WILLIE HILL

v.

EMPLOYEE BENEFITS ADMINISTRATIVE COMMITTEE OF MUELLER GROUP LLC

MARCUS, Circuit Judge:

Willie Hill and twenty-two other appellants (the "employees") are hourly workers at a pipe factory in Bessemer, Alabama. They participate in a pension plan that provides Special Early Retirement (“SER”) benefits if they are laid off or terminated by a permanent plant shutdown before their normal retirement age, after meeting certain age and service requirements. The employees meet the age and service requirements -- each has worked at the factory for at least eighteen years and each is at least fifty-three years old.

* Honorable Paul C. Huck, United States District Judge for the Southern District of Florida, sitting by designation.

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On April¹, 2012, the former parent company (Mueller Group, LLC) of the entity that employs the workers (U.S. Pipe and Foundry Company (“U.S. Pipe”)) sold its interest in U.S. Pipe to another company (USP Holdings). Before and after the sale, the factory remained continuously operational and the employees remained employed in their same jobs. Nevertheless, the employees claim that they are entitled to SER benefits because the sale effected either a layoff or a permanent plant shutdown. They brought this action under the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”) found in 29 U.S.C. §§ 1132(a)(1)(B) and 1132(a)(3) to challenge the plan administrator’s denial of those benefits.

The employees’ theory fails because they were not laid off. And they were not terminated by a permanent plant shutdown because the Bessemer plant where they work did not shut down -- even for a single day. We affirm.

I.

At all times relevant to this litigation, the employees were longstanding hourly workers at a factory owned by U.S. Pipe. At U.S. Pipe, the employees participated in a pension plan for hourly employees. The plan provided for ordinary retirement benefits upon reaching age 65 and Special Early Retirement benefits under specified circumstances:

[A] Participant whose Termination Date occurs prior to his Normal Retirement Age because he is (1) laid off and not recalled within 2

years, or (2) terminated by permanent plant shutdown, ... and (4) who has both attained the age of 53 years as of the applicable shutdown or layoff date and completed at least 18 years of Service as of his Termination Date shall be eligible for a Special Early Retirement Pension.¹

This pension plan defines "Termination Date" as "[t]he date of an Eligible Employee's termination of employment with the Employer," which was defined as "United States Pipe and Foundry Company or any successor thereto. The Employer is the Plan sponsor." The U.S. Pipe pension plan does not define "Layoff," "laid off,” or “permanent plant shutdown." At all relevant times, the employees met the age and service conditions for SER benefits: each was at least fifty-three years old and each had worked at the Bessemer plant for at least eighteen years.

In 2009, Mueller Group, LLC (“Mueller”), a nationwide manufacturer of water transport products, purchased all membership interests in U.S. Pipe. As part of the purchase, Mueller incorporated verbatim U.S. Pipe's pension plan for hourly employees into its own plan, the Mueller Group, LLC Pension Plan for Selected Employees (the "Mueller Plan”), as “Part M.” In 2010, Mueller made a handful of clarifying amendments to Part M, including deleting the sentence defining "Employer" as "the Plan sponsor," so that the definition read only "United States

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Pipe and Foundry Company or any successor thereto.” The Mueller Plan qualifies as a defined benefit plan governed by ERISA, 29 U.S.C. § 1001 et seq., and was administered by the Employee Benefits Administrative Committee of Mueller Group, LLC ("EBAC"). The decisions of EBAC are appealable to an Appeals Committee. The text of the Mueller Plan granted EBAC “discretion to interpret the Plan, including any ambiguities [t]herein, and to determine the eligibility for benefits under the Plan in its sole discretion."

In 2012, Mueller entered into a purchase agreement with USP Holdings Inc. ("USP") to sell its interest in U.S. Pipe. Under the terms of the purchase agreement, Mueller agreed to freeze and fully vest all benefits provided for by Part M and to remain liable for paying those benefits after the sale. USP agreed that outstanding collective bargaining agreements would continue to govern the hourly employees' terms and conditions of employment. In anticipation of the sale, Mueller had already frozen the accrual of credited years of service in 2011, and it amended the Mueller Plan in the weeks after signing the purchase agreement to vest benefits and prepare for payment. In pertinent part, this amendment provided that employees “shall be deemed to experience a Termination Date on the Closing Date" of Mueller's transaction with USP Holdings.

