Bell v. Pfizer, Inc.

626 F.3d 66, 49 Employee Benefits Cas. (BNA) 2153, 2010 U.S. App. LEXIS 18111, 2010 WL 3385949
CourtCourt of Appeals for the Second Circuit
DecidedAugust 30, 2010
DocketDocket 07-5390-cv
StatusPublished
Cited by29 cases

This text of 626 F.3d 66 (Bell v. Pfizer, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bell v. Pfizer, Inc., 626 F.3d 66, 49 Employee Benefits Cas. (BNA) 2153, 2010 U.S. App. LEXIS 18111, 2010 WL 3385949 (2d Cir. 2010).

Opinions

WINTER, Circuit Judge:

Diana Bell, M.D., appeals from Judge Conti’s bench trial verdict that appellees had not breached any fiduciary duties owed to her under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq.

On May 31, 2003, Bell terminated her employment with Pfizer, Inc. Before leaving Pfizer, Bell made various inquiries of Pfizer Human Resources (“HR”) personnel and Benefits administrators regarding her eligibility for, and the terms of, retirement 1 under the Pfizer Retirement Annuity Plan (the “PRAP” or the “Plan”), including the treatment of her stock options if she left Pfizer’s employ. She alleges that she received various writings and oral advice assuring her that her stock options would remain exercisable for the remainder of the grant period if she left Pfizer. However, on or about August 15, 2003, Bell was informed by Pfizer that certain of her stock options had been cancelled and that others would be cancelled on September 1, 2003.

Bell commenced the instant action in December 2003. After a bench trial, the district court held that any misrepresentation concerned only appellant’s stock benefits under a non-ERISA plan and, therefore, did not violate any fiduciary obligations under ERISA. Bell appeals.

We affirm on the ground that the only misinformation conveyed did not relate to appellant’s status under the ERISA plan.

BACKGROUND

a) Pfizer’s Retirement Annuity and Stock Incentive Plans

At all relevant times, employees at Pfizer were eligible for various retirement benefits under the Pfizer Retirement Annuity Plan, an employee retirement plan governed by ERISA and administered by Pfizer through the Pfizer, Inc. Retirement Committee. The PRAP provides for three categories of retirement: (i) normal retirement under Section 4a, in which PRAP retirement benefits are available to members when they reach age 65; (ii) late retirement under Section 4b, in which PRAP retirement benefits are available to members who remain in service after age 65; and (iii) early retirement under Section 4d, in which PRAP retirement benefits are available to qualifying members who have reached age 55.

The PRAP specifically defines “retire” or “retirement” for purposes of the Plan as “to terminate or the termination of service ... after meeting the requirements of Sections 4a, b, or d.... ” It is undisputed that Bell did not qualify for retirement under Sections 4a, b or d of the PRAP.

The PRAP also provides benefits for a narrow class of employees who wish to cease working but are not eligible to retire [69]*69under Sections 4a, b or d. These benefits are paid pursuant to Section 4k of the PRAP, which is entitled “Special Rules for Certain Members Who Are Not Eligible to Retire Under Sections 4a or 4d” and is known by Pfizer employees as the “Pre1994 benefit.” Section 4k provides an annuity benefit upon “termination” to employees who have completed at least five years of “creditable service” prior to January 1, 1994 and meet certain other conditions. As elaborated infra, Bell understood at all relevant times that she was eligible for, but only for, the Pre-1994 benefit.

In addition to the PRAP, Pfizer also offers its employees a Stock and Incentive Plan (“SIP”), a non-ERISA plan managed by appellee Pfizer Employee Compensation and Management Development Committee. Pursuant to Section 6(f) of the SIP, an employee’s stock options terminate when the employee ceases to be an employee “for any reason including retirement,” unless (in pertinent part) the “optionee has retired or is eligible for retirement under Sections 4a., b., or d. of the [PRAP].” The SIP thus uses the term “retirement” more broadly than the PRAP. See supra Note 1. If the employee retires, or is eligible to retire, under Sections 4a, b, or d of the PRAP, the employee’s stock options remain exercisable for the remainder of the ten-year life of the option grant, except for options that had been granted within one year of retirement. Leaving under Section 4k, therefore, falls within the terminate “for any reason” clause of 6(f) of the SIP and causes the employee’s stock options to terminate.

While employed at Pfizer, Bell participated in the SIP, and on various occasions received and exercised Pfizer stock options. Although Bell never read the SIP in its entirety prior to commencing her lawsuit, she, along with her lawyer husband Wesley Light,2 had read various documents entitled “Points of Interest” that accompanied each of her stock option grant letters. The “Points of Interest” describe, in layman’s terms, the salient features of the SIP, including the treatment of stock options upon the employee’s retirement or other termination of employment with Pfizer.

For example, the Points of Interest that were mailed with Bell’s 1993 stock option grant specifically addressed the question, “What happens if I retire under the Company’s retirement plan?” as follows:

If you retire from the Company on or before August 25, 1994, your options will terminate on the date of your retirement. Thereafter, if you retire under Section 4, parts a. (normal retirement), b. (late retirement), or d. (early retirement) of the [PRAP] ... you will have the remainder of the option term to exercise the options that were exercisable on the date of your retirement....

In addition, the 2003 Points of Interest that was mailed with Bell’s 2003 stock option grant stated:

For any and all purposes with respect to this 2003 key employee stock option grant, retirement is defined as having attained a minimum age of 55 and ten years of service at the time of your separation from the company.

b) Bell’s 2001 Retirement Plans

In 2001, when Bell was 49 years old, she received a booklet from Pfizer regarding retirement, which explained the “Pre-1994 [70]*70benefit,” i.e., Section 4k. Bell also received a pamphlet that Pfizer distributed to its “legacy employees” — those who had always been directly employed by Pfizer— which stated that “[if] you’re a legacy Pfiz1 er [ ] Colleague age 50 or older, [Pfizer’s] retirement counselor can answer all your retirement questions.” According to this pamphlet, “[t]he retirement counselor is now your primary source for information about eligibility and participation [and] provisions of the [PRAP],” and will provide, inter alia, “one-on-one counseling; a comprehensive, personalized summary of impact of retirement on benefits; [and] a summary of outstanding stock options.” Id.

After reading these materials, Bell concluded that she could leave Pfizer under the Pre-1994 benefit provision; however, she desired clarification as to the extent of her benefits under this provision, including the treatment of her stock options. Bell then contacted Leighton Gleicher in Pfizer’s HR department, who referred Bell to Payal Sahni, a Pfizer HR Specialist. In February or March 2001, Bell and Sahni met in person, and later continued their dialog via email.

Sahni ultimately referred Bell’s benefits questions to Kimberly Malik in Pfizer’s pension benefits administration department.

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Cite This Page — Counsel Stack

Bluebook (online)
626 F.3d 66, 49 Employee Benefits Cas. (BNA) 2153, 2010 U.S. App. LEXIS 18111, 2010 WL 3385949, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bell-v-pfizer-inc-ca2-2010.