Filed: Apr. 21, 2015
Latest Update: Mar. 02, 2020
Summary: Instead, he maintains on, appeal that, after the December 5 call, he told people that DeFalco, had retired him., 9, At the time of Niebauer's departure from Crane, human, resources had determined that he was ineligible for severance, benefits under the plan and declined to pay them out.F.3d at 8.
United States Court of Appeals
For the First Circuit
No. 14-2059
ROBERT NIEBAUER,
Plaintiff, Appellant,
v.
CRANE & CO., INC.; CRANE & CO., INC. EXECUTIVE SEVERANCE PLAN,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Michael A. Ponsor, U.S. District Judge]
Before
Barron, Selya, and Stahl,
Circuit Judges.
Robert A. Fisher, with whom Jonathan A. Keselenko, Christopher
S. Feudo, and Foley Hoag LLP were on brief, for appellant.
David C. Casey, with whom Robert B. O'Brien and Littler
Mendelson, P.C. were on brief, for appellees.
April 21, 2015
STAHL, Circuit Judge. In this case arising under the
Employee Retirement Income Security Act ("ERISA"), 29 U.S.C.
§§ 1001 et seq., Plaintiff-Appellant Robert Niebauer alleges that
the administrator of his former employer's executive severance plan
denied him severance benefits after erroneously determining that he
had retired voluntarily from his position. See 29 U.S.C.
§ 1132(a)(1)(B). Niebauer further alleges that his former employer
improperly interfered with his rights under the plan, in violation
of 29 U.S.C. § 1140. The district court granted Defendants-
Appellees summary judgment on both counts. See Niebauer v. Crane,
44 F. Supp. 3d 147 (D. Mass. 2014).
Because we find that the plan administrator's decision to
deny Niebauer's claim for benefits was both supported by
substantial evidence and procedurally proper, we affirm the
district court's judgment in that regard. However, we vacate the
district court's judgment as to the interference claim and remand
for application of the correct standard of review.
I. Facts & Background1
At the time of the events in question, Robert Niebauer
was the chief technology officer of Crane & Co., Inc. ("Crane").
Headquartered in Dalton, Massachusetts, Crane produces specialty
1
As both parties and the district court did, we draw the
facts from the full summary judgment record. We detail infra the
specific information and documents that were before the plan
administrator when it made its decisions.
-2-
paper products, including the banknote paper used for printing
United States currency.
Crane maintains an executive severance plan ("plan"),
under which severance benefits are available to designated
employees who have been involuntarily terminated. Because the plan
is an employee welfare benefit plan, it is governed by ERISA, 29
U.S.C. §§ 1001 et seq. Employees who voluntarily leave Crane are
entitled to benefits only if they do so for "good reason," which
the plan defines as certain changes to an employee's position, such
as relocation, significant reduction in salary, or substantial
changes to the employee's job responsibilities.2 The plan reserves
to the administrator — here, the compensation committee of Crane's
board of directors — "full discretionary power and authority to
construe, interpret and administer the Plan [and] to make Benefit
Eligibility determinations." As a Crane executive, Niebauer was
covered by the plan.
In his capacity as chief technology officer, Niebauer
reported to the chief executive officer ("CEO") of the company — a
position occupied, as of October 2011, by Stephen DeFalco, a recent
hire. One of DeFalco's priorities upon taking office was repairing
a frayed relationship with a significant client of the company, the
2
Per the terms of the plan, an event constitutes "good
reason" only if the employee provides written notice to the Crane's
board of directors, specifying the event in question, within sixty
days of the first occurrence of such event.
-3-
Bureau of Engraving and Printing ("BEP"), a division of the United
States Department of the Treasury. Work on the latest BEP project,
called "Type V," had stalled as a result of technological
difficulties encountered in printing the paper used for $100
banknotes. To address the problems afflicting Type V, DeFalco
launched a task force within Crane, referred to internally as
"Project Momentum," and designated an employee named Rich Rowe as
the project leader. As part of Project Momentum, DeFalco decided
to station a Crane staff member at the BEP printing facility in
Fort Worth, Texas, who would serve as the company representative
and liaison to the Massachusetts headquarters.
On November 18, 2011, DeFalco asked Niebauer to serve as
the Project Momentum deputy in Texas. Niebauer agreed, on the
understanding that he was to be in Texas only to the end of the
calendar year. However, after their conversation, DeFalco noted in
an email to the BEP contact that Niebauer would "spend substantial
time at [BEP] facilities until at least March [2012]." Niebauer
began to have "second thoughts" about the length of the assignment,
and also became concerned about personnel decisions that DeFalco
had made in connection with Project Momentum, including his
addition to the Massachusetts team of certain individuals whom
Niebauer felt BEP distrusted.
Because of these concerns, Niebauer and DeFalco scheduled
a phone call for November 22 to review the project's personnel and
-4-
the length of Niebauer's commitment. The two characterize this
call differently. According to DeFalco, Niebauer effectively
attempted to extract severance benefits in exchange for agreeing to
the Texas assignment. According to Niebauer, he communicated to
DeFalco that he believed that his new Project Momentum role
constituted a triggering event under the severance plan, entitling
him to benefits. In response, Niebauer says, DeFalco called this
claim "crazy talk," stating that severance was awarded only if an
executive was fired, and Niebauer was not being fired. Niebauer
admits to telling DeFalco that he was in a position of "maximum
leverage" vis-à-vis securing severance benefits. In any event,
Niebauer ultimately recommitted to the Texas assignment.
