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BARCELONA v. FOX GROCERY CO. EMPLES. PENSION PLAN

January 2, 1980

CHARLES BARCELONA, Plaintiff
v.
FOX GROCERY COMPANY EMPLOYEES' PENSION PLAN, FOX GROCERY COMPANY, A CORPORATION, UNION NATIONAL BANK OF PITTSBURGH, TRUSTEE, EDWARD A. SAVARNO, TRUSTEE, Defendants



The opinion of the court was delivered by: SNYDER

Charles Barcelona brings suit under the Employees Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq., to recover pension benefits under a post-ERISA pension plan. Before the Court are Cross Motions for Summary Judgment. The Defendants' Motion will be granted and the Plaintiff's Motion will be denied.

I.

 Barcelona began his employment with Fox Grocery (Fox) on July 20, 1958; he became a participant in the Defendant Fox Grocery Company Employees' Pension Plan on December 12, 1965. Later, when the parties came to a parting of the ways they entered into an agreement which provided in full:

 "AGREEMENT

 
This Agreement is being made between Charles B. Barcelona, hereinafter referred to as the Employee, and Fox Grocery Company, hereinafter referred to as the Employer. Due to a difference of opinion concerning Corporate Policy between the Employee and the Employer, and in consideration of the Employee's years of service, the Employer hereby agrees to grant the Employee 12 months leave of absence with pay, effective Dec. 31, 1975, with the understanding that the Employee hereby agrees not to work in any business, activity or endeavor that is or will be competitive to those activities or businesses currently engaged in by the Employer.
 
This restriction applies only to the geographical area currently designated as the official franchise territory granted by Foodland International Corporation to the Fox Grocery Company, Belle Vernon, Pennsylvania and Service Wholesale Company, Culloden, West Virginia.
 
This restriction is to extend for a period not to exceed four (4) years from this date.
 
Both Parties agree that this Agreement is enforceable by injunction in equity.
 
Signed this 2nd day of December, 1975.

 Under the pension plan in effect on the effective date of the agreement (Plan I), a participant whose employment was terminated for reasons other than death or retirement had limited rights, i. e., to the cash value of the life insurance or annuity contracts purchased by the Trustee for the participant. See § 5.01 of Plan I. *fn1"

 Effective December 28, 1976, Plan I was amended to bring it into compliance with ERISA. Under the amended plan (Plan II), even though a participant terminated his employment prior to retirement, he earned a vested and non-forfeitable interest in his accrued benefit, based on his years of credited service. See §§ 5.01(d) *fn2" and 7.03 of Plan II. *fn3" A participant with fifteen years or more credited service had a 100 per cent vested interest.

 Under his agreement, Barcelona continued to receive his salary through December 31, 1976, three days after Plan II went into effect, without performing any services for Fox since December 31, 1975. Payments were then terminated. He now brings action for benefits under Plan II.

 II.

 The Defendants look to Plan I. They argue that the leave of absence created a break in credited service under § 2.03 *fn4" of Plan I, rendering Plaintiff a non-participant in Plan I as of the effective date of Plan II. Thus, Barcelona must be considered a new employee under Plan II which requires that new employees complete one year of service to become a participant, under the Defendants' theory. They offer the Plaintiff his interests as determined under Plan I.

 Barcelona contends he was a Fox employee on December 28, 1976 because a leave of absence does not constitute a termination of employment. Barcelona points to the December 2, 1975 agreement as being only a leave of absence.

 III.

 The standards for summary judgment, as offered in Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3rd Cir. 1976), cert. denied 429 U.S. 1038, 97 S. Ct. 732, 50 L. Ed. 2d 748 (1977), are:

 
"Rule 56 (F.R.Civ.P.) allows the trial court to grant summary judgment if it determines from its examination of the allegations in the pleadings and any other evidential source available that no genuine issue as to a material fact remains for trial, and ...

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