Ericsson Salesman Loses 5th Cir. Severance Appeal

Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...

By Jacklyn Wille

July 8 — Telecom manufacturer Ericsson Inc. doesn't owe severance benefits to a salesman who wiped his work laptop of company files after being terminated, an appeals court ruled ( Gomez v. Ericsson Inc. , 5th Cir., No. 15-41479, 7/8/16 ).

The July 8 decision by the U.S. Court of Appeals for the Fifth Circuit focused on whether the company's severance policies qualified as benefit plans governed by the Employee Retirement Income Security Act.

In finding the policies to be ERISA-governed, the court said that the relevant inquiry was whether the policies involved an “ongoing administrative program,” as opposed to a system of one-time payments triggered by discrete events. The Ericsson programs—which cover more than 10,000 employees—are a “far cry” from “single event” plans not subject to ERISA, the court said.

Under this framework, the Fifth Circuit upheld Ericsson's denial of benefits as reasonable under the plans.

In particular, the court declined to consider whether Gomez's deletion of company files violated the severance programs' requirement that terminated workers return company property before receiving benefits, as Ericsson had determined. According to the court, Gomez forfeited his right to challenge this characterization by failing to raise this argument on appeal.

Instead, the court considered Gomez's primary argument on appeal: that the plans conditioned severance only on the signing of a satisfactory waiver and release of claims. Since Gomez had signed a waiver and release of claims, he argued this was all he needed to do to receive benefits.

Although the court found “some force” to this argument, it ultimately saw enough ambiguity in the Ericsson plans to uphold the company's decision denying benefits.

Judge Gregg J. Costa wrote the decision, which was joined by Judges Jerry E. Smith and Rhesa H. Barksdale.

Sanford Firm represented Gomez. Ogletree Deakins Nash Smoak & Stewart PC represented Ericsson.

To contact the reporter on this story: Jacklyn Wille in Washington at

To contact the editor responsible for this story: Jo-el J. Meyer at

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