Thereafter, team members worked to get Project Momentum
up and running, and scheduled meetings with BEP representatives in
Fort Worth for Monday, December 5. Niebauer, who had not yet
relocated to Texas, was slated to make the trip. In an exchange
with Rowe over the preceding weekend, however, Niebauer began to
express reluctance to travel and eventually decided not to go. In
a December 4 email to Rowe, Niebauer said that he had "made some
decisions that [he] must inform [Rowe] of." Niebauer also emailed
DeFalco on December 4, asking to set up a meeting "concern[ing] a
decision [he] ha[d] reached."
The ensuing December 5 phone call between Niebauer and
DeFalco is a focal point of this litigation; the parties vehemently
-5-
dispute the content and import of the conversation. Niebauer's
account is that he called DeFalco on his cell phone and told him
that his persistent concerns about the structure of Project
Momentum left him no choice but to "at least consider retirement"
if the project organization did not change.3 At some point
thereafter, the parties agree that the call was dropped. Niebauer
asserts that, when the connection was reestablished, DeFalco
rebuffed his offer to repeat what he had said; instead, DeFalco
declared that he had heard enough, and that it was his policy not
to try to talk an executive out of retirement. According to
DeFalco, however, Niebauer told him that he was "retir[ing] now,
effective immediately," since he was not going to receive severance
at the conclusion of Project Momentum. DeFalco told Niebauer that
he was disappointed but understood his decision to retire and
wished him well.
In the aftermath of the December 5 phone call, both
Niebauer and DeFalco sent emails to various individuals explaining
what had happened. That afternoon, DeFalco emailed Charles
Kittredge, the former CEO of Crane who had stayed on as chairman of
the board, letting him know that Niebauer had just told DeFalco
that "he would be retiring immediately." DeFalco also informed the
Project Momentum team by email the next day that Niebauer had
3
Niebauer testified at his deposition that the reason he gave
DeFalco for being forced to consider retirement was his failure to
negotiate a severance package.
-6-
decided to retire and that his last working day was likely to be
December 16.
For his part, Niebauer emailed his daughter the morning
after his conversation with DeFalco, telling her that he had "made
the announcement to [DeFalco] that [he did] not want to go live in
Fort Worth for the next six months and want[ed] to retire." On the
afternoon of December 5, Niebauer also forwarded to DeFalco an
email from a BEP contact who was trying to schedule a phone call.
In forwarding the email, Niebauer asked DeFalco for guidance in
responding to the BEP email, noting that he wanted "this to be a
smooth transition but under[stood] if [DeFalco wanted] to make it
more abrupt." Niebauer then forwarded the email chain to his wife,
who replied, "Sounds like you told [DeFalco] that retirement is
route."4
Following the December 5 call, DeFalco instructed Jay
Wickliff, the head of human resources at Crane, to reach out to
Niebauer to discuss next steps. Wickliff and Niebauer met on the
morning of December 6. The parties' characterizations of this
meeting diverge. Niebauer claims that he told Wickliff that he had
not voluntarily retired but rather DeFalco had "retired him" — but
that if he were going to retire, he would need to learn more about
4
As will be further discussed below, Niebauer's position in
this litigation is that he never expressed an intent to retire, nor
did he tell others that he had retired. Instead, he maintains on
appeal that, after the December 5 call, he told people that DeFalco
"had retired him."
-7-
his financial options. Crane asserts that Niebauer reiterated his
decision to retire, and that he and Wickliff discussed setting a
retirement date that took into account Niebauer's remaining
vacation time. Wickliff emailed DeFalco after the meeting,
stating, "[Niebauer] confirmed to me this morning his decision to
retire." Wickliff added, "We discussed having some kind of event
to honor his career. At first he thought he did not want to do
anything, but decided that a low key event . . . would be best."
Later that day, DeFalco posted a message on Crane's
internal communications system formally announcing the launch of
Project Momentum. Niebauer's name was not included in the list of
team members. Shortly thereafter, a colleague wrote in an email to
Niebauer that he had just seen the announcement, which "said it
all." In the ensuing back-and-forth, Niebauer wrote that he
believed that his last day of work would be the next day, December
7, and that his "[r]etirement day [would] most likely be February
1st." Niebauer explained to the colleague that his "decision to
leave was that in [his] opinion, the company [had] become
dishonorable." Niebauer also emailed Rowe, the leader of Project
Momentum, stating, "I am assuming that you know about my pending
retirement,"5 and that, since the announcement of the project team
5
The copy of this typed email in the record bears handwritten
quotation marks around "pending retirement."
-8-
had been posted without his name, he expected that he would not
attend upcoming team meetings.
