Thomas P. Kelly v. the Retirement Pension Plan for Certain Home Office, Managerial

* Honorable Joseph E. Irenas, Senior District Judge for the United States District
Court for the District of New Jersey, sitting by designation.
NOT PRECEDENTIAL
THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 02-3185
___________
THOMAS P. KELLY,
Appellant
v.
THE RETIREMENT PENSION PLAN FOR CERTAIN
HOME OFFICE, MANAGERIAL AND OTHER EM PLOYEES
OF PROVIDENT MUTUAL, PROVIDENT MUTUAL
LIFE INSURANCE COMPANY,
___________
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
(D.C. No. 01-CV-1789)
District Judge: The Honorable M arvin Katz
___________
Submitted Under Third Circuit LAR 34.1(a)
July 11, 2003
BEFORE: NYGAARD and SMITH, Circuit Judges and IRENAS,* Senior District Judge.
(Filed: September 5, 2003 )

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___________
OPINION OF THE COURT
___________
IRENAS, Senior District Judge.
Appellant Thomas P. Kelly has challenged the Opinion and Order of the District
Court finding for the Defendants and entered on July 11, 2002. The Opinion and Order
followed a four day bench trial involving the alleged wrongful discharge of the Appellant
and various pension related errors. Appellant has challenged the Opinion and Order of
the District Court on four grounds. Specifically, Appellant argues that when he was
discharged by his employer, Provident Mutual Life Insurance Company (“Provident”), in
2000, it was in retaliation for his complaints about the illegality of a particular marketing
scheme introduced by Provident. In addition, Appellant argues that the District Court
erred in upholding the decision of the Benefits Committee to deny him pension credit for
the years 1981 through 1988, and in upholding the decision of the Benefits Committee to
deny him a Disability Retirement Date of either 1993 or 2000. We will affirm the District
Court.
I.
Appellant first argues that the District Court erred in finding against him on his
claim of retaliatory discharge. Under Pennsylvania law, an at-will employee can be

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terminated for any reason, with a limited exception if the termination is contrary to public
policy. Clark v. Modern Group Ltd., 9 F.3d 321, 327-28 (3d Cir. 1993). This Court has
previously held that the Pennsylvania public policy exception is limited solely to when the
employee objects to a course of action that the employer is taking that is clearly illegal.
Id. at 328.
Appellant argues that he was terminated for objecting to Provident’s scheme for
the marketing of a non-commissionable term rider bundled with a base insurance policy.
He argues that the method of marketing that he objected to violates Rule 10b-5 of the
Securities and Exchange Act of 1984. 17 C.F.R. 240.10b-5. The District Court held that
while the legality of the marketing practice was questionable, it was not clearly illegal.
Appellee notes that the Appellant did not argue at trial that Rule 10b-5 was being
violated.
In any case, these arguments are irrelevant as the Pennsylvania Supreme Court has
held that in order for the public policy exception to apply, the alleged violation of public
policy must be of Pennsylvania public policy, not solely an alleged violation of federal
law. McLaughlin v. Gastrointestinal Specialists, Inc., 750 A.2d 283, 289 (Pa. 2000)
(“[A] Plaintiff must do more than show a possible violation of a federal statute...[and]
must allege that some public policy of this Commonwealth is implicated, undermined, or
violated.”). The Pennsylvania Supreme Court stated that “we declare the public policy of
this Commonwealth by examining the precedent within Pennsylvania, looking to our own

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1 When reviewing the decisions of Benefits Committees or plan administrators under
ERISA, the appropriate abuse of discretion standard requires that the district court uphold the
decision unless the decision was an abuse of discretion or arbitrary and capricious. Firestone
Tire and Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989); Mitchell v. Eastman Kodak Co., 113
F. 3d 433, 439 (3d Cir. 1997). In determining whether there has been an abuse of discretion, the
district court should make its decision based solely on evidence that was presented to the
Benefits Committee. Mitchell, 113 F.3d at 440.
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Constitution, court decisions and statutes promulgated by our legislature.” Id. at 288.
Appellant has not indicated any Pennsylvania public policy that would have been violated
had he been terminated for objecting to the marketing scheme. Therefore, the District
Court was correct in finding for the Defendants on the issue of retaliatory discharge.
II.
Appellant argues that even though the District Court properly used the abuse of
discretion standard in reviewing the decision of the Benefits Committee to deny him
pension credit for the years 1981 through 1988, the District Court improperly considered
evidence that was not presented to the Benefits Committee when it made its decision.1
Specifically, Appellant makes reference to the testimony of Marie Treftz, Director of
Payroll and Benefits, that he would not have been classified on the Home Office or Field
Clerical payrolls during the time period from 1981 through 1988. Ms. Treftz’ testimony
was not heard by the Benefits Committee. This is the only evidence that Appellant can
point to when arguing that outside evidence was considered by the District Court.
In its Opinion and Order, the District Court clearly did base its decision only on

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evidence presented before the Benefits Committee. The reference to the testimony of Ms.
Treftz occurs in paragraph 26 of the Opinion and Order. In that paragraph, the District
Court notes that no evidence was presented that the Appellant was on the Home Office or
Field Clerical payroll. The Court then goes on to note that the testimony of Ms. Treftz
was that the Appellant would not have been classified on either payroll during the years in
question. It is clear that the District Court used the testimony of Ms. Treftz to confirm
evidence that actually was before the Benefits Committee, namely that at no time between
1981 and 1988 was Appellant on either payroll. Therefore, the District Court properly
applied the abuse of discretion standard.
Appellant also argues that the District Court improperly used the 1989 Home
Office Plan when determining that the Benefits Committee did not abuse its discretion in
finding that the Appellant was not a Home Office employee. The Benefits Committee
had used the 1999 Home Office Plan when making its determination, and the Appellant
now asks that this Court review his claim under the 1984 and 1987 Manager’s Plans. At
trial the Plaintiff asked that the District Court use the 1989 Home Office Plan.
Accordingly, the Appellant waived his right to challenge the District Court’s use of the
1989 Home Office Plan when it was precisely that plan that the Appellant asked the
District Court to use when evaluating his claim during trial. In addition, Appellant was
not an Agency Manager during the period from 1981 through 1988 and was not covered
under any Manager’s Plan. Therefore, any review of the 1984 and 1987 Manager’s Plans

