Wagner Law Group is a nationally recognized practice in the areas of
ERISA and employee benefits, estate planning, employment, labor and
human resources and investment management.
in 1996, The Wagner Law Group is dedicated to the highest standards
of integrity, excellence and thought leadership and is considered to
be amongst the nation's premier ERISA and employee benefits law
firms. The firm has seven offices across the country, providing
unparalleled legal advice to its clients, including large, small and
nonprofit corporations as well as individuals and government entities
worldwide. The Wagner Law Group's 34 attorneys, senior benefits
consultant and five paralegals combine many years of experience
in their fields of practice with a variety of backgrounds. Seven
of the attorneys are AV-rated by Martindale-Hubbell
and six are Fellows of the American
College of Employee Benefits Counsel, an invitation-only
organization of nationally recognized employee benefits
lawyers. Seven of the firm's attorneys have been
named to the prestigious Super
Lawyers list for 2017, which highlights outstanding
lawyers based on a rigorous selection process.
Wagner Law Group
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Third Circuit Court of Appeals has ruled, in Girardot v. The
Chemours Company, that an employer's severance plan is not a
welfare benefit plan as defined under ERISA and, therefore, plan
participants are not entitled to the protections provided by ERISA.
Facts. In conjunction with a corporate spin-off
operation, the employer announced the creation of a Voluntary
Separation Program ("VSP"). Employees were told that
they could elect to be considered for the program only during a
specified time period and that additional requests would be
considered on a strict, "exception-only" basis.
Participants in the VSP would be terminated and were entitled to
payment of a specified lump sum severance benefit plus three months'
employer stated in a summary of the VSP that it had sole authority
and discretion to determine which employees would be eligible to
participate in the VSP and that the employer could select some
participants to continue working part-time for up to six months after
the expected termination date.
VSP did not attract a sufficient number of employees, the employer
announced a new severance plan with greater benefits. Some
employees who had accepted the original VSP sued under ERISA, saying
they would not have elected to participate in the VSP had they been
informed of the possibility that a new severance plan would be
implemented with greater benefits.
Law. The Supreme Court established the
standard for determining whether an employer's severance policy
is a "plan" subject to ERISA in Fort Halifax Packing
Co., Inc. v. Coyne. In Fort Halifax, the Supreme
Court held that a one-time lump sum severance payment did not create
an ERISA plan because it did not create the need for an "ongoing
Fort Halifax, the crucial questions for determining whether an
employer's severance policy is a plan subject to ERISA are:
- Is the
severance policy more than a one-time lump sum payment to a
group of employees triggered by a single event that is not
expected to recur?
- Does the
severance policy require an ongoing administrative scheme?
Recognizing the Supreme Court's ruling, the Third Circuit added that
"simple or mechanical determinations do not necessarily require
the establishment of an administrative scheme" and that ERISA
plans "involve administrative activity potentially subject to
employer abuse." In this case, the employer did not
express an intention to provide regular and long-term benefits. On
the contrary, it merely entered into an obligation to provide lump
sum payments to a class of employees over a defined and relatively
brief period. "Determining the amount of these lump sum payments
did not require a new administrative body or the exercise of
discretion - rather, it involved the mechanical application of a
simple formula based on time of employment with the"
employer. Also, the selection and extension-of-employment
processes did not involve an ongoing administrative scheme nor did
they create a risk of employee abuse or mismanagement of the VSP.
Therefore, because the VSP was not covered under
ERISA the court dismissed the lawsuit.