Also on December 6, Niebauer met with Rick Kendall, who
handled retirement calculations for Crane's executives in
conjunction with an outside firm, Towers Watson, which acted as
Crane's actuarial consultant. Niebauer and Kendall discussed
different options for retirement dates. Kendall advised that
obtaining a retirement calculation from Towers Watson did not
commit him to retiring, but that if he did retire, he would not be
eligible for severance. In email correspondence through December
9, Niebauer asked Kendall to use February 1, 2012 as a basis for a
retirement calculation, and then later proposed March 1, 2012 as
his retirement date. Kendall then told Niebauer via email on
December 9 that his last day of work would be January 27, 2012,
followed by five weeks of vacation, for a retirement date of March
1. Shortly thereafter, Niebauer wrote in an email to his wife that
they could "kiss the severance option good bye."
Beginning on December 12, Niebauer began unambiguously
portraying his retirement as involuntary. When a coworker, Chris
Duquette, emailed him that day to congratulate him on his
retirement, Niebauer responded, "All I have agreed to is to
consider retirement and look at the numbers to see if it is
possible." Around that time, Niebauer also approached Wickliff
(the head of human resources) to tell him that he had not decided
-9-
to retire and was not in fact retiring. Wickliff responded that
Niebauer had indeed resigned,6 and the CEO DeFalco had already
accepted his resignation; if he wanted his job back, he would have
to consult DeFalco.
DeFalco called Niebauer on December 16 to tell him that
that day would be his last working day, but that he would be kept
on the company payroll through the end of January. Wickliff sent
Niebauer a letter to a similar effect, which Niebauer received on
December 19. Following the phone call with DeFalco on December 16,
Niebauer memorialized his disagreement in a letter, sent to DeFalco
by certified mail, writing, "I have not resigned from Crane & Co.
and . . . I have no present intention of resigning from Crane & Co.
. . . [T]he termination of my employment at this point would be
considered involuntary under the Executive Severance Plan." He
claimed that this was all a misunderstanding arising out of the
December 5 dropped call and that he had never communicated an
intent to retire. Nonetheless, Crane shut off Niebauer's email and
telephone access on December 16. Niebauer did not thereafter
report to work.
Niebauer filed a claim for severance benefits under the
plan on February 2, 2012, on the ground of involuntary termination.
The compensation committee — the designated plan administrator,
6
This opinion uses the terms "resign" and "retire"
interchangeably, as the parties do in their briefing.
-10-
responsible for determining Niebauer's benefits eligibility — was
scheduled to meet on March 15, 2012. In advance of the meeting,
James Hackett, general counsel of Crane, investigated Niebauer's
claim. He reviewed Niebauer's email correspondence around the time
of his departure and spoke with various Crane employees about the
circumstances leading up to the departure, including DeFalco,
Wickliff, Rowe, Kendall, and Doug Crane, a Crane vice president.
With the help of Wickliff and outside counsel, Hackett created a
one-page timeline of events from November 2011 to February 2012 to
summarize the results of his investigation.
At the compensation committee meeting, Hackett presented
the timeline he had prepared.7 Other documents before the
committee included a copy of the plan, certain emails that Niebauer
had sent in December of 2011,8 and Niebauer's application for
benefits.9 DeFalco, Wickliff, and Kittredge also provided relevant
information to the committee orally.10
7
Niebauer did not attend the meeting, nor did he request to
attend.
8
Emails from Niebauer to Rich Rowe concerning travel plans to
Texas, to his daughter, to Rick Kendall, and to Chris Duquette were
not before the committee.
9
At the time of Niebauer's departure from Crane, human
resources had determined that he was ineligible for severance
benefits under the plan and declined to pay them out. A summary of
this decision was also before the compensation committee.
10
Separately from Niebauer's claim for severance benefits, the
committee also considered the issue of his "management incentive
compensation," awarding him a lump sum of $3.5 million instead of
-11-
The committee issued a written summary of its decision on
May 2, 2012, outlining the substance of Niebauer's claim, relevant
plan provisions, and the information presented to the committee.
Its conclusion was to deny Niebauer's claim for benefits, given
that he had "voluntarily elected to resign his employment" and
therefore "was not eligible for a severance benefit pursuant to the
Plan." The written decision also noted that, pursuant to the terms
of the plan, Niebauer was entitled to file an appeal within sixty
days.
Although he had initially submitted his claim without
supporting documentation, Niebauer's appeal of the adverse
decision, filed on June 28, 2012, numbered almost seventy pages in
length and contained a detailed rebuttal of Hackett's timeline and
various appended emails and documents. Niebauer's position was
that he had never announced an intent to retire, and that Crane's
belief to the contrary was a misunderstanding; even though he had
attempted to clear up the confusion, Crane did not allow him to
maintain his employment.
In advance of the August 24, 2012 compensation committee
meeting, members were provided with all of the documents that
Niebauer had submitted in support of his appeal, in addition to a
memorandum written by Hackett that included, among other things, an
explanation of the legal authorities cited in Niebauer's appeal and
a payout over ten years.
-12-
copies of certain relevant emails, Hackett's timeline of events
created for the first meeting, and the written summary of the
initial decision to deny benefits. At the meeting, the committee
unanimously voted to deny Niebauer's appeal, on the ground that he
had resigned his employment without "good reason" to do so, as
defined in the plan. The committee issued a written summary of its
decision on September 7, 2012.
