On Appeal from the United States District Court for the Middle District of Pennsylvania (Scranton) (D.C. Civil Action No. 86-1261) District Judge: Hon. Sylvia H. Rambo.
Higginbotham, Stapleton, and Cowen, Circuit Judges.
A. LEON HIGGINBOTHAM, JR., Circuit Judge
This case arose out of a class action suit challenging an employer-plan administrator's decision to deny severance benefits to a group of employees terminated as that employer's employees as a result of that employer's sale of the division in which they worked as a going business. The district court granted summary judgment to the employer-defendant. Because the district court applied an unreasonable interpretation of the language of the plan, and because this error was outcome determinative, we will reverse the grant of summary judgment and remand to the district court for further proceedings consistent with this opinion.
Harsco Corporation is a diversified business with more than fifteen divisions. Joint Appendix ("Jt. App.") at 444 (magistrate's summary of "undisputed facts"). The consequences of the sale of one of these divisions, the Quaker Alloy Casting Division ("Casting Division"), as a going business is the issue here.
In December 1981, the Casting Division's management issued a written policy regarding severance pay for its salaried employees. Jt. App. at 445. The severance pay fund was to be funded from the general assets of Harsco. The Severance Pay Policy ("Plan") became effective on January 1, 1982, id., and it was an "employee welfare benefit plan" within the meaning of the Employee Retirement Income Security Act of 1974 ("ERISA"), 88 Stat. 829, as amended, 29 U.S.C. § 1001 et seq., Jt. App. at 446.
Harsco announced the terms of the policy to the employees of the Casting Division. These terms became part of the terms of their employment. Id. at 445. The plan was never amended or modified. Id. The plan provided that:
To further our concept of career employment, the Company will take all practical steps to provide continuing employment, including attempts to arrange transfers if work becomes unavailable at the individual's normal workplace.
However, occasions may arise where the Company will be unable to continue the employment of certain people or groups of people. In these instances, when employment is terminated, the Company will make a reasonable effort to assist such person or persons in securing employment elsewhere and will make severance payment according to the following rules:
A. ELIGIBILITY FOR SEVERANCE PAY
All permanent salaried personnel are eligible for payments under this policy, except in cases of voluntary resignation not initiated by the Company, discharge for cause, and where other Company policies govern, such as death, disability, retirement and military leave.
Jt. App. at 449-50. In the situation at issue here, no "other Company policies" govern that might preclude the payment of ...