USCA1 Opinion

UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT
____________________

No. 97-1556

LEO VARTANIAN,

Plaintiff - Appellant,

v.

MONSANTO COMPANY, ET AL.,

Defendants - Appellees.

____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Michael A. Ponsor, U.S. District Judge]

___________________

____________________

Before

Torruella, Chief Judge,

___________

Lynch, Circuit Judge,

_____________

and Stearns,* District Judge.

______________

_____________________

John C. Sikorski, with whom Robinson Donovan Madden & Barry,

________________
________________________________
P.C. was on brief for appellant.
____

Richard J. Pautler, with whom Peper, Martin, Jensen, Maichel

__________________
______________________________
and Hetlage, Francis D. Dibble, Jr. and
___________ _______________________

Bulkley, Richardson and

_______________________

Gelinas were on brief for appellees.

_______

____________________

December 15, 1997

____________________

____________________

Of the District of Massachusetts, sitting by designation.

STEARNS,
STEARNS,

District
District

Judge.
Judge.

This

appeal

involves

_______________

question

of

first

impression

in

this

circuit,

namely,

the

standard to apply in determining when an employer's consideration

of an employee

severance program gives rise to

of disclosure under

of 1974, 29

U.S.C.

a fiduciary duty

the Employee Retirement Income

1001-1461 ("ERISA").

Security Act

Plaintiff-Appellant

Leo Vartanian alleges that his former employer, Monsanto Chemical

Company ("Monsanto"), misled him by failing to respond adequately

to

his

inquiries

about

severance

package

that

was under

internal corporate consideration when he retired from the company

on May

have

1, 1991.

A benefits package

otherwise been eligible was

for which

Vartanian would

approved by the Monsanto Board

of Directors on June 28, 1991.

Vartanian

filed a

complaint against Monsanto

in 1992

alleging two counts of breach

of fiduciary duty under ERISA, one

count of unlawful discrimination in

and one

count of

common law

violation of

510 of ERISA,

negligent misrepresentation.

The

district court, Ponsor, J.,1 granted Monsanto's motion to dismiss

the

action

on

the

grounds

that,

having

taken

lump

sum

distribution of all the vested benefits to which he was entitled,

Vartanian could not qualify as a "plan participant" with standing

to assert

Supp.

ERISA violations.

36, 41

(D. Mass.

Vartanian v. Monsanto Co.,

_________
____________

1993).

This Court

inter alia, that because Vartanian was

822 F.

reversed, holding,

a plan member at the time

____________________

Judge Ponsor

was at the

time a Magistrate

office as a District Judge on March 14, 1994.

Judge.

He took

-2-

the alleged misrepresentations were made,

under ERISA.

he had standing to sue

Vartanian v. Monsanto Co., 14 F.3d 697,

_________
_____________

703 (1st

Cir. 1994)(Vartanian I).

_________

On remand Judge Ponsor dismissed Vartanian's claim that

Monsanto had

breached an ERISA

duty by failing to

disclose its

prospective plans to reduce staffing, but permitted the claims of

misrepresentation

incentive plan

about the

possibility of an

to proceed.

Supp. 63, 70-71

Vartanian v.
_________

(D. Mass. 1995).

granted

Monsanto's motion

because

no enhanced severance

Vartanian

was under

retired,

no

Vartanian v.
_________

for

"serious

actionable

After

summary

early retirement

Monsanto Co.,
____________

880 F.

discovery, Judge Ponsor

judgment, holding

that

package that would

have affected

consideration"

the

misrepresentation

Monsanto Co., 956 F. Supp.

____________

at

had

time

been

he

made.

61, 66 (D. Mass. 1997).

We affirm.

I.
I

Our review of a motion for summary judgment is de novo.

Associated Fisheries of Maine, Inc.

___________________________________

No.

97-1327, 1997 WL

563584 at

v. Daley, ___ F.3d ___, ___,

_____

*3 (1st

Cir. Sept.

16, 1997).

Summary

judgment

depositions,

together

is

where

"the

pleadings,

answers to interrogatories, and admissions on file,

with the

affidavits, if

genuine issue as to any

is entitled to a

56(c).

appropriate

show that

material fact and that the

judgment as a matter of law."