On October 30, 2012, Niebauer filed suit in the district
court against Crane and the Crane executive severance plan. His
complaint sought to recover severance benefits allegedly due under
the plan, 29 U.S.C. § 1132(a)(1)(B), and also pleaded one count of
interference with a protected right. Specifically, Niebauer
alleged that Crane "terminated [his] employment [against his will]
and then labeled it as a retirement in order to deprive him of
severance pay and other benefits under the Plan," thereby
discriminating against him for the purpose of interfering with a
protected right, in violation of 29 U.S.C. § 1140. In total,
Niebauer sought $1,169,484 in damages, plus attorney's fees and
costs. That amount included $855,920 in severance benefits, $5000
for reimbursement of health insurance premiums, and $308,564 in
back pay.
After ordering additional discovery to fill in gaps in
the administrative record, the district court granted the
defendants' motion for summary judgment. The court held that the
-13-
committee's decision to deny Niebauer's claim for benefits was
neither arbitrary nor capricious and was supported by substantial
evidence. The court further held that because Niebauer could not
establish that he had suffered an adverse employment action, he
could not make out a prima facie case of interference with a
protected right. This appeal followed.
II. Analysis
On appeal, Niebauer argues that the compensation
committee's decision to deny his claim for severance benefits was
tainted by a conflict of interest as well as procedural errors, and
was not supported by substantial evidence. He also asserts that
the district court improperly granted summary judgment to the
defendants on the interference claim. We address these issues in
turn, but first discuss the applicable standard of review, which
the parties dispute.
A. Standard of review
In general, where an ERISA plan delegates to the plan
administrator the discretion to construe the plan and determine
eligibility for benefits under its provisions, a decision made
under the plan will be upheld unless it was "arbitrary, capricious,
or an abuse of discretion." Cusson v. Liberty Life Assurance Co.
of Bos., 592 F.3d 215, 224 (1st Cir. 2010) (internal quotation
marks omitted). Under this standard, a reviewing court "asks
whether a plan administrator's determination is plausible in light
-14-
of the record as a whole, or, put another way, whether the decision
is supported by substantial evidence in the record." Colby v.
Union Sec. Ins. Co. & Mgmt. Co. for Merrimack Anesthesia Assocs.
Long Term Disability Plan, 705 F.3d 58, 61 (1st Cir. 2013)
(internal quotation marks omitted). Because we review the district
court's summary judgment decision de novo, we, too, apply a
deferential standard to the plan administrator's decision. Leahy
v. Raytheon Co.,
315 F.3d 11, 18 (1st Cir. 2002).
Niebauer argues against such deferential review by
pointing out that the plan at issue is a "top hat plan" and urges
us to follow the approach of the Third and Eighth Circuits, which
have held that de novo review applies to decisions made under top
hat plans. See Craig v. Pillsbury Non-Qualified Pension Plan, 458
F.3d 748, 752 (8th Cir. 2006) (holding that "[t]op hat plans should
be treated as unilateral contracts and reviewed in accordance with
ordinary contract principles" (internal quotation marks omitted));
Goldstein v. Johnson & Johnson,
251 F.3d 433, 443 (3d Cir. 2001)
(same); see also McCarthy v. Commerce Grp., Inc.,
831 F. Supp. 2d
459, 480 (D. Mass. 2011) (noting circuit split regarding whether de
novo or arbitrary and capricious standard of review applies to top
hat plans generally).
Under ERISA, a top hat plan is "any 'plan which is
unfunded and is maintained by an employer primarily for the purpose
of providing deferred compensation for a select group of management
-15-
or highly compensated employees.'" Alexander v. Brigham & Women's
Physicians Org., Inc., 513 F.3d 37, 42 (1st Cir. 2008) (quoting 29
U.S.C. § 1051(2)). The parties agree that the plan at issue is a
top hat one.
We decline to decide whether top hat plans are
categorically subject to de novo review because, as Crane observes,
"[e]ven the Circuit courts that have reviewed top hat decisions
under 'ordinary contract principles' . . . have noted that it is a
distinction without a difference where, as here, the plan grants
the administrator discretion to interpret the plan." Both the
Third and Eighth Circuit cases upon which Niebauer relies
ultimately reviewed decisions under top hat plans simply for
reasonableness. See Craig, 458 F.3d at 752;
Goldstein, 251 F.3d at
444. Those courts reasoned that a plan's grant of discretion to an
administrator must be given effect as contract principles would
ordinarily require: "where one party is granted discretion under
the terms of the contract, that discretion must be exercised in
good faith — a requirement that includes the duty to exercise the
discretion reasonably."
Craig, 458 F.3d at 752 (quoting
Goldstein,
251 F.3d at 444). As "reasonableness is the basic touchstone in
all benefit-denial cases," Denmark v. Liberty Life Assurance Co. of
Bos.,
566 F.3d 1, 6 (1st Cir. 2009) (internal quotation marks
omitted), we apply our typical deferential standard of review here.
In reliance on Hannington v. Sun Life & Health Insurance
-16-
Co., 711 F.3d 226, 230–32 (1st Cir. 2013), Niebauer argues in the
alternative that de novo review is mandated under this Circuit's
precedent where a plan administrator interprets material outside
the plan. Niebauer maintains that the compensation committee here
"interpreted emails and other documents to reach its conclusion."
