>The US District Court for the Western District of Tennessee ruled the CFO’s replacement made the decision without knowledge of the potential impact on the as-of-yet unvested SERP package, and thus the dismissal did not violate ERISA Section 510. Judge Jon McCalla made the determination after the terminated CFO failed to present evidence of any malicious intent in preventing the vesting of the retirement package, according to Washington-based legal publisher BNA.
“There is no evidence that the SERP was a motivating factor or even a consideration in the decision to fire Plaintiff,” the court said.
Out With The Old
>John Parker was a 24-year veteran with Union Planters Corp, including 10 years as company CFO. During Parker’s tenure as CFO, Union Planters grew in size from approximately $4 billion in assets to roughly $33 billion in assets, and went from losses of about $22 million in the year before he took over the post to a financial institution that earned approximately $410 million in the last year he was CFO, the court said.
>In 1995, the company drafted a SERP to provide benefits for Parker and four other executives. To receive benefits under the SERP, an executive was required to work 10 years for the company and have reached the age of 55. The value of Parker’s SERP benefits on January 1, 2000, was nearly $3.4 million.
>However, Parker would never reach the necessary plateau to claim the benefits. In 1999, Union Planters decided to undergo a corporate restructuring, which included replacing Parker as CFO. Parker’s replacement was given the ability to hire and fire employees at his discretion. After Parker and his replacement collaborated for a few months, the new CFO – without consulting other executives at the company – terminated Parker’s employment.
>After being let go, Parker requested the SERP benefits. The company denied his request because he was not 55 at the time he was fired, a birthday he was just 16 months shy of at the time of his dismissal.
>Parker sued Union Planters alleging the company interfered with his right to SERP benefits in violation of ERISA Section 510. After a bench trial, the district court ruled in favor of Union Planters, finding that Parker had not satisfied his burden of proving that the company fired him in order to prevent him from obtaining his SERP benefits.
The case is Parker v. Union Planters Corp., W.D. Tenn., No. 01-2070-M1/V, 5/29/03.