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Araujo v. Kraft Foods Global

July 7, 2009

RE: MANUEL ARAUJO
v.
KRAFT FOODS GLOBAL, INC. ADMINISTRATIVE COMMITTEE



The opinion of the court was delivered by: William J. Martini Judge

MARTIN LUTHER KING JR. FEDERAL BLDG. & U.S. COURTHOUSE 50 WALNUT STREET, P.O. BOX 419 NEWARK, NJ 07101-0419 (973) 645-6340

LETTER OPINION

Dear Litigants:

This matter comes before the Court on Defendant's motion for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Oral arguments were not held. Fed. R. Civ. P. 78. For the reasons set forth below, Defendant's motion is GRANTED.

I. BACKGROUND

Plaintiff Manuel Araujo ("Araujo") worked for Nabisco, Inc. ("Nabisco") from 1970 until the company was acquired by Kraft Foods Global, Inc. ("Kraft") in 1999 or 2000. Compl. ¶¶ 4, 7. He continued to work for Kraft until November 2001, for a total of 31 years of service. Compl. ¶ 11. Plaintiff's employment enabled him to enroll in the Plan for Pensions of Nabisco, Nabisco's employee benefits plan. Compl. ¶ 5. The benefits plan was renamed the Nabisco, Inc. Flat Dollar Pension Plan (the "Plan") in January 2001. Compl. ¶ 8.

Article III of the Plan describes the various pension benefits available to enrolled employees, including a "Normal Retirement Pension," an "Early Retirement Pension," a "Disability Retirement Pension," a "Job Elimination Retirement Pension," and a "Deferred Vested Pension." Section 3.05 of the Plan describes a Job Elimination Retirement Pension" ("JERP") and states that " [a] Participant with 10 or more Vesting Years of Service, who is at least 55 and has a termination of employment due to job elimination may elect to receive a Job Elimination Retirement Pension." Rattay Certif., Ex. B.

Nabisco also issued a Summary Plan Description ("SPD") to the covered employees. Section 3 of the SPD describes a JERP as follows:"A Job Elimination Pension is payable monthly for life to Participants who retire as a result of the elimination of their job and who are at least age 55 with 10 years of Vesting Service." The SPD goes on to say that if "employment is terminated due to job elimination and you are at least age 55 and have completed at least 10 years of Vesting Service, you will be eligible for a Job Elimination Retirement Pension." Rattay Certif., Ex. C.

In 2001, Kraft decided to close the New Jersey facility at which Plaintiff worked. Compl. ¶ 9. In October 2001, Kraft and Plaintiff's union signed a Memorandum of Agreement ("the Memorandum") describing the closure of the plant. Id.; Rattay Certif., Ex. E. Pursuant to the Memorandum, Plaintiff was given the option of transferring to another plant or terminating his employment and accepting a severance package. Significantly, the Memorandum contained a "bridging provision" (the "Bridging Provision") applicable to employees who elected to terminate and receive severance. The Bridging Provision stated that employees close to meeting the eligibility requirements for a JERP at the time of termination could spread out their severance payments over an extended period of time to help them attain the age requirement, the vesting service requirement, or both.*fn1 Rattay Certif., Ex. E.

Plaintiff chose to retire and receive severance. He did so under the belief that the SPD enabled employees to receive a JERP at age 55 even if the job elimination occurred earlier. Compl. ¶ 11. Plaintiff is not a native English speaker and has some difficulties with the language. However, he receives assistance from his son with reading documents. Pl.'s Rule 56 Counterstatement of Facts. Plaintiff's employment ended November 2, 2001, but he received a severance package paying him his weekly salary through June 7, 2002, as well as an additional lump sum. He also signed an agreement waiving future employment with Kraft. Compl. ¶ 11.

In September 2002, Plaintiff received a letter from Kraft regarding his pension eligibility. The letter informed him that he was eligible to start receiving his Vested Pension at age 65 but could elect to receive an actuarially reduced Deferred Vested Pension ("DVP") beginning at age 55. Compl. ¶ 12. In July 2003, Plaintiff's counsel wrote to Kraft asking why Plaintiff was not eligible for a JERP, which paid more than a DVP, should he elect to start receiving his benefits at age 55. Plaintiff did not receive a response. Compl. ¶ 13.

Plaintiff elected to receive his benefits starting at age 55 and began receiving his DVP on April 1, 2004. Compl. ¶ 14. On February 16, 2005, Plaintiff filed a formal claim with Kraft to adjust his pension from a DVP to a JERP. Plaintiff alleged that he qualified for a JERP even though he was not 55 at the time of his termination. Compl. ¶ 15. Kraft's Administrative Committee (the "Administrative Committee" or "Defendant") denied the request. Compl. ¶ 16. The denial letter also noted that even if Plaintiff had chosen to use the Bridging Provision, he still would not have qualified for a JERP. Plaintiff appealed the decision but was again denied in September 2005. Compl. ¶ 17.

On February 15, 2008, Plaintiff filed a complaint in federal court, alleging that Defendant had violated the Employee Retirement Income Security Act ("ERISA") by awarding him a DVP instead of a JERP. Specifically, he alleged that the SPD was misleading, such that (1) Kraft should be ...


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