Inferences are drawn in the

nonmoving party.

any,

there is

no

moving party

Fed. R. Civ. P.

light most favorable to the

Reich v. John Alden Life Ins. Co., 126 F.3d 1,

_____
________________________

-3-

6 (1st Cir.

motion

1997).

The nonmovant

for summary

existence

of

judgment

scintilla

may not, of course,

on conjecture

of

evidence

alone.

in

defeat a

"The

support

of

mere

the

plaintiff's position will be insufficient; there must be evidence

on

which the

jury

could reasonably

find

for the

plaintiff."

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986).

________
___________________

The

the

parties'

following undisputed material facts are drawn from

Joint

Statement of

Stipulated

Facts, Defendant-

Appellee Monsanto's Statement of Undisputed Facts, and Plaintiff-

Appellant

Undisputed

Vartanian's

Facts.

Response

to

Defendant's

Statement

of

After thirty-six years at Monsanto, Vartanian

in December 1989 announced his

intention to retire on January 1,

1991 (later amended to May 1, 1991).

Vartanian was then employed

at Monsanto's plastics facility at Indian Orchard, Massachusetts.

Vartanian elected to take a lump sum distribution of his Salaried

Employee's

Pension Plan benefits.

During past restructurings of

its business,

Monsanto had offered early

retirement incentives,

sometimes

sometimes

on

company-wide basis

and

to specific

groups of employees.

During 1990

net

income

employees

that the

program as

October

shrunk.

of

and 1991, Monsanto's

Rumors

company was

a cost-cutting

1990

began

Monsanto

Monsanto operating unit)

circulating

pondering

device.

sales stagnated

These

Agricultural

among Monsanto

an early

retirement

intensified when

Company

and

(a

offered a severance program to

in

separate

some of

its employees

as part

of a reorganization

plan.

In

the first

-4-

quarter of 1991, Robert Potter,

discussing

with

his

streamline operations at

closing

senior

managers

various

Monsanto Chemical.

of several plants,

where Vartanian worked.

the president of Monsanto, began

but not the

No plans were

These

proposals

to

included the

Indian Orchard facility

drawn up to implement

severance

package,2

president of

although

finance,

Frank

prepared

an

Reining, Monsanto's

estimate

of

the

vice-

cost

of

offering severance benefits to some 400 hypothetical employees.

In March of

1991, Vartanian asked Charles

immediate supervisor,

plan

were

Vartanian

program

that

After

Monsanto

for which

Vartanian

and

true.

if the

investigating,

was

he would

and his wife

Agreement in

rumors about

not

an early

Eggert

retirement

reported

contemplating any

be eligible.

On

executed an Affidavit,

anticipation of

Eggert, his

the release

to

severance

March 25,

1991,

General Release,

of the

lump sum

benefits.

During

the week

of April

15-21,

1991, after

gossip

about a possible severance plan revived, Vartanian contacted both

Eggert

and Lori Heffelfinger,

the personnel

representative for

his employee group.

they

had

been

Eggert and Heffelfinger told

unable

to

confirm

personally believe that any early

the

rumors,

Vartanian that

and

did

not

retirement package was in

the

____________________

Vartanian

inferentially

asserts

that

any

downsizing

have involved

the

issue

because of Monsanto's record of

of

discussions
severance

would

benefits

offering such incentives as part

of past restructuring.

-5-

works.

Vartanian does

not dispute

the truthfulness

of either

statement.

Between

Management

to

the

April

21

and

May

1,

1991,

the

Board met six times, eventually deciding to recommend

Board

of Directors

presentation concerning

any of these

the

closure

of

six

plants.

early retirement incentives

meetings, and no document analyzing

severance program was prepared.

product

recommended

1991.

lines

in

or proposing a

Three alternate plans were drawn

Vartanian's

for discontinuance.

No

was made at

up for restructuring Monsanto's multiple product lines.

the

Monsanto

Plastics

Vartanian

None

Division

retired

on May

of

was

1,

On May 7, 1991, Potter met with

the Monsanto Executive

Management Committee, which endorsed in principle his proposal to

restructure

the company.

director of employee

program

for

On

May 16,

1991,

John Manns,

benefits, was asked to develop

potentially

impacted

employees.

the

a severance

Manns

asked

Monsanto's actuaries, Towers, Perrin, Forster & Crosby ("TPF&C"),

to gather the necessary data.

an

outline of

Robert

his proposal.

