Fawvor v. Kerr McGee Corp

• Court: Court of Appeals for the Fifth Circuit
• Decided: May 8, 2001
• Docket: 00-30061
• Status: Unpublished

Opinion

UNITED STATES COURT OF APPEALS For the Fifth Circuit

No. 00-30061

J KIM FAWVOR,

Plaintiff-Appellant, VERSUS

KERR MCGEE CORP,

Defendant-Appellee.

Appeal from the United States District Court For the Western District of Louisiana (98-CV-1089) May 8, 2001 Before REYNALDO G. GARZA, STEWART, and DENNIS, Circuit Judges:

PER CURIAM:*

J. Kim Fawvor appeals the district court’s order granting

summary judgment to his former employer, Kerr-McGee Corporation

(Kerr-McGee), and finding that the Kerr-McGee Corporation Benefits

Committee (the Administrator) did not abuse its discretion in

denying Fawvor severance benefits under the Restated Kerr-McGee

Corporation 1996/1997 Restructuring Plan (the Plan).1 After

* Pursuant to 5TH CIR. R. 47.5, the Court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. 1 The plan was originally effective October 1, 1996, and was amended and restated effective March 1, 1997. reviewing the record and the briefs, we find that the Administrator

did not abuse its discretion, and we AFFIRM the judgment of the

district court granting summary judgment to Kerr-McGee.

FACTS AND PROCEDURAL HISTORY

Fawvor worked for Kerr-McGee in various capacities between

1979 and September 22, 1997. Although Fawvor began his employment

with Kerr-McGee as a roustabout, he was promoted to “Production

Foreman” in 1991. As of October 1996, Fawvor was “assigned to

assist in the development and implementation of the SEMP [Safety

and Environmental Management Program] plan.”2 His duties included

onshore and offshore work, such as conducting safety audits,

training field personnel, and developing written operating and

maintenance procedures. Although Fawvor initially spent most of

his time at Kerr-McGee’s Lafayette office, his officially

designated job location throughout his employment with the SEMP was

“offshore.”3

On October 1 1996, Kerr-McGee underwent restructuring and

moved its Exploration and Production Department (E & P) offices,

2 According to Production Manager Darrell Holleck, SEMP’s goal was to address potential safety and environmental issues in operations being conducted in the Gulf of Mexico. 3 A series of Personnel Action Forms from June 11, 1996 to September 30, 1997 indicate that Fawvor’s job location was, at all times, listed as “# 279.” Internal Correspondence from Kerr-McGee indicates that “#279" is company code for “offshore out of Morgan City.” Fawvor does not challenge this designation but argues merely that his work location was a “fiction,” as demonstrated by his actual work location.

2 the division under which Fawvor was employed, from Lafayette to

Houston. As part of the restructuring, Kerr-McGee promulgated the

Plan, under which employees terminated not later than September 30,

1997, were eligible to receive severance benefits. The Plan

defines “Eligible Employees” as those “regular full-time U.S.

domestic employees of Kerr-McGee whose employment has been

terminated.” The term “Eligible Employees” does not, however,

extend to those “[e]mployees whose employment is terminated due to

. . . voluntary resignation.” The term also excludes “[e]mployees

who decline an offer of a Comparable Job within Kerr-McGee

Corporation or an affiliate.” “Comparable Job means a position

with Kerr-McGee . . . that requires similar knowledge, skills, and

experience, will not result in lower Base Pay, and the work

location is 50 miles or less from the current work location.”

On November 21, 1996, Kerr-McGee issued a bulletin stating,

“Most local employees will be offered transfers; however, the

company wants to emphasize that Kerr-McGee’s offshore workers, some

200 in all, who live and work in the Lafayette/Morgan City area

will not be affected by the move.” At the time of the

reorganization, Kerr-McGee determined that Fawvor could most

effectively be employed as a production foreman working a “regular

7/7 hitch offshore,” which included SEMP duties and other projects

within the operations department. Darrell Holleck, Fawvor’s

supervisor, assured Fawvor, however, that his job was not scheduled

for termination. After the reorganization, Fawvor continued at the

3 same pay grade as a production foremen.

On September 22, 1997, Fawvor submitted a letter of

resignation in which he stated that he had “found some business

opportunities within our industry and want[ed] to explore them.”

Fawvor made a claim for severance benefits, but the Administrator,

which had “the authority to interpret the Plan, manage its

operation and determine all questions arising in the

administration, interpretation and application of the Plan,”

concluded that Fawvor was not eligible for benefits because he was

not an “Eligible Employee” as he had “voluntarily terminated” his

employment. The Administrator also concluded that because Fawvor’s

job position was located offshore prior to the reorganization, the

closing of the Lafayette office did not affect Fawvor’s

eligibility.

Fawvor filed suit in the Western District of Louisiana against

Kerr-McGee pursuant to the Employee Retirement Income Security Act

(ERISA), 28 U.S.C. § 1101 et. seq., to recover benefits under the

Plan. Fawvor claimed that because the Plan excludes employees from

eligibility who decline comparable employment, it must, as a

corollary, include employees who decline non-comparable employment

and resign. Fawvor claimed his new job was not comparable because

of the change in his work schedule and because his new work

location is more than fifty miles from Lafayette. Both Fawvor and

Kerr-McGee moved for summary judgment. In Kerr-McGee’s motion it

argued that Fawvor failed to exhaust his administrative remedies

4 under the Plan. The district court dismissed Fawvor’s suit without

prejudice and remanded the case to the Administrator. After Fawvor

exhausted his administrative remedies, the district court granted

Kerr-McGee’s motion for summary judgment on the merits. The

district court held that the Administrator had not abused its

discretion in finding that Fawvor voluntarily terminated his

employment and that Fawvor’s job position was comparable under the

Plan. Fawvor now appeals to this court.