Those interpretations of non-plan documents, the argument goes, are
not entitled to deference.
Hannington is inapposite. In that case, a plan
administrator relied on a provision of the Veterans' Benefits Act
to reduce the benefits due under a plan to a claimant, where that
claimant was also receiving service-related disability compensation
under the statute. 711 F.3d at 229, 231–32. We reviewed the plan
administrator's construction of the statute de novo, holding that
the administrator only had discretion to interpret the plan's
provisions and that deference is inappropriate "when the plan
fiduciary is required, in the course of determining the meaning of
the plan language, to interpret material outside the plan."
Id. at
230; see also Coffin v. Bowater Inc.,
501 F.3d 80, 85 (1st Cir.
2007) (reviewing de novo plan administrator's interpretation of
stock purchase agreement that allegedly terminated plan's
obligations to subsidiary's workers after sale of subsidiary).
Here, by contrast, the non-plan material at issue is
email correspondence, not documents creating or altering legal
obligations such as statutes or contracts. The emails that the
-17-
compensation committee considered, wherein Niebauer discussed his
retirement from Crane, do not bear on the legal definition of plan
terms. Rather, they provide pertinent background, a basis for
assessing whether the factual predicate of the plan's provisions
has been triggered. Simple fact-gathering cannot displace the
deference owed to a plan administrator. We thus proceed under the
rubric of arbitrary-and-capricious review.
B. Conflict of interest
Niebauer argues that the compensation committee's
decision to deny him benefits was irreparably tainted by a conflict
of interest, pointing out that the existence of such a conflict is
one factor that may justify the conclusion that a plan
administrator's decision was arbitrary and capricious. See Metro.
Life Ins. Co. v. Glenn, 554 U.S. 105, 116–17 (2008);
Denmark, 566
F.3d at 8. In particular, he asserts that the committee was biased
by its concern with the ongoing problems plaguing the BEP contract
and with Niebauer's integral role in ameliorating those problems,
thus precluding it from impartially deciding Niebauer's claim for
severance benefits. In other words, Niebauer maintains that the
committee was so frustrated with the impending loss of the most
important staff member (him) on Crane's most important project that
it denied his claim for benefits to spite him.
This argument sits in tension with Niebauer's overall
theory of the case. As the district court observed,
-18-
[Niebauer] seems to suggest that his absence
was going to damage [Project Momentum] and
that Defendants wanted to penalize him because
they were angry at his decision to leave the
company at a sensitive time. [Niebauer] also
strongly contends, however, that he never
decided to leave, that Defendants knew he
wanted to continue his employment, and that
they nevertheless arbitrarily terminated him
involuntarily, apparently despite the negative
impact on the Project.
Niebauer, 44 F. Supp. 3d at 162. Thus, if it is true that the
committee was so resentful of Niebauer's ill-timed departure that
its judgment was impaired as to his severance claim, it is
implausible that Crane would have terminated him in the first
instance, as he claims.
But even leaving aside any internal inconsistency in his
position, Niebauer does not identify an actual conflict of
interest. The paradigmatic conflict of interest in ERISA cases
occurs when the same entity is responsible for "both determin[ing]
whether an employee is eligible for benefits and pay[ing] benefits
out of its own pocket."11 Glenn, 554 U.S. at 108. In such cases,
the plan administrator's financial stake in the outcome acts as a
disincentive to award benefits. Here, though, the success of
Project Momentum in no way depended on the compensation committee's
decision on Niebauer's claim for severance benefits. Whatever the
11
Before the district court, Crane conceded the existence of
such a structural conflict, albeit one that was de minimis in
nature. Niebauer, however, does not press a structural-conflict
argument on appeal.
-19-
committee members thought about the effect of Niebauer's departure
on Project Momentum, the decision to award benefits would not
impact the project either way. Rather than conflict of interest,
Niebauer's argument on this score sounds in retaliation — a claim
that he has also raised independently and that we address below.
C. Claimed procedural errors
We next turn to Niebauer's contention that the
compensation committee's decision was procedurally flawed. He
raises two arguments to buttress this claim: first, that the
decision relied on an incomplete factual record, and second, that
the committee's transmission of its decision to Niebauer failed to
comply with ERISA's notice requirements, 29 U.S.C. § 1133. We
address each in turn.
1. Whether the committee's decision relied on an
incomplete factual record
Niebauer faults the committee for relying on an
"inaccurate and incomplete" record in rendering its decision. He
points to two categories of errors that, in his view, undermine the
legitimacy of the committee's final decision: first, he argues that
the committee inappropriately relied on the one-sided timeline of
events prepared by Hackett, the general counsel. He goes on to
contend that Hackett "withheld" certain documents from the
committee that supported Niebauer's position, such as various
emails and personnel files.
-20-
We do not agree that there was anything improper in the
content or scope of the materials that the committee considered.
As an initial matter, it was entirely appropriate for the committee
to rely on materials submitted by Crane; indeed, the plan
contemplates that the committee will do just that, by making
eligibility determinations "on the basis of information supplied to
it by the Employer." And while a plan administrator may not rely
on evidence that it knows or has reason to know is misleading,
Buffonge v. Prudential Ins. Co. of Am., 426 F.3d 20, 30 (1st Cir.