Abercrombie, the

Blitstein,

severance

a corporate

plan.

It

On May 24, 1991, Manns

On May

28, 1991, Manns

corporate benefits director,

vice president,

was at

this

extending an offer of early retirement

was first raised.

gave TPF&C

to

meeting

discuss a

that

met with

and Barry

concrete

the idea

of

to all Monsanto employees

-6-

Coincidentally,

Plastics Division employee

1991, was assured

on

May

28, 1991,

St. Louis-based

who had decided to retire

by letter that

on June 1,

he would receive the

value of

any increase in benefits if an early retirement program for which

he would

months

otherwise have been

of his retirement

eligible was adopted

date.

On

June 12, 1991,

within three

another St.

Louis-based Plastics Division

July

1, 1991,

employees

was

were

given

employee who planned to

a similar

eventually

written

paid the

retire on

assurance.

additional

benefits

Both

from

Monsanto's corporate treasury.

On

Committee

program,

Potter

June

3,

1991,

endorsed the idea

Monsanto's

Executive

of a company-wide

Management

early retirement

and authorized further development work on the project.

told his

division managers

final decision whether to

employees.

John

successor,

Arthur

retirement plan was

offer the program to

Tuley, the

decided not to participate.

that they

manager

were to

make the

their respective

of Vartanian's

division,

Tuley's decision was reversed by his

Fitzgerald,

in

mid-June

finalized on June 27, 1991,

of

1991.

The

and approved by

Monsanto's Board

been

eligible

of Directors on

to

participate,

June 28, 1991.

he

would

Had Vartanian

have

received

an

additional $174,700 in pension benefits.3

II.
II.

Although

this

Court,

in

Vartanian
_________

I,

stated

that

____________________

It is

unclear whether Vartanian

would have qualified

for a

lump sum distribution had he chosen the early retirement option.

-7-

Monsanto had "a fiduciary duty not to mislead Vartanian as to the

prospective adoption of

a plan under serious

F.3d at 702,

occasion to reach

it had no

the question of

exactly constitutes "serious consideration."

on remand adopted

Fischer
_______

v.

cert. denied,
____________

serious consideration obtains

is being

96

Third Circuit in

F.3d

117 S. Ct.

1533

(3d

Cir.

1247 (1997),

that

when "(1) a specific

discussed for purposes of implementation

management with the

Supp. at 66

what

The district court

the standard espoused by the

Philadelphia Elec. Co.,

________________________

1996)(Fischer II),
_______

consideration," 14

proposal (2)

(3) by senior

authority to implement the change."

(quoting Fischer II, 96 F.3d at 1539).

_______

956 F.

Finding that

"[t]he

undisputed facts

Monsanto

66,

reveal that

until weeks after

none of

this

occurred at

plaintiff retired," 956

F. Supp. at

Judge Ponsor granted Monsanto's motion for summary judgment.

Id. at 67.
___

Monsanto

urges us to

court and adopt the Fischer II

_______

follow the lead

test.

of the district

Vartanian asks for a

flexible standard loose enough to fit the facts of his case.

reasons

that

will

be

explained,

we

prefer

the

Fischer
_______

more

For

II

approach.4

____________________

We are aware that some courts

possibility

of an

affirmative duty to

potential plan changes,

inquiry.

Antweiler
_________

of appeals have recognized the

advise a

beneficiary of

regardless of the existence

of employee

v. American Elec. Power Serv. Corp., 3 F.3d

_________________________________

986, 991

(7th Cir. 1993);

Eddy v.
____

Colonial Life Ins. Co., 919

_______________________

F.2d 747, 750 (D.C. Cir. 1990); but see Pocchia v. NYNEX, 81 F.3d
___ ___ _______
_____
275,

278 (2d

Cir.), cert. denied,

_____________

fiduciary is not

117 S. Ct.

required to voluntarily

benefit plan before they are adopted.").

302 (1996)("[A]

disclose changes in

This issue, however, is

not before us.

-8-

A.
A.

It has been said that employers who offer benefit plans

wear

"two

hats,"

because

of

the

"distinction

between

an

employer s prerogative to initiate discretionary policy decisions

such as creating, amending,

compared

to

its

fiduciary

existing plan for

employees."

