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in 1996, The Wagner Law Group is dedicated to the highest standards
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Rejects Severance Pay Claim of Employee Terminated for
Circuit Court of Appeals (the "D.C. Circuit"), in Peck.
v. SELEX Systems Integration, Inc., has affirmed a district
court's judgment that a terminated employee was not eligible for
severance pay after he refused to accept a transfer from his
marketing position in D.C. to a quality-control position in Kansas.
Background. The employee was employed in an executive
marketing position with the employer when he was informed that he was
being removed from that position for poor performance. As an
alternative, the employer offered to transfer the employee to Kansas
to work as a quality control executive, a position for which he had
significant experience. The employee rejected the employer's offer of
transfer, even after the employer explained that his refusal to
accept the quality control position would be cause for his
termination. Accordingly, the employer terminated the employee after
his final refusal of the transfer offer.
employer's severance plan provided that benefits were available to
eligible full-time employees "whose employment terminated due to
a lack of work, elimination of position, or change of control."
The plan further provided that employees who were terminated for
cause were ineligible for severance pay.
being terminated, the employee filed a claim for benefits under the
employer's severance plan. The employer denied the employee's claim
because of the "circumstances of the termination of [his]
employment" (i.e., he was terminated for cause and not
one of the three reasons enumerated in the severance plan).
employee subsequently sued the employer in federal district court,
claiming that its decision to deny his claim for severance benefits
violated ERISA. The district court dismissed the employee's claim for
severance pay, reasoning that the evidence confirmed that he was terminated
because he refused the accept the transfer to Kansas and not because
the employer was eliminating the marketing position. In turn, the
employee filed an appeal with the D.C. Circuit.
Circuit. In reviewing the
matter, the D.C. Circuit observed that the employee's claim for
severance benefits was based solely on the premise that the employer
had eliminated his marketing position. The court noted, however, that
the employee did not contest the district court's determination that
he was terminated for refusing the transfer as opposed to the
elimination of his position. Moreover, the court found that the
employer's termination letter to the employee confirmed that its
reason for terminating him was because he had refused the transfer to
Kansas. Accordingly, the D.C. Circuit affirmed the district court's
judgment in favor of the employer on the employee's severance pay