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GILLIS v. HOECHST CELANESE CORP.

September 24, 1992

LEONARD GILLIS and VALDO A. SARGENI, on behalf of themselves and all others similarly situated V. HOECHST CELANESE CORPORATION and HOECHST CELANESE RETIREMENT PLAN


The opinion of the court was delivered by: BY THE COURT; J. WILLIAM DITTER, JR.

 DITTER, J.

 September 24, 1992

 In this case, employees claim they lost benefits when the plant where they worked was sold to another company. Plaintiffs, Leonard Gillis and Valdo A. Sargeni, are asserting claims against Hoechst-Celanese Corporation and the Hoechst-Celanese Retirement Plan under the Employee Retirement Income Security Act, 9 U.S.C. §§ 1001-1371, and the Delaware Wage Payment and Collection Act, Del. Code Ann. tit. 19, §§ 1101-1115. The parties submitted cross motions for summary judgment. Also pending is the plaintiffs' motion for reconsideration of my March 31, 1992, decision concerning an early retirement issue.

 Having considered the briefs, I will grant the defendants' motion for summary judgment, deny the plaintiffs' motion for summary judgment, deny the motion for reconsideration, and order judgment in favor of the defendants and against the plaintiffs.

 Despite the sale, Mr. Gillis, Mr. Sargeni, and the other PVC division employees continued to work at the Delaware City facility, albeit for the new employer. They kept the same jobs and did not lose any working days.

 In connection with its purchase of the PVC division, American Mirrex agreed to provide substantially the same employee benefits as those of Hoechst-Celanese. Mr. Gillis and Mr. Sargeni claim, however, that they have lost severance pay, certain early retirement benefits, and vacation pay. Mr. Gillis and Mr. Sargeni seek a declaration that they deserve these benefits, appropriate funding for them, and penalties for various reporting and disclosure violations under ERISA.

 In an order dated March 31, 1992, I certified Mr. Gillis and Mr. Sargeni as class representatives for the severance and vacation pay claims. In these matters, Mr. Gillis and Mr. Sargeni represent themselves and other former Hoechst-Celanese employees who now work for American Mirrex in the Delaware City PVC division. On the final two issues, the reporting violations and early retirement claims, Mr. Gillis and Mr. Sargeni are proceeding for themselves only.

 To prevail on summary judgment, a party must show there are no genuine issues of material fact and that it is entitled to judgment as a matter of law, even after all of the evidence is interpreted in a way most favorable to the other party. To show there are no genuine issues, a party must show that no reasonable fact-finder, after considering all of the evidence presented, could find for the other party.

 I. The Severance Claim.

 Mr. Gillis, Mr. Sargeni, and the class members claim they deserve severance benefits because their employment with Hoechst-Celanese ceased after the PVC plant sale. Hoechst-Celanese agrees it no longer employs the plaintiffs, but it maintains they are not entitled to severance benefits. Hoechst-Celanese claims the plain language in the company's severance plan does not provide severance payments to employees when a company acquires their division and continues to employ them. On this basis, the Hoechst-Celanese human resources department denied the plaintiffs' request for severance benefits.

 The Hoechst-Celanese severance plan applied to Mr. Gillis, Mr. Sargeni, and the other class members when Hoechst-Celanese sold the Delaware City PVC plant to American Mirrex. The plan explicitly gave the human resources department the right to interpret the plan and set up a standard of review for these decisions. Section 6 reads:

 
The Corporate Human Resources Department is responsible for administering this policy, issuing procedures and local guidelines, and handling any questions of policy interpretation, as well as determining the rights of any person to benefits under this policy. The decisions of the Corporate Human Resources Department shall be binding unless arbitrary or capricious.

 For this reason, I must accept the human resources department's denial of severance benefits unless it was arbitrary or capricious. See Stoetzner v. U.S. Steel Corp., 897 F.2d 115, 119 (3d Cir. 1990). The appropriate question is therefore whether the evidence shows the denial was clear error or not rational. See Shiffler v. Equitable Life Assur. Soc., 838 F.2d 78, 83 (3d Cir. 1988). In this case, Hoechst-Celanese's severance decision must stand.

 1. The severance plan.

 After the merger, on January 1, 1989, Hoechst-Celanese adopted a severance policy. Paragraph 2.2 of Hoechst-Celanese's "Separation Pay Policy for Salaried Employees" provides:

 All regular, full-time salaried employees who are terminated by reason of

 -death

 -disability

 -retirement

 -gross misconduct

 -sale of all or part of a business (where the acquiring or purchasing company offers ...


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