Severance Benefit Claims

This week’s notable decision is Castellon-Vogel v. International Paper Company, __F.App’x__, 2020 WL 5891679 (6th Cir. Oct. 5, 2020). Martha Castellon-Vogel (Vogel) worked as an engineer for International Paper Company (IPC). The company’s ERISA welfare benefit plan provided that Vogel could receive a severance package at the end of her employment if, among other conditions, she “sign[ed] a termination agreement acceptable to the Company.” After her job was eliminated, Vogel signed such a “Termination Agreement,” which included a broad General Release. That provision released IPC of liability for all employment-related claims arising during her tenure. She then received fifty-four weeks’ pay, in accordance with the Plan’s terms. Despite cashing the check, Vogel sued IPC. She argued on appeal that the Plan’s terms were illusory and that the General Release in the Termination Agreement was unenforceable for lack of consideration.
Continue Reading Sixth Circuit Affirms Dismissal of Claims Challenging Severance Plan’s General Release Requirement

This week’s notable decision is Peck v. SELEX Sys. Integration, Inc., No. 17-7138, __F.3d__, 2018 WL 3431740 (D.C. Cir. July 17, 2018). Plaintiff Ronald Peck was a participant in Defendant SELEX Systems Integration’s “top-hat” ERISA-governed deferred compensation plan.  After working for SELEX for over fifteen years, the company terminated him when he refused to accept a transfer from his marketing position in D.C. to a different position in quality-control in Kansas.  Defendants denied Plaintiff’s claims for benefits under SELEX’s deferred-compensation plan and its severance policy on the basis that Plaintiff’s termination for refusing to transfer positions rendered him ineligible for benefits.  The district court granted judgment in SELEX’s favor on both claims for benefits.  The D.C. Circuit vacated the district court’s judgment with regard to the deferred compensation claim but affirmed the judgment with regard to severance pay.
Continue Reading D.C. Circuit Holds That Participant Is Entitled to Deferred Compensation Benefits Despite Termination for Refusing to Transfer Positions