Date: 09-11-2024

Case Style:

Michael E. Trvares v. Bose Corporation, et al.

Case Number: 22-CV-10719

Judge: Denise J. Casper

Court: United States District Court for the District of Massachuetts (Suffolk County)

Plaintiff's Attorney:

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Defendant's Attorney: Scott K. Pomerey

Description:

Boston, Massachuetts Employees Retirement Plan of Bose Coporation ERISA lawyer.

Tavares was employed by Bose from 1995 to 1999. AR 3, 30. As an employee of Bose, Tavares had participated in the Bose Employees' Retirement Plan, a defined benefit pension plan. AR 33-34, 41. At the time Tavares decided to leave Bose, the plan terms in effect were the 1989 Amended and Restated Plan Document (the “1989 Plan”). AR 3, 46-85. The Bose Committee on Employee Benefit Plans, (the “Bose Committee”), was the Named Fiduciary and Plan Administrator. AR 65-66. Specifically, the Bose Committee had the “authority to construe the terms of the Plan” and “to determine eligibility to participate in the Plan.” AR 67.

Under the terms of the 1989 Plan, a participant who terminates their employment with Bose before retirement is subject to an “Immediate Cash Out” of their pension benefits under Section 4.16. AR 61. The 1989 Plan also included a specific provision for those employees who were rehired concerning how prior years of service count towards the participant's vested benefits. AR. 46. Section 3.03 provided that:

[i]n the case of a Participant whose nonforfeitable percentage is zero and who incurs five or more consecutive one-year Breaks in Service, then Benefit Years of Service earned before the Breaks in Service shall be disregarded. Also, if a Participant is rehired by the Employer, Benefit Years of Service with respect to which the Participant previously received full payment of the Participant's vested Accrued Benefit shall be disregarded unless the Participant (1) received less than the present value of the Participant's full Accrued Benefits (i.e., forfeited the non-vested portion of his Accrued Benefit) and (2) repays the payment received for his vested Accrued Benefit plus interest (at the lesser of 5% or the rate determined for purposes of Code Section 411(c)(2)(C) before the later of (1) two years after the Participant is rehired by the Employer or (2) the earlier of (a) five years after the Participant is rehired by the Employer, (b) the close of the first period of five consecutive one-year Breaks in Service commencing after the original payment to the Participant, or (c) if the payment was other than on account of separation from service, five years after the original payment.

AR 46-47. As relevant to that provision, the 1989 Plan defined a “Break in Service” as “a twelve-consecutive month period during which the Participant does not complete more than 500 Hours of Service.” AR 44. The 1989 Plan defined a “Benefit Year of Service” to mean “a Plan Year during which the Participant had not less than 1,000 Hours of Service as an Employee.” AR 46.

2. The 2012 and 2017 Bose Retirement Plans

As reflected in the Administrative Record, Bose restated the terms of its plan in 2012 (the “2012 Plan”) and in 2017 (the “2017 Plan”). AR 6, 157, 329. Under these Plans, the Bose Committee remained the Named Fiduciary and Plan Administrator. AR 207, 388. Specifically, the Bose Committee had “the full power and discretionary authority to administer the Plan” and to determine eligibility to participate in the Plan.[3] AR 207-08, 388-89. The Bose Committee's
decisions shall be “conclusive and binding” in the absence of “clear and convincing evidence that the [Bose] Committee acted arbitrarily and capriciously.” AR 207, 388. The Bose Committee can also authorize the payment of benefits under the 2012 and 2017 Plans. AR 208, 389.

The 2012 Plan and 2017 Plan contained a specific section, Section 3.03, entitled “Reemployment.” AR 175, 348. As relevant to this provision, the 2012 and 2017 Plans specified that a rehired employee who has incurred a break in service becomes eligible to accrue retirement benefits, “only after completing a Year of Eligibility Service, taking into account only service performed after his or her most recent date of hire.” AR 175-76, 348-49. The 2012 and 2017 Plans maintained Section 3.03 from the 1989 Plan as Section 3.03(c) that permitted an employee to have prior years of service count towards the accrued benefit if the employee timely repaid the prior distribution according to the specified terms.[4] As relevant to Section 3.03(c), the 2012 and 2017 Plan defined a “Break in Service” as a “Plan Year during which an Employee or Participant has not completed more than 500 Hours of Service.” AR 165, 337. A “Plan Year” was defined as “the twelve-month period ending each December 31.” AR 172, 344.

