United States v. Theola Blackmon

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 09-2125
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Kathryn Schultz; Marlys E. Rezaian; *
Katherine A. Cummins; *
Connie L. Nelson, *
*
Plaintiffs - Appellants, * Appeal from the United States
* District Court for the District
v. * of Nebraska.
*
Windstream Communications, Inc., *
*
Defendant - Appellee. *
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Submitted: March 10, 2010
Filed: April 5, 2010
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Before SMITH, BENTON, and SHEPHERD, Circuit Judges.
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BENTON, Circuit Judge.
Appellants Kathryn D. Shultz, Maryls E. Rezaian, Katherine A. Cummins, and
Connie L. Nelson sued their former employer, Windstream Communications, Inc.,
alleging that an amendment to its pension Plan violated the Employee Retirement
Income Security Act of 1974 (ERISA), and federal and state age discrimination laws.

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1 The Honorable David L. Piester, United States Magistrate Judge for the
District of Nebraska, sitting with the consent of the parties pursuant to 28 U.S.C. §
636(c).
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The district court 1 granted summary judgment for Windstream. The former
employees appeal. Having jurisdiction under 28 U.S.C. § 1291, this court affirms.
I.
On December 6, 2006, Windstream announced that 15 employees – including
Appellants – would be laid off on April 13, 2007. As of April 13, Shultz was 50 years
old and had worked for Windstream for 28 years; Rezaian was 53 years old and had
worked for Windstream for 28 years; and Cummins was 52 years old and had worked
for Windstream for 29 years. Shultz, Rezaian, and Cummins were entitled to
retirement benefits under the “Early Retirement-50/25” provision of the Plan. Under
the 50/25 provision, employees who, at the time of retirement (or here layoff), are at
least 50 years old with at least 25 years of service, are eligible for a pension. The
50/25 pension benefit is reduced by .5% for each month the employee is under age 55
at the end of service.
The Plan also included an “Early Retirement-30” benefit. Under it, employees
under the normal retirement age of 65, but with 30 years of service to the company,
can retire and receive a full, unreduced pension.
Eight of the employees laid off on April 13, 2007, were not eligible for any
benefits on the layoff date, although they were close. Appellant Nelson was among
these employees. As of April 13, she was 49 years old and had worked for
Windstream for 29 years. Windstream decided to amend the Plan to make these eight
employees eligible for the first early-retirement benefit each would have qualified for
if they had been allowed to work until December 31, 2008.

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The “Proposal to Accelerate Pension Eligibility For Specified Plan Participants
Nearing Retirement,” dated December 20, 2006, was drafted by Robert R. Boyd,
Vice-President of Benefits for Windstream, and a member of Windstream’s Benefits
Committee. Boyd submitted the proposed plan amendment to the Benefits
Committee. By the authority of Windstream’s Board of Directors, the Committee
approved and adopted the Amendment with an effective date of January 12, 2007.
The resolution was signed by the members of the Committee in February 2007, which
authorized and directed Boyd to finalize and execute the Amendment. Although the
Amendment became effective on January 12, 2007, it was not signed by Boyd until
December 20, 2007. The Amendment did not address or modify the retirement
benefits of Shultz, Rezaian, and Cummins.
The laid-off employees began receiving pension payments on May 1, 2007.
Shultz, Rezaian, and Cummins received the Early Retirement-50/25 benefit under the
pre-amendment version of the Plan. Had these three been presumed to work until
December 31, 2008, they would have accumulated 30 years of service and thus
received the Early Retirement-30 unreduced benefit. As for Nelson, she turned 50
after April 13, 2007. About three weeks after her birthday, she would have
accumulated 30 years of service. Therefore, the first early retirement benefit that
Nelson would have qualified for was the 50/25 benefit. However, if the Amendment
had allowed her to recover benefits presuming service until December 31, 2008 (but
not limiting her to the benefit she first became eligible for), Nelson would have
received the unreduced Early Retirement-30. The other seven employees listed in the
Amendment would have accumulated 30 years of service before reaching age 50 had
they worked until December 31, 2008. Therefore, under the Amendment, these
employees received unreduced pension benefits under Early Retirement-30.
Appellants claim that the Plan Amendment violated several provisions of
ERISA, the Age Discrimination in Employment Act, 29 U.S.C. § 621, and the
Nebraska ADEA, Neb. Rev. Stat. § 48-1001. The district court granted Windstream’s

