language to the severance policy in Ulmer v. Harsco Corp.. Unlike the plan in Anderson, the Separation Plan defines the term "Company" as the Exide Corporation and all references to the "Company" in the Plan could only be reasonably understood to refer to Exide. Following the reasoning in Ulmer v. Harsco, therefore, the Separation Plan should have been interpreted to mean the failure of Exide, its subsidiaries, or affiliates to offer comparable employment requires the disbursement of separation pay when employees lose employment "as a result of a reduction of staff or an elimination their position or the lack of available work . . .," from Exide, not with its successor, the Richardson Division. Furthermore, in addition to the "offer-of-comparable-employment" exception, the Separation Plan provides six other exceptions to eligibility. Under the principle of expressio unius exclusio alterius, if Exide had intended an exception to eligibility for a going concern, the Separation Plan would have simply read the "Company, any of its subsidiaries, affiliates, or its successor."
In sum, the disputed language in the Separation Plan is not ambiguous. The term "Company" clearly refers to Exide and, according to the plain meaning of the Separation Plan, Hardtke lost employment as a result of an elimination of his position from Exide when its Stokes Division was sold to Richardson. Since Exide, its subsidiaries, or affiliates did not offer employment to Hardtke after the sale, Exide's decision to deny Hardtke separation pay under the "offer-of-comparable-employment" exception to eligibility was erroneous.
Therefore, it is unnecessary for us to decide whether Exide's construction of the term "comparable," to include the terms of the offer made by the Richardson Division, was arbitrary and capricious.
Exide submits that Hardtke was additionally ineligible for separation pay under the Plan because the immediate reason for his separation from the Company was a termination. The Separation Plan provides that "employees terminated for misconduct, insubordination, fraud, dishonesty, willful neglect of duties, intentional damage of Company property, disclosure of confidential information, or because of any other similar act detrimental to the Company . . .;" are ineligible to receive separation pay. Hardtke contends that Exide's denial of benefits under this exception was erroneous because the circumstances under which he was terminated do not constitute a "similar act detrimental to the Company" within the meaning of the Plan. Exide argues to the contrary.
We now turn to review these circumstances.
Hardtke was terminated for allegedly negotiating for a job with Hardigg Industries, Exide's primary competitor for the sale of industrial battery products, while still employed with Exide's Stokes Division, which, in Exide's judgment, was seriously detrimental to its Stokes Division. Exide was concerned because Hardtke had access to confidential marketing strategies and both Hardigg and Stokes called upon the same customers. Yet, Exide presented no evidence that Hardtke had ever revealed confidential marketing strategies to Hardigg or attempted to solicit customers away from Stokes. Nevertheless, Exide made a determination that for Hardtke to continue calling on customers while at the same time maintaining a relationship with Hardigg created a conflict of interest.
After Hardtke was unable to reach an agreement with Richardson as to the terms of his employment, then-President of Stokes, Arthur Koch, met with Hardtke to inquire whether he would seek employment with Hardigg. Hardtke admitted working for a competitor was a possibility that he had considered, as industrial battery sales was the type of work that he was familiar with. Additionally, Hardtke had learned of a possible opening at Hardigg through an inadvertent contact with a Hardigg salesman at the office of a mutual customer. However, we find that Exide's determination that Hardtke was negotiating for job with Hardigg while he was still employed by Stokes to be erroneous. Their determination was based solely on unsubstantiated rumor in the industry. Hardtke testified that prior to his termination on December 14, 1984, his happenstance conversation with the Hardigg salesman was his sole contact with anyone from Hardigg with respect to obtaining employment.
Thus, we must determine whether Hardtke's act of considering employment with Stokes' primary competitor, Hardigg, after he was unable to reach an agreement with Richardson, but while still employed at Stokes, constitutes a "similar act detrimental to the Company" under the Separation Plan.
The terms "similar act detrimental to the Company" are ambiguous on their face. The interpretation of ambiguous plan provisions is a question of fact. Taylor v. Continental Group, 933 F.2d 1227, 1232 (3d Cir. 1991). In identifying the intent of the parties as to the meaning of such terms, a court may consider the language of the plan, the reasonable understanding of the parties, past practices, customary usage in the trade, and other competent evidence bearing on the issue. Id. at 1232-33. Here, once again, the parties have failed to introduce any evidence, except the language of the Separation Plan and their contrary understandings of the meaning of the terms to include the circumstances under which Hardtke was terminated.
However, we can ascertain the meaning of these terms through the language used in the remainder of this exception. Thus, "similar act detrimental to the Company" means an act of malfeasance that is comparable in severity to "misconduct, insubordination, fraud, dishonesty, willful neglect of duties, intentional damage of Company property, [or] disclosure of confidential information . . .."