2005), that is not what happened here. The timeline, far from
being "undisputedly false," as Niebauer asserts, was a reasonable
synthesis of a convoluted series of events, which hewed to the
available evidence. For example, although Niebauer claims that the
timeline falsely represented that he agreed to a February 1, 2012
retirement date, that representation is a fair reading of a
December 8, 2011 email to Rick Kendall on the topic of retirement
calculations in which Niebauer wrote, "[I] think February 1st will
work."
We also resist Niebauer's imputation of bad faith to
Hackett in his management of the investigation. Niebauer argues
that Hackett kept certain records from the committee because they
supported Niebauer's position. In particular, Niebauer points to
emails between him and Kendall about retirement calculations;
emails between him and coworker Chris Duquette in which Niebauer
-21-
rebuffed congratulations on his retirement, stating that he had not
actually retired; as well as a document in his personnel file which
listed the reason for Niebauer's departure as "Retired —
Involuntary."12 Hackett testified at his deposition that, in
assembling materials for the committee to review, he "look[ed] for
any e-mails that were relevant on the topic [of Niebauer's
departure] in either direction," mindful of the committee's
"fiduciary duties to get all the facts and to look at this thing in
good faith." Hackett stated that he turned over to the committee
all emails, sent during the relevant time period, that he deemed
relevant to Niebauer's claim. Niebauer does not offer any reason
to discredit this testimony.
Niebauer argues that, as a result of these supposed
inaccuracies and omissions, the committee was under the mistaken
impression that he had at least at one point decided to retire,
before ultimately changing his mind. But deposition testimony
makes clear that the committee members understood that Niebauer's
position was that he had not announced an intent to retire during
the initial December 5 call with Stephen DeFalco. In other words,
12
An affidavit from the Crane benefits specialist who prepared
the form, Gail Rondeau, demonstrates that the designation "Retired
— Involuntary" was not intended to be an official pronouncement on
the reason for Niebauer's departure from the company. Rondeau
averred that, in filling out the electronic form, she simply used
the reason that Niebauer had provided, and that she "understood
that the designation in the computer program was irrelevant for any
purpose besides the Human Resources Department's administrative
termination of Niebauer's enrollment in various benefits programs."
-22-
they understood that Hackett's timeline did not align with
Niebauer's stance. Certainly, if they were not aware of Niebauer's
position when the issue was considered at the first meeting, they
were by the time they decided his appeal, which offered a "point-
by-point refutation" of the timeline, Niebauer, 44 F. Supp. 3d at
158, and also provided copies of the allegedly withheld Kendall
emails. It is this final decision that carries weight. Terry v.
Bayer Corp.,
145 F.3d 28, 35 (1st Cir. 1998).
Although Niebauer now argues that the appeal was
necessarily incomplete because it was prepared once he no longer
had access to his Crane email account, he noted at the time that he
had intentionally presented his version of events in exhaustive
detail so as to give the committee full context for his arguments.
He does not now explain how the handful of documents that were
unavailable to him at the time he filed his appeal would have
materially strengthened his presentation of his position to the
committee. As the district court concluded, "[t]he appeals process
protected against potential bias on the part of Hackett by allowing
[Niebauer] to present his unfiltered perspective to the
Compensation Committee." Niebauer, 44 F. Supp. 3d at 165. Thus,
even if the factual record undergirding the committee's initial
decision was incomplete in some way, it was adequately supplemented
by Niebauer's appeal.
-23-
2. Whether the committee complied with 29 U.S.C.
§ 1133
Niebauer next argues that the committee failed to comply
with ERISA's notice provision, which requires plan administrators
to "provide adequate notice in writing to any participant or
beneficiary whose claim for benefits under the plan has been
denied, setting forth the specific reasons for such denial, written
in a manner calculated to be understood by the participant." 29
U.S.C. § 1133(1); see 29 C.F.R. § 2560.503–1 (setting forth
implementing regulations). Plan beneficiaries whose claims have
been denied are further entitled to "a reasonable opportunity . . .
for a full and fair review by the appropriate named fiduciary of
the decision denying the claim." 29 U.S.C. § 1133(2). Relying on
these provisions — in particular § 1133(1) — Niebauer argues that
the notice of the compensation committee's final decision on his
appeal was inadequate.
The notice requirements of ERISA are designed to "insure
that when a claimant appeals a denial to the plan administrator,
[he] will be able to address the determinative issues and have a
fair chance to present [his] case." DiGregorio v. Hartford
Comprehensive Emp. Benefit Serv. Co., 423 F.3d 6, 14 (1st Cir.