(6th Cir.

will

Drennan
_______

1992).

and

deliberations

When

a prospective change

some or

all

administer an

its participant-

v. General Motors Corp., 977

____________________

inherent

its

F.2d 246, 251

in a benefit

plan participants,

institutional desire

confidential.

plan

tension

feature of

doubt

that

[the

to

keep

its internal

This conflict is, in many respects,

ERISA.5

observed, "[w]hen acting on behalf

no

to

as

arises between the employer s fiduciary obligations to its

employees

an

responsibilities

the benefit and interests of

adversely impact

often

or terminating a particular plan

employer]

As

one district

court

has

of the pension fund, there is

must

act

solely

to

benefit

participants and

beneficiaries.

that a company has named

trustee

does not restrict

behavior . .

Corp., 567 F.
_____

. ."

However, . . . . the

mere fact

itself as pension plan administrator or

it from pursuing

Sutton v.
______

reasonable business

Weirton Steel Div. of Nat'l Steel

__________________________________

Supp. 1184, 1201 (N.D.W.Va.), aff'd,

_____

724 F.2d 406

____________________

The conflict has generated a fair amount of scholarly comment.

See Mary O.
___

Jensen, Separating Business Decisions and Fiduciary

____________________________________________

Duty in ERISA Litigation?, 10 BYU J. Pub. L.

__________________________
Davi,

139 (1996); Steven

To Tell the Truth: An Analysis of Fiduciary Disclosure

__________________________________________________________

Duties and Employee Standing to Assert Claims under ERISA, 10 St.

_________________________________________________________
John's

J. Legal Comment. 625

(1995); Edward E. Bintz, Fiduciary

_________

Responsibility under ERISA: Is There Ever a Fiduciary Duty to

_________________________________________________________________
Disclose?, 54 U. Pitt. L. Rev. 979 (1993).
_________

-9-

(4th Cir. 1983).

the

point at

namely the

proposal,

We are called

which

one form

upon in this case

of reasonable

confidential consideration

is

overbalanced by

of an

to delineate

employer behavior,

employee severance

the corresponding

fiduciary duty

imposed by ERISA.

Early decisions grappling with the employer's duties in

this context focused mainly

on the extent of the cause of action

engendered by an employer's material misrepresentations regarding

prospective

changes

in plan

benefits.

States Tel. & Tel., Inc.,

____________________________

Vartanian I, 14
_________

994 F.2d 130

54 F.3d

See
___

1488

F.3d at 703; Fischer v.

_______

Maez
____

(10th

1988).

Cir.

1995);

Philadelphia Elec. Co.,

______________________

(3d Cir. 1993)(Fischer I); Berlin

_______
______

Tel. Co., 858 F.2d 1154 (6th Cir.

________

v. Mountain
________

v. Michigan Bell
_____________

As a consensus on that

issue developed, attention began to shift to the question of when

the

consideration of

a change

in benefits

reached a

point of

seriousness sufficient to trigger a fiduciary duty of disclosure.

See Hockett v.
___ _______

1997);

Muse v.
____

Sun Co., Inc., 109 F.3d

_____________

I.B.M., 103
______

F.3d 490,

1515, 1522-24 (10th Cir.

493-94 (6th

Cir. 1996),

cert. denied, 117 S.

_____________

Ct. 1844

(1997); Fischer
_______

II, 96

F.3d at

1538-41.

Vartanian

ostensibly

because

corporate interests.

1065

(1996),

corporate

urges

it

is

to reject

too

Citing

the

deferential

Varity Corp. v.
____________

Vartanian advocates

deliberations

consideration."

us

a more

achieve

But he fails to

the

Fischer
_______

to

an

II test,

employer's

Howe, 116
____

diffuse test

level

of

suggest much by way of

-10-

S. Ct.

of when

"serious

content

for his

the

proposed test.

common law

duties

ERISA

the

principle

"with respect

participants

is true that

that a

to a plan

29 U.S.C.

this case,

Corp., the employer

_____

solely in

116 S.

1104(a)).

however, is

discharge its

the interest

Ct. at

of the

1074 (quoting

Varity Corp.'s relevance to

____________

questionable.

deliberately misled its employees

actuarial soundness of a benefit

to

Varity Corp. reaffirms

____________

fiduciary must

and beneficiaries."

