Judge: ERISA Severance Claims Should Go to Jury

July 2, 2003 (PLANSPONSOR.com) - A federal judge has jurisdiction over an employee's severance plan benefits claims because the plan is ERISA governed even if the employer isn't aware of that fact, a judge ruled.

>Having decided the severance plan was ERISA governed, US District Judge Shira Scheindlin of the US District Court for the Southern District of New York refused to dismiss the suit filed by plaintiff Michael Davis, saying there were remaining questions of fact that deserved to be decided by a jury. The issue was whether Davis was fired from his position as a branch manager at the Commercial Bank of New York in September 2001, in connection with a merger, or for cause.

>At the time Davis was fired, the vice-president in charge of human resources said it was without cause. Davis claimed he was entitled to benefits under the bank’s severance plan, arguing that he fell under the plan’s provision for employees discharged in connection with a business restructuring. The bank then claimed for the first time that Davis was fired for cause.

>Scheindlin also rejected Davis’s claim that the bank violated ERISA by refusing to produce requested plan documents. Since the bank did not believe its severance plan was governed by ERISA, it had no supporting documents, the court said. The court said the employee handbook was the only plan document, and Davis already had that in his possession.

The case is Davis v. Commercial Bank of New York, S.D.N.Y., No. 02 Civ. 1913 (SAS), 6/17/03.