As provided for by the purchase agreement, the sale closed Sunday, April¹, 2012, and U.S. Pipe became a wholly owned subsidiary of USP. At the Bessemer

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plant, little changed on the day of the closing. The factory operated continuously - - manufacturing the same products -- before and after the sale, and each of these workers remained employed in the same capacity for at least the next two years.² However, the employees were no longer eligible to purchase stock through Mueller's employee stock purchase plan, and USP provided health and welfare benefits from different providers than Mueller had used.

In 2014, the employees (having learned that some salaried employees were being paid SER benefits after the 2012 sale) made claims to EBAC for SER benefits. They argued that the 2012 sale from Mueller to USP constituted either a layoff or a permanent plant shutdown, which, when coupled with the undisputed fact that the employees met the age and service requirements for SER benefits, would entitle them to immediate payment of retirement benefits. EBAC denied the claims on the ground that the employees' “termination" for purposes of the Mueller Plan, which occurred when U.S. Pipe was sold, did not qualify as a "layoff" or "permanent plant shutdown." The employees appealed that determination to the Appeals Committee, which agreed with EBAC in a thorough letter, explaining that the employees had not "experienced either of the relevant

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pre-requisites for eligibility” because they “did not experience a layoff” and “the U.S. Pipe plant was not permanently shut down.”

The employees then filed this lawsuit in the United States District Court for the Northern District of Alabama, naming Mueller, the Mueller Plan, EBAC, and the Appeals Committee as defendants. Their first claim seeks payment of wrongfully denied pension benefits under 29 U.S.C. § 1132(a)(1)(B), on the theory that the April¹, 2012, sale either laid them off or terminated them by a permanent plant shutdown, either condition of which would entitle them to SER benefits. The second claim seeks SER benefits under 29 U.S.C. § 1132(a)(3), arguing on the same grounds that Mueller, the Plan, EBAC, and the Appeals Committee violated 29 U.S.C. § 1054(g), ERISA’s “anti-cutback” provision. After discovery, the parties filed cross motions for summary judgment. The district court granted defendants’ motion for summary judgment because it found the defendants’ interpretation of the Plan to have been reasonable.

This timely appeal followed.

II.

We review de novo a district court’s grant of summary judgment. See Alexandra H. v. Oxford Health Ins. Inc. Freedom Access Plan, 833 F. 3d 1299, 1306 (11th Cir. 2016). “Summary judgment is appropriate where there is ‘no genuine issue as to any material fact and the moving party is entitled to judgment

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as a matter of law.'" Id. (quoting Fed. R. Civ. P. 56(a)). We may affirm “for any reason supported by the record, even if not relied upon by the district court." United States v. Chitwood, 676 F. 3d 971, 975 (11th Cir. 2012) (quotation omitted).

A.

The employees' first claim arises under 29 U.S.C. § 1132(a)(1)(B), which gives beneficiaries of ERISA-governed pension plans a cause of action “to recover benefits due to [them] under the terms of [their] plan." 29 U.S.C. § 1132(a)(1)(B). We review a claim for the wrongful denial of benefits by an administrator under a long-established, six-step framework:

(1) Apply the de novo standard to determine whether the claim administrator's benefits-denial decision is "wrong" (i.e., the court disagrees with the administrator's decision); if it is not, then end the inquiry and affirm the decision.
(2) If the administrator's decision in fact is “de novo wrong," then determine whether [it] was vested with discretion in reviewing claims; if not, end judicial inquiry and reverse the decision.
(3) If the administrator's decision is “de novo wrong" and [it] was vested with discretion in reviewing claims, then determine whether "reasonable" grounds supported it (hence, review [its] decision under the more deferential arbitrary and capricious standard).
(4) If no reasonable grounds exist, then end the inquiry and reverse the administrator's decision; if reasonable grounds do exist, then determine if [the administrator] operated under a conflict of interest.
(5) If there is no conflict, then end the inquiry and affirm the decision.

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(6) If there is a conflict, the conflict should merely be a factor for the court to take into account when determining whether an administrator's decision was arbitrary and capricious. Alexandra H., 833 F. 3d at 1311-12 (quoting Blankenship v. Metro. Life Ins. Co., 644 F. 3d 1350, 1355 (11th Cir. 2011) (per curiam)).

