Schroeder v. Phillips Petroleum Co.

17 F.3d 1147, 1994 WL 70250

• Court: Court of Appeals for the Eighth Circuit
• Decided: March 10, 1994
• Docket: Nos. 93-2474, 93-2614
• Status: Published

Opinion

LOKEN, Circuit Judge.

On February 28, 1986, Phillips Petroleum Company sold the stock of its wholly-owned subsidiary, American Fertilizer & Chemical Company, to Cepex, Incorporated. In this action brought under § 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1132(a)(1)(B), American Fertilizer employees seek to recover severance pay from Phillips. Following a trial on stipulated facts, the district court¹ held that Phillips’s refusal to pay severance benefits was consistent with the plain language of American Fertilizer’s Severance Plan. The employees appeal. We affirm.

The employees’ right to severance pay is governed by the Severance Plan, which provides benefits to “eligible employees who are laid off due to a force reduction for lack of work.” After Phillips sold the stock of American Fertilizer to Cepex, American Fertilizer continued to exist with no change in its work force or its Severance Plan. This change in corporate ownership did not result in employees being “laid off,” or in a “force reduction,” or in a “lack of work” at Ameri-can Fertilizer. The district court was clearly correct in its construction of the plain language of the Severance Plan.

This court has frequently held that the sale or discontinuance of a business does not entitle employees to benefits under a severance plan if a new or successor employer continues their employment without interruption under substantially identical terms and conditions.² Thus, the employees’ attempt to recover American Fertilizer severance benefits from Phillips, the former owner of Amer-ican Fertilizer’s stock, has no support in the language of the Plan, in the prior decisions of this court, or in the equities of the situation.

The judgment of the district court is affirmed.

1 . The HONORABLE WARREN K. URBOM, Senior United States District Judge for the District of Nebraska.

2 . See Harper v. R.H. Macy & Co., 920 F.2d 544 (8th Cir.1990); Lakey v. Remington Arms Co., 874 F.2d 541 (8th Cir.1989); Simmons v. Diamond Shamrock Corp., 844 F.2d 517 (8th Cir.1988); Agee v. Armour Foods Co., 834 F.2d 144 (8th Cir.1987); Acton v. Tosco Corp., 815 F.2d 1161 (8th Cir.1986); Pabst Brewing Co. v. Anger, 784 F.2d 338 (8th Cir.1986), aff'g 610 F.Supp. 214 (D.Minn.1985).