The opinion of the court was delivered by: MARVIN KATZ
After a bench trial on the issue of liability,
the court makes the following findings of fact and conclusions of law:
1. The plaintiffs are five former employees of Bell Telephone Company of Pennsylvania ("Bell of Pennsylvania") and New Jersey Bell Telephone Company ("New Jersey Bell") who voluntarily retired between April 3 and June 1, 1991.
2. At all relevant times, Bell of Pennsylvania and New Jersey Bell were subsidiaries of Bell Atlantic Corporation ("Bell Atlantic").
3. All five plaintiffs are participants in the Bell Atlantic Management Pension Plan (the "Pension Plan").
4. The defendants are Bell Atlantic, the Pension Plan, and Charles W. Crist, the Vice President of Human Resources at Bell Atlantic.
5. Soon after Bell Atlantic's formation in 1984, senior management recognized that Bell Atlantic and its subsidiaries employed more managers than the business would require in the long term, and that some downsizing would be necessary. (Crist Test., Tr. II at 109-10.)
6. There are several methods that can be used to achieve corporate downsizing goals, including: (1) pension benefit retirement incentives, (2) severance pay retirement incentives, (3) attrition, (4) strict controls on hiring and promotion, and/or (5) involuntary terminations.
8. On August 13, 1991, Bell Atlantic's Board of Directors, through its Human Resources Committee, amended the Pension Plan (the "1991 Amendment"). The 1991 Amendment was prospective, applying only to participants who retired from active employment on or after December 15, 1991. It made some permanent improvements in Pension Plan benefits, and improved the benefits available to participants who elected to retire during a specified window of time, thereby providing an incentive for voluntary retirement. (Stip. P 1; Trial Ex. 40.)
9. The plaintiffs allege that the defendants were seriously considering improvements to the Pension Plan before they retired, but concealed that information from them. In their amended complaint, they assert claims for violations of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1132(a) (1) (B), 1140; breach of fiduciary duty; and equitable estoppel. (Am. Compl. PP 51-64.)
10. In August 1990, Bell Atlantic and its subsidiaries employed between 20,000 and 21,000 persons in management positions. (Stip. P 4.)
11. On August 8, 1990, Anton Campanella, the President of Bell Atlantic, and Phillip Campbell, the Chief Financial Officer, sent a memorandum to officers of Bell Atlantic and its operating companies. The memorandum read:
The slowdown in the economy and the related business downturn are major considerations for our business. . . . We will all need to reexamine the level of expense planned for the rest of this year and into 1991. . . .
In addition to looking at the many ways we will reduce expense, we are asking you to establish new management and non-management force objectives for the end of 1990 and 1991. . . . With the changing economic conditions, we need to find ways to reduce those numbers.
The Office of the Chairman has asked John Gamba [the Executive Vice President of Bell Atlantic's Network Services Staff] to work with you to coordinate this effort. He will be asking you to rethink the need for any additions to management through hires and promotions, to look for ways to expedite consolidations of work groups and for ways to eliminate unnecessary work. He will also develop end of year targets for each year through 1993 to help us focus on our goal of reaching 18,000 management employees by that time frame. . . .
12. On the same date, Mr. Gamba sent a memorandum to officers of Bell Atlantic and its operating companies that read:
. . . . Our challenge today is to find ways to reduce [the number of management employees] and still fulfill our business commitments.
We need to stop the growth in management employees as soon as possible. For that reason I have asked the HR Directors to review with you all open management requisitions to determine whether they can be deferred, especially those that would result in net additions, such as hires or promotions into management.
. . . . I ask you to consider all possible ways that your entity can reduce its force requirements through consolidation of work activities, mechanization or elimination of work. Charlie Crist and I will be in touch with you to help develop approaches that establish appropriate force goals and action plans that meet our Bell Atlantic commitments.
Based on our current knowledge of business conditions, we do not anticipate nor are we planning for any general incentive programs, i.e., ones available to a wide portion of the employee body. We do have a program available, the Force Management ...