
USCA1 Opinion

	




                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                              _________________________          No. 95-1704                             EDMUND H. BELANGER, ET AL.,                               Plaintiffs, Appellants,                                          v.                                WYMAN-GORDON COMPANY,                                 Defendant, Appellee.                              _________________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                   [Hon. Nathaniel M. Gorton, U.S. District Judge]                                              ___________________                              _________________________                                        Before                                Selya, Circuit Judge,                                       _____________                            Aldrich, Senior Circuit Judge,                                     ____________________                               and Cyr, Circuit Judge.                                        _____________                              _________________________               Mark  I. Zarrow, with whom Lian, Zarrow, Eynon & Shea was on               _______________            __________________________          brief, for appellants.               John  O. Mirick,  with  whom Mirick,  O'Connell, DeMallie  &               _______________              _______________________________          Lougee was on brief, for appellee.          ______                              _________________________                                  December 14, 1995                              _________________________                                SELYA,  Circuit  Judge.   This  appeal  requires us  to                    SELYA,  Circuit  Judge.                            ______________          decide  what constitutes  a benefit  "plan" for  purposes of  the          Employee  Retirement Income  Security Act  (ERISA), 29  U.S.C.             1001-1467 (1988).   The heart  of the appellants'  case is  their          contention that a series of four early retirement offers extended          by  their employer  over a  four-year period constitute  an ERISA          plan.  The  district court  thought not, and  dismissed the  suit          after a bench trial.  We affirm.                                          I.                                          I.                                          __                                      Background                                      Background                                      __________                    We  take  the  underlying  facts  principally from  the          parties' pretrial stipulations.                    Facing an uncertain economic future, defendant-appellee          Wyman-Gordon Co. (the company) decided  to reduce its work  force          in hopes of improving its overall financial outlook.  The company          made its first move in November  1987.  Rather than simply laying          off  loyal minions,  the company  offered all  age-qualified non-          union workers (characterized as  all "weekly and monthly salaried          employees") an opportunity for early retirement (Offer No.1).  To          make departing  a sweeter  sorrow, the  company proposed  to pay,          over  and beyond  regular retirement  benefits, a  lump-sum bonus          amounting to one  week's pay for each  year of service, plus  two          days' pay for each  year of service  in excess of fifteen  years,          multiplied by 110%.   Offer No. 1 contained no  cap on the number          of service years that could be included in calculating the amount          of  the one-time  bonus.   Some  eligible employees  accepted the                                          2          offer and some did not.                    In January  1990, the company,  still in the  throes of          downsizing, made a similar early retirement offer (Offer  No. 2).          It structured this offer  in much the same manner,  but devised a          less complicated  formula for computing retirement  bonuses:  one          week's salary for each year of  service.  Like Offer No. 1, Offer          No. 2 did  not impose a  ceiling on the  number of service  years          that could figure  into the calculation.  Once again,  some   but          not all   of the eligible employees accepted the offer.                    In   corporate   America,  financial   security   is  a          consummation  ardently  sought but  seldom  achieved.   When  the          company's  prognosis remained  gloomy,  it sponsored  yet another          early retirement offer (Offer  No. 3) in January  of 1991.   This          offer contemplated that the  amount of an individual's retirement          bonus would be calculated  by the same formula used  for purposes          of Offer  No. 2 (multiplying one  week's pay times the  number of          service  years), but capped the number of years includable in the          computation at twenty-five.  Almost  two-thirds of the weekly and          monthly salaried employees  who were eligible  to do so  accepted          Offer  No. 3, including the  eighteen persons who  appear here as          plaintiffs and  appellants  (all  of  whom had  spent  more  than          twenty-five years in the company's service).                    Despite  the winnowing  that  occurred  over time,  the          company    apparently  convinced  that strength  lay  in lack  of          numbers   undertook further cost-reduction measures in October of          1991.     