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would not have been relevant.
III.
Appellant continues to challenge the Opinion and Order of the District Court with
regard to its ruling that the Plaintiff was not entitled to pension credit for the years 1981
through 1988. Appellant argues that under the language of the Summary Plan
Description (“SPD”) he should receive pension credit, and that the language in the SPD is
contradictory to the language in the 1989 and 1999 Home Office Plans. Appellant also
argues that the District Court, even under an abuse of discretion standard, committed
clear error, the standard this Court uses when reviewing a district court’s findings of fact,
in rejecting his claim for pension credit.
This Court has recently held that, under ERISA, when the language of an SPD
conflicts with the language in the plan that the SPD is summarizing, it is the SPD
language which controls. Burstein v. Ret. Account Plan for Employees of Allegheny
Health Educ. and Research Found., 334 F.3d 365, 378 (3d Cir. 2003). In this case, the
Appellant argues that the language in the SPD describing who is eligible to participate in
the Plan and therefore due pension benefits requires that he be given credit for the years
1981 through 1988. Under the SPD, the Appellant argues that he is “a full-time,
managerial agency employee on a regular annual salary basis” who is eligible to
participate.

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Under either the 1989 Home Office Plan used by the District Court, or the 1999
Home Office Plan used by the Benefits Committee, in order to be eligible for pension
credit the employee must also be on the Home Office or Field Clerical Payroll. Appellant
argues that the SPD is therefore contradictory to either Home Office Plan and so the SPD
should control and he should qualify for the pension credit. However, even though a
contradictory SPD is controlling over actual plan language, “an SPD is, by its nature, a
summary, and cannot include all the terms contained in the full Plan.” Id. at 379. The
Home Office Plans, in this case, do not contradict the language of the SPD, instead they
expand upon the language to give a more complete definition of who is a Covered
Employee. Accordingly, the District Court’s use of the language in the Home Office Plan
to determine that the Plaintiff was not a Covered Employee was appropriate.
Appellant’s other argument related to pension credit is that he should have been
classified as a Covered Employee under the 1989 Home Office Plan and therefore eligible
for pension benefits for the years 1981 through 1988. His argument is that under the
definition of Covered Employee in the 1989 Home Office Plan he was “an active, full-
time Managerial Agency employee on a regular annual salary basis as classified on a
Field Clerical payroll by the Company’s Agency Division.” Unfortunately for Appellant,
he has never presented any evidence that he was on the Field Clerical payroll during the
relevant time period. In finding that the Benefits Committee did not abuse its discretion
in determining that the Plaintiff was not a Covered Employee because he never appeared

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on a Field Clerical payroll, the District Court did not make a clearly erroneous decision.
IV.
Appellant also challenges the District Court’s ruling upholding the Benefits
Committee’s decision to deny him a Disability Retirement Date (“DRD”) of either 1993
or 2000. There is no dispute that, with regard to the 1993 date, the issue is whether the
Appellant had a Separation from Service in 1993 under the 1989 Home Office Plan. The
District Court, as a finding of fact, held that the Plaintiff did not have a separation from
service and therefore was not due a DRD. The District Court’s findings of fact on this
issue are reviewed by this Court under a clear error standard.
The District Court’s finding that there was no Separation from Service in 1993 was
not clearly erroneous. Under the 1989 Home Office Plan, a Separation from Service
“means, for any Employee, his death, retirement, resignation, discharge or any absence
that causes him to cease to be an Employee.” The District Court ruled that, while the
Plaintiff was not able to work for eight months because of a snowmobile accident, he was
still an employee of Provident. The District Court held that because the Plaintiff’s
employment contract was not terminated, he continued to receive a salary, his position as
Agency Manager was not filled by anyone else, and he eventually returned to his job, he
never had a Separation from Service. While Appellant argues that he did not receive a
salary, he did receive short term disability payments from Provident during those eight

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months and the District Court’s finding that these payments constituted a salary was not
clearly erroneous. In addition, under the definition of a Separation from Service, the
District Court did not make any clear error in determining that because of the
combination of factors described above, the Plaintiff never ceased to be an employee of
Provident.
Appellant argues that because he received benefits under COBRA during that
period, he did have a Separation from Service. However, COBRA benefits are given out
when an employee suffers a termination or a reduction in hours. 26 U.S.C. § 4980B(f)(3).
The District Court did not make a clear error in determining that the Plaintiff was merely
suffering from a reduction of hours, and not a termination.
As for his termination in 2000, the District Court held that the Benefits Committee
did not abuse its discretion in finding that the Plaintiff was not terminated because of any
disability, a requirement for a DRD. There was substantial evidence presented to the
Benefits Committee and to the District Court that the termination in 2000 was
performance related. This evidence included the fact that in both 1998 and 1999 the
agency that the Plaintiff was in charge of failed to achieve its annual goals. In
determining that there was no abuse of discretion by the Benefits Committee in its finding
that the Plaintiff was terminated for performance related reasons, the District Court’s
findings were not clearly erroneous.

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V.
For the foregoing reasons, we will affirm the Opinion and Order of the District
Court.
TO THE CLERK:
Please file the foregoing opinion.
Joseph E. Irenas
Senior District Judge

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