United States District Court, S.D. Indiana, New Albany Division
DEBORAH J. JOHNSON, Plaintiff,
RETIREMENT PLAN OF GENERAL MILLS, INC. AND THE BAKERY, CONFECTIONARY, TOBACCO AND GRAIN MILERS INTERNATIONAL UNION BCTGM, Defendant.
ORDER ON MOTION TO STAY LITIGATION AND COMPEL
BAKER UNITED STATES MAGISTRATE JUDGE.
cause is before the Court on Defendant's motion to stay
litigation and compel arbitration. [Filing No. 27.]
Although Plaintiff gallantly raises a number of objections to
this motion [Filing No. 32], the Court agrees this
action should be stayed, and that the parties must proceed to
forth in Defendant's brief, Plaintiff was offered,
accepted, and received over $20, 000 to enter into a contract
in which she released, and agreed to arbitrate all disputes
to, her claims in this action. [Filing No. 35, at ECF p.
1.] Plaintiff agreed to arbitrate “any dispute or
claim arising out of or relating to the above release of
claims, including, without limitation, any dispute about
the validity or enforceability of the release or the
assertion of any claim covered by the
release…” (Emphasis added).
[Filing No. 28-1, at ECF p. 2.] This sweeping
language requires that all issues of the arbitration
agreement's enforceability and scope must be arbitrated.
argues that the Plan is not a party to the agreement because
“the Plan is a separate legal entity, and is not
GMI” or its affiliate. [Filing No. 22, at ECF p.
12.] However, the facts show the Plan is sponsored and
maintained by GMI. It uses GMI's Employer Identification
Number for government reports and GMI's address for legal
service of process. GMI is the Plan's financial
fiduciary, must contribute amounts necessary to maintain the
Plan, selects the Plan's trustee, and has the right to
modify or amend the Plan. And any Plan assets not required
for benefit payments revert to GMI. Thus, the Plan is a party
to the agreement because it is part of GMI. Likewise, the
Plan is an “affiliate” of GMI. Therefore, the
Plan is so inherently interconnected with GMI that it is a
party to the agreement.
Plan is also entitled to enforce the agreement because it is
intended to benefit from it. A third party may enforce a
contract to which it is not a party but is an intended
beneficiary if it shows: (1) a clear intent by the parties to
the contract to benefit the third party; (2) a duty imposed
on one of the contracting parties in favor of the third
party; and (3) performance of the contract's terms is
necessary to render the third party the intended benefit.
Barth Elec. Co. v. Traylor Bros., Inc., 553 N.E.2d 504,
506 (Ind.Ct.App. 1990). Plaintiff's release of all
claims, without limitation, under ERISA, demonstrates that
the release is intended to benefit the Plan. All claims under
ERISA relate to benefit plans and some claims under ERISA may
be asserted against only a benefit plan. As in Barth, the
terms of the agreement demonstrate that the Plan is intended
to benefit from the release, and accordingly the Plan has the
right to enforce it.
next argues that the Plan has forfeited any right to enforce
the arbitration clause by failing to provide him pertinent
information and by actively litigating this lawsuit. The
Court finds no support for Plaintiff's claim that
Defendant's counsel misled her and thus Defendant waived
the Plan's right to enforce the agreement. The origin of
this claim is that in response to Plaintiff's
counsel's October 28, 2016, e-mail about whether the
agreement would affect Plaintiff's claims in this
litigation, Defendant's counsel responded on October 31
that they would inquire with the Plan. On November 1, 2016,
Plaintiff's counsel responded that Plaintiff would assume
that the agreement did not affect her claims in this
litigation until told otherwise. Plaintiff argues that
because counsel did not later inform her that the agreement
did release her claims in this lawsuit, the Plan has
forfeited its right to enforce it. [Filing No. 32, at ECF p.
problem with this argument is that Plaintiff executed the
release agreement on October 28, 2016, the same day she first
contacted the Plan's counsel. She signed it
“knowingly, voluntarily and without reliance upon any
statements made by or on behalf of GMI except those in [the
Release Agreement] or the other written information provided
to [her] in connection with this [Release Agreement].”
[Filing No. 28-1, at ECF p. 3.] Defense counsel's e-mail
to Plaintiff's counsel three days later stating that
counsel would seek information about the scope of the
agreement does not defeat the release's plan language or
forfeit the Plan's rights under it.
the Court persuaded by Plaintiff's argument that the Plan
waived its right to arbitrate by litigating this dispute.
Plaintiff executed the agreement on October 28, 2016. The
Plan received the executed agreement sometime in November. On
November 30, the Plan moved for leave to amend its answer to
add an affirmative defense related to its right to compel
arbitration, and assert a counterclaim to compel arbitration.
[Filing No. 15.] That same day, the Plan also moved for an
extension of time to file the administrative record until
after the Court had ruled on its motion for leave to amend,
which the Court granted on December 21, 2016. The Plan filed
its amended answer and counterclaim to compel arbitration the
next day. [Filing No. 21, Filing No. 22.] On January 6, the
Court granted the Plan's motion for an extension of time
to file the administrative record, and the Plan moved to stay
this litigation and compel arbitration three days later.
[Filing No. 26, Filing No. 27.] As these facts reveal, the
Plan acted to enforce its arbitration rights 33 days after
Plaintiff executed the release. This brief timespan does not
amount to waiver, and the Plan's participation in a
Court-ordered status conference does not change this fact.
Plaintiff argues that her substantive claims are not covered
by the release and that she released only ERISA
discrimination and retaliation claims. The unambiguous terms
of the agreement demonstrate otherwise. Plaintiff
released-and agreed to arbitrate- all claims under ERISA
“without limitation.” And because Plaintiff's
claims relate to her employment at GMI and arise under ERISA,
they fall within the scope of the release and, consequently,
its arbitration provision.
reliance on the release's exemption for “any and
all vested benefits acknowledged by GMI as benefits to which
[Plaintiff is] entitled as a participant in any GMI benefit
plans” is misplaced. Plaintiff does not have a vested
right to-and GMI has not acknowledged that she is entitled
to-a disability pension from the Plan. Vested benefits are
nonforfeitable. Vallone v. CAN Fin. Corp., 375 F.3d
623, n.5 (7th Cir. 2004). Here, Plaintiff is seeking
disability pension benefits. Plan participants must meet
specific eligibility criteria to quality for these benefits.
Absent demonstrated eligibility, a participant is not
entitled to them. A participant who is awarded disability
benefits must submit to reoccurring eligibility examinations.
If the participant is found ineligible, the disability
benefits terminate. Thus, unlike certain other retirement
benefits under the Plan, disability retirement benefits are
forfeitable. Therefore, the release exemption does not save
the day for Plaintiff.
these reasons, the Court finds that the agreement at issue is
enforceable and requires Plaintiff to arbitrate questions
about the Plant's right to enforce it and whether it
governs her substantive claims. Therefore, the Court stays