                                                                                                                           Opinions of the United
1995 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


5-15-1995

Ackerman v Warnaco Inc
Precedential or Non-Precedential:

Docket 94-3527




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Recommended Citation
"Ackerman v Warnaco Inc" (1995). 1995 Decisions. Paper 132.
http://digitalcommons.law.villanova.edu/thirdcircuit_1995/132


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                 UNITED STATES COURT OF APPEALS
                     FOR THE THIRD CIRCUIT



                          No. 94-3527



     VALERIE J. ACKERMAN, Chester O. Adams, Anne E. Alexander,
Barry M. Allmond, Helen L. Anders, Marlene Archey, Mary H. Auker,
    Frances C. Balestino, Pauline Balestino, Thomas L. Ballos,
     Barney W. Barndollar, Elaine Barnes, Bertha L. Barnhill,
 James E. Becker, Linda Becker, Mark A. Becker, Katherine L. Bem,
    William F. Black, Diane Blanchard, Timothy Bowser, Barbara
  Brocious, Janette C. Buzzella, Daniel R. Campbell, Barbara C.
 Carney, David Castle, Paul M. Clack, Ronald Clapper, Darlene R.
 Clark, Joyce Ann Conrad, Karen Joy Consalvo, Evelyn Conte, Carol
    J. Corbin, Anna M. Costlow, Helen Creamer, Amporn Y. Cuff,
 Shirley Cunningham, Hilda D'Amata, Melissa K. Daugherty, Judith
  G. Davis, Twila Davis, Mary Louise Dawson, Walter E. Dempsie,
       Deborah L. Deyarmin, Gary L. Dick, Phyllis I. DiTosti,
  Charlotte Dixon, Deborah G. Dugan, Thomas Edmiston, Gordon M.
  Ellis, Helen Erickson, Helen F. Fanelli, Paul Ferguson, Renee
 Figait, Elizabeth C. Fleck, Gary P. Frederick, Roberta J. Frew,
     David G. Frey, Rupert Friedenberger, Shirley A. Fudalski,
      Derwin D. Gilbert, Jr., Brenda Greenleaf, Ida Gristina,
    Steve Gristina, Gilda M. Hammer, Patricia Hartzell, Barbara
   D. Helsel, Leslie E. Hildebrand, Karen S. Holmberg, Anita F.
 Hoover, Lucy Horton, Joan B. Ickes, Penelope Ickes, Shirley Ann
  Ickes, Glenna D. James, Sue Ellen Jensen, Diane Kelley, Soonja
     Kelly, Alice Lawrence, William H. Leedy, Dale E. Lenning,
   Agnes E. Lidwell, William S. Luther, Virginia Lynam, Mary L.
 Maidl, June Martino, Dawn M. Masic, Doris H. Massaro, Eugene A.
  Massaro, Kathy L. Mast, John L. McClosky, James F. McDermitt,
 Jr., Donald E. McMasters, Francis R. Mentzer, Howard S. Mentzer,
 Terrance Mentzer, Donnis Miller, Richard Miller, Ruth A. Miller,
 James W. Morning, Donald M. Myers, Shirley Louise Myers, Jack E.
    Neely, Scott E. Neely, Denise K. Neil, Wesley C. Noye, II,
  Shirley L. Nyiri, Sean M. O'Connor, Mark E. Oswald, Jane Ozio,
 Elsie K. Parsons, Joan L. Patterson, Sheryl A. Patterson, Dansie
       Pearson-Lightner, Shirley J. Pero, Walter M. Phillips,
 Marjorie Grace Pierce, Diana M. Prosser, Eugene Quarry, Santina
  Radazzo, Mark A. Reagan, Bonnie Jean Rhodes, Donna E. Rhodes,
        Thomas Leo Rhodes, Jr., Gerald P. Richards, Harry W.
   Rickabaugh, Gary Lee Roudabush, Mary F. Russo, Steven Sager,
    Pamela M. Sarvis, Kenneth Showalter, Jr., Minnie Showalter,
       Sandra L. Showalter, Susan K. Showalter, Mary J. Sill,
        George Simpson, Barry L. Siters, Rose Marie Skipper,
        E. Kirby Smeigh, Joann Smith, Robert W. Snowberger,
 Theresa Snowberger, Joseph C. Snyder, Teresa Soldenwagner, John
    Stevens, Dawn Sturgill, Carol Sumner, Kathleen A. Sweitzer,
  Richard M. Sweitzer, Judith L. Swires, John L. Taylor, William
M. Taylor, Lester R. Thompson, Sharon Thompson, Mary Ann Trexler,
      Steven J. Vasas, Dolores G. Verbonitz, Katherine Waite,
  Barbara F. Walter, Robert E. Walter, Scott A. Walter, Michael
  E. Weaver, Veda S. Wertz, Richard M. Weston, Kay Weyandt, Jay
    Wible, Donald A. Wolfe, Janet R. Wolfe, Diane J. Woomer and
                          Margaret Yantim