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motion for summary judgment on all claims. See Schultz v. Windstream
Communications, Inc., No. 08-3086, 2009 WL 1028175 (D. Neb. April 16, 2009).
II.
A grant of summary judgment is reviewed de novo. Hillery v. Metropolitan
Life Ins. Co., 453 F.3d 1087, 1089 (8th Cir. 2006). Summary judgment is appropriate
if the evidence, viewed most favorably to the nonmovant, shows no genuine issue of
material fact and that the movant is entitled to judgment as a matter of law. Fed. R.
Civ. P. 56(c).
A.
Appellants argue Windstream violated the fiduciary duties owed to plan
participants under 29 U.S.C. § 1104, by arbitrarily and capriciously reducing their
retirement benefits, while giving full benefits to other employees. “Nothing in ERISA
requires employers to establish employee benefits plans. Nor does ERISA mandate
what kind of benefits employers must provide if they choose to have such a plan.”
Lockheed Corp. v. Spink, 517 U.S. 882, 887 (1996). Rather, ERISA seeks to ensure
that, if an employer promises retirement benefits to employees, they will actually
receive those benefits. “To increase the chances that employers will be able to honor
their benefits commitments–that is, to guard against the possibility of bankrupt
pension funds,” ERISA imposes fiduciary duties when employers manage and deal
in fund assets. Id.
Conversely, when employers adopt, modify, or terminate plans that provide
pension benefits, “they do not act as fiduciaries, but are analogous to the settlors of
a trust.” Id. at 890 (internal citation omitted). See also Anderson v. Resolution Trust
Corp., 66 F.3d 956, 960 (8th Cir. 1995) (“An employer’s decision to amend . . . an
employee benefit plan is unconstrained by the fiduciary duties that ERISA imposes

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on plan administration.”); Hickman v. Tosco Corp., 840 F.2d 564 (8th Cir. 1988)
(holding defendant employer did not breach fiduciary duties by refusing to “bridge”
retiring employees’ periods of employment until they reached age 55 to make them
eligible for early retirement when employees were terminated following sale of plant
less than one year before they turned 55 even though defendant routinely “bridged”
other salaried employees who were terminated less than one year before reaching age
55; decisions to terminate those employees rather than carry them on payroll did not
affect administration of pension plan or investment of its assets).
Appellants rely on Metropolitan Life Ins. Co. v. Glenn,, which held that a
reviewing court should consider the conflict of interest arising from the dual role of
an entity as an ERISA plan administrator and as a payer of plan benefits, in
determining whether the entity has abused its discretion in denying benefits. Metro.
Life, 128 S. Ct. 2343, 2346 (2008). See also Firestone Tire and Rubber Co. v.
Bruch, 489 U.S. 101, 115 (1989). Metropolitan Life involved the denial of benefits
under a plan, not an amendment to a plan. It does not apply in this case where
Appellants received the benefits that they were entitled to under the Plan.
Schultz, Rezaian, and Cummins were over 50 years of age with more than 25
years of service when their employment was terminated. Under the Plan, they were
entitled to Early Retirement-50/25 benefits, which they are receiving. Under the Plan
as amended, Nelson was made eligible for 50/25 early retirement benefits, which she
is receiving. No facts support a claim that Windstream failed to pay benefits to
Appellants in accordance with the terms of the Plan. Because “the act of amending
a pension plan does not trigger ERISA’s fiduciary provisions,” Lockheed Corp., 517
U.S. at 891, the district court properly granted summary judgment on this claim.

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B.
Appellants make several challenges to the validity of the Amendment, including
that it lacked specificity, it was not reduced to writing until December 20, 2007, they
did not receive proper notice of the Amendment, and it was not adopted with the
proper authority. While the district court questioned whether the Appellants had
standing to raise these issues, this court concludes they do not. To have standing,
Appellants must suffer an actual harm by the loss of a legally protected interest; there
must be a causal connection between the injury and the conduct complained of; and
it must be likely that the injury will be “redressed by a favorable decision” by the
court. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992).
The Amendment did not alter the pension benefits owed to Schultz, Rezaian,
and Cummins. Therefore, even if this court invalidated the Amendment based on
these challenges to its validity, these Appellants would still receive benefits under the
Early Retirement-50/25 provision. They have no standing to challenge how it was
adopted because how it was adopted does not affect them. Nelson would not be
eligible for early retirement at all if this court invalidated the Amendment. The
Appellants have not shown that they would have been made eligible for the unreduced
Early Retirement-30 benefit had the Amendment been more specific, reduced to
writing earlier, given more notice, or signed by every member of the Board of
Directors before their payments began.
C.
Appellants contend the Amendment discriminated against them on the basis of
age because they were not allowed to accrue the service that younger employees were,