Hardtke, who was a salesman of industrial battery parts, was employed by Stokes for over 25 years. The industry for industrial battery products is small and limited with very few competitors. Therefore, after Hardtke was unable to come to an agreement with Richardson as to his employment, he was left with little alternative, but to consider work with a competitor. Moreover, industrial battery sales was the type of work in which he was experienced and qualified to perform. Hardtke was aware of a possible opening at Hardigg and considered this opportunity, as Hardigg, who was a major player in the industry, would likely offer him an attractive position. However, Hardtke did not pursue this potential opportunity until after his termination. Additionally, there was no evidence that he performed any acts of disloyalty, such as revealing Stokes' confidential marketing strategies. To the contrary, the then-President of Stokes, Arthur Koch, testified that Hardtke was a good employee, who served Stokes well and that he highly recommended him to Richardson. In short, we find that these circumstances fall well below a level of malfeasance that is comparable in severity to the acts described in this exception. Therefore, the circumstances under which Hardtke was terminated do not constitute a "similar act detrimental to the Company" under the Separation Plan.
Accordingly, Exide's denial of benefits under this exception was also erroneous.
D. DAMAGES AND PREJUDGMENT INTEREST
Under the Separation Plan, eligible employees with one or more years of continuous service are entitled to a separation payment "of one week (1) of pay . . . for each year of continuous service up to a maximum of twenty-six (26) weeks . . .." In the case of employees, like Hardtke, earning base pay plus commissions through a sales incentive plan, "pay" is defined as the average weekly earnings over the last twelve months prior to separation. The parties agree that the calculation of Hardtke's entitlement under the Separation Plan amounts to $ 20,000.35.
Hardtke has also requested an award of prejudgment interest. Exide contends that Hardtke is not entitled to prejudgment interest prior to June 7, 1991 because he was responsible for a substantial delay in bringing this action. An award of prejudgment interest to a prevailing party in an action arising under ERISA is within the discretion of the court. Anthuis v. Colt Indus. Operating Corp., 971 F.2d 999, 1010 (3d Cir. 1992); Schake v. Colt Indus. Operating Corp. Severance Plan, 960 F.2d 1187, 1190 (3d Cir. 1992). Such an award is to be granted based on "'considerations of fairness [and] denied when its exaction would be inequitable.'" Ambromovage v. United Mine Workers, 726 F.2d 972, 981-82 (3d Cir. 1984) (citation omitted). A claimant's diligence in prosecuting an action is one factor a court may consider in exercising its discretion, Pension Benefit Guar. Corp. v. Greene, 570 F. Supp. 1483, 1503 (W.D.Pa. 1983) (citation omitted) and, therefore, a court may fix the dates at which prejudgment interest should commence. Valle v. Joint Plumbing Indus. Bd., 623 F.2d 196, 206-07 (2d Cir. 1980).
In the instant case, Hardtke was less than diligent in pursuing his claim for benefits. He was denied separation pay on or about December 14, 1984, but waited four years until December of 1988 to file a Writ of Summons and did not file his Complaint until June 7, 1991. Under these circumstances, we will award prejudgment interest from December, 1984 to December, 1988 and from June, 1991 to the time of judgment in February, 1993. Hardtke has requested prejudgment interest to be calculated at a rate of 6% per annum.
Accordingly, based on the amount of damages, $ 20,000.35, a time period of five years and eight months, and a 6% interest rate, we award $ 6,799.32 in prejudgment interest.
IV. CONCLUSIONS OF LAW
1. Hardtke's claim for separation pay is governed by ERISA, 29 U.S.C. §§ 1001-1461.
2. The Court has jurisdiction in this action pursuant to 29 U.S.C. 1331 and 29 U.S.C. 1132(f).
3. Hardtke is a participant under Exide's Separation Plan and entitled to bring this action.
4. The de novo standard of review applies to Exide's denial of benefits under the Separation Plan, except to the extent the denial is based on an offer of "comparable" employment, which is reviewed under the arbitrary and capricious standard.
5. Under the plain meaning of the Separation Plan, Hardtke lost employment as a result of an elimination of his position when the Stokes Division was sold to Richardson and, was thus, eligible to receive separation pay.
6. The term "Company" unambiguously refers to Exide and, therefore, Exide's interpretation of the term "Company" to include Richardson was erroneous.
7. Since Exide, its, subsidiaries, and affiliates did not offer employment to Hardtke after the sale, Exide's denial of benefits under the "offer-of-comparable-employment" exception to eligibility was erroneous.
8. The circumstances under which Hardtke was terminated do not constitute a "similar act detrimental to the Company" under the Separation Plan.
9. Thus, Exide's denial of benefits under the "termination" exception was also erroneous.
10. Hardtke is entitled to $ 20,000.35 in separation pay under the
Plan and, in our discretion, an award of $ 6,799.32 in prejudgment interest.
An appropriate order follows.
AND NOW, this 4th day of February, 1993, upon consideration of testimony and exhibits presented in the bench trial in the above-captioned matter on December 10, 1992, it is hereby ORDERED that JUDGMENT IS ENTERED in favor of the PLAINTIFF, ANDREW C. HARDTKE, and against the DEFENDANT, EXIDE CORPORATION, for damages in the amount of $ 20,000.35, plus prejudgment interest in the amount of $ 6,799.32. This case is closed.
BY THE COURT,
Franklin S. Van Antwerpen, J.