                                      Appellants

                                 v.

                            WARNACO, INC.



         On Appeal from the United States District Court
            for the Western District of Pennsylvania
                    (D.C. No. 93-cv-0-00101J)


                     Argued March 28, 1995

               BEFORE:   Mansmann, Cowen and Lewis
                          Circuit Judges

                      (Filed May 15, 1995)


James P. Hollihan (Argued)
Manion, McDonough & Lucas
600 Grant Street
Suite 882
Pittsburgh, PA 15219

     Counsel for Appellants

George E. Preonas (Argued)
Seyfarth, Shaw, Fairweather & Geraldson
2029 Century Park East
Suite 3300
Los Angeles, CA 90067

     Counsel for Appellee
                               OPINION




Cowen, Circuit Judge:

     Plaintiffs, 169 former employees of defendant Warnaco, Inc.

("Warnaco"), appeal from an order of the district court that

granted summary judgment in favor of Warnaco and denied

plaintiffs' cross-motion for partial summary judgment as to

liability on plaintiffs' claims for termination benefits pursuant

to an employee benefit plan.   Plaintiffs claim on appeal that the

district court erred by concluding that a complete rescission of

a welfare plan does not implicate the amendment procedures

required by section 402(b)(3) of the Employee Retirement Income

Security Act ("ERISA"), 29 U.S.C. § 1102(b)(3).   Because we

conclude that a complete rescission of a benefit plan does

implicate the requirements of section 402(b)(3), we will reverse

the order of the district court and provide certain directions

upon remand.

     Plaintiffs also assert on appeal that the district court

erred by: (1) failing to void a change to Warnaco's employee

benefits plan that eliminated the plan's termination allowance

policy where the plaintiffs did not receive adequate notice of

this change; and (2) concluding that no genuine issue of material

fact existed as to whether Warnaco intentionally misled the

plaintiffs by not timely disclosing the elimination of the
termination allowance policy.   Subsequent to the district court's

decision in this matter, and while this appeal was pending, the

Supreme Court decided the case of Curtiss-Wright Corp. v.

Schoonejongen,     U.S.     , 115 S. Ct. 1223 (1995).    In light of

the Supreme Court's decision in that case, and because we

conclude that there are genuine issues of material fact in

dispute, we will remand this matter to the district court for

further findings of fact.



                                I.

     Plaintiffs worked in production positions at Warnaco's

Altoona, Pennsylvania plant, where Warnaco manufactured various

types of fashion apparel.   In January of 1988, Warnaco published

an "Employee Handbook" (the "1988 Handbook") and distributed it

to all of its employees, including the plaintiffs.      The 1988

Handbook described the company's termination allowance policy as

follows:

          Warnaco hopes that economic circumstances never makes
     [sic] it necessary to eliminate any jobs within the Company.
     Should this unfortunate circumstance occur, however, you may
     be eligible for a termination allowance. For example, you
     may be eligible if Warnaco eliminated your job to achieve
     long-term savings to the Company. A condition of
     eligibility is that the employee sign an agreement to
     release Warnaco from liability for employment-related
     matters.
          In some cases, loss of employment will not make you
     eligible for a termination allowance. For example, you will
     not be entitled to an allowance if termination of your
     employment occurs as a result of death, retirement,
     resignation, or discharge for misconduct or poor
     performance. Entitlement to a termination allowance may
     also be affected if you receive any other termination or
     disability pay. Furthermore, you will not be entitled to a
     termination allowance if, at or about the time of
     termination of your employment with Warnaco Inc., you are
     offered employment with Warnaco Inc. or any affiliate or
     subsidiary of Warnaco Inc., or any purchaser of Warnaco
     assets, at a salary not substantially less than your last
     current salary at Warnaco Inc. You will also not be
     entitled to a termination allowance if, prior to termination
     of your employment, management has altered or rescinded this
     termination allowance policy.
          Eligible employees are entitled to receive a
     termination allowance of one week pay for each completed
     year of service, with a minimum of termination allowance of
     two weeks.


App. 116a-17a (emphasis added).

     In a memorandum dated December 26, 1990, Stanley

Silverstein, the Secretary and Assistant General Counsel of

Warnaco, stated that, "effective immediately, the Termination

Allowance Policy referred to in the Warnaco Employee Handbook,

has been rescinded.    Employees separated from the employment of

Warnaco on and after December 19, 1990 will not be eligible for

any termination allowance."     App. at 120a.   This memorandum also

directed that meetings be scheduled to communicate this change to

all employees.   Id.

     Plaintiffs contend that while one of Warnaco's vice

presidents met with employees at the Duncanville, Pennsylvania

warehouse and advised them of the rescission of the termination

allowance policy, no such meeting was ever held with employees at

the Altoona plant.     Further, plaintiff Francis Mentzer avers that

Warnaco did not give written or oral notice that the termination

allowance policy was being rescinded until a meeting was held on

January 22, 1992 to discuss issues raised by the closing of the

Altoona plant.   At that meeting, plaintiffs assert, employees
questioned Warnaco Vice President Richard Mitchell as to whether

they would be receiving the severance benefits provided for in

the 1988 Handbook, and he informed them that no such benefits

would be paid.

     Warnaco claims, and plaintiffs do not dispute, that sometime

in 1991, it published an updated Employee Handbook (the "1991

Handbook") reflecting the elimination of the termination

allowance.   Further, it is undisputed that Warnaco President and

Chief Executive Officer Linda Wachner, by letter dated January

16, 1991, advised employees about unfavorable economic times, and

stated, "it has been necessary for us to take certain measures

to protect the 11,800 members of our Warnaco family.    While such

things as a salary freeze and changes in our severance policy are

difficult, they represent the kind and quality of tapestry that

we must weave to strengthen our company."    App. at 155a (emphasis

added).   Plaintiff Mentzer acknowledges receipt of this letter,

which he describes as "vague," and without reference to any

rescission of the termination allowance policy.

     No reference is made in the 1991 Handbook, or elsewhere in

the record, to the procedure that was followed in eliminating the

termination allowance or the precise date such action was

accomplished.    More important, while plaintiffs concede that

Warnaco began distributing the 1991 Handbook to new employees at

other locations in 1991, plaintiffs allege that no employees at

the Altoona plant ever received a copy of this updated handbook.

Warnaco failed to produce any evidence that it distributed the

1991 Handbook to employees at the Altoona plant.
     Warnaco shut down its Altoona plant in early 1991, and

terminated the plaintiff employees at different times from

October 1991 through January 1992.     In light of Warnaco's refusal

to pay severance benefits, the plaintiffs filed suit against

Warnaco in the United States District Court for the Western

District of Pennsylvania alleging violations of ERISA and seeking

the benefits due to them under the 1988 Handbook, interest, and

attorney's fees.   Warnaco moved for summary judgment and

plaintiffs cross-moved for partial summary judgment as to the

issue of liability.    The district court granted summary judgment

in favor of Warnaco and denied the plaintiffs' cross-motion.

This appeal followed.

