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KINCAID v. HARCOURT BRACE JOVANOVICH

September 1, 1994

E. LEON KINCAID, Plaintiff,
v.
HARCOURT BRACE JOVANOVICH, INC., Defendant.



The opinion of the court was delivered by: DALE E. SAFFELS

 I. INTRODUCTION

 This case involves Plaintiff's claims that his rights were violated under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. ยง 1001 et seq. and the Kansas Wage Payment Act, K.S.A. 44-313 et seq. Plaintiff alleges he was wrongfully denied severance pay benefits from his employer, defendant Harcourt, Brace and Jovanovich, Inc. Plaintiff's job was terminated when his division of the company was sold. Plaintiff, however, was offered, and accepted, employment with the buyer. The matter is currently before the court on Defendant's Motion for Summary Judgment. (Doc. 22). For the reasons set forth below, defendant's motion is granted.

 II. BACKGROUND

 On, or about, May 10, 1991, as a result of the sale of the Farm Publications Division ("Farm Publications") of Harcourt Brace Jovanovich, Inc., ("HBJ"), plaintiff Kincaid terminated employment with HBJ. On, or about, that same day, plaintiff was offered, and accepted employment with Farm Progress Companies ("Farm Progress"), the company which bought Farm Publications. Kincaid's position with Farm Progress was not identical to the job he held with Farm Publications and eventually required relocation to a different city. Kincaid incurred certain expenses as a result of the move. The Farm Progress severance pay plan also differed from the HBJ plan.

 When Farm Publications was sold, HBJ did not pay severance pay to any employee who accepted continued employment with the Farm Progress. HBJ did pay severance benefits to employees who were offered positions with Farm Progress but declined due to substantial personal hardship. *fn1" Plaintiff made a claim for benefits under the HBJ severance plan.

 Plaintiff's request for severance benefits was considered by HBJ officials in at least three departments: Insurance; Human Resources; and Legal. Plaintiff's requests were denied.

 Plaintiff was informed that he was being denied benefits because he had accepted the job with Farm Progress and that he was not entitled to "double dip" both severance pay and continued employment.

 Defendant belatedly provided plaintiff with copies of the severance pay plan description/summary plan description and IRS Forms filed for the years 1988 to 1991.

 HBJ's Handbook for Employees ("Handbook") is disseminated to all personnel. When updated versions are distributed, employees are required to acknowledge in writing that they have received the update and that they are responsible for familiarizing themselves with any changes.

 The 1986 edition and the 1988 edition contained the following:

 
This Handbook supersedes all previous employer statements, including any previous handbooks, manuals, memorandums, and oral or written statements pertaining to Company policies described here. It is effective immediately and applicable to all employees regardless of their date of employment . . . . When appropriate, the Company may of its own volition deviate from or make exceptions to particular provisions stated here.
 
HBJ reserves the right, on a case-by-case basis, to interpret its stated or usual policies, practices and procedures when the Company deems it necessary or appropriate. HBJ further reserves the right to modify or revoke, suspend, terminate, or change any or all such policies and procedures, in whole or in part, at any time, and without notice.

 HBJ has long maintained a severance pay plan for employees. The plan is published in the Handbook. The plan did not change significantly until the 1988 Handbook. Prior to that edition, the severance pay plan excluded payments to those who were retired or were discharged, but did not speak to those employees who worked in a business unit which had the potential for being sold.

 The 1988 edition addressed that issue and provided: "severance pay is never paid when . . . a department, division, or subsidiary is sold and the employee is offered continued employment by the buyer."

 The revised Handbook was issued in January 1988. Farm Publications was sold on May 10, 1991. From 1988 to 1991, HBJ sold several operating units and never paid severance benefits to any employee who accepted a job offer made by the purchaser.

 HBJ determined that some Farm Publication employees who were offered jobs by Farm Progress might decline the offer because of substantial hardship. HBJ made the decision that severance benefits would be paid to those employees who were offered jobs with Farm Progress, but who declined because of substantial hardship.

 Of the more that 100 Farm Publications employees, 33 received job offers from Farm Progress. Two employees declined the offer because of substantial hardship and received severance pay. No one received severance pay and accepted a job offer with Farm Progress.

 Plaintiff accepted the job offer from Farm Progress. Plaintiff subsequently called Farm Publications President Michael Pickett ("Pickett") and indicated he believed he was entitled to severance pay. Pickett stated that employees who accepted job offers were not eligible for severance pay.

 On June 5, 1991, Kincaid wrote to the company claiming he was entitled to severance pay. He further asserted that his employment with Farm Progress did not constitute continued employment, that he had suffered from the change in location, from a reduction of base salary, and from a loss of benefits in the new job.

 HBJ responded that Kincaid was not eligible for severance pay because he accepted the job offer from Farm Progress and concluded:

 ". . . . your claim is totally lacking in merit under settled contract law, is totally lacking in merit under settled Kansas law, is in any event preempted by federal benefits law, and that in no event are you entitled to 'double dip' both continued employment and severance."

 Kincaid and HBJ engaged in an exchange of letters concerning severance pay rights, including whether Kincaid's claims under Kansas law were preempted by ERISA, whether Kincaid's assertion that he had not been advised that his severance benefits would be determined by whether he accepted or declined the job offer from Farm Progress.

 Kincaid requested a Summary Plan Description, Statement of Material Modification, "the most recent Summary Annual Report," "the most recent Form 5500," and a copy of the written plan document. HBJ referred Kincaid to the Handbook and enclosed no other documents. HBJ eventually sent all the 5500s filed by the company.

 In 1991, Kincaid filed a charge with the Division of Employment Standards, Kansas Department of Human Resources ("KDHR"). HBJ and Kincaid filed position statements. KDHR announced its intent to hold an administrative hearing. HBJ filed an action in this court to enjoin the hearing. Kincaid then filed the instant action and this court dismissed HBJ's action as moot.

 III. SUMMARY JUDGMENT STANDARDS

 A court shall render summary judgment upon a showing that there is no genuine issue of material fact and that the movant is entitled to a judgment as a matter of law. Fed. R. Civ. P. 56(c). The rule provides that "the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). The substantive law identifies which issues are material. Id. at 248. A dispute over a material fact is genuine when the evidence is such that a reasonable jury could find ...


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