Rachel Lerner
Mon, 10/03/2022
On September 27, 2022, a U.S. District Judge in California ruled that a former Twenty-First Century Fox executive was owed severance benefits after she lost her job following the merger between Disney and Fox.
In April 2018, Bernadette Paine began working at Fox as a Vice President of Worldwide Marketing Strategy and Communications. Part of the benefits package provided by Fox included severance benefits when an employee is terminated without cause. After Fox and Disney merged in 2019, Paine’s employment ended on July 26, 2019. Paine then submitted a claim for severance benefits, which was denied. According to the Plan Administrator, Paine voluntarily resigned from the company.
Paine appealed the decision and submitted various emails between her and the Human Resources Director which she contends shows that she did not voluntarily resign. The Administrative Subcommittee of the Plan Administrator (“Subcommittee”) denied her appeal. Paine then appealed to the U.S. District Court.
Under the Employee Retirement Income Security Act (“ERISA”), a plan administrator must set for “specific reasons for such denial” and provide a “full and fair review” of the claim when denying a claim. 29 U.S.C. § 1133. A plan administrator may not “arbitrarily refuse to credit a claimant’s reliable evidence.” Black & Decker Disability Plan v. Nord, 538 U.S. 822, 834 (2003).
The court found that the decision to deny Paine severance benefits ignored the multiple emails between Paine and the H.R. director that suggested setting a separation date over Paine’s opposition. Because the Subcommittee failed to address and credit the evidence Paine submitted, the court found they abused their discretion in denying Paine severance benefits. Therefore, the court ruled that the denial of severance benefits violated ERISA and granted judgment in favor of Paine.
MSE represents employees in the negotiation and enforcement of severance agreements. For more information, visit https://www.mselaborlaw.com/practice-areas/severance-separation-agreements. If you believe you have been unjustly terminated and/or denied severance benefits to which you are entitled, contact MSE at info@mselaborlaw.com.