The 2017 Plan also provided a specific contractual limitations period in Section 8.08 for pursuing claims under the Plan which provided that “[a]ny action in court must be filed within three years from the date of the initial failure regarding the benefit claimed.” AR 393.

B. Bose Rehired Tavares in 2016

In 1999, Tavares voluntarily terminated his employment with Bose. AR 290. On June 25, 1999, Tavares was automatically paid out a lump sum pension benefit of $1,269.98. AR 33.

In 2016, Bose rehired Tavares. AR 87. At the time of rehire, Tavares received an offer letter that outlined certain terms of his employment and contained a statement concerning benefit eligibility requirements. AR 88. The offer letter stated that “[t]he benefits described in the enclosed summary are those presently in effect, are subject to the terms of the plan itself, and may be changed or eliminated at the discretion of Bose Corporation.” Id. The offer letter attached a “Bose Benefits Summary 2016” that provided an overview of Bose's various benefit programs. (the “Benefits Summary”). AR 92. In particular, the Benefits Summary contained a section entitled “Employees' Retirement Plan” which stated in relevant part:

The Bose Employees' Retirement Plan is a defined (non-contributory) plan. This Plan is designed to provide you with income at retirement age based on your final average earnings and your services of service. You become an eligible participant after one year of service. Vesting begins after three years of service, and you are fully vested after seven years.

AR 93. Tavares acknowledged and signed the Bose offer letter on July 11, 2016. AR 90.

Tavares also attended a new hire orientation where he was informed of the Bose's retirement plan information and where to find plan documents.[5] AR 4. The 2014 Pension Summary Plan Description (“SPD”) was in effect at the time of Mr. Tavares's rehire. AR 7. In summarizing how a participant vests, the SPD had a section entitled “Breaks in Service/Loss of Credited Service”:

“If you are partially or fully vested and leave the Company before you retire, your prior Years of Benefit Service will be recognized if either:

• You have not received a full payment of your vested accrued benefit, or

• You received full payment of your vested accrued benefit but you received less than the present value of your full accrued benefit (i.e., you forfeited the non-vested portion of your accrued benefit) and you repay the previous payment received with interest within two years after your reemployment. (In certain situations, the two-year repayment period may be extended. Contact the Plan Administrator for the rules which apply to your situation.)

AR. 243. Bose also provided Tavares with online access to his benefit account information, which also included access to view plan documents.[6] AR 4. Between 2016 and 2020, Tavares received quarterly account retirement statements that reflected detailed information about his Bose retirement accounts.[7] Id.

C. Tavares Inquired Concerning His Pension Benefits

On April 16, 2019, Tavares emailed Elizabeth LeFleur (“LeFleur”) and inquired whether the previous years he worked at Bose from 1995 to 1999 counted towards his pension calculation.[8]AR 134. LeFleur suggested he call the retirement call center or Laurie Berthiaume, (“Berthiaume”) a Bose Retirement Plans Program Manager. AR 133-34. Tavares reached out to Berthiaume on April 17, 2019. AR 133. That same day, Berthiaume responded to Tavares that he “did receive [his] vested accrued benefit back in 1999 and did not pay it back to the plan within two years of reemployment so [his] prior service does not count in [his] pension service.” Id. Berthiaume stated that her response was based on information from the “Summary Plan Description” which stated the following:

If you are partially or fully vested and leave the Company before you retire, your prior Years of Benefit Service shall be recognized if either: [y]ou have not received a full payment of your vested accrued benefit, or [y]ou received full payment of your vested accrued benefit but you received less than the present value of your full accrued benefit (i.e., you forfeited the non-vested portion of your accrued benefit) and you repay the previous payment received with interest within two years after your reemployment.

AR 133 (internal quotations omitted). Tavares responded that he did not “recall getting a disbursement back in 1999” and he did not know about the repayment option. Id. Berthiaume stated that Tavares received a disbursement on July 26, 1999 and that the information to repay the distribution would have been in the Summary Plan Description and the packet of information he received from Empower when Tavares was rehired. AR 132-33. On April 19, 2019, Tavares acknowledged that he received the distribution in 1999 but that the only information he received during the rehiring process was that his “pension [would be] effective after 7 years of service.” AR 132.
Tavares v. Bose Corp., 22-cv-10719-DJC (D. Mass. Sep 11, 2024)

Outcome: For the foregoing reasons, the Court ALLOWS Bose's motion for summary judgment, D. 30, and DENIES Tavares's motion for summary judgment.

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Defendant's Experts:

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