A 51-year-old employee terminates her employment. Before leaving, she asks her employer about her eligibility for, and the terms of, various benefits, including an ERISA pension benefit plan and a non-ERISA stock option plan. Under the stock option plan, options terminate when the employee ceases to be an employee “for any reason including retirement,” unless the option holder retires or is eligible for retirement under the ERISA pension benefit plan. The employee in this case is not eligible for early retirement under the ERISA pension benefit plan, but she allegedly receives erroneous information from her employer that her stock options will remain exercisable for the remainder of the grant period. Later, the employee is told that some of her stock options, worth millions of dollars, have been or will be cancelled because she is not eligible for retirement under the ERISA pension benefit plan. The employee sues the employer, asserting a breach of ERISA fiduciary duties relating to alleged misstatements regarding her ability to exercise the options.
The federal trial court in this case concluded that any misrepresentations or omissions relied upon by the employee related solely to the stock option plan. Because the stock option plan was a non-ERISA plan, the employer did not breach its ERISA fiduciary duty. The employee appealed and a split federal appeals court affirmed the decision of the federal trial court. (Bell v. Pfizer Inc, 2nd Cir. 2010)