     Plaintiffs relied heavily on our decision in Schoonejongen

v. Curtiss-Wright Corporation, 18 F.3d 1034 (3d Cir. 1994),

rev'd,      U.S.      , 115 S. Ct. 1223 (1995) in presenting their

appeal.   Following the Supreme Court's decision in that matter,

which reversed our prior panel decision, we ordered supplemental

briefing on the question of the effect of the Schoonejongen case

on the instant appeal.    We recognize, of course, that the

district court did not have the benefit of the Supreme Court's

decision in Schoonejongen for purposes of its decision concerning
the granting of summary judgment.



                                 II.

     The district court exercised jurisdiction in this matter

pursuant to 29 U.S.C. § 1132(e)(1) and 28 U.S.C. § 1331.      We have

jurisdiction over this appeal pursuant to 28 U.S.C. § 1291.
                                III.

     The plaintiffs' first claim is that the district court erred

by concluding that a complete rescission of a welfare plan does

not implicate the amendment procedures required by section

402(b)(3) of ERISA.    Plaintiffs assert that it is illogical to

suggest that while changes to a benefit plan which reduce

benefits must follow the procedure outlined in section 402(b)(3),

changes that totally eliminate plan benefits do not require such

a procedure.   Further, plaintiffs assert that the district court

misinterpreted dicta in Schoonejongen, 18 F.3d at 1040, in

reaching its erroneous conclusion.

     We exercise plenary review over the district court's rulings

concerning statutory construction.     United States v. Barel, 939

F.2d 26, 31 (3d Cir. 1991).    Section 402(b)(3) of ERISA states

that every employee benefit plan shall "provide a procedure for

amending such plan, and for identifying the persons who have

authority to amend the plan."    29 U.S.C. § 1102(b)(3) (1988).

Concededly, nothing in the language of this ERISA section

indicates that an employee benefit plan must provide a procedure

for terminating the plan.    Nevertheless, as the district court

recognized, it is anomalous to suggest that ERISA offers

employees protection from mere changes in employee benefit plans,

but does not afford protection against wholesale elimination of

benefits.   Ackerman v. Warnaco, No. 93-101J, slip. op. at 9 (W.D.
Pa. August 8, 1994).    Further, the view that termination is
categorically different from an amendment for purposes of

402(b)(3) is at odds with the tenor of a previous decision of our

court where we stated that, "ERISA generally allows employers to

amend or terminate welfare benefit plans at will so long as the

procedure followed is consistent with the plan and the Act."

Deibler v. United Food & Commercial Workers' Local Union 23, 973

F.2d 206, 210 (3d Cir. 1992) (emphasis added).   Accordingly, we

agree with the plaintiffs that the requirements of section

402(b)(3) apply to plan terminations as well as plan amendments.1

     Warnaco asserts, and the district court agreed, that

language in our previous decision in Schoonejongen supports the

view that a complete rescission of an employee benefit plan does

not implicate the requirements of section 402(b)(3).   Warnaco and

the district court point to a passage in that decision where we

stated:



1
 . We are aware that the Court of Appeals for the Eleventh
Circuit has taken a different view in a recent decision. See
Aldridge v. Lily-Tulip, Inc. Salary Retirement Plan Benefits
Committee, 40 F.3d 1202, 1210 (11th Cir. 1994). In that case,
the court determined that the purpose of preventing unanticipated
amendments from defeating employees' expectations of benefits are
not achieved by applying section 402 to plan terminations. Id.
The court reasoned that the notice and procedural requirements
specifically tailored for terminations under 29 U.S.C. § 1341 are
sufficient to keep employees apprised of their benefits under the
plan and to promote certainty with regard to plan terminations.
Id.
     We are unpersuaded by this analysis. We believe that an
unanticipated termination of an employee benefit plan can have an
even more devastating effect in defeating employees expectations
of benefits than an unanticipated amendment. In addition, we
fail to see how 29 U.S.C. § 1341 ensures that employees will be
apprised of a termination of their severance benefits.
     Alternatively, [the employer] suggests that we should
     sustain the November 1983 announcement as a termination of
     its entire welfare benefit plan and the institution of a new
     plan without benefits for the retirees of the Wood-Ridge
     plant. It points out that it reserved the right to
     terminate its plan as well as amend it and that §
     402(b)(3)'s requirement of a plan provision specifying a
     process for amendments does not apply to plan terminations.
     Because [the employer] could have terminated its entire plan
     without implicating § 402(b)(3) and could then have
     instituted a new plan without benefits for the Wood-Ridge
     retirees, [the employer] insists that it should be held to
     have accomplished the same result in "one step rather than
     two." We are unpersuaded.