These  included  salary  cuts  and  yet  another  early                                          3          retirement  offer (Offer  No. 4).   As  with the  two immediately          preceding  proposals,   the  carrot  that  the   company  dangled          consisted of a bonus calculated on the basis of one week's salary          for each year of  service.  This time, however,  the company made          the offer accessible to more  employees (by lowering the  minimum          age  for early retirement) and abjured any ceiling on the maximum          number  of  service years  includable in  figuring the  lump sum.          Thirty-eight of  forty-six eligible employees accepted  Offer No.          4.                    The  appellants  were displeased  no little  (and quite          some)  upon learning of the more generous terms embodied in Offer          No. 4.  Each of them had accepted a capped offer   Offer No.  3            as   an  inducement  to  take   early  retirement,  and  the  cap          effectively reduced their early  retirement bonuses by an average          of roughly $9,950 per  retiree.  They sued the  company, alleging          inter  alia  that  the series  of  four  early retirement  offers          _____  ____          constituted a  plan under the  terms of ERISA, 29  U.S.C.   1002;          that the plan failed to comply with ERISA's imperatives, e.g, the          company had not provided a written plan description or a protocol          for amendment,  see 29  U.S.C.     1022  & 1102;  and that  these                          ___          violations entitled them to damages based on what they would have          received had Offer No. 3 not been capped, together with interest,          counsel fees, and other redress.                    After conducting a  non-jury trial, the district  court          rejected  the central premise  underlying the  appellants' claim.          The  court  held  that  the  early  retirement  offer  which  the                                          4          appellants accepted did not constitute a plan for ERISA purposes,          and  that, therefore, the company was not obliged to heed ERISA's          requirements.   See Belanger v. Wyman-Gordon Co., 888 F. Supp. 9,                          ___ ________    ________________          12 (D. Mass. 1995).  The appellants assign error.1                                         II.                                         II.                                         ___                                      Discussion                                      Discussion                                      __________                                          A.                                          A.                                          __                                  Standard of Review                                  Standard of Review                                  __________________                    The question whether a given employee benefit or set of          benefits is a plan  properly governed by the strictures  of ERISA          requires a  certain level  of judicial  versatility.   Because an          inquiring court must both assess the facts and apply the law, two          different standards of review  come into play.  "For  purposes of          appellate review, mixed questions of fact and law ordinarily fall          along  a  degree-of-deference  continuum,  ranging  from  plenary          review  for law-dominated  questions  to  clear-error review  for          fact-dominated questions."   Johnson  v. Watts Regulator  Co., 63                                       _______     ____________________          F.3d  1129,  1132 (1st  Cir.  1995).   At  the  near  end of  the          continuum, the district court's interpretation of the word "plan"          as it is used in ERISA poses a question of law subject to de novo          review.   At the  far end of  the continuum, the  court's inquiry          into the nature  and scope of the  benefits actually at issue  in          the instant  case  demands factfinding,  and  is to  that  extent                                        ____________________               1In  the district  court, the  appellants also  raised other          claims.   The  court  found  against  them  on  all  fronts,  see                                                                        ___          Belanger,  888 F. Supp. at  12-13, and only  this ERISA claim has          ________          been preserved for review.                                          5          reviewable only for clear error.  In other words, as  long as the          trial court accurately applies  the relevant legal standards, the          existence vel non of an  ERISA plan is principally a question  of                    ___ ___          fact, and the court of appeals must defer to the district court's          judgment unless that judgment is clearly erroneous.   See Wickman                                                                ___ _______          v. Northwestern Nat'l Ins.  Co., 908 F.2d 1077, 1082  (1st Cir.),             ____________________________          cert.  denied, 498 U.S. 1013  (1990); see also  Cumpiano v. Banco          _____  ______                         ___ ____  ________    _____          Santander P.R.,  902 F.2d  148, 152 (1st  Cir. 1990)  (explaining          ______________          that there is no clear error "unless, on the whole of the record,          [the court of appeals] form[s] a strong, unyielding belief that a          mistake has been made").                                          B.                                          B.                                          __                                The Meaning of "Plan"                                The Meaning of "Plan"                                _____________________                    The text of ERISA itself  affords scant guidance as  to          what  constitutes a  covered "plan."   The  statute, 29  U.S.C.            1002(2)(A), merely  constructs a tautology, defining  an employee          benefit  plan  as "any  plan,  program  or  fund" established  or          maintained  by  an employer  that  provides  certain benefits  to          employees.   Relying on the purposes undergirding  the statute to          give meaning to this cryptic language, the Supreme Court has made          it very clear that an employee  benefit may be considered a  plan          for  purposes of  ERISA only  if it  involves the  undertaking of          continuing  administrative  and  financial  obligations   by  the          employer  to the behoof of employees or their beneficiaries.  See                                                                        ___          Fort  Halifax Packing Co.  v. Coyne, 482  U.S. 1,  12 (1987); see          _________________________     _____                           ___          also District of Columbia  v. Greater Wash. Bd. of  Trade, 113 S.          ____ ____________________     ___________________________                                          6          Ct.  580, 584 n.2 (1992) (construing Fort Halifax as holding that                                               ____________          a  plan exists  only if  an employer  has "some  minimal, ongoing          `administrative' scheme or practice").                    Fort  Halifax is  the beacon  by which  we  must steer.                    _____________          There, the  Court  rejected an  ERISA preemption  challenge to  a          Maine statute requiring employers  to tender a one-time severance          payment to displaced employees  in the event of a  plant closing.          The  Court held that Maine's plant-closing law did not succumb to          ERISA's  preemptive  force  because  the  legislatively  mandated          tribute  comprised no  more  than a  "one-time, lump-sum  payment          triggered by a single event."  482 U.S. at 12.  Consequently, the          state statute neither "establishe[d], nor require[d] an  employer          to  maintain,  an employee  benefit  plan."    Id.  (emphasis  in                                               ____      ___          original).                    Two of ERISA's cardinal goals   protection of employers          and  protection  of employees     appear to  have  influenced the          Court's interpretation of  what constitutes  a plan.   As to  the          former  goal,  the  Court  acknowledged  that  Congress  designed          ERISA's preemption provision partially to protect employers  from          a  "patchwork  scheme"  of  regulations in  respect  to  employee          benefits.   Id.   This concern has  little or no  pertinence, the                      ___          Court  reasoned, in  a one-time  payment situation  in  which the          employer's only obligation is  to draw a  single check.  See  id.                                                                   ___  ___          By  contrast, this  concern  is highly  pertinent  in respect  to          employee  benefits  that  place  "periodic  demands" on  employer          assets,  "creat[ing]  a  need  for  financial  coordination   and                                          7          control."  Id.                     ___                    As  to ERISA's  other, more  important goal,  the Court          recognized that, in general, ERISA's  substantive protections are          intended to safeguard the financial integrity of employee benefit          funds, to permit employee monitoring of earmarked  assets, and to          ensure that employers' promises are kept.   See id. at 15.  Since                                                      ___ ___          a single-shot benefit requires no greater assurance than that the          check  will  not  bounce,  ERISA's  panoply  of  protections  has          virtually nothing to do with such a  simple task.  See id. at 16.                                                             ___ ___          More elaborately structured benefits, however,  raise a different          set  of concerns.  As the Court observed, ongoing investments and          obligations are uniquely vulnerable to employer abuse or employer          carelessness, and thus require  ERISA's special prophylaxis.  See                                                                        ___          id.          ___                    The  upshot is that, in the albedo of Fort Halifax, the                                                          ____________          existence  of  a plan  turns  on  the  nature  and extent  of  an          employer's  benefit obligations.   Withal,  making particularized          judgments in this area on  the basis of vague etchings  of policy          is no mean feat.  As we wrote on an earlier occasion, "so long as          Fort  Halifax prescribes  a definition  based on  the extent  and          _____________          complexity  of administrative obligations, line drawing  . . . is          necessary and  close  cases  will approach  the  line  from  both          sides."   Simas v. Quaker Fabric Corp., 6 F.3d 849, 854 (1st Cir.                    _____    ___________________          1993).                    