404(a),

facts of

It

In Varity
______

about the

plan to induce them to transfer

a new division which had been tacitly created for the purpose

of consolidating

the company's

money losing

ventures.

Id. at
___

1068-70.

Because of the

"need not reach

deception, the Court determined that it

the question of

whether ERISA fiduciaries

any fiduciary duty to disclose truthful information

initiative, or in response to employee inquiries."

Vartanian proposes that, in

the multiple factors

on their own

Id. at 1075.
___

the alternative, we

test used by the Second

have

adopt

Circuit to analyze

the materiality of an employer's misleading statements in Ballone

_______

v. Eastman Kodak Co., 109 F.3d 117,

__________________

factors

include

misrepresent[ed]

regarding

significantly

the present

status

[the

false]

of internal

These

statement

deliberations

future plan changes, the special relationship of trust

and confidence

and the

"[h]ow

125 (2d Cir. 1997).

between a plan

fiduciary and beneficiary, .

specificity of the assurance."

. .

Id. (citations omitted).

___

Ballone,
_______

however, is

court in Ballone,
_______

claims

because

also inapposite.

Although the

like the district court here,

of

the

lack

of

any

district

dismissed ERISA

evidence

of

"serious

-11-

consideration,"

alleged

that

109 F.3d

the

employer

at

122,

falsely

the complaint

informed

the

in

Ballone
_______

inquiring

plaintiff

that the

company had

retirement plan for at

decided not

least two years.

to offer

Id. at 121.
___

an early

It seems

reasonable that where an allegation of positive misrepresentation

is involved, that "aspect of the assurance can render it material

regardless of whether

future changes are under

the time the misstatement is made."

presented

with

facts

that

suggest

Id. at 124.
___

consideration at

We are not here

deliberate

attempt

on

Monsanto's part to affirmatively mislead Vartanian, and therefore

have no occasion to consider whether we would apply Ballone in an

_______

appropriate case.

It is

fiduciary duties,

true

that in

we are

considering

counseled "to

the scope

of

ERISA

apply common-law

trust

standards [while] 'bearing in mind the special nature and purpose

of employee

(quoting

benefit plans.'"

H.R. Conf.

Rep.

Varity Corp., 116

____________

No. 93-1280,

at

S. Ct.

302, 3

at 1075

Legislative

History of the Employee Retirement Income Security Act of 1974 at

4569 (1976)).

The common law impresses on a trustee the

duty to

give a beneficiary "upon his request at reasonable times complete

and accurate information as to the nature and amount of the trust

property .

. . ."

Restatement (Second)

"[T]he beneficiary is always

reasonably necessary to

the

cmt. c.

173 (1957).

entitled to such information as

enable him to

trust or to prevent or

of Trusts

enforce his rights

redress a breach of

trust."

is

under

Id. at
___

Any application of trust principles in an ERISA context

-12-

must, however, as the Supreme Court cautioned in Varity Corp., be

____________

tempered by a scrupulous regard for the delicate balance Congress

struck in enacting ERISA.

[C]ourts

may

have

to

competing

congressional

Congress' desire to
protection
hand,
create

system

account

purposes,

such

of
as

offer employees enhanced

for their

and, on the

take

benefits,

on the

other, its desire

that is

so

complex

one

not to
that

administrative costs, or litigation expenses,

unduly discourage employers from offering . .

. benefit plans in the first place.

Varity Corp., 116 S. Ct. at 1070.

____________

The Third

Circuit, in

our view,

carefully reconciled

these competing concerns in shaping the Fischer II test.

_______

The

concept

of

"serious

consideration"

recognizes and moderates

the tension between

an

information and

employee's right

employer's need
basis.

to operate

Every

strategies,

to

business

gather

must

Moreover

corporations regularly
part of

develop
evaluate

Full disclosure

in this process is

impossibility.

packages as

day-to-day

information,

options, and make decisions.

of each step

on a

an

a practical
.

review their
an on-going

large
benefit

process of

cost-monitoring and personnel management. . .

. A corporation
required complete

could not function if

disclosure of

ERISA

every facet

of these on-going activities. . . .

