Compliance July 19, 2005

Appeals Judges Back Severance Benefits Denial

July 19, 2005 (PLANSPONSOR.com) - A federal appeals court has backed a lower court judge in ruling that IBM's severance plan was within its right to deny benefits to a participant who repeatedly threatened the plan administrator.
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The US 2 nd Circuit Court of Appeals said the plan rightfully denied the benefits request from plaintiff Richard Waksman, citing the “threatening conduct” exception to granting benefits.

“Here, it is rational and consistent with the plain language to interpret ‘threatening conduct’ as including Waksman’s conduct here,” the appeals judges wrote. “It is not uncommon in the modern vernacular to refer to violence against persons, and it might well be an abuse of discretion to construe ‘threatening conduct’ to include an isolated exclamation along the lines of ‘I could just kill her!’ Here, however, Waksman was unusually detailed in his wording, identifying a weapon and a mode of transport.”

The fact that Waksman may have otherwise had a peaceful work history was not relevant because in the court’s opinion it was only important that the participant “chose to express his frustration by describing a deadly assault,” the appeals judges wrote.

The judges affirmed an earliler ruling by US District Judge Stephen Robinson of the US District Court for the Southern District of New York.

The opinion in Waksman v. IBM Separation Allowance Plan, 2d Cir., No. 04-4084-cv, unpublished 7/8/05 is  here .  

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