2005) (quoting Halpin v. W.W. Grainger, Inc.,
962 F.2d 685, 689
(7th Cir. 1992)). This purpose is the lodestar in determining
whether there has been substantial compliance with the notice
provisions; strict compliance is not required. See Terry, 145 F.3d
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at 39. In assessing a notice-based challenge, we ask whether "the
beneficiary [was] supplied with a statement of reasons that, under
the circumstances of the case, permitted a sufficiently clear
understanding of the administrator's position to permit effective
review." Id. (internal quotation marks omitted). A claimant
typically must demonstrate that he or she has been prejudiced as a
result of the notice's inadequacy. Bard v. Bos. Shipping Ass'n,
471 F.3d 229, 240–41 (1st Cir. 2006).
Here, Niebauer complains that notice of the committee's
final decision was inadequate because it failed to provide specific
reasons. But although Niebauer claims that "[t]he entirety of the
Committee's decision on the appeal [was] contained in two
sentences," the two-page memorandum at issue in fact provided a
procedural and factual background, in addition to a description of
the relevant provisions of the plan and the information the
committee considered in arriving at its decision, before
summarizing its conclusion. At the end of the memo, the committee
encapsulated its decision as follows:
After considering and discussing the
information presented, the Committee concluded
that [Niebauer] had in fact elected to resign
his employment rather than continue to work in
support of the Crane & Co. project to which he
had been assigned and further that his
resignation was not for good reason as that
term is described in the Severance Plan. See
Article 2, Sections 2.10 and 2.16. Therefore
[Niebauer's] appeal is denied.
-25-
This explanation, which clearly outlines the reason for the
committee's decision, satisfies ERISA's notice requirements. See
Orndorf v. Paul Revere Life Ins. Co., 404 F.3d 510, 526 (1st Cir.
2005) ("The denial letter need not detail every bit of information
in the record . . . .").
In any event, the notice of the committee's initial
decision, with which ERISA's notice provisions are primarily
concerned, was adequate to permit effective review of Niebauer's
claim. As Crane observes, it is undisputed that the key issue
before the committee was whether Niebauer had resigned or instead
had been involuntarily terminated. Niebauer was undeniably aware
that this question was dispositive of his claim; indeed, after
receiving notice of the committee's initial decision,13 he submitted
an appeal with seventy pages of supporting documentation, addressed
to the precise issue of whether he had retired, or whether, in his
parlance, he "was retired" against his will. After considering the
documents that he submitted, the committee upheld its earlier
decision on the same grounds. As such, Niebauer has no credible
claim that his understanding of the issues at stake was so muddled
as to inhibit effective review.14 Compare Terry, 145 F.3d at 39
13
As discussed above, this notice advised Niebauer of the
committee's conclusion that he, "a valued senior executive, had
voluntarily elected to resign his employment, and that therefore he
was not eligible for a severance benefit pursuant to the Plan."
14
Niebauer also argues that the inadequacy of the notice is
manifested in its incorrect reference to section 2.10 of the plan,
-26-
(where claimant submitted additional information to committee that
directly addressed whether he was disabled from performing "any"
job, "[h]is actions demonstrate[d] that he was well aware of the
reasons for the decision, and was submitting additional evidence on
the crucial point"), with Bard, 471 F.3d at 241 (where
administrator provided no notice of denial, claimant was not
"informed that he needed to show that his total disability occurred
prior to termination of his employment, [and accordingly] submitted
medical documentation not meant to address that point . . . which
ultimately proved quite harmful to his administrative appeal").
D. Substantial evidence
As noted above, where the plan confers administrative and
interpretive discretion upon the administrator, we review
substantive challenges to decisions made under the plan for an
abuse of discretion. Cusson, 592 F.3d at 224. To pass muster,
administrators' determinations "must be reasoned and supported by
substantial evidence."
Colby, 705 F.3d at 62 (internal quotation
marks omitted). "Evidence is deemed substantial when it is
reasonably sufficient to support a conclusion." Ortega-Candelaria
v. Johnson & Johnson,
755 F.3d 13, 20 (1st Cir. 2014) (internal
which details the various "disqualifying event[s]" that constitute
grounds for denying benefits. Even though section 2.10 is not at
issue in this case, the errant citation to that provision does not
undermine our conclusion that Niebauer — who received notice of the
committtee's initial decision that referred to the proper sections
of the plan— had a sufficiently clear understanding of the
committee's position in order to permit effective review.
-27-
quotation marks omitted). Thus, the question before us is not
which side is right, but whether the compensation committee's
decision to deny Niebauer's claim for severance benefits was
reasonable on the record before it. See id.
Niebauer would have us answer in the negative.
Essentially, his position is that the evidence demonstrates that he
never expressed an intent to retire — on the December 5 call with
DeFalco or otherwise. Accordingly, he argues, his departure from
Crane was the result of an involuntary termination, as evidenced by
Crane's unilateral selection of his last day of work. He contends
that the committee failed to consider his position at all and
instead accepted DeFalco's version of events uncritically.
Niebauer's claim that he never expressed an intent to
retire is belied by the administrative record. The committee had
before it ample evidence that Niebauer announced his retirement to
various parties on and around December 5, 2011. In particular,
even though there is no record of the disputed December 5 call,
contemporaneous emails show that both DeFalco and Niebauer relayed
to others that Niebauer decided to retire that day, effective
immediately. In the twenty-four hours after the call, both DeFalco
and Niebauer independently confirmed the retirement announcement to
various third parties; Niebauer's wife wrote in an email to him,
"Sounds like you told [DeFalco] that retirement is route," and he
later told her that "severance is very unlikely based on the
-28-
triggering events . . . . [I] think we kiss the severance option
good bye."
