The U.S. District Court for the Middle District of Tennessee dismissed a retired employee’s negligent misrepresentation claim against a third party administrator (TPA) who provided services to his former employer’s Supplemental Executive Retirement Plan (SERP).
While still employed, the employee, a participant in the SERP, had received a benefit statement from the TPA indicating that he had an accrued $1,234,572 as of January 1, 2008. The employee claims that, in reliance on this benefit statement, he elected be included in the employer’s reduction in force. As part of his termination of employment, the employee signed a separation agreement that included a release of any claims against the employer and its agents. The TPA subsequently sent a letter to the employer, which was then shared with the employee, stating that the employee’s estimated retirement benefit was $517,103.10 (assuming a termination date of November 15, 2008). The TPA explained that the prior benefit statement valued the benefit based on the assumption that the employee would retire at normal retirement age of 62.
The employee brought a negligent misrepresentation claim against the TPA, arguing that the separation agreement contained an exception from the release for all rights and benefits under any employment benefit plan, including the SERP. The district court disagreed, however, reasoning that because the employee was not seeking benefits in accordance with the written terms of the SERP plan, his claim was not subject to the exception. Rather, the negligent misrepresentation claim is a state law tort claim that is clearly barred by the release in the separation agreement that the employee signed. (Duncan v. Milliman Inc., M.D. Tenn. 2012)