ANALYSIS

“Summary judgment is appropriate if ‘the record discloses that

there is no genuine issue as to any material fact and that the

moving party is entitled to a judgment as a matter of law.’” Duhon

v. Texaco, Inc., 15 F.3d 1302, 1305 (5th Cir. 1993) (quoting

Rodriguez v. Pacificare, Inc., 980 F.2d 1014, 1019 (5th Cir. 1993)).

In reviewing a district court’s grant of summary judgment, we

employ a de novo standard of review, id. (citing FDIC v. Ernst &

Young, 967 F.2d 166, 169 (5th Cir. 1992)), and “apply the same

standard of review as did the district court.” Id. (citing

Rodriguez, 980 F.2d at 1019).

“A denial of ERISA benefits by a plan administrator . . . is

[also] reviewed under a de novo standard unless the plan gives the

administrator ‘discretionary authority to determine eligibility for

benefits or to construe the terms of the plan.’” Id. (quoting

Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989)).

5 “Challenges to the plan administrator’s interpretations of plan

terms . . . are reviewed under an abuse of discretion or ‘arbitrary

and capricious’ standard if the plan grants the administrator the

authority to make a final and conclusive determination of the

claim.” Id. A decision is arbitrary and capricious only if “it

is made without a rational connection between the known facts and

the decision or between found facts and the evidence.” Meditrust

Fin. Servs. Corp. v. Sterling Chems., Inc., 168 F.3d 211, 213-14

(5th Cir. 1999). A decision should be affirmed if it is supported

by substantial evidence. Id. Eligibility for benefits under any

ERISA plan is governed in the first instance by the plain meaning

of the plan language. Threadgill v. Prudential Sec. Group, Inc.,

145 F.3d 286, 292 (5th Cir. 1998) (citing Nickel v. Estate of Estes,

122 F.3d 294, 298 (5th Cir. 1997)).

Because the Administrator had “the authority to interpret

the Plan, manage its operation and determine all questions arising

in the administration, interpretation and application of the Plan”

and because this challenge is, in essence, a challenge to the

Administrator’s interpretation of plan terms, we employ an abuse of

discretion standard of review.4

4 We note, as the court in Duhon did, that some cases employ a two-pronged test in addressing the question of whether the Administrator abused its discretion. Duhon, 15 F.3d at 1307 n.3. That is, to determine if the Administrator’s interpretation was legally correct, a court must look to “(1) whether the administrator has given the plan a uniform construction; (2) whether the interpretation is consistent with a fair reading of the plan; and (3) any unanticipated costs resulting from different

6 Fawvor’s challenge is, at base, two-fold: (1) that he

qualifies as an “Eligible Employee” and (2) that because his job

after the reorganization was non-comparable, his voluntary

resignation does not preclude him for recovering severance

benefits.

As the district court held, “the Administrator did not abuse

its discretion in finding that plaintiff’s resignation rendered him

ineligible for severance benefits under the foregoing Plan

provision.” Fawvor was not terminated as a result of the E & P

reorganization. Fawvor’s contention that voluntary resignation

does not preclude eligibility under the Plan is belied by the

expressly stated purpose of the Plan. The first section of the

Plan states that “[t]he purpose of this Kerr-McGee Corporation

1996/1997 Restructuring Plan as amended and restated (the ‘Plan’)

is to provide Eligible Employees . . . severance benefits upon

termination of employment by Kerr-McGee Corporation or any of its

interpretations of the plan.” Rhorer v. Raytheon Eng’rs & Constructors, Inc., 181 F.3d 634, 640 n.7 (5th Cir. 1999). If the court determines that the Administrator’s interpretation was legally incorrect, then it must examine three additional factors to determine whether the Administrator’s error constitutes an abuse of discretion: “(1) the internal consistency of the plan under the administrator’s interpretation; (2) any relevant regulations formulated by the appropriate administrative agencies; and (3) the factual background of the determination and any inferences of bad faith.” Id. at 643 (citation omitted). Like the Duhon court, however, we recognize that “the reviewing court is not rigidly confined to this two-step analysis in every case.” Duhon, 15 F.3d at 1307 n.3. As it is clear from the record that the Administrator did not abuse its discretion, we decline to employ the two-step analysis.

7 affiliates. . . .” (emphasis added). Fawvor’s employment was not

terminated by Kerr-McGee; Fawvor voluntarily resigned.

Even if we were to find that Fawvor is an “Eligible Employee”

under the Plan, we express doubt as to whether Fawvor’s job after

the reorganization was so non-comparable as to allow him to resign

without excluding himself from benefits. Before the

reorganization, Fawvor was an offshore foreman who assisted in the

development and implementation of the SEMP for offshore workers.

Because his regular work location was “offshore,” the relocation of

the E & P Office from Lafayette to Houston had no impact on his

eligibility. Fawvor’s duties were a function of the needs of the

SEMP at a particular time. Although for a while Fawvor did spend

the majority of his time in the Lafayette office, Fawvor’s job

description, both before and after the reorganization, was as an

“offshore” worker.

Similarly, although Fawvor’s duties evolved over time, his

position as a “Production Foreman” did not change as a result of

the reorganization. In fact, Fawvor’s “Job Title,” (i.e.,

“Production Foreman”) remained the same from 1991 until his

voluntary departure. Similar knowledge and skills were required,

and his base pay remained unchanged after the relocation of the

E & P office.

CONCLUSION

8 For the foregoing reasons, we affirm the district court’s

grant of summary judgment to Kerr-McGee.

AFFIRMED.