Equally importantly,
protects

employees.

serious consideration
Every

employee has

need for material

employee

can

decisions.

information on which

rely

Too low

in

making

that

employment

a standard could

result

in an avalanche of notices and disclosures. .

. . [T]ruly material information could easily
be

missed if the flow of information was too

great.

The warning that a change in benefits

was under serious

consideration would become

meaningless if cried too often.

Fischer II, 96 F.3d at 1539.

_______

-13-

The

consideration

specific

Third

of a

change in

proposal

implementation (3)

Circuit

(2)

is

plan benefits

being

by senior

implement that change."

concluded

discussed

management with

Id.6
___

that

"[s]erious

exists when

for

purposes

of

the authority

to

Notably important

to the Fischer
_______

II court was the effect that a less definite standard might

on the availability of employee severance packages.

Finally,

as a matter of policy, we note that

imposing liability too quickly for failure to

disclose

a potential

could harm
from

resorting

formulation
layoffs,
retirement

early retirement

employees by
to

avoids
the

plan

deterring employers
such

forcing

primary

plans.

Our

companies

into

alternative

to

inducements.

This

protects the interests of workers.

Id. at 1541 (internal citations omitted).

___

(1) a

further

have

Those

the issue have

of our sister circuit courts that have addressed

generally followed the

reasoning of Fischer
_______

II.

The Tenth Circuit recently applied

the Fisher II test in holding

______

that "serious

severance plan did

consideration" of a

not occur

until a meeting was convened that "gathered together the heads of

all

departments related

to

employee

benefits"

discuss

specific proposal.

Hockett,
_______

Sun Company's vice

president of human resources was contacted by

the

plaintiff-employee

109 F.3d at 1524.

to

regarding

In Hockett, the
_______

the possibility

of

an early

____________________

We add a gloss to the Fischer II court's formulation by way of

_______

clarification.
must

To prevail under the Fischer II test, a plaintiff

_______

show that a

specific proposal under

serious consideration

would have affected him.

_________________________
Fischer II and
_______

This we

recognize

is implicit

the rules governing ERISA standing,

in

but to avoid

any misunderstanding it is best said explicitly.

-14-

retirement

program.

Id. at 1519.
___

respond to the employee's inquiry,

that the subject

at

1521.

The vice

despite the fact that he knew

was being discussed by senior

Because of

the

president did not

employer's frequent

management.

need to

Id.
___

review

retirement

II

plans, the Hockett panel determined that the "Fischer

_______
_______

formulation appropriately narrows

which

an employer

inquiries,

must

disclose,

its tentative

the range of

in

response

intentions regarding

instances in

to

an

employees'

ERISA plan."

Id. at 1523.
___

Although

did

not directly

test,

the Sixth Circuit's opinion in Muse v. I.B.M.

____
______

refer to

holding that "serious

Fischer II,
_______

be

F.3d at 494.

a similar

consideration" exists only

company focuses on a particular

103

it advocated

The Muse court

____

plan for a particular

when "a

purpose."

was guided by what it found to

Congress's main object in imposing disclosure requirements on

ERISA

fiduciaries, namely,

to

"ensure

that 'employees

[would

have]

sufficient information

and data

to enable

them to

know

whether the plan was financially sound and being administered

intended.'"

Id. at
___

Rep. No. 533, at 11

4649).

Because

the likelihood

[and] .

in original)(quoting

(1974), reprinted in 1974 U.S.C.C.A.N. 4639,

an early disclosure requirement

of

H.R.

confusion on

the part

would "increase

of the

beneficiaries

. . management would be unduly burdened by the continued

uncertainty of

court

494 (alteration

as

required

what to

the

particular purpose."

disclose and when

existence

Id.
___

of

It also

-15-

to disclose

"particular

plan

found that "there

it," the

for

[was] no

convincing

evidence

possibility

that

suggest[ed]

that

of enhanced benefit plans for

IBM

Fischer II
_______

we have

already

indicated,

Id.
___

our

embrace

of

the

approach is influenced by similar appreciation of the

conflicting interests that ERISA

concern of

the

any reason other than

to gain a general appreciation of its options."

As

studied

Congress

employers from

pension plans

in enacting

offering employee

will not be

seeks to reconcile.

