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Aaron Hoffman v. Sara Lee Corp.

October 13, 2011


The opinion of the court was delivered by: Hon. Harry D. Leinenweber


Before the Court is Defendants' joint Motion to Dismiss Plaintiff's Amended Complaint pursuant to FED. R. CIV. P. 12(b)(6) on two grounds: (1) that Count II does not state a proper claim for estoppel; and (2) that Sara Lee Corp. ("Sara Lee") is not a proper defendant. For the reasons stated herein, the motion is granted in part and denied in part. Count II is dismissed, but Sara Lee will remain a defendant in the case.


Plaintiff Aaron Hoffman ("Hoffman"), a former executive at Sara Lee Corp., brought the instant claim under Section 502 of the Employment Retirement Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., alleging the company failed to pay him severance in violation of the law. Hoffman's suit names both Sara Lee and the Sara Lee Corporation Executive Pay Plan for Key Employees. Defendants assert that the plan is misnamed in the Complaint, and that it is actually called the Sara Lee Corporation Severance Pay Plan for Key Employees ("the Plan").

The following facts are taken from Hoffman's Complaint, and the Court will accept them as true for the purposes of this motion. Additionally, the Court will consider the Plan documents and other exhibits attached to Hoffman's Complaint, which include his performance appraisal, correspondence between his attorney and Sara Lee, and correspondence between his attorney and the Sara Lee ERISA Appeal Committee. See Centers v. Centennial Mortg., Inc., 398 F.3d 930, 933 (7th Cir. 2005); FED. R. CIV. P. 10(c)("A copy of any written instrument which is an exhibit to a pleading is a part thereof for all purposes.").

Hoffman began working for Sara Lee in November 1999 as Director of Investor Relations. In 2001, he was promoted to the position of Vice President for Investor Relations, and reported directly to Sara Lee's Chief Financial Officer, Theo de Kool ("de Kool"). In 2009, de Kool left the company and Hoffman began reporting to Marcel Smits ("Smits"). Smits first served as the company's Chief Financial Officer and later became its Interim Chief Executive Officer.

During this time, Hoffman was considered a key executive and was entitled to the benefits of the Plan. Under paragraph 3 of the Plan, an eligible employee is entitled to severance benefits if "at his employer's request, [he] agrees to voluntarily terminate his employment."

Hoffman alleges that on a number of occasions over an 18-month period, Smits advised him that it was Smits' intention to either divide Sara Lee into smaller companies or to sell the company, and that as a result Hoffman's position and possibly his entire department would be eliminated. Smits further told Hoffman that when the time came for Hoffman to leave the company, he would be entitled to a severance payment under the Plan, the Complaint alleges.

The first such conversation, according to the Complaint, happened in November 2009 while Hoffman and Smits were on a flight to Boston. The two worked on a valuation to determine what the price of the company's shares would be in a breakup or sale. They arrived at a price substantially higher than that at which the stock was trading at the time. Hoffman remarked that it would be great to see the price at that level, to which Smits replied that he didn't think Hoffman would like that because "[y]ou'll be out of a job. Hoffman responded that he would receive a severance payment, to which Smits replied, "That's true."

In the spring of 2010, Smits told Hoffman the details of the anticipated breakup of Sara Lee. Smits mentioned that the intent was to reduce or eliminate the size of the Investor Relations Department if the breakup went forward.

On July 15, 2010, according to the Complaint, Smits gave Hoffman his annual performance review. He made positive comments about Hoffman's work, but told him it was time to leave Sara Lee. Hoffman asked if that meant he was being asked to leave the company. Smits replied that he was asking him to leave during fiscal year 2011. Hoffman said that he wanted to be clear that he would receive severance if he left the company, and Smits replied that he would. Hoffman's written performance review includes a statement by Smits that he and Hoffman had talked about how it would be in Hoffman's best interest to work toward attracting a "good outside offer" in fiscal year 2011.

Hoffman subsequently began looking for another job and found one at a lower rate of pay. On November 10, 2010, he informed Smits that he had found a new job. Sara Lee has subsequently refused to pay severance pursuant to the Plan.

Hoffman made an initial claim for benefits on December 28, 2010, which was denied. He then appealed to the Sara Lee ERISA Appeal Committee, which on April 19, 2011, issued its decision denying his claim and notifying Hoffman of his right to file the present lawsuit within 90 days.

Count I of Hoffman's Complaint alleges a violation of Section 502 of ERISA, while Count II alleges a federal ...

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