The opinion of the court was delivered by: SAMUEL DER-YEGHIAYAN, District Judge
This matter is before the court on Defendant's motion to
dismiss. For the reasons stated below we deny the motion in part
and grant the motion in part.
In 1999, Plaintiff Yaskov B. Holansky ("Holansky") worked for
Defendant Prudential Securities Incorporated ("PSI"). During his
employment Holansky elected to participate in a compensation plan
referred to as the MasterShare Plan ("Plan"). The Plan is a
compensation plan offered to employees called Financial Advisors at PSI. Holansky quit his employment with PSI and PSI
told him that his contributions to the Plan were forfeited under
the terms of the Plan. PSI claims that before signing onto the
Plan, Holansky received an informational booklet and signed an
election form that specifically disclosed the forfeiture
provision in the plan.
PSI argues that the individuals that participated in the Plan
were Financial Advisors and thus, were sophisticated individuals
that were knowledgeable in financial matters. Holansky contends
that he was merely a Financial Advisor trainee and that he and
others were not trained in matters that would have enabled him to
understand the forfeiture provision.
Holansky also contends that PSI promoted the Plan as a pension
plan and claims that employees were pressured to join the Plan.
According to Holansky, all trainees were "strongly encouraged" to
join the Plan and that non-participation in the plan was
considered an indication that the trainee did not plan to stay
with PSI. According to Holanksy, a substantial portion of a
trainee's salary was deducted as contributions for the Plan.
Holansky brought the instant action against Defendant PSI and
Defendant Judy Vance (hereafter included in references to "PSI")
who was PSI's Director of Human Resources. Holansky seeks to
recover his contributions and attorneys' fees under § 502 of the
Employee Retirement Income Security Act ("ERISA"). Holansky also brings a breach of fiduciary duty claim under ERISA, an
equitable claim for recovery of contributions, a New York labor
law claim, and an estoppel claim. Defendants have moved to
dismiss the amended complaint in its entirety.
In ruling on a motion to dismiss, the court must draw all
reasonable inferences that favor the plaintiff, construe the
allegations of the complaint in the light most favorable to the
plaintiff, and accept as true all well-pleaded facts and
allegations in the complaint. Thompson v. Illinois Dep't of
Prof'l Regulation, 300 F.3d 750, 753 (7th Cir. 2002); Perkins
v. Silverstein, 939 F.2d 463, 466 (7th Cir. 1991). The
allegations of a complaint should not be dismissed for a failure
to state a claim "unless it appears beyond doubt that the
plaintiff can prove no set of facts in support of his claim which
would entitle him to relief." Conley v. Gibson, 355 U.S. 41,
45-46 (1957). Nonetheless, in order to withstand a motion to
dismiss, a complaint must allege the "operative facts" upon which
each claim is based. Kyle v. Morton High School, 144 F.3d 448,
454-55 (7th Cir. 1998); Lucien v. Preiner, 967 F.2d 1166, 1168
(7th Cir. 1992). The plaintiff need not allege all of the facts
involved in the claim and can plead conclusions. Higgs v.
Carter, 286 F.3d 437, 439 (7th Cir. 2002); Kyle, 144 F.3d at
455. However, any conclusions pled must "provide the defendant with at least minimal notice of the claim," Id., and
the plaintiff cannot satisfy federal pleading requirements merely
"by attaching bare legal conclusions to narrated facts which fail
to outline the bases of [his] claim." Perkins, 939 F.2d at
I. Whether the Plan is Governed by ERISA
Holansky's ERISA claims are based upon the provisions of ERISA
that prohibit the forfeiture of employee contributions.
Defendants seek to dismiss the suit on the basis that the Plan is
not governed by ERISA. ERISA governs plans that fall within the
definition of an "employee welfare benefit plan" or an "employee
pension benefit plan." 29 U.S.C. § 1002(3). Holansky claims that
the Plan constitutes an employee pension benefit plan. An
employee pension benefit plan is defined as "any plan, fund, or
program . . . to the extent that by its express terms or as a
result of surrounding circumstances such plan, fund, or program
(i) provides retirement income to employees, or (ii) results in a
deferral of income by employees for periods extending to the
termination of covered employment or beyond. . . ."
29 U.S.C. § 1002(2)(A). Holansky argues that the surrounding circumstances in
this case indicate that the Plan was an employee pension benefit plan
and that it was thus governed by ERISA.
Holansky argues that the Plan is an employee benefit pension
plan because the Plan defers taxation. PSI argues that the Plan
defers taxation only for a discrete period of time and does not
systematically defer taxation until retirement. According to PSI,
the Plan provides for distribution during a participant's
employment and that at the end of the three year period Plan
participants have the unrestricted right to the full value of
their shares. However, the Plan allows participants to request
successive one year extensions after the three year period.
Holansky alleges that Plan participants routincly seek successive
one year extensions under the terms of the plan to continue
deferment until retirement. PSI argues that simply because
employees may theoretically use a Plan to defer income until
retirement does not mean that the Plan is an employee benefit
pension plan. However, such matters although not conclusive, are
relevant for the surrounding circumstances inquiry.
Holansky also alleges that PSI promoted the Plan as an employee
benefit pension plan. He claims that PSI told new trainees that
the Plan was to serve as a pension plan and was a "great way to
save for retirement." (Ans 2). PSI points out that when Holanksy
joined the Plan he signed a form indicating that his understanding of the Plan was based on the ...