Deboard v. Woods Research and Development Corporation, 208 F.3d 1228 (10^th Cir. 2000)-Former employees filed suit after their employer, Woods Research and Development Corp., reneged on its promise of lifetime medical insurance coverage for employees who elected early retirement during a special window offer ten years earlier.  In 1985, Woods sent letters to employees explaining the benefits package they would receive should they elect to retire.  Charles Deboard and several other employees elected to retire based on these promises.

            In 1995, Sunshine Mining & Refining Co., which had acquired Woods, informed the employees that it would cease paying premiums on the employees' insurance. (Employees could continue coverage by paying premiums themselves.)  As explanation for this decision, Sunshine cited the fact that it had agreed during the acquisition of Woods not to terminate any employee benefit plans (including health and welfare plans) for a period of 10 years.  This court found Sunshine's reliance on this explanation misplaced, since the crucial issue was that Woods had demonstrated an intent in the 1985 letters to create vested insurance benefits, with no indication that the company could unilaterally change the benefits at a later date.  (A summary plan description booklet did contain some language concerning termination, but this court found it ambiguous.)

            In this appeal, Woods argued that the 1985 letter did not create a new and separate ERISA plan, but merely described the benefits provided under the existing medical insurance plan—which, incidentally, contained a clause affording Woods the right to amend or terminate the plan at any point.  This court pointed out that the issue in such an inquiry is whether the company intended to create multiple plans; here, (despite Woods' present denial) the evidence evinced such intent.  It was clear that the purpose of the new plan was to provide early retirement incentives to a certain group of employees.

            Additionally, the 1985 letters "satisfied the minimum requirements for establishing an ERISA plan."  The letter specified a funding mechanism for the plan, and allocated ongoing operational and administrative responsibilities to the employer.  It also "described the intended benefits (lifetime health insurance benefits, etc.), the intended class of beneficiaries (persons participating in the voluntary early retirement subsidy), and the procedures for receiving benefits."

             Thus, this court affirmed the district court's finding that the plan owed the plaintiff employees continuing medical coverage of the same type that defendants' current employees receive.  It also affirmed the district court's refusal to impose additional penalties on defendants for failing to provide plaintiffs with copies of the 1985 merger agreement between Woods and Sunshine.  This court reversed and remanded on the issues of plaintiffs' attorney's fees, and whether Sunshine's BlueLincs program would provide plaintiffs with the same type of coverage that defendants' current employees receive.  See Stearns v. NCR Corporation, 2000 U.S. Dist. LEXIS 7028 (D. Minn. May 17, 2000) discussed in the July 2000 issue of ERISA LITIGATION ALERT.