Carol L. Harper Jerre Sardou v. R.H. MacY & Company, Inc., and Dillard's Department Stores, Inc., Maureen H. Shawver Marilyn J. Barbour Bonnie Beth Maxine Briggs Linda M. Cain Nora Daugherty Anne C. Gooch Patricia W. Harris Ila June Hayes Prentice J. Hildebrand Jeanette R. Holbert Marsha R. Holderness Patricia A. Kratz Marilyn Krohn G. Maxine Moenkhoff Eleanor L. Ninemire Dale Prewitt Gloria F. Ramirez Donna Ritter and Donna S. Rohrback Linda A. Schroeder Joyce G. Evans v. R.H. MacY & Co. Dillard Department Stores, Inc., Billie Grady Norma Deere and David Eubank v. Dillard Department Stores, Inc., and R.H. MacY & Company, Inc.

Citation: 920 F.2d 544Docket: 89-2259

Court: Court of Appeals for the Eighth Circuit; February 10, 1991; Federal Appellate Court

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Former employees of R.H. Macy Co. and Dillard Department Stores sought severance benefits under an employee welfare benefit plan governed by ERISA after Macy's sold stores to Dillard's. The employees, who accepted comparable positions with Dillard's with no interruption in employment, claimed benefits for permanent termination under the severance plan. Macy's denied their claims, asserting that the employees were not permanently terminated as defined by the plan. 

The district court granted summary judgment to Macy's, concluding that there was no permanent termination since employment terms did not substantially change due to the sale. The court conducted a de novo review of the severance plan, aligning with the heightened scrutiny standards established in Firestone Tire & Rubber Co. v. Bruch, and found Macy's denial of benefits to be justified. Additionally, the court ruled that some employees' failure to exhaust administrative remedies barred their claims and that ERISA preempted their common law claims.

On appeal, the court acknowledged the de novo review standard and determined that despite the district court's imprecise language, it effectively reviewed the severance plan as a contract. The decision affirmed the district court's ruling in favor of Macy's.

Employees claim entitlement to severance benefits under a plan due to their permanent termination by Macy's. The court reviews the denial of benefits de novo, emphasizing that the issue is one of contract interpretation. The plan's language is analyzed to ensure consistency among its provisions, avoiding interpretations that render any terms meaningless. The court concludes that Macy's did not permanently terminate the employees as defined by the plan, since those continuing to work under comparable terms for the purchaser of the business do not qualify as permanently terminated. This decision aligns with previous cases where employees rehired immediately under similar conditions were found ineligible for severance benefits. As the court agrees with the district court's conclusion that no employees are entitled to severance, it does not address the district court's finding regarding exhaustion of administrative remedies. Additionally, the court affirms that ERISA preempts the employees' common law tort and contract claims. Ultimately, the court thoroughly considers the employees' arguments and affirms the district court's ruling.