There  is  no  authoritative  checklist  that   can  be          consulted to determine conclusively if an employer's  obligations                                          8          rise to  the level  of an  ERISA plan.   While  a  wide array  of          factors may  be suggestive,  typically "no  single act  in itself          necessarily constitutes  the establishment  of the plan,  fund or          program."   Donovan v. Dillingham, 688 F.2d 1367, 1373 (11th Cir.                      _______    __________          1982) (en banc).  Yet, some factors tend to be more indicative of          the existence of a plan than others.                    One very important consideration  is whether, in  light          of  all the  surrounding  facts and  circumstances, a  reasonable          employee would perceive an ongoing  commitment by the employer to          provide  employee benefits.   See Henglein  v. Informal  Plan for                                        ___ ________     __________________          Plant Shutdown Benefits for Salaried Employees, 974 F.2d 391, 400          ______________________________________________          (3d Cir. 1992);  Donovan, 688 F.2d at 1373;  cf. Johnson, 63 F.3d                           _______                     ___ _______          at  1135 (advocating  that courts  should judge  the  question of          whether an  employer "established  or maintained" a  benefit plan          within  the   scope  of  ERISA  "from  the  employees'  place  of          vantage").  Thus, evidence that an  employer committed to provide          long-term or  periodic benefits  to its employees  will often  be          telling.   See  Henglein, 974  F.2d at  400;  see also  Kenney v.                     ___  ________                      ___ ____  ______          Roland Parson Contracting Corp., 28 F.3d 1254, 1258-59 (D.C. Cir.          _______________________________          1994) (explaining that a plan may be created, even in the absence          of formal documentation, by  "an employer's representation that a          plan  has been established, in  conjunction with any action, such          as  withholding wages for contribution to such a plan, that tends          to  confirm  its representations").   Anticipating  this reality,          this court stated in Wickman, 908 F.2d at 1083, that the "crucial                               _______          factor in determining if a `plan' has been established is whether                                          9          the [proffering of an  employee benefit] constituted an expressed          intention  by the employer to  provide benefits on  a regular and          long term basis."                    We  end where we began.   In this  cloudy corner of the          law, each case must be  appraised on its own facts.  All that can          be stated with assurance is that Fort Halifax controls.  Thus, so                                           ____ _______          long as a proffered benefit does not involve employer obligations          materially beyond those  reflected in Fort Halifax, see  Simas, 6                                                ____________  ___  _____          F.3d at 853-54,  the benefit will not amount to  a plan under the          ERISA statute.2                                          C.                                          C.                                          __                                       Analysis                                       Analysis                                       ________                    Viewed  against this  backdrop,  the  district  court's          conclusion  that ERISA  did  not apply  to  the series  of  early          retirement  offers  is eminently  supportable.    Nothing in  the          offers,  whether  they  are   assessed  individually  or  in  the          aggregate,  reflects  the  company's  assumption  of  an  ongoing          administrative  or financial obligation  to its  employees within          the purview of Fort Halifax.                         ____________                    Taken  singly,  the  early  retirement  offers  involve                                        ____________________               2Simas  involved a  situation in  which an  employer  had to                _____          fulfill,  under   state  law,  obligations   analogous  to,   but          materially beyond, those imposed under the Maine statute at issue          in Fort  Halifax.  The Massachusetts statute  addressed in Simas,             _____________                                           _____          unlike  the  Maine   statute,  required  individualized  employer          determinations, based  on at  least one nonmechanical  criterion,          over a prolonged time period.  See  Simas, 6 F.3d at 853.   Thus,                                         ___  _____          we held  that ERISA  preempted the Massachusetts  statute because          the  statute imposed  obligations on  the employer  equivalent to          those involved in an ERISA plan.  See id. at 853-54.                                            ___ ___                                          10          precisely the kind  of one-time, lump-sum  payment that the  Fort                                                                       ____          Halifax Court clearly excluded from  the pantheon of ERISA plans.          _______          See 482  U.S. at  12.   The company's offers  hinged on  a purely          ___          mechanical  determination  of   eligibility  and,  if   accepted,          required  no  complicated  administrative  apparatus   either  to          calculate or  to distribute  the promised  benefit.   The  offers          pivoted on a single,  time-specific event.  