Comrie v. IPSCO, Inc.

In 1980, John Comrie (plaintiff) began working for IPSCO, Inc. (defendant) in Canada. IPSCO moved its headquarters to Illinois in 1999, and Comrie relocated there. Comrie claimed he was orally assured by IPSCO that the move would not affect his pension benefits. In 2005, Comrie became a participant in the IPSCO Enterprises, Inc. U.S. Supplemental Executive Retirement Plan (SERP). In 2007, IPSCO underwent a change in control, after which Comrie reported to IPSCO’s general counsel instead of its CEO. Comrie resigned and requested his SERP benefits, which were enhanced because his organizational rank was reduced following the change in control. Under the SERP, benefits were based in part on a percentage of the participant’s average compensation for the preceding five years, excluding any bonus. The SERP did not define the term bonus, which Comrie contended was limited to cash payments and did not include income from stock options or other stock-based compensation. If the latter were included in Comrie’s average compensation, his SERP benefits would have been approximately $2.5 million higher. The SERP’s administrative committee (committee), which had discretion to interpret the SERP, maintained that Comrie’s income from stock options and other stock-based compensation was a bonus and excluded it from his average compensation. Comrie sued IPSCO under the Employee Retirement Income Security Act of 1974 (ERISA), seeking the higher level of SERP benefits. He also asserted Canadian-law claims for additional pension benefits he was allegedly orally promised, as well as severance pay. The district court determined that the committee’s interpretation of the SERP was reasonable, granted summary judgment to IPSCO on Comrie’s ERISA claim, and dismissed Comrie’s Canadian-law claims. Comrie appealed. Although Comrie was entitled to receive stock options, the number of options he received each year was subject to IPSCO’s discretion. Comrie argued that language in the summary plan description (SPD) for IPSCO’s 401(k) plan that separately referenced bonuses and incentive pay suggested that income from stock options and other stock-based compensation—a form of incentive pay—should not be considered a bonus under the SERP. IPSCO countered that the SPD was for a different plan and thus irrelevant.