"At each step, the court makes a determination that results in either the progression to the next step or the end of the inquiry.” HCA Health Servs. of Ga., Inc. v. Emp’rs Health Ins. Co., 240 F. 3d 982, 993 (11th Cir. 2001), implied overruling on other grounds recognized by Doyle v. Liberty Life Assurance Co. of Bos., 542 F. 3d 1352, 1359 (11th Cir. 2008). Thus, where, as here, there is no claim that the administrator labored under a conflict of interest, at most only the first three steps of this framework are implicated. At step two, it is undisputed that the Mueller Plan gave EBAC discretion to determine eligibility for benefits.

The district court concluded that Mueller's decision to deny SER benefits was de novo incorrect because of perceived inconsistencies in the reasoning of EBAC and the Appeals Committee in their denial letters to the employees. As we see it, however, this case should be decided at the first step rather than reaching for the third step as the district court did. In conducting de novo review of a plan administrator's decision at step one, a court must look only at the text of the plan in light of the facts presented in the case. Cf. Tippitt v. Reliance Standard Life Ins. Co., 457 F. 3d 1227, 1232 (11th Cir. 2006) ("Wrong' is the label used by our

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precedent to describe the conclusion a court reaches when, after reviewing the plan documents and disputed terms de novo, the court disagrees with the claims administrator's plan interpretation." (emphasis added and quotation omitted)). Because the court analyzes the participants' eligibility as if it were the administrator in the first instance, what the actual administrator said in justifying its decision is irrelevant to this step one analysis. See Melech v. Life Ins. Co. of N. Am., 739 F. 3d 663, 672 (11th Cir. 2014) (“[B]ased on the evidence before the administrator at the time it made its decision, the court evaluates whether it would have reached the same decision.”); Glazer v. Reliance Standard Life Ins. Co., 524 F. 3d 1241, 1246 (11th Cir. 2008) (“The court must consider, based on the record before the administrator at the time its decision was made, whether the court would reach the same decision as the administrator."). But even if we proceeded to step three, as the district court did, we would still conclude that EBAC's interpretation of the Mueller Plan documents was a reasonable one.

We hold that EBAC's decision was correct under de novo review. Pursuant to the unambiguous terms of the Mueller Plan, the employees simply did not qualify for SER benefits. To qualify, the employees either had to be laid off or terminated by a permanent plant shutdown. These employees were neither laid off, because they kept their same jobs at the same plant, nor were they terminated by a permanent plant shutdown, because the Bessemer plant never shut down. Thus,

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the employees are not eligible for SER benefits, and EBAC's denial of those benefits was the correct interpretation of the Mueller Plan.

1.

We begin at the first step, reviewing EBAC's decision de novo. In interpreting plan documents, we look first to the text of the plan. See Bedinghaus v. Modern Graphic Arts, 15 F. 3d 1027, 1029 (11th Cir. 1994). The Mueller Plan does not define the phrase "laid off." Therefore, we must discern its ordinary meaning. See Alexandra H., 833 F. 3d at 1307. In its ordinary meaning, losing one's job, at least temporarily, is a prerequisite of having been laid off. We know this because the loss or suspension of one's job is a feature of the phrase's definition. See, e.g., Layoff, Black's Law Dictionary (11th ed. 2019) (defining "layoff” as the "termination of employment at the employer's instigation, usu[ally] through no fault of the employee"); Lay off, MacMillan Dictionary, https://www.macmillandictionary.com/us/dictionary/british/lay-off_1 (last visited Aug. 13, 2020) (defining to "lay off” as "to end someone's employment, especially temporarily, because there is not enough work for them"); Lay Off, Collins Dictionary, https://www.collinsdictionary.com/us/dictionary/english/lay-off (last visited Aug. 13, 2020) (“If workers are laid off, they are told by their employers to leave their job, usually because there is no more work for them to do."). The employees did not lose their jobs; they were not laid off.