They did  not involve          promises that had to be  kept over a lengthy period, nor  did the          company thereby make  any lasting financial commitment  of a type          that might implicate ERISA's substantive protections.  The bottom          line is  that the company  did no  more than propose  to write  a          single  check to  each  eligible employee  who accepted  an early          retirement  offer.   If this  is not  Fort Halifax  redux,  it is                                                ____________          sufficiently  close  to  the  Fort Halifax  model  that  it falls                                        ____________          outside  ERISA's sphere.  See  Fort Halifax, 482  U.S. at 12; see                                    ___  ____________                   ___          also Kulinski v.  Medtronic Bio-Medicus, Inc.,  21 F.3d 254,  258          ____ ________     ___________________________          (8th Cir. 1994) (holding  that a severance plan involving  a one-          time payment is not an  ERISA plan); Angst v. Mack  Trucks, Inc.,                                               _____    __________________          969  F.3d 1530,  1539 (3d  Cir. 1992)  (similar); Fontenot  v. NL                                                            ________     __          Indus., Inc., 953 F.2d 960, 962-63 (5th Cir. 1992) (similar).          ____________                    The more  intriguing question  in this case  is whether          the incidence of serial  offers   the fact that the  company made          not a  lone offer but  a succession  of offers over  a period  of          roughly four years   changes the  result.  We do not believe that          it does.   Each of the  four early retirement  offers, in and  of          itself, is  beyond  ERISA's  reach.    The  appellants  have  not                                          11          advanced  any convincing  reason why the  sheer number  of ERISA-          exempt early retirement offers, without more, serves to alter the          Fort  Halifax  analysis.   To be  sure,  in some  circumstances a          _____________          parade  of early retirement offers  might constitute a plan under          ERISA    where,  for example,  employees rely  on the  promise of          future offers.  Cf. Moeller v. Bertrang, 801 F. Supp. 291, 294-95                          ___ _______    ________          (D.S.D. 1992) (emphasizing the importance of employee reliance on          employer promises of  future benefits).  But this  record reveals          no  such concatenation of circumstances.   Here, the  whole is no          greater than the sum of the parts.                    Three  pieces of  information confirm  this conclusion.          First,  the  administration  of  the offers  neither  required  a          special   mechanism  nor  engendered  a  need  for  nonmechanical          decisionmaking.   Second, the  record is  devoid of  any evidence          that the serial offers  were the product of a  prearranged design          or that the company ever represented  to its work force that they          were linked in  a defined sequence.  Consequently,  the employees          had  no promises of financial  obligation on which  to rely, and,          thus, no need for ERISA's substantive protection.  The  finishing          touch is the district court's factual finding that the offers did          not impose continuing obligations  of either an administrative or          a  financial nature.   See  Belanger, 888  F. Supp.  at 12.   The                                 ___  ________          appellants have pointed to no facts that remotely contradict this          factual finding.                    To sum up,  it appears  that the  company devised  each          offer  without giving thought to possible future offers, and that                                          12          each  offer was motivated  by a bona  fide need to  reduce costs.          Just as four eggs,  without more, do not  make an omelette,  four          independent early retirement offers, without visible ties to each          other and without  proof of  an enduring obligation  owed by  the          employer to the employees, do not make an ERISA plan.3                                         III.                                         III.                                         ____                                      Conclusion                                      Conclusion                                      __________                    We need go no further.   The district court found, as a          matter of fact,  that the company's four  early retirement offers          involved no continuing administrative or  financial obligation on          its part, and thus concluded, as a matter of law, that the offers          together did not constitute a plan under ERISA.  On this  record,          we emphatically agree.                    Affirmed.                    Affirmed.                    ________                                        ____________________               3Although the  appellants press heavily on the fact that the          same executive designed each  retirement offer, this does nothing          to prove that he did  so as part of  an ERISA plan.  Indeed,  the                                   _________________________          uncontroverted evidence strongly  suggests that successive offers          were   necessary  only  because   the  corporate  profit-and-loss          statement failed to recuperate in the projected time frame.                                          13