Schoonejongen, 18 F.3d at 1040-41 (emphasis added).    According to

Warnaco and the district court, this passage indicates that a

complete rescission of a welfare benefit plan does not implicate

the requirements of section 402(b)(3).

     We are unpersuaded by such reasoning.     As a preliminary

matter, our decision in Schoonejongen has been reversed by the

United States Supreme Court, albeit not on the precise issue

discussed in this passage.    Schoonejongen,     U.S. at     , 115

S. Ct. at 1231 (reversing the prior decision of our Court).       More

important, however, in this passage we were merely describing an
argument of the employer.    We were not setting forth a rule of

law or even providing persuasive dicta.   Because it is improper

to give precedential weight to a mere characterization of a

party's argument, we find that Warnaco's argument lacks merit.

Accordingly, we will reverse the order of the district court

granting summary judgment in favor of Warnaco and remand for

further proceedings consistent with this opinion.

     On remand the district court must determine whether Warnaco

complied with section 402(b)(3).    We pause briefly to provide
certain directions.    The plaintiffs assert that Warnaco failed to

comply with section 402(b)(3) because it failed to identify

specifically the entity with the authority to alter plan

benefits.    Warnaco counters that it expressly reserved the right

of "the management" to alter or rescind the termination allowance

policy, and that "the management" is sufficiently specific to

comply with section 402(b)(3).

      In our previous decision in Schoonejongen, we determined

that designating "the Company" as the entity with authority to

amend a benefits plan was not sufficiently specific to comply

with section 402(b)(3).    Schoonejongen, 18 F.3d at 1039.   The

Supreme Court granted certiorari on this precise issue, however,

and determined that designating "the Company" as the entity with

authority to alter the plan satisfied the requirements of section

402(b)(3).   Schoonejongen,      U.S. at   , 115 S. Ct. at 1228-

29.   The Court reasoned that designating "the Company" is

sufficiently specific because principles of corporate law provide

a ready-made set of rules for determining who has authority to

make decisions on behalf of the company.   Id. at     , 115 S. Ct.

at 1229.    The Court also explained that the literal terms of

section 402(b)(3) are ultimately indifferent to the level of

detail in the identification procedure.    Id.   Although it is a

close question, in light of the Supreme Court's decision, we

conclude that designating "the management" as the entity with

authority to alter the plan satisfies the requirements of section
402(b)(3).2   Accordingly, on remand the issue to be determined is

whether Warnaco's valid amendment procedure was complied with in

this case.    The answer will depend on a fact-intensive inquiry

into whether Warnaco's management actually approved the new plan

provision rescinding the termination allowance policy.



                                IV.

     Plaintiffs next argue that even if the rescission to the

termination allowance policy was properly adopted, the district

court erred by failing to void this rescission where the

plaintiffs' did not receive adequate notice of the change.

Plaintiffs assert that each affected employee is entitled to

written notice of such rescission.    According to plaintiffs, the

1991 Handbook evidencing the deletion of the termination

allowance policy was not distributed at the Altoona plant at

which they worked, and meetings were not held at the Altoona

plant to advise the employees of this change.

     Warnaco counters that ERISA does not require written notice

to each affected employee.    Warnaco argues that meetings were

held for most of Warnaco's 11,800 employees, and that one such

meeting was conducted at the nearby Duncanville plant.    Warnaco

also argues that the employees at the Altoona plant received a

letter from Linda Wachner, Warnaco's CEO, explaining that the

2
 . The question is close because although designating "the
management" as the body with authority to alter a plan in one
sense is more specific than designating "the Company," companies
act through well-recognized chains of corporate governance. Who
has authority to act on behalf of "the management" is less clear.
company was experiencing economic difficulties and referencing

changes in the severance policy.    Finally, Warnaco asserts that

whether or not plaintiffs received notice of the termination

allowance, their claim for benefits is barred because a

procedural defect like defective notice does not give rise to a

substantive remedy under ERISA.