Furthermore, there is substantial evidence that, beyond
simply talking about the retirement, both parties took steps to
effectuate Niebauer's stated intent after December 5. DeFalco left
Niebauer's name off the announcement of the Project Momentum team,
and Niebauer stopped attending team meetings thereafter. The
committee considered evidence that Niebauer consulted with two
different Crane employees about retirement logistics and also began
discussing plans for a retirement party. He openly talked about
his pending retirement with his coworkers and wife.
In the face of all this evidence, the committee was
entitled to view Niebauer's belated disavowal of his retirement in
the December 16 letter to DeFalco — eleven days after his initial
announcement — as a specious attempt to collect severance. See
Gannon v. Metro. Life Ins. Co., 360 F.3d 211, 216 (1st Cir. 2004)
(holding that it is within plan administrator's discretion to weigh
competing evidence). This is particularly so where Niebauer's
letter maintained that he had never resolved to retire, without
acknowledging that his earlier conduct may have evinced a contrary
intent.15 And while Niebauer complains that the committee failed
15
We note that it is unclear from the record how a decision
to retire is officially finalized at Crane. But we do not view
this ambiguity as undercutting the substantial evidentiary grounds
for the committee's decision, particularly where the committee
considered evidence that Niebauer had announced his intent to
-29-
to consider his account of the December 5 dropped call, including
his claim of miscommunication, the record reflects the opposite.
As the chairman of the compensation committee testified at his
deposition, "Certainly there was weight applied to the claim on Mr.
Niebauer's part that there was some confusion, but the other
evidence that we had . . . supported so much the retire[ment]
decision that we credited it fairly significantly." The committee
thus appropriately discharged its "responsibility . . . to weigh
conflicting evidence." Vlass v. Raytheon Emps. Disability Trust,
244 F.3d 27, 32 (1st Cir. 2001).
Niebauer devotes significant attention to providing his
perspective on the emails upon which the committee relied wherein
he discussed his retirement with various people. For example,
Niebauer asserts that the December 6 email to Rowe in which he
mentioned his "pending retirement," "does not suggest that he in
fact voluntarily retired," but simply reveals that he had been
"specifically instructed to refer to it in that manner." But these
alternative explanations cannot undermine the substantial
evidentiary basis for the committee's decision that Niebauer had
voluntarily retired and was thus ineligible for severance benefits.
"[I]n the presence of conflicting evidence, it is entirely
appropriate for a reviewing court to uphold the decision of the
retire "effective immediately."
-30-
entity entitled to exercise its discretion," Gannon, 360 F.3d at
216, and we accordingly affirm the committee's decision here.
E. Interference with protected rights
In the second count of his complaint, Niebauer has
alleged that Crane impermissibly interfered with his protected
rights under the plan, as proscribed by 29 U.S.C. § 1140.
Specifically, Niebauer argues that "Crane involuntarily terminated
[his] employment and then labeled it as retirement in order to
deprive him of severance pay and other benefits under the Plan,"
even though he "repeatedly told Crane that he was not retiring and
did not intend to retire."
The district court's analysis of this count relied on the
"substantial evidence" standard applicable to assessing denial-of-
benefits claims under ERISA. The court held that
Rule 56 cannot be used . . . to create an end
run around the "substantial evidence" rule in
an ERISA case. Because Defendants'
determination that he retired, and was not
involuntarily terminated, was supported by
substantial evidence, he cannot claim that he
suffered an adverse employment action
sufficient to support a claim under [29 U.S.C.
§ 1140].
Niebauer, 44 F. Supp. 3d at 168.
This ruling inappropriately conflates review of denial-
of-benefits claims with review of interference claims. In denial-
of-benefits cases, "the ordinary question is whether the
administrator's action on the record before him was unreasonable."
-31-
Liston v. UNUM Corp. Officer Severance Plan, 330 F.3d 19, 24 (1st
Cir. 2003). In such cases, "summary judgment is simply a vehicle
for deciding the issue[, which] means the non-moving party is not
entitled to the usual inferences in its favor."
Orndorf, 404 F.3d
at 517. In interference cases, by contrast, "the ultimate inquiry
. . . is whether the employment action was taken with the specific
intent of interfering with the employee's ERISA benefits." Barbour
v. Dynamics Research Corp.,
63 F.3d 32, 37 (1st Cir. 1995). The
court is thus reviewing an employer's conduct, rather than an
administrator's decision, and as such, there is no administrative
determination that commands deference. Indeed, our cases have
uniformly applied the typical summary judgment standard — under
which evidence is reviewed in the light most favorable to the
nonmoving party — in assessing interference claims. See, e.g.,
Kouvchinov v. Parametric Tech. Corp.,
537 F.3d 62, 66–70 (1st Cir.
2008); Lehman v. Prudential Ins. Co. of Am.,
74 F.3d 323, 327,
330–31 (1st Cir. 1996);
Barbour, 63 F.3d at 36–42. We therefore
remand this count to the district court for consideration under the
appropriate standard of review.
III. Conclusion
For the foregoing reasons, we AFFIRM the judgment of the
district court as to Count I of the complaint. We VACATE the
judgment of the district court as to Count II of the complaint and
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remand for proceedings consistent with this opinion. No costs are
awarded.
-33-
