Frequent Travel Does Not Equal Relo

August 10, 2004 ( - William Peach may have been asked to travel between Michigan and Texas for several weeks, but he was not formally relocated so he was not entitled to severance pay.

>Affirming a lower federal court’s opinion, the US Court of Appeals for the 6 th Circuit found Peach’s former employer did not act arbitrarily or capriciously in determining that the assignment requiring the plaintiff to travel to Texas was not a relocation.   Thus, the plaintiff is not entitled to severance benefits as would have been provided by the company’s Change in Control Severance Plan had he been relocated.   

Training Days

Peach was asked in 1998 to travel from Alma, Michigan to San Antonio Texas to train employees as part of Ultramar Diamond Shamrock’s acquisition of Total Petroleum Inc. the year before.   Peach, a Total employee, was asked to be part of a transition team for six weeks with his official termination date scheduled for September 30, 1998.

Ultramar offered to fly Peach into San Antonio on Monday mornings and back to Michigan on Friday mornings. On several occasions, Peach refused Ultramar’s attempt to have him travel to San Antonio and eventually Peach quit his job.

After leaving, Peach filed an application for benefits through Ultramar’s severance plan. Under the plan, an employee was entitled to benefits if he or she left the company for “good reason.” The term “good reason” was defined to include situations where an employee was asked to relocate.  

When Ultramar refused to pay Peach severance benefits, Peach sued, alleging Ultramar violated provisions of the Employee Retirement Income Security Act (ERISA).  

Court Rulings

In the initial case, US District Judge David Lawson of the US District Court for the Eastern District of Michigan found, “Although a six- to eight-week stay in a location over a thousand miles away might reasonably be considered a ‘relocation,’ a requirement of weekly travel that begins on Monday and ends on Friday morning can be distinguished.”

Lawson agreed with Ultramar that Peach did not quit his job for “good reason” because he was not asked to relocate to San Antonio, but instead was asked to simply travel to San Antonio for business reasons.

“There will come a point in time when travel to the same location from another city, day after day, becomes a de facto relocation. Weekly travel for parts of five days for six weeks, however, will not establish ‘relocation’ as a matter of law,” the district court said in awarding summary judgment to the company.

The appellate court affirmed the decision.   “We agree with the district court’s order affirming the [Ultramar Diamond Shamrock Employee Benefits Review Committee’s] denial of Peach’s application for enhanced severance benefits,” Circuit Judge R. Guy Cole, Jr. said in the court’s opinion.    

The case is Peach v. Ultramar Diamond Shamrock ,6 th Circuit No. 02-2392.