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MUSCAR v. ARCO CHEM. CO.

December 22, 1986

JOHN MUSCAR, SR., ROBERT R. WALLACE, and RAYMOND J. KRETZLER, Plaintiffs,
v.
ARCO CHEMICAL COMPANY, a Division of Atlantic-Richfield Company, Defendant


Gerald J. Weber, D. J.


The opinion of the court was delivered by: WEBER

The remaining issues in this case come before the court on cross motions for summary judgment. The parties have submitted briefs and supporting evidentiary materials, and after careful review of these we conclude that there are no disputed issues of material fact and defendant is entitled to summary judgment.

 I. Facts

 The three plaintiffs were hourly employees at the ARCO Polymers Plant in Monaca, Beaver County, Pennsylvania. John Muscar began his employment there in 1947, Robert Wallace in 1951, and Raymond Kretzler in 1972.

 On April 5, 1982, Robert Wallace submitted an application for retirement benefits requesting an effective date of August 1, 1982. Raymond Kretzler and John Muscar filed similar applications on July 13 and July 20, 1982, respectively, both requesting an effective date of September 1, 1982. Plaintiffs were under no compulsion to retire but rather chose to do so voluntarily.

 Plaintiffs' retirement applications were sent to and processed by ARCO's Retirement Office, located in Los Angeles, California. ARCO records reveal that the retirement applications of Muscar and Wallace were formally accepted on December 1, 1982, and Kretzler's was accepted on January 1, 1983. At that time, the final benefits calculation and any necessary adjustments were made.

 On September 14, 1982, after plaintiffs had filed their retirement applications, ceased to work, and received their first pension checks, ARCO announced a Special Early Retirement Program for hourly employees of ARCO Chemical. Hourly employees of the ARCO Polymers Beaver County Plant who were on the payroll on September 14, 1982 were eligible to select this Special Plan which was more lucrative financially than the regular pension plan. *fn1" The purpose of the Special Plan was simply to effect a reduction in the work force.

 Following announcement of the Special Plan, plaintiffs sought to be included in it. The president of the union Local wrote to the Company requesting that plaintiffs be included in the Special Plan. The Company refused, contending that plaintiffs had retired prior to the date of the Special Plan and were therefore ineligible.

 II. Offer and Acceptance

 Plaintiffs ground their principle argument in basic contract law. It is plaintiffs' contention that their retirement applications were offers to retire, submitted to the Company for acceptance. However, before the Company accepted those offers, plaintiffs in effect withdrew them and accepted the Company's offer of a Special Early Retirement Plan.

 The flaw in plaintiffs' argument lies in its basic premise: the characterization of the retirement applications as mere offers subject to acceptance, rejection or withdrawal.

 The regular pension plan, or General Plan, which plaintiffs bargained for and retired under, is governed by ERISA, 29 U.S.C. § 1001 et seq. That Act provides employees with nonforfeitable interests in the plan, interests which the employer is without discretion to deny. § 1002(19); § 1053. When an employee meets the requirements of the Plan and applies for benefits, benefits must be paid. § 1132. In this context it is important to note that the employee's application for pension benefits is characterized by the Act as an "election" or "claim" for his interests or "rights" in the Plan. E.g., § 1053; § 1056; § 1133.

 In this light, plaintiffs' applications are not offers. They lack a fundamental characteristic of offers: they cannot be refused. The retirement application is instead merely the employee's choice of the benefit he bargained and worked for and is the switch which sets the administrative machinery in motion to determine the employee's rights in the Plan. Rather than an ...


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