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ALLEY v. RESOLUTION TRUST CORP.

March 23, 1992

MICHAEL ALLEY, et al., Plaintiffs,
v.
RESOLUTION TRUST CORPORATION Defendant. MARGARET E. ARISTEGUITA, et al., Plaintiffs, v. RESOLUTION TRUST CORPORATION Defendant.


Revercomb


The opinion of the court was delivered by: GEORGE H. REVERCOMB

The 48 plaintiffs in these two actions are former employees of the now defunct Federal Asset Disposition Association (FADA). FADA was a federally chartered savings association whose stock was wholly owned by the former Federal Savings and Loan Insurance Corporation (FSLIC) and whose sole function was to dispose of the assets of failed FSLIC insured thrift institutions. The 28 Aristeguita plaintiffs worked in FADA's Atlanta and Los Angeles offices, while the 20 Alley plaintiffs worked in Denver. The defendant, Resolution Trust Corporation, has been receiver for FADA since February 5, 1990, pursuant to FSLIC's abolition and FADA's liquidation under the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA).

 Defendant RTC has moved for summary judgment on grounds that all of plaintiffs' state law causes of action are preempted by the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1140 et seq. (ERISA), which Courts have held to regulate exclusively the type of unfunded employee plans at issue in this case, and because the plans were not government employee plans exempted from ERISA. *fn1" Neither complaint seeks relief under ERISA. The Court heard oral argument on summary judgment from all parties on February 28, 1992. For the reasons set forth below, the Court agrees with the defendant's argument and grants summary judgment in its favor.

 The Plans

 Plaintiffs argue that FADA's plans are not preempted by ERISA because, while traditional severance plans are among the employee retirement and welfare benefits governed by 29 U.S.C. 1002(2)(A)(i) and (ii), "the intent and purpose of [FADA's] benefits were not to cover a possible period of unemployment after job loss, . . . [but rather to] provide an incentive to keep employees on the payroll in the face of a difficult and negative work environment." Aristeguita Opp. at 9; see also Alley Opp. at 7-8. The defendant counters that plaintiffs make a distinction without a difference, since "the very mechanism by which the retention plan allegedly induced Plaintiffs to remain at FADA was to provide them with income security in the event of a layoff or job termination." RTC Reply at 3.

 The undisputed facts and exhibits show that the FADA plans at issue arose as follows. FADA's management issued Personnel Policy No. 820 on May 3, 1988. By its own terms, Policy No. 820 provided from two to eight weeks of "separation pay" for an employee leaving FADA due to "work force reductions or job eliminations," but not for voluntary termination unless it occurred "after receipt of formal notice that his or her job will be eliminated" or as a result of the employee being "directed to work in a new geographic location over fifty miles distance from present work location." Complaint, Exhibit B. On June 21, 1988, FADA's board of directors adopted a resolution supplementing Policy No. 820 by providing a "program of severance benefits . . . to all employees of FADA who remain in the employ of FADA through the date of . . . termination" of FADA's charter. The supplemental benefits included a lump-sum severance payment equal to four months of salary and prepayment of four months of major medical insurance. Among other things, the resolution provided that

 immediately prior to the date of termination, the Association shall deposit into an irrevocable escrow account . . . sufficient funds to pay the obligations of the Association to its employees under the severance plan.

 It also authorized the FADA's officers to implement the severance policies and "to take such other actions in furtherance of the foregoing resolutions as they deem necessary," and it directed that the severance policy be disclosed, filed, and distributed "in compliance with ERISA procedures." RTC Appendix Tab 4 at 10-12.

 On September 29, 1988, FADA management issued an addendum to Policy No. 820 entitled "Employee Retention Plan." The addendum is materially identical to the June 21, 1988, board resolution and stated as its "Purpose" that

 Complaint Exhibit A (emphasis added). As RTC points out, the addendum refers to FADA's "severance policy" and "severance benefit" eight times in two pages, while using the term "Retention Plan" only twice. The plaintiffs base their claim of entitlement to four months of severance pay and medical benefits primarily on this addendum.

 On May 2, 1989, FADA's board of directors passed a second resolution stating that

 the Resolution . . . of June 21, 1988 regarding Severance Benefits is ratified and affirmed . . . with the following ...


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