      The district court based its decision on Warnaco's final

contention, that even if the plaintiffs did not receive notice,

this procedural defect does not give rise to a substantive

remedy.   Relying on Hozier v. Midwest Fasteners, Inc., 908 F.2d

1155, 1170 (3d Cir. 1990) and Berger v. Edgewater Steel Co., 911

F.2d 911, 921 (3d Cir. 1990), cert. denied, 499 U.S. 920, 111 S.

Ct. 1310 (1991), the court determined that the caselaw of this

circuit teaches that substantive remedies are generally not

available for such violations.    Ackerman, No. 93-101J, slip. at

10.   The court explained that while monetary relief is sometimes

available in "exceptional cases" or if "extraordinary

circumstances" are present, there was insufficient evidence of

such circumstances in this case to warrant relief.   Id. at 10-11.

      In Schoonejongen, the Supreme Court described a number of
ERISA's core requirements and goals.       U.S. at      , 115 S. Ct.

at 1230-31.   As the Court recognized in that case, ERISA requires

that "`[e]very employee benefit plan shall be established and

maintained pursuant to a written instrument.'" Id. at 1230

(quoting 29 U.S.C. § 1102(a)(1)).    Further, as the Court

explained, a written instrument is required to enable employees

to determine exactly what his or her rights are under the plan.
Id. (citing H.R. Conf. Rep. No. 1280, 93rd Cong., 2d Sess. 297

(1974), reprinted in 1974 U.S.C.C.A.N. 4639, 5077-78).        Finally,

as the Court noted, ERISA gives effect to the written plan scheme

through a comprehensive set of reporting and disclosure

requirements embodied in 29 U.S.C. §§ 1021-31.      Id.    Certain of

these reporting and disclosure requirements are at issue in this

case.

     ERISA requires that if there is a modification or change in

a summary plan description,3 a summary of this modification or

change must be furnished to each plan participant not later than

210 days after the end of the plan year in which the change is

adopted.   29 U.S.C. § 1024(b)(1) (1988).   In addition, and

"[m]ore important," ERISA requires that every plan administrator

make available for inspection in the administrator's "`principal

office' and other designated locations," a set of currently

operative governing plan documents, which "necessarily includes

any new, bona fide amendments."    Schoonejongen,         U.S. at       ,

115 S. Ct. at 1231 (citing 29 U.S.C. § 1024(b)(2)).4

3
 . A summary plan description contains information including the
plan's requirements for eligibility for participation and
benefits. 29 U.S.C. § 1022(b).
4
.   Section 1024(b)(2) provides:

     The administrator shall make copies of the plan description
     and the latest annual report and the bargaining agreement,
     trust agreement, contract, or other instruments under which
     the plan was established or is operated available for
     examination by any plan participant or beneficiary in the
     principal office of the administrator and in such other
     places as may be necessary to make available all pertinent
     information to all participants (including such places as
     the Secretary may prescribe by regulations).
     Warnaco acknowledges that not all of its employees received

notice of the rescission of the termination allowance policy

within 210 days of the end of the plan year in which the change

was adopted.5    Warnaco, however, suggests that a copy of the

amended handbook with the rescission of the termination allowance

policy was on file in the principal office of the plan

administrator.    Unfortunately, Warnaco cannot point to convincing

record support for its claim that the 1991 Handbook was on file

in the plan administrator's principal office, and the plaintiffs

assert that this is a disputed issue of material fact.6


(..continued)

