Beach v. Commonwealth Edison Co.

Randall Beach (plaintiff) announced his retirement from Commonwealth Edison Company (ComEd) (defendant) in May 1997 and remained on ComEd’s payroll through mid-June of that year. Because Beach was under the age of 55 when he retired, he waived any entitlement to future health benefits but retained his vested pension benefits. At the time of Beach’s retirement, ComEd was in the process of reorganizing certain departments and sometimes offered incentives like severance and health benefits to employees who agreed to accept an early-retirement package. Before taking his retirement, Beach verbally asked his supervisor and ComEd’s human-resources department whether there was any immediate prospect of such incentives being offered in his department. Beach’s recollection was that both his supervisor and the human-resources personnel told him that it would not happen. However, at about the time of Beach’s last day as an employee, ComEd began to have internal discussions about reorganizing Beach’s former department. On July 22 or 23, 1997, managers began to discuss the possibility of offering separation incentives to achieve a net staff reduction of approximately 30 of the 4,700 positions in the department. In late July or early August, an incentive plan was prepared that would be offered to 5 percent of the department’s staff, or approximately 240 employees. Had Beach remained employed through August 7, 1997, ComEd would have offered him the separation incentives. Beach filed suit under the Employee Retirement Income Security Act of 1974 (ERISA), arguing that ComEd gave him incorrect advice in violation of fiduciary duties owed to him as a participant in ComEd’s pension and health plans. The district court entered judgment in favor of Beach, ordering ComEd to treat Beach as though he had remained employed through August 1997 and qualified for all benefits offered in the incentive plan. ComEd appealed.