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Brackett v. Siemens VDO Automotive Corp.

United States District Court, E.D. Michigan, Southern Division

May 15, 2019



          Denise Page Hood, Chief United States District Judge.


         This matter was removed to the United States District Court for the Eastern District of Michigan on January 7, 2009, on the basis of this Court's federal question jurisdiction. 28 U.S.C. § 1331 and §§ 1441, 1446. The Complaint, originally filed in the State of Michigan Circuit Court for the County of Oakland, alleged two counts: Count I, Breach of Contract, and Count II, Violation of ERISA. Count I was dismissed by the Court prior to trial. A trial of this matter before the bench was held. The Plaintiffs herein seek severance pay benefits under the Siemens VDO Automotive Corporation's ("SVAC's") Severance Pay Plan ("Severance Plan") (Exh. D-l). The Severance Plan is a welfare benefit plan under ERISA. The Plaintiffs claim a violation of ERISA for SVAC's failure to pay these benefits. SVAC denied payment claiming that the Plaintiffs are not entitled to these benefits under the Severance Plan: Plaintiff Harvey because he voluntarily retired; Plaintiffs Brackett, Kepczynski and Murphy because they were offered and accepted "substantially comparable employment" "immediately following the divestiture" of the business unit in which they were employed, pursuant to the Severance Plan. These are the findings of fact and conclusions of law of the court pursuant to Rule 52 of the Federal Rules of Civil Procedure.


         A. The Parties

         In this case, four plaintiffs, Steve Brackett, Kevin Murphy, Dariusz Kepczynski and Bruce Harvey, seek severance benefits from Defendants Siemens VDO Automotive Corporation ("SVAC") and Siemens VDO Corporation ("SVI") (known now as Continental Automotive Systems US, Incorporated) pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132 et seq. SVAC is a United States corporation and SVI is a Canadian corporation. The parent company for these entities was Siemens AG, a German corporation. SVAC and SVI were separate companies, sold by Siemens AG to Continental Automotive Systems US, Inc. in December 2008. Plaintiffs Brackett, Murphy and Kepczynski were full-time employees of SVAC working in the PAF Unit, until May 31, 2007. Plaintiff Harvey was also a full-time employee of SVAC working in the PAF Unit until his retirement date, March 31, 2007.

         All four Plaintiffs were employed by SVAC, located in Auburn Hills, Michigan. SVAC as noted is a subsidiary of Siemens AG, a German corporation. Plaintiffs worked in a Business Unit of Siemens AG called Power Train AM AF, but commonly referred to as PAF. This Business Unit dealt with motor vehicle air intake modules and air induction systems. The PAF Business Unit was sold to Mahle GmbH ("Mahle") in May 31, 2007. Plaintiffs, in various ways, inquired about severance benefits, but Defendants denied Plaintiffs' request for severance benefits.

         B. The Plan

         SVAC had an established Severance Pay Plan. It is undisputed that this Severance Plan was subject to ERISA. Each Plaintiff had a copy of the Severance Plan. Under the Severance Plan an employee was entitled to certain benefits upon the occurrence of certain events. The Severance Plan provides in pertinent part:

I. About the Plan
1.1 This Severance Pay Plan (the "Plan") of Siemens VDO Automotive Corporation ("SVAC") has been established to provide specified severance pay and benefits to all regular, non-bargaining unit, United States salaried employees of SVAC.
1.3 The Plan is administered by the Siemens VDO Automotive Corporation Severance Pay Plan Committee (the "Committee"). The Committee has full and final authority to administer, interpret and construe the Plan and to determine whether severance pay and benefits are payable under the Plan.
II. Eligibility
2.2 Subject to section 2.3 below, severance pay will be granted to eligible employees of SVAC whose termination is permanent and initiated by SVAC as a result of any one of the following "Qualifying Events":
b) Elimination of the employee's position, unless the employee has rejected a comparable position within SVAC or an affiliated unit or Company of Siemens, as described in Section 2.3(e) below.
d) A separation for the convenience of SVAC for business or other reasons.
2.3 An eligible employee will not be entitled to severance pay under this Plan if the employee's termination is the result of:
c) The employee's retirement (except that an employee who is to be terminated due to a Qualifying Event and who elects to retire under a retirement plan of S VAC shall be granted severance pay, nonetheless);
d) The divestiture of a business unit of SVAC, or the sale of the stock or asset of SVAC or a business unit or subsidiary of SVAC, if the employee continues or is offered substantially comparable employment with the new employer immediately following the divestiture;
III. Severance Pay for Qualifying Terminations
3.1 An eligible employee who is terminated as a result of a Qualifying Event shall receive Basic Severance Pay as provided under the following schedule. ...
V. Administration of the Plan 5.1
This Plan is a welfare plan under the Employee Retirement Income Security Act of 1974 ("ERISA") and benefits are paid from the assets of SVAC.
5.2 SVAC is the Named Fiduciary and Sponsor of this Plan. The Plan Administrator is the Siemens VDO Automotive Corporation Severance Pay Plan Committee, comprised of no less than three members who shall be appointed by the Plan Sponsor. All benefits payable under this Plan are unfunded and paid solely from the general assets of SVAC.
5.3 The Committee has the sole right and authority to determine eligibility for benefits under the Plan and to construe the Plan's terms.
5.4 Any employee or former employee for whom no benefits have been authorized may appeal the decision to the Committee in writing, within 60 days of receiving such notice, requesting the Committee to review and reconsider its determination. The Committee shall give the employee notice of its decision. The decision of the Committee to this appeal shall be final.

(Exhs. P-l & D-l, SVAC Severance Pay Plan)

         It is not disputed that all Plaintiffs were regular employees of SVAC subject to the Severance Plan. It is undisputed that each Plaintiff had a copy or access to a copy of ...

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