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Haeffele v. Hercules Inc.

filed: February 17, 1988.

HAROLD J. HAEFFELE, APPELLANT
v.
HERCULES INCORPORATED, HERCULES INCORPORATED RETIREMENT INCOME PLAN PENSION TRUST AND BANKERS TRUST COMPANY, AS TRUSTEE OF THE HERCULES INCORPORATED RETIREMENT INCOME PLAN PENSION TRUST, APPELLEES



Appeal from the United States District Court for the District of Delaware, D.C. Civil No. 85-722.

Gibbons, Chief Judge, Sloviter and Cowen, Circuit Judges.

Author: Gibbons

Opinion OF THE COURT

GIBBONS, Chief Judge:

Harold Haeffele, a retired employee of Hercules Incorporated (Hercules) appeals from a summary judgment in favor of Hercules and Bankers Trust Company, the trustee of Hercules Retirement Income Plan and Trust, in his suit charging that Hercules' refusal to extend benefits to him under an early retirement incentive program was a breach of contract (Count I) and a violation of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. ยงยง 1001 et seq. (Count II). He contends that disputed issues of material fact are apparent in the summary judgment record which preclude summary judgment on either count. Our review is plenary. Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir. 1976), cert. denied, 429 U.S. 1038, 50 L. Ed. 2d 748, 97 S. Ct. 732 (1977). We will reverse.

I.

The Summary Judgment Record

From the pleadings, depositions, exhibits, and affidavits on file a factfinder could find that Haeffele was employed by the Hercules Specialty Chemicals Company, a division of Hercules, as Vice President of the Fragrance and Food Ingredients Group. In 1984 the Specialty Chemicals division had approximately 10,000 employees, and Hercules' management was seeking to improve its profitability. Among the steps considered toward that end was a reduction in the size of the division's workforce to be induced by offering a special incentive to encourage early retirement. The task of devising an incentive program was assigned to Kenneth A. Wagner, Vice President of Human Resources. After studying the early retirement incentive programs of a number of companies, he recommended an amendment to the Hercules Retirement Income Plan, which eventually came to be known as the 1985 Flex-5 Retirement Incentive Program (Flex-5). Flex-5 adds five years of age and credited service for the purpose of calculating benefits under the Hercules Retirement Plan, increasing retirement benefits, and thereby providing an incentive to retire early. Flex-5 was to be offered only to employees of the Specialty Chemicals division.

On February 27, 1985, the Board of Directors of Hercules adopted Flex-5, and authorized such amendments to the Hercules Retirement Income Plan as might be deemed necessary or appropriate to implement it. Under Flex-5, eligible employees of the Specialty Chemicals division could agree to retire on May 1, 1985, receiving the additional years of age and credited service referred to above. They were entitled to elect various payment options. In Section 8 of Flex-5, Hercules reserved the right to terminate or suspend the program at any time, except that no such action could affect benefit entitlements already approved. The covered employees were stated to be:

Hercules Specialty Chemicals Company full-time salaried employees, who are vested under the Hercules Incorporated Retirement Income Plan as of the offering of this Program on March 4, 1985, and who are not assigned as operations personnel at plant locations . . . .

When Flex-5 was adopted, Haeffele was vested under the Hercules Incorporated Retirement Income Plan, and he was not assigned to plant operations.

On February 20, 1985, prior to the Board action adopting Flex-5, a computer printout was generated listing the Specialty Chemicals division employees who were considered to be eligible. This list included Haeffele. Management used this list to identify employees who might take early retirement. Management also used the list to prepare individual reports showing each eligible participant the benefits available to him or her under Flex-5. Among these, an individual report was prepared for Haeffele.

The terms of Flex-5 were not disclosed to Specialty Chemical employees until March 1, 1985. On that date a memorandum was sent to the employees identified on the computer-generated list, advising them that a one-time incentive retirement plan was being offered to them. Each of those employees, including Haeffele, received a packet of documents, containing descriptions of the Flex-5 program and benefits and an application for participation. In addition, meetings were scheduled at which employees could ask questions about the program.

On March 4, 1985, Haeffele signed an application to participate in the Flex-5 program. The application was never accepted. Instead, David I. Hollingsworth, then the president of the Specialty Chemicals division, orally informed Haeffele about "the tentative decision that he would not be eligible" for Flex-5. Hollingsworth deposition, JA-87. The tentative decision was made at a meeting between Hollingsworth and Al Giacco, one of Hercules' top managers. At that meeting Giacco concurred in Hollingsworth's view that the "executive group" in the Specialty Chemicals division should be excluded from Flex-5, but expressed concern that Hercules had not been more specific in the announcement of that plan with respect to such an exclusion. It was agreed that Hollingsworth "would contact Harold [Haeffele] and inform him of the lack of likelihood that he was eligible pending further ...


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