ERISA

was not

pensions.

to

"We know

adopted and that existing

A primary

discourage

that new

plans will

not

be expanded

and liberalized

if the

costs are

made overly

burdensome, particularly for employers who generally foot most of

the bill."

120

Long)(reprinted

important,

the

very

Cong. Rec.

29,945 (1974)(statement of

in Jensen, supra
_____

note 5,

at 155-56).

Senator

Equally

the practical constraints of a severance program, and

purpose for

disclosure

of

sufficiently firm.

reduce labor

which

it is

designed,

company's

plans

until

"Changing circumstances,

costs, might

require

counsel delaying

proposal

becomes

such as the need to

an employer

to sweeten

its

severance package, and an employer should not be forever deterred

from giving its employees a better deal merely because it did not

clearly indicate to a previous

one

day be proposed."

Swinney
_______

employee that a better deal might

v. General Motors Corp., 46 F.3d

____________________

512,

520 (6th

imposing

frustrate

Cir. 1995).

threshold

the

very

Indeed, it is

not implausible that

lower

than

that

of

purposes

for

which

typically is designed: to reduce

Fischer
_______

severance

II

would

program

a workforce by voluntary means.

-16-

See Pocchia, 81 F.3d at 279 ("Employees simply would not leave if

___ _______

they

were

informed

that

improved

benefits

were

planned

if

workforce reductions were insufficient.").

At

the

ERISA are not to

procedural

same time,

be ignored.

protections

determination that

the

the fiduciary

"After all, ERISA's

partly

common

reflect

law

completely satisfactory protection."

1070.

and

ERISA's

other

primary goal is

benefits by

concerns underlying

of

trusts

standards and

congressional

did

not

Varity Corp., 116 S. Ct. at

____________

to "protect[] employee

offer

setting forth

pensions

certain

general

fiduciary duties applicable to the management of both pension and

nonpension

therefore

turn on

benefit

plans."

careful to emphasize

Id.
___

The

Fischer II
_______

that "this formulation

court

was

does not

any single factor; the determination is inherently fact-

specific.

Likewise,

criteria; the

the factors

three interact

picture of serious

themselves

and coalesce to

consideration."

are not

isolated

form a

composite

Fischer II, 96
_______

F.3d at 1539

(citation omitted).

Thus,

alternatives,

"[a]

specific

and the

plan as

somewhat from the

the

proposal.

overall test, is

concrete

proposal

finally

What

a specific

to support consideration

purpose of implementation."

"[c]onsideration by senior

can

several

implemented may

differ

is required, consistent

proposal that

with

is sufficiently

by senior management

Id. at 1540.
___

for the

Correspondingly, while

management is . . .

-17-

contain

limited to those

executives

who possess the

authority to implement

the proposed

change," id., this prong

___

should

not

limit serious

deliberations by

a quorum

Directors . . . .

of

and

recommendations

of

of

the Board

be considered by

senior

responsibility for
business,

to

It is sufficient for this

factor that the plan

members

consideration

who
to

benefits operation.

those

management

with

the benefits area

of the

ultimately
the

Board

will

make

regarding

Id.
___

This emphasis on flexibility permits a

the three-pronged

trial court to apply

standard without slighting the

core fiduciary

principle that "[l]ying is inconsistent

with the duty of loyalty

owed

in section

by all

ERISA."

fiduciaries

Varity Corp.,
_____________

and codified

116

S. Ct.

at

1074

404(a)(1) of

(alteration

in

original) (quoting Peoria Union Stock Yards Co. Retirement Plan

______________________________________________

v. Penn Mut. Life Ins. Co., 698 F.2d 320, 326 (7th Cir. 1983)).
_______________________

Our

primary reason

test's flexibility is

to deliberately

for

emphasizing

the

to remove any temptation that

evade one

subverting ERISA's fiduciary

of its three

commands.

factors as

If it is

Fischer
_______

II

might exist

a means

of

clear from the

totality of the facts that a severance package is, in fact, under

serious consideration, we

of

the Fischer
_______

liability.

II test

do not think that

should relieve

a wrongdoer

from ERISA

The ultimate question is whether "a composite picture

of serious consideration" has developed.

1539.

clever manipulation

We recognize, of

directed to

the exceptional

where there is no evidence

Fischer II, 96 F.3d at

_______

course, that this cautionary

case.

