Id. at 102-03, 105-07; exhibits P-7, P-11, P-13, D-1. When a bank charges off an account, the amount owed to the bank is no longer carried as an asset on the bank's balance sheet. Tr. 199. Re-aging and charging-off are related concepts: if an account is re-aged, the time at which it must be charged off can be postponed. One of the criteria by which Furcini was evaluated was whether his department had maintained a low level of charge-offs. Id. at 112-13.
In 1984, Equibank underwent senior managerial and operational changes resulting from a cease and desist order imposed by bank regulators. Id. at 185-86. In August of 1984, Equibank hired Claire Gargalli as senior executive vice-president. Id. at 184. At that time, she had twenty years of banking experience. Id. at 184-85. Equibank hired Mrs. Gargalli to evaluate the banking practices then existing at Equibank, and to remedy any deficiencies in those practices. Id. at 186. Mrs. Gargalli testified that an example of an improper banking practice she discovered was that Equibank would cash checks drawn on other banks without waiting for the checks to clear from the drawee banks. Id. at 191-92. In November of 1984, Mrs. Gargalli became Equibank's president. Id. at 184.
Upon joining Equibank, Mrs. Gargalli held group and individual meetings with Equibank employees, repeatedly requesting them to disclose problems in their departments and to report any instances of imprudent banking practices. Id. at 189. Mrs. Gargalli understood that, prior to her arrival, identical requests had been made by Equibank's then-president and board chairman James Lowry. Id. As part of the management request to come forward, employees were promised that they would not be penalized for voluntarily disclosing imprudent banking practices. Id. at 189-90. The court finds that Furcini knew of this management request.
Between May and August of 1984, then-president Mr. Lowry instructed all senior bank personnel to promptly charge off non-performing loans. Id. at 149-50, 185-86. Richard Hallstein, the senior vice-president of consumer credit and Furcini's supervisor, informed Furcini of Mr. Lowry's instruction. Id. at 149-51. In the summer of 1984, Furcini reviewed the consumer loan portfolio and determined that between $ 600,000 and $ 700,000 in delinquent accounts were eligible to be charged off. Id. at 82-84. He discussed this matter with Mr. Hallstein. Id. at 81-84. Furcini knew that Mr. Hallstein's banking experience was minimal. Id. at 97.
In November of 1984, Mrs. Gargalli hired Rocco Abessinio as senior vice-president in charge of consumer credit; he thus became Furcini's superior. Id. at 30, 191. Mrs. Gargalli requested Mr. Abessinio to examine closely the procedures being followed in the consumer credit department. Although he normally reported to Jerry Wojcicki, the executive vice-president in charge of community banking, Mr. Abessinio also could report any adverse findings directly to Mrs. Gargalli. Id. at 191-94. In late November, Mr. Abessinio told Mrs. Gargalli that he had discovered a problem with re-aging in the consumer credit portfolio, that the author of the re-aging practice was Furcini, and that re-aging was employed to keep charge-offs at a predetermined level. Id. at 194-202. Mr. Abessinio recommended to Mrs. Gargalli that Furcini be discharged for cause; Mrs. Gargalli concurred in his recommendation. Id. at 203-04. Mr. Abessinio advised Judith Yankovic, the senior vice-president of human resources, of the re-aging practiced under Furcini's management and of the decision to discharge him. Id. at 241-42. As administrator of Equibank's severance pay plan, Ms. Yankovic determined that Furcini's discharge fell within the provision of Equibank's plan that precluded employees discharged for poor performance from receiving severance pay; Ms. Yankovic therefore determined that Furcini was ineligible for that benefit. Id. at 243-44. This action followed.
To make clear what is the statutory basis for Furcini's claim, and what is not, it is necessary to begin with the text of the statute. In relevant part, section 510 of ERISA provides:
It shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan, . . . or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan . . . .
29 U.S.C. § 1140. Furcini's claim is not stated under the "exercise clause" of section 510; he does not claim that Equibank characterized his discharge as one for cause because he availed himself of some right under his employee benefit plan. Rather, Furcini claims that Equibank violated the "interference clause" of section 510; he alleges that Equibank purposefully interfered with his attainment of a right, severance pay, to which he otherwise would have become entitled.
Notwithstanding his counsel's protestations to the contrary, see tr. 282, Furcini has not alleged a "discharge" claim under section 510; he does not claim that he was discharged for the purpose of interfering with his attainment of a plan right. Indeed, the right that Furcini claims Equibank denied him, severance pay, necessarily presupposes his discharge.
Nor is Furcini's claim a "fine, suspend, expel, or discipline" claim. Rather, Furcini's complaint sounds under the "discrimination" prohibition of section 510. It is Equibank's characterization of his discharge as one for cause that Furcini claims is unlawful; he alleges that his discharge was so characterized for the purpose of interfering with his receipt of severance pay.
When reduced to its essentials and stated in the context of the statute, Furcini's claim is that Equibank discriminated against him by characterizing his discharge as one for cause for the purpose of denying him severance pay, a right to which he otherwise would have been entitled under Equibank's benefit plan. The court now must examine the requirements for such a claim and must evaluate whether they were fulfilled by the proof adduced at trial.
In Gavalik v. Continental Can Co., 812 F.2d 834 (3d Cir. 1987), the United States Court of Appeals for the Third Circuit recently explained the requirements for making out a claim under section 510 of ERISA. The court stated that "the essential element of proof under § 510 is specific intent to engage in proscribed activity." Id. at 851. The Gavalik court recognized, however, that a plaintiff rarely will have direct "smoking gun" evidence of an employer's unlawful purpose. Id. at 852. Rather than foreclose such plaintiffs from making out a claim, the Gavalik court approved the use of circumstantial evidence to show an employer's specific intent to interfere with an employee's rights. Id. at 852-53.
In establishing the framework for making out a case under section 510 using only circumstantial evidence of discrimination, the Gavalik court transplanted into the ERISA field the burden-shifting minuet of McDonnell Douglas Corp. v. Green, 411 U.S. 792, 36 L. Ed. 2d 668, 93 S. Ct. 1817 (1973). As modified by Gavalik, the McDonnell Douglas formula for section 510 cases first requires the plaintiff to make out a prima facie case by demonstrating:
(1) prohibited employer conduct