May 15, 1995
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
On Appeal from the United States District Court for the Western District of Pennsylvania (D.C. No. 93-cv-0-00101J)
Before: Mansmann, Cowen and Lewis Circuit Judges
The opinion of the court was delivered by: 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.
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 ...
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