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2 Nebraska’s age discrimination law is interpreted in conformity with the
ADEA. Humphrey v. Neb. Pub. Power Dist., 503 N.W.2d 211, 217 (Neb. 1993).
3 Appellants have not raised a disparate impact claim, which focuses on
unjustified discriminatory results. See Smith v. City of Jackson, 544 U.S. 228, 239-
40 (2005).
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in violation of the ADEA and the Nebraska ADEA.2 Under the ADEA, Appellants
must show that Windstream’s adoption of the Amendment was actually motivated by
age. 3 See, e.g., King v. United States, 553 F.3d 1156, 1160 (8th Cir. 2009).
Appellants’ only evidence was 1) the dates of birth and years of service for Schultz,
Resaian, and Cummins, 2) the date of birth and years of service for Nelson, 3) the
dates of birth and years of service for the other seven employees listed in the
Amendment; 4) the terms of the Plan, and the Amendment; and 5) the fact that
Appellants received Early Retirement-50/25 benefits, rather than the Early
Retirement-30 benefits received by the other seven employees listed in the
Amendment.
The district court held that Appellants’ claim was precluded by the Supreme
Court’s decision in Kentucky Retirement Systems v. Equal Employment Opportunity
Commission, 128 S. Ct. 2361 (2008). In Kentucky Retirement Systems, the EEOC
alleged that a provision of Kentucky’s state-disability-retirement plan discriminated
on the basis of age by excluding those employees above normal retirement age.
Specifically, an employee was entitled to normal retirement with 20 years of service,
or with five years of service and attaining age 55. However, if an employee became
disabled before accumulating 20 years of service, or reaching age 55 with five years
of service, Kentucky’s plan imputed enough years of service to make the employee
eligible for retirement. Id. at 2365. If an employee was already eligible for normal
retirement when becoming disabled, however, no years were imputed toward the
retirement benefit. Id. The Supreme Court held that Kentucky’s plan did not violate
the ADEA:

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Where an employer adopts a pension plan that includes age as a factor, and that
employer then treats employees differently based on pension status, a plaintiff,
to state a disparate treatment claim under the ADEA, must adduce sufficient
evidence to show that the differential treatment was “actually motivated” by
age, not pension status.
Id. at 2370.
In this case, Appellants and the other seven employees specified in the
Amendment had all worked for Windstream for at least 28 years. However, as the
district court correctly noted, the seven younger employees began their jobs with
Windstream at an earlier age than Appellants (before age 20). Therefore, under the
Plan, unless they quit or their employment ended before they attained 30 years of
service, they would become eligible for unreduced Early Retirement-30 benefits at a
younger age than any of the Appellants, who each started working for Windstream
after age 20. Therefore, the Early Retirement-30 benefit–which provides pensions
based on longevity with the company, without reference to age–creates the difference
in retirement benefits between the younger employees and Appellants.
The Plan, not the Amendment, distinguishes between the Early Retirement-
50/25 and Early Retirement-30 benefits. The Amendment specifies those employees
with more than 28 years of service who would not, without the Amendment, be
eligible for any benefits. Just as in Kentucky Retirement Systems, Windstream
imputed years of service to Nelson and the other specified employees to make them
eligible for early retirement benefits (albeit that Nelson’s first early retirement benefit
was the reduced 50/25). Because Shultz, Resaian, and Cummins were already eligible
for early retirement when laid off, no years were imputed in calculating their benefits.
The employees’ age was a factor in the benefit received only because the Plan
includes age as a consideration when defining early retirement benefits, as permitted
by the ADEA. See 29 U.S.C. § 623(l)(1)(A)(i). Therefore, the difference in the
retirement benefit provided Appellants, as compared to the other seven employees, is

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based on pension status. Appellants present no evidence that the differential treatment
was actually motivated by age.
Appellants also claim that Windstream violated ERISA because their pension
benefit accrual ceased, and they were excluded from participation in the Plan, because
they attained the age of 50. See 29 U.S.C. § 1054(b)(1)(H)(i), § 1052(a)(2).
However, Appellants’ early retirement benefits were not reduced or discontinued
because they reached a specified age, but rather because they were laid off. Had they
not been laid off, their pension benefit accrual would have continued. Appellants do
not attack their selection for layoff, stipulating that they were selected for neutral, non-
discriminatory reasons. The district court properly dismissed Appellants’ age
discrimination claims.
III.
The judgment of the district court is affirmed.

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