLE, Circuit Judges.

COFFEY, Circuit Judge.

ARGUED SEPTEMBER 13, 1995

DECIDED MARCH 19, 1996

Alan Perry Wahlin appeals the district court's dismissal of his complaint for failing to state a claim under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. sec. 1132. We affirm.

I. Background

In 1990, Alan Perry Wahlin was a director of corporate accounting and finance at Sears Logistical Services (SLS), a subsidiary of Sears, Roebuck & Company (Sears), where he had been employed since 1966. Due to reorganization at SLS, the company offered Wahlin the opportunity for an early retirement and enhanced benefits under a program labelled "SLS Unit Closing Severance Allowance Plan for Checklist Employees (Reorganization Incentive)," also known as "Plan No. 501." With regard to pension benefits, the "Reorganization Incentive" plan provided that "you [the employee] will be offered enrollment in any retirement benefit plans for which you are eligible." Wahlin accepted the early retirement package and on December 7, 1990 he signed a letter of understanding, which provides in relevant part: This will confirm our understanding that you will continue active employment until [March 31], 1992, at which time you will become eligible for and agree to accept the benefits of the SLS Unit Closing Allowance Plan for Checklist Employees (Reorganization Incentive) in effect on November 26, 1990.

This arrangement is in accordance with the provisions of the Reorganization Incentive, and the severance benefits you will receive will be governed by the terms and conditions of that Plan. In this regard, you agree to complete the required forms necessary to be eligible for the Reorganization Incentive. The other benefits you will be entitled to at retirement, such as Pension, will be governed by the applicable plans then in effect.

Accordingly, Wahlin continued active employment with SLS until March 31, 1992, when he began his leave of absence pursuant to the agreement. The paid leave of absence was to run for one year, to March 31, 1993, at which time Wahlin was due to retire and would commence to receive pension benefits.

However, during Wahlin's leave of absence in 1992, SLS continued downsizing its operations and offered its current employees a somewhat different retirement incentive package, entitled "SLS 1993 Early Retirement Incentive Program for Exempt Associates" (or "ERIP"). Although similar to the "Reorganization Incentive" previously accepted by Wahlin, the 1993 ERIP offered its participants an additional benefit: "a credit of an additional five years to both age and length of service [will] be used in calculating pension benefits . . . ."

ERIP was composed of two parts: a Voluntary ERIP and the Unit Closing/Reorganization ERIP, the first for voluntary retirees and the latter for those employees forced into retirement by unit closings and company reorganization. However, both ERIP programs were offered only to those employees who were currently on active employment status and the plan specifically excluded from coverage those employees, such as Wahlin, who had previously accepted retirement packages under the prior "Reorganization Incentive" package then-offered. *fn1

On March 10, 1993 Wahlin wrote the ERIP plan administrator, requesting the new five-year credit available under the 1993 ERIP program. The plan administrator refused Wahlin's request, stating that because he had formally retired in 1992 and accepted the "Reorganization Incentive" retirement package offered at that time, he was ineligible for the 1993 ERIP benefits. Wahlin requested a review of this decision, but the plan administrator again denied his claim for the additional benefits, reasoning:

The enhanced pension benefit is available only to associates who meet the eligibility requirements for ERIP. As mentioned in my earlier correspondence, associates receiving benefits under the Closed Unit/Reorganization Severance Plan (Plan 501) are not eligible for benefits from the ERIP. This is one of the applicable provisions of the Plan and, as such, is also consistent with the December 6, 1990 letter of understanding attached to your request for reconsideration.

Wahlin brought this action against SLS, Sears, and the plan administrator, claiming that he was denied benefits due under the 1993 ERIP. 29 U.S.C. secs. 1132(a)(1)(B), (a)(3). *fn2 The district court dismissed the complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure for ...


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