Thus,

in the

note is

typical case,

of a deliberate attempt to circumvent

-18-

ERISA, a

straightforward application of

the Fischer II
_______

test is

all that is required.

We thus

consideration

conclude, modifying

of a

change in

plan benefits

specific proposal which would affect

the

plaintiff

(2)

implementation (3)

is

being

by senior

Fischer II,
_______

that serious

exists when

(1) a

a person in the position of

discussed

management with

for

purposes

the authority

of

to

implement that change.

B.
B.

Turning to the facts of this

early

retirement

plan

affecting

case, it is clear that no

Vartanian was

under

serious

consideration

by Monsanto's senior management on April 21, 1991,

the day

Vartanian began

when

Potter had

his final

begun conferring with

possibility of

inquiries.

his senior managers

a corporate restructuring.

estimate of the

But

the

in

downturn

about the

He had asked

cost that Monsanto would incur

were laid off.

President

for an

if 400 employees

these corporate ruminations, precipitated by

Monsanto's

business,

did

not

trigger

any

contemporaneous duty of disclosure.

First,

consideration.

there

At most, there

severance package

fiscal woes.

was

might be

Second,

individuals qualifying

to implement the

no

specific

proposal

under

was a suggestion that an enhanced

one way to

deal with

the company's

although Potter was certainly among

as "senior management with

change," there is no evidence

those

the authority

that anything of

substance was, in fact, being

discussed for implementation.

The

-19-

ideas that were

ideas.

floating among top management were

only that --

As a result, the answers that Vartanian received in March

and April of 1991, that no material changes affecting his benefit

plan were being considered, were not misrepresentations.

Potter received an endorsement

on May 7, 1991, of

his

restructuring

Committee.

benefits

from the

Nine days later,

to

employees who

meeting of

proposal

begin

Monsanto

Executive Management

he ordered the director of employee

planning

severance

would be displaced.

senior managers was

program

Not until

for

the May 28,

it proposed to extend

retirement plan to all Monsanto employees.

This is

those

1991

the early

the point at

which "the three [factors] interact[ed] and coalesce[d] to form a

composite picture

of serious

fiduciary duty of disclosure.

consideration," giving

rise to

Fischer II, 96 F.3d at 1539.7

_______

Conclusion
Conclusion

Vartanian's additional

merit.8

While

arguments on

we recognize that the outcome

____________________

appeal are

of no

of this protracted

It

appears that Monsanto went further than

we might require.

After serious consideration

had occurred, two employees

announced

to retire

possible

their

intention

changes in

their

without

retirement plans

who had

inquiring

about

were retroactively

paid the value of the benefits enhancement.

Vartanian

asserts error

summary judgment

in

to Monsanto on

which makes it unlawful for

the district

court's grant

his claim under

510

of

of ERISA,

any person to discriminate against a

plan participant for purposes of interfering with any right under

a benefit plan.

Vartanian's assertion, however,

depends upon a

finding of a material misrepresentation.

He also

suggests that,

consideration" is
jury.

At

because a

fact-specific, it

determination of
can only

the summary judgment stage, however,

material fact need be resolved by a fact-finder.

-20-

"serious

be resolved by

only disputes of

Fed. R. Civ. P.

litigation is

and

practices

an unhappy one

"inevitably

for Vartanian, benefit

hurt

themselves on the wrong side of the

859 (quoting

(1st Cir.

individuals

line.'"

While it may

has resulted in

be small

who

find

Palino, 664 F.2d at

______

Rueda v. Seafarers Int'l Union, 576 F.2d

_____
______________________

1978)).

perseverance

'some

plan rules

939, 942

comfort, Vartanian's

the clarification of

an important

area of ERISA law in this circuit.

For the foregoing reasons, the judgment of the district

court is affirmed.
affirmed
________

Costs to appellees.

____________________

56(c).

Finally, Vartanian asserts error in the district court's grant

of a

motion to strike

his jury demand.

Because we

affirm the

district court's grant of summary judgment, we need not reach the

issue of Vartanian's

failure to file a timely

See Smith
___ _____

502 U.S.

v. Barry,
_____

244, 248

jurisdictional and fatal).

-21-

notice of appeal.

(1992)(noncompliance is