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In April 2012, Willie Hill would surely not have announced to his family, with the gravity such an occasion may demand, that he had been laid off, let go, or terminated at the Bessemer plant. No doubt the date of his ostensible layoff was much like any other evening on which he came home from the job he had worked for the past eighteen years and had every intention of returning to the next morning. Being laid off is a big deal for people because it means that they have lost their job and, for at least some period of time, their source of income. Maybe they will be able to land another job, and maybe they will be recalled to the job they previously had. But the change in circumstances visited by a job termination is obvious, clear, and frequently a defining moment in the employment history of an employee. Moreover, because of the significance attached to a termination or layoff, it makes sense for employers to offer some kind of assurance that employees will be taken care of in the event of layoffs -- especially employees who are particularly unlikely to find another job or whose discharge was particularly without cause. That is exactly what Part M of the Mueller Plan did -- it offered early retirement benefits to an employee, in the unfortunate event of a layoff, who was especially unlikely to find another job (on account of age) and for whom the impact was especially severe (because the employee worked for the company for a long time).

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Rather than rebut the intuitive observation that to have been laid off one must have lost one's job, the employees offer an almost metaphysical argument based on the nomenclature of the corporation that employed them -- before the sale, the employees were employed by Mueller, which owned U.S. Pipe, and after the sale, they were employed by USP. So, the argument goes, even if they kept their jobs at the Bessemer plant, they lost their jobs with Mueller, and because this loss was through no fault of their own, they were "laid off." This is not how people ordinarily use the phrase "laid off." Each employee kept the same job, at the same plant, with the same consideration. No one would describe himself as having been laid off simply because the employer's corporate nomenclature changed, especially when everything else remained the same.

The basic understanding that being "laid off" for the purpose of deriving benefits under an ERISA-governed plan requires losing one's job is amply supported by the case law. See Blank v. Bethlehem Steel Corp., 926 F. 2d 1090, 1093 (11th Cir. 1991); see also Headrick v. Rockwell Int'l Corp., 24 F. 3d 1272, 1276 (10th Cir. 1994) (explaining that "inhering in the term 'laid off” is the understanding the affected employee no longer holds the same job he did prior to being 'laid off”); Bradwell v. GAF Corp., 954 F. 2d 798, 800–01 (2d Cir. 1992) (declining to award severance “in the context of the sale of a business where the buyer retains the former owner's employees”); Rowe v. Allied Chem. Hourly

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Emps.’ Pension Plan, 915 F. 2d 266, 269 (6th Cir. 1990) (affirming that “separation from one employer followed by immediate employment with a successor employer does not constitute a layoff”).

In Blank, for instance, we confronted facts similar to those found in this case. There, a pension plan provided benefits for employees who met certain age and service requirements and “whose continuous service is broken by reason of a layoff or disability.” 926 F. 2d at 1092. The plaintiffs’ employer sold the factory at which the plaintiffs worked as “an ongoing business” and they continued to work in the same capacity after the sale. Id. But, like here, they claimed that the sale itself constituted a layoff and entitled them to benefits. Id. We rejected the argument, observing that “an employee who continues employment with a purchasing corporation has not experienced a layoff by the original employer.” Id. at 1093.

The cases cited by the employees largely construed phrases other than the term “layoff” and thus provide little guidance today. For example, in Yochum v. Barnett Banks, Inc. Severance Pay Plan, participants in a pension plan were not entitled to severance benefits as the result of a merger if they “declined a written offer of comparable employment.” 234 F. 3d 541, 544–45 (11th Cir. 2000) (per curiam). In that case, the plaintiff turned down the offer of a different job with different responsibilities and different benefits with the purchasing company. Id. at

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543. Because this was not an offer of "comparable employment," we held that he was still entitled to severance benefits. Id. at 546. But this holding turned on the meaning of the phrase "comparable employment," and not "laid off.” Similarly, in Bedinghaus, the plan at issue provided benefits where an employee was "discharged as a full-time staffer for reasons other than cause," 15 F. 3d at 1029, which we held could encompass the sale of a subsidiary as an ongoing business, id. at 1030. But "discharged as a full-time staffer for reasons other than cause" differs from being "laid off” in several critical ways. For one, the term “discharged" encompasses a broader category of job loss than does "laid off," which typically refers to job loss caused by lack of work or corporate restructuring. For another, the phrase in Bedinghaus specified that the discharge be “as a full-time staffer," while "laid off" refers to the complete loss of employment.