29 U.S.C. § 1024(b)(2) (1988).
5
 . Once again, Warnaco argues that a termination of benefits is
different from an amendment and is therefore not covered by the
language of 29 U.S.C. § 1024(b)(1) which speaks of a plan
"modification" or "change." We find this argument unpersuasive
for the same reasons we found Warnaco's argument concerning
section 402(b)(3) unpersuasive -- we do not believe Congress
intended to protect employees from undisclosed plan amendments,
but leave them defenseless with respect to a plan termination, a
change with potentially more dramatic effects. We take no
position, however, on whether the 210 day notice period
sufficiently protects employees' rights. Indeed, at least one
court has determined that 210 days after the end of the plan year
in which the change has been adopted is too long a period for
employees to wait to be notified of changes in their rights, and
that "prompt" notice will be required. See Rucker v. Pacific FM,
Inc., 806 F. Supp. 1453, 1459 (N.D. Cal. 1992).
6
 . Counsel for Warnaco states, in a supplemental brief filed
with this Court, that his law firm has spoken with Denise Kelly,
the personnel manager for the Knitwear Division of Warnaco, and
she has confirmed that copies of the 1991 Handbook were on file
in the Duncanville personnel office and available for review by
all Altoona and Duncanville employees. As a preliminary matter,
since Ms. Kelly's statements on this point are not part of the
record before us, we cannot consider them. Even more
fundamental, however, the district court made no findings
     We have repeatedly held that under ordinary circumstances

defects in fulfilling the reporting and disclosure requirements

of ERISA do not give rise to a substantive remedy other than that

provided for in section 502(a)(1)(A) of that Act.7   See Hozier,

908 F.2d at 1169-70 (declining to find an implied remedy for a

violation of ERISA's reporting and disclosure requirements);

Berger, 911 F.2d at 921 ("[T]his Circuit has apparently rejected

the reasoning that substantive remedies, such as the severance

pay the Employees seek on appeal, are available for violations of

ERISA's procedural requirements."); see also Gridley v. Cleveland

Pneumatic Co., 924 F.2d 1310, 1319 (3d Cir.) (declining to find a

basis for equitable relief absent "extraordinary circumstances"),

cert. denied, 501 U.S. 1232, 111 S. Ct. 2856 (1991).   Thus, even

if as the result of Warnaco's negligence a copy of the 1991

Handbook was not available for plaintiffs' review in the

principal office of the plan administrator, and the employees did

not receive written notice of the termination of their severance

benefits within 210 days of the end of the plan year in which

this change was adopted, we are unable to conclude that ERISA

(..continued)
concerning whether Duncanville, or any other location, was the
principal office of the plan administrator.
7
 . Section 502(a)(1)(A) of ERISA codified at 29 U.S.C. §
1132(a)(1)(A) states that any administrator who fails to provide
information required to be disclosed under ERISA within 30 days
after a request for such information is made may in the court's
discretion be personally liable for an amount of up to $100 per
day from the date of such failure or refusal to provide the
information, and may be liable for such other relief as the court
deems appropriate. 29 U.S.C. § 1132(a)(1)(A) (referencing §
1132(c).
provides the remedy that plaintiffs seek.    Plaintiffs are limited

to their statutory remedies under such facts.



                                V.

     The plaintiffs' final contention is that the district court

erred in determining that no genuine issue of material fact

existed as to whether Warnaco intentionally misled the plaintiffs

by not timely disclosing the elimination of the termination

allowance policy.   According to the plaintiffs, even though

substantive remedies are generally not available for an

employer's violation of ERISA's reporting and disclosure

violations, the remedy of striking a plan amendment is available

where an employer is guilty of bad faith or active concealment

with respect to a substantive plan change.    The plaintiffs point

to the fact that meetings that were scheduled to inform the

plaintiffs of the change in policy were never held, the fact that

the 1991 Handbook was never distributed to the Altoona employees,

and the fact that a letter of January 16, 1991 from Warnaco's CEO

spoke of "changes" in (rather than the elimination of) the

severance plan, to support their view that Warnaco was actively

concealing the elimination of the severance policy in order to

induce workers to stay at their jobs.

     As we discussed above, substantive remedies are generally

not available for violations of ERISA's reporting and disclosure

requirements.   See Hozier, 908 F.2d at 1169-70; Berger, 911 F.2d

at 921.   We have, however, recognized the possibility of a remedy

where the plaintiff can demonstrate the presence of
"extraordinary circumstances."    See Gridley, 924 F.2d at 1319.

Such circumstances include situations where the employer has

acted in bad faith, or has actively concealed a change in the

benefit plan, and the covered employees have been substantively

harmed by virtue of the employer's actions.    See Berger, 911 F.2d

at 920-21;    Blau v. Del Monte Corp., 748 F.2d 1348, 1353-54 (9th

Cir. 1984), cert. denied, 474 U.S. 865, 106 S. Ct. 183 (1985).

Further, we have acknowledged that reporting and disclosure

violations can "wreak especially substantial harm" in the context

of a dispute over the validity of a plan alteration.     Hozier, 908

F.2d at 1168-69 n.15.     The district court concluded that the

record contains "no evidence of the narrow `extraordinary

circumstances,' which must be present for substantive relief to

be available."    Ackerman, 93-101J, slip op. at 11.   We disagree.

     At oral argument, Warnaco described its failure to

distribute the 1991 Handbook to affected employees at the Altoona

plant, its failure to hold scheduled meetings with Altoona

employees, and its issuance of a letter concerning "changes" in

the severance policy, as mere bureaucratic "bungling."    While we

do not rule out the possibility that administrative error

accounted for Warnaco's omissions, we conclude that a reasonable

fact finder could infer from these facts and from the plaintiffs'

evidence regarding the employment climate at the Altoona plant

that Warnaco actively concealed the change to its severance

policy in order to prevent employees at the Altoona plant from

leaving.     Under such circumstances, we conclude that it would be

inappropriate to deprive the plaintiffs of the remedy of voiding
Warnaco's rescission of the termination allowance policy.8

Accordingly, we will reverse the district court's grant of

summary judgment in favor of Warnaco, and remand for further

findings on this disputed factual issue.9



                           CONCLUSION


8
 . We find support for the remedy of voiding a rescission of an
employee benefits plan in a portion of our previous decision in
Schoonejongen that was not expressly reversed on appeal to the
Supreme Court. In that case, we explained that where we are
asked to void a plan amendment we are in a situation "[u]nlike
the situation in Hozier where the plaintiffs sought benefits not
provided for in the plan." Schoonejongen, 18 F.3d at 1040.
Further, in Hozier, we implicitly recognized the possibility of
striking down a plan amendment where there has been a reporting
and disclosure violation concerning the amendment. Hozier, 908
F.2d at 1168-69 n.15. We conclude that such a remedy is
appropriate in situations of active concealment.
     We point out that an inference of bad faith or active
concealment does not arise simply from a failure to comply with
ERISA's reporting or disclosure requirements. It is the peculiar
combination of Warnaco's alleged deficiencies in this case that
raises a material issue of fact necessitating a remand.
9
 . Warnaco also asserts that our decision in Hamilton v. Air
Jamaica, Ltd., 945 F.2d 74 (3d Cir. 1991), cert. denied, 503 U.S.
938, 112 S. Ct. 1479 (1992), precludes recovery for a violation
of a notice requirement, even in situations of active
concealment, where an employee handbook contains an express
reservation clause. According to Warnaco, where a plan document
expressly reserves the right to alter or eliminate benefits, no
additional notice to the beneficiaries is required to eliminate
benefits.
     As a preliminary matter, we note that in Air Jamaica, the
employee handbook at issue expressly reserved the right to alter
or eliminate benefits "without notice," id. at 76, a provision
not contained in the description of Warnaco's termination
allowance policy. More fundamentally, however, we refuse to read
Air Jamaica so broadly. We did not intend in Air Jamaica to
allow employers to absolve themselves of good faith compliance
with their ERISA reporting and disclosure requirements simply by
placing a reservation clause in their employee handbooks.
     Because we find that a complete rescission of a benefit plan

does implicate the requirements of section 402(b)(3) of ERISA, we

will reverse the order of the district court.   Upon remand the

district court must determine whether Warnaco complied with its

otherwise valid procedure for altering plan benefits.   With

respect to Warnaco's alleged reporting and disclosure violations,

we will reverse and remand this case for a determination as to

whether Warnaco acted in bad faith, or actively